Bermuda’s economy has long been a tale of continual reinvention. As The Royal Gazette editorialised in 2020, with “no natural resources and [so] far from the nearest land, its people have always known that economic growth is not just desirable—it is a matter of survival.”
Over four centuries, the island repeatedly shifted its focus: from tobacco and subsistence farming in the 1600s, to thriving shipbuilding and Atlantic trade in the 1700s, to salt harvesting and a rich export agriculture by the 1800s. By the late 20th century, however, tourism had emerged as “the island’s new economic pillar”. This long-form feature traces how and why tourism supplanted Bermuda’s earlier industries, how policy and global change shaped that shift, and what it has meant for island life.
Bermuda’s geography – a cluster of reefs and islets – dictated its early economies. The first English settlers (arriving after the 1609 Sea Venture wreck) attempted tobacco and wine grapes, but the poor soil and limited acreage soon forced a switch. By the 1700s, Bermudians “abandoned the tobacco industry and took up maritime pursuits”. Shipyards turned out the famed Bermuda sloops – fast, light trading vessels prized in the Caribbean and along the American coast. Islanders also became expert mariners and privateers, building fortunes on piloting, salt trade (notably transporting Turks & Caicos salt), and whaling.
But change was coming. In the 19th century, steam-power and protective trade policies began to undermine Bermuda’s traditional strengths. As The Royal Gazette noted, “the advent of steam engines in the 19th century sounded the death knell for shipbuilding,” ending the era when local yards had supplied worldwide fleets. Meanwhile, Bermuda’s lucrative produce exports – onions, arrowroot, and Easter lilies – suffered under new competition. Advances in refrigeration and transport allowed mainland U.S. farms to undercut Bermuda’s market, and U.S. tariffs in the early 1930s slashed island exports. One vivid image remained of that collapse: “crates of rotting onions sitting on the Hamilton docks” when the American market closed. By mid-century, Bermuda had “no exportable natural resources… and few viable exports other than onions”.
In short order, agriculture itself began shrinking. At its peak in the early 1900s, roughly 3,000 acres – much of the island’s arable land – were under cultivation. By 2016 that had fallen to only 738 acres in protected arable reserve (half of which is idle). In practical terms, fields once planted with onions or lilies gave way to development. “Over the last 60 years a significant proportion of prime agricultural land has been lost to tourism and residential development and the infrastructure required to support the new ‘pillars of its economy,’” reported a government crop strategy document. Few Bermudians now recall when the island was known as “New York’s Market Garden,” exporting winter vegetables to the mainland.
With traditional exports fading, Bermuda in the early 20th century reinvented itself around what it did have: natural beauty, a temperate climate, and proximity to America. The beginnings were modest. Adventurers and shipwrecked castaways had long reported on the subtropical enclave’s charms, but real tourism only emerged in the late 1800s. A publicity coup arrived in 1883 when Princess Louise, daughter of Queen Victoria, wintered in Bermuda. Her visit “encouraged America’s elite” to follow, and the first hotels and guidebooks soon appeared. Wealthy vacationers arrived by cruise liner or even early seaplanes, travelling between parishes on the new 22-mile railroad.
Locals watched cautiously as grand hotels rose by the shore. One 1911 governor’s report proudly noted that tourists had increased from a few thousand to tens of thousands in just years. As The Bermudian magazine later recalled, “If there was one year in which Bermuda could be said to have been ‘discovered’ as a desirable destination…it was probably 1883,” when postcard views of pastel-coloured houses and pink sands began drawing repeat visitors. Yet many Bermudians initially preferred garden farming, and early hotels often struggled with staffing and attitudes. Visitors dined on crepes and played croquet; horseback rides and dances were entertainment. Over time, tourism slowly wove itself into island life.
The real transformation came after World War II. In 1941 the U.S. military built Kindley Field (later Bermuda’s L.F. Wade International Airport) as part of the Atlantic campaign, drastically improving air access. Soon jets, helicopters and cruise liners made Bermuda routine tourist fare. “Bermuda now had cars and large new hotels. Visitors arrived by jumbo jets and cruise ships,” notes a local history. The 1960s and 1970s saw a tourism boom: solar-heated pools, championship golf courses, and high-end resorts catering to Americans escaping harsh winters. At its height, tourism employed thousands of Bermudians and reached stunning scale – “the industry’s golden years were the 1970s and 1980s, with a peak of 630,000 tourists in 1985”.
By the late 20th century, signs of strain were emerging. The Caribbean – with its all-inclusive resorts and tropical prices – was undercutting Bermuda’s premium niche. Environmental pressures and rising costs meant fewer available rooms: from dozens of hotels at midcentury, today Bermuda has only a handful of large resorts. Many older hotels closed or merged, and year-round visitation patterns became highly seasonal. The 1990s and 2000s saw Bermuda losing market share. Cruise traffic did grow (by 2019 it formed about 65% of arrivals), but Nassau and Jamaica were capturing the budget traveler who might otherwise have spent in Hamilton. Employment in tourism lagged other sectors, and younger locals sometimes showed limited interest in service work.
At the same time, Bermuda was expanding offshore finance, creating a second economic pillar. The island’s low-tax, well-regulated environment attracted insurance and reinsurance companies, banks, and fund managers. By the 1980s and ’90s, “international business” had surpassed tourism in GDP contribution, bringing in multibillion-dollar transactions. Although this global financial sector now dominates Bermuda’s wealth (today accounting for about 60% of GDP), tourism remains crucial for jobs and tax revenue. As the Minister of Economy pointed out in 2024, the tourism industry – with hotels, restaurants, transport and retail – “provided 2,113 jobs in 2022…approximately 6.6% of the total jobs in the Bermuda economy”. (Nearly 7 in 10 of those tourism jobs were held by Bermudians.)
Recognising tourism’s importance, Bermuda’s leaders have made deliberate policy and infrastructure choices to support it. In the 1960s and 70s, public investment built causeways, deepened harbours, and expanded airport facilities to handle jets. More recently, Bermuda created the Bermuda Tourism Authority (BTA) to market the island and improve visitor experience. Campaigns have targeted new demographics – for example promoting ecotourism, African American heritage trails, and niche events (sailing races, music festivals). Hosting global events like the 2017 America’s Cup and the annual PGA golf championship have been efforts to drive off-season traffic and spotlight Bermuda internationally.
Meanwhile, global travel trends exert strong influence. The rise of jet travel in the 1950s made Bermuda accessible to more visitors, but also lowered costs to distant Caribbean islands. In the 21st century, competition comes from anywhere with a beach – plus airplane capacity and even cruise itineraries. “Tourism is no longer the debutante at her first ball,” observed Bermuda’s Minister of Economic Development in 2020. He noted that the “days of getting by on natural beauty alone are over,” and that Bermuda must distinguish itself beyond scenery. In other words, marketing and product quality matter as much as sun and sand.
Economic crises and health scares have also left their mark. The 2008–2009 global financial crisis sharply reduced U.S. leisure travel; tourism revenues in Bermuda fell while international business contracted. Most recently, the COVID-19 pandemic all but halted travel in 2020, halving arrivals and grinding hotels to a pause. Critically, it also led to the shutting of the Southampton Princess, losing Bermuda a total of 593 potential beds. But Bermuda’s economy showed resilience: by 2023 visitor counts had bounced back past 2019 levels, and tourist spending surged. Government reports credit a 2023 GDP growth of 4–5%, driven by international business growth and “continuous recovery in the Tourism industry”.
Government officials have likewise emphasised rebuilding tourism. In 2024 the Minister of Economy noted that, beyond direct output, tourism’s ripple effects indirectly supported hundreds of millions in revenue. However, even the government admitted that “it is impossible for Bermuda to return to tourism’s heyday of the 1970s and 1980s,” The Royal Gazette commented in 2020. Instead, commentators urge a more targeted vision: attracting niche markets, focusing on quality over quantity, and leveraging Bermuda’s unique culture and environment.
Tourism’s rise has profoundly shaped Bermudian society. Where once neighbours traded farm produce or ship parts, many now find work serving visitors. The service economy – hotels, restaurants, taxis, tour guides and retail – became major employers. That brought prosperity: Bermuda now has one of the highest per-capita incomes in the world. Yet it also created challenges. A large segment of the tourism workforce is foreign-born (notably from the Philippines and Caribbean), partly because many young Bermudians prefer professional jobs in finance or media over hospitality work. Local officials have tried apprenticeship and certification programs to draw natives into hospitality, but the trend remains: foreign workers often fill up to half the jobs in hotels.
Culturally, the impact is mixed. Tourism helped preserve some traditions – hotel buffets still serve the famous Bermuda rum swizzle, tourist brochures tout Gombey dancers, but it has also commercialised others. Historic Town of St. George, a UNESCO site, thrives on guided tours. Conversely, rapid development has erased old farms and woods, fuelling concerns about water supply and the loss of “juniper wilderness” landscapes noted by settlers. A 21st-century challenge is balancing growth with heritage.
All over the world, from Barcelona to Bali, destinations have begun to question the old assumption that more tourists are always better. UNESCO even added “plastic apocalypse” Bali and bustling Barcelona to its watch list of cultural sites under strain, and mayors from Santorini to Venice are enforcing visitor caps to protect life for locals. Santorini (20,000 year-round residents) welcomed 3.4 million tourists last year and is now capping cruise arrivals at 8,000 a day to relieve pressure. Across Europe and Asia, governments are experimenting with tourist taxes, yacht bans and limits on hotel rooms – all signals that mass tourism is no longer seen as sustainable by default.
Bermuda, for its part, feels these dynamics sharply. The island’s tiny footprint and tight community mean even modest tourism spikes can overwhelm streets, beaches and services. Locals report “overcrowding and overtourism” on cruise days when multitudes descend on Hamilton and St. George’s. In fact, one commentator notes the “massive influx” of day-trippers each season routinely outpaces preparations at spots like Horseshoe Bay. Adding to the strain is the nature of cruise business itself: passengers often spend much of their time and money on board or in tour packages, leading to a “lack of meaningful engagement” with Bermudian shops and tours. That said, many here would die for those sort of numbers. But at the same time, the island cannot indefinitely chase higher headcounts of low-spend visitors without consequence. Heavy cruise dependence leaves Bermuda “susceptible to fluctuations” in the market and hinders the development of a more diversified, resilient tourism economy, but without it, jobs will certainly be lost.
Bermuda’s situation is both cautionary and quietly hopeful. It underscores that a small island simply cannot sacrifice quality of life for sheer visitor volume. Yet the global shift points to a silver lining: tourism authorities now talk of prioritizing high-value, low-impact experiences over raw numbers. In practice, that means fewer cruise liners might call this harbor in future, but each arrival could bring a richer encounter with nature and culture. Bermuda’s brand – its pink beaches, clear reefs and storied heritage – aligns well with travelers seeking authenticity rather than crowds. If the island remembers why it first embraced tourism (to share its charm, not to be overwhelmed by it), then attracting a smaller number of more engaged visitors may prove a better legacy than packing in ever more.
In the end, the lesson is as much caution as hope: Bermuda’s path forward will rest not on breaking tourism records, but on holding fast to the island’s soul even as the world’s attitude toward travel continues to evolve.
Sources: Historical overviews from Bermuda archives; government reports and statistical releases; Royal Gazette analysis; expert commentary; and Bermuda Tourism Authority data; recent global reports on overtourism and sustainable tourism; World Bank discussions of Caribbean tourism trends.
