Missionaries and military officers were Bermuda’s first visitors, their impressions of the island ranging from euphoric descriptions of an earthly paradise to indictments of a disease-ridden backwater. It was not until the late 19th century that the concept of travel as “vacation” was born. It took the 10-week winter sojourn of Queen Victoria’s daughter, Princess Louise, in 1883, to officially launch tourism in Bermuda. Following glowing media coverage of her visit, America’s elite—politicians, socialites, artists, and writers—began to travel to the island to escape North American winters. Woodrow Wilson, Rudyard Kipling, Mark Twain, and Frances Hodgson Burnett were among the most celebrated early visitors, and as hotels and clubs sprang up to accommodate tourists like them, Bermudian officials marketed the island as a lotus land for wealthy urban Americans. In 1911, the first guidebook extolled the offerings of Bermuda as “Nature’s Fairyland” and the “Isles of Rest”—euphemisms that fixed the island in foreign imaginations as a romantic escape from the real world.

That image—of candy-pink cottages, blossom-sprinkled lanes, and private azure bays—has been Bermuda’s calling card ever since, a magnet that made the island the private playground of the super-rich and gradually built a significant industry. The timing was perfect, as Bermuda desperately needed an economic lifeline. Agriculture in the early 1900s was starting to wane, and the chance for a makeover through tourism was welcomed. Early visitors attended garden parties, dances, and military displays, traveling around by bicycle or horse-drawn carriages on unpaved roads (cars were banned until the post-war years). Croquet, tennis, and golf became popular, as well as the popular new pastime of swimming.

Gradually the island became both a winter and summer resort, with ocean liner service to and from the U.S. East Coast, whose residents made up 85 percent of the trade. A steady influx of year-round visitors began to pour in to the island. Critics worried the influx would spoil Bermuda’s quaint character, but there was no stopping it. Between the two world wars, the tourism industry became more developed, and Bermuda’s appeal, especially to the glitterati, grew. Visits by Vincent Astor, William Vanderbilt, Charlie Chaplin, and playwright Eugene O’Neill underscored the island’s self-perpetuated image as a place for the rich and famous.

Tourism’s heyday came in the post–World War II years, thanks to the new civilian airport, built for the war by the U.S. military. The airport opened the island for the first time to large numbers of mainstream visitors from gateway cities. Bermuda was no longer the realm of the elite. The island had modernized, too, allowing private cars and investing in large new hotels. By the mid-1960s, some 200,000 visitors were traveling to the island annually, including many thousands on cruise ships during the summer season. The industry’s golden years throughout the 1970s and 1980s saw that figure catapult to a peak of 630,000 in 1985. Tourism employed thousands of Bermudians and represented not only the country’s economic lifeblood, but also its sense of identity and national pride.

It was not to last, however. Competing destinations, especially bargain resorts in the Caribbean, coupled with rising costs triggered a slow but steady slump in the industry throughout the 1990s and into the 21st century. Even more alarming to the industry is the continued drop in visitor spending; retailers blame fewer air arrivals compared to cruise passengers, a demographic that traditionally spends less than those who fly to the island.

Claiming they could no longer afford to operate, several well-known hotels have closed since the 1980s, including Club Med, the Belmont, Lantana, the Palmetto Hotel, the Inverurie, the Newstead, Wyndham Sonesta Beach Resort, and the Marriott Castle Harbour. The Hamilton-based Bermudiana Hotel, where Woodrow Wilson once slept, was sold to become the headquarters of Bermuda’s largest reinsurers. Other former hotel properties have developed upscale time-share and condominium units, with a promise to government to include a certain number of hotel rooms in the future. Labor is another challenge: From the mid-1980s onward, the industry has been hemorrhaging young Bermudians to better-paying careers in international business.

Tourism remains Bermuda’s second-largest industry, however, and to a large extent business and tourism are codependent on each other, with increasing numbers of business visitors needing accommodations, attractions, and visitor-geared recreation. Indeed, many of the most successful hotels and guesthouses now claim business clientele as their major source of income. Notably, a few closed-down properties are reopening: The waterside Inverurie in Paget was redeveloped as a business hotel–condominium complex; Lantana was purchased with plans for a spa resort, though to date no ground has been broken; and the Newstead, another Paget landmark, opened in 2008 with hotel units, condos, a spa, and a top-rated restaurant. A new, $130-million, 88-room boutique hotel with a five-star restaurant, 5,000-square-foot conference center, spa, and fitness center, was due to open in 2009 at Tucker’s Point, St. George’s, at the site of the former Marriott Castle Harbour. A luxury Park-Hyatt hotel on the outskirts of the Town of St. George boasting 100 rooms, five restaurants, and an 18-hole golf course designed by Nick Faldo is slated to open in 2012. Other deals being negotiated at press time included a Starwood St. Regis hotel in the center of Hamilton and a Jumeirah resort in Southampton. Existing properties such as Pompano Beach, Mandarin Oriental’s Elbow Beach Hotel, and the Fairmont Southampton have reinvested millions in their properties, with Mandarin Oriental planning further extensive renovations of the property in the near future.

The majority of Bermuda’s visitors still hail from North America, mostly Americans (80 percent), followed by Europeans (11 percent), and Canadians (10 percent). The difference is that more now come from farther afield—the U.S. Midwest and the West Coasts of both Canada and the United States—and the island is starting to attract people from newer markets such as continental Europe. Generally, Bermuda visitors of all nationalities are affluent (making at least $100,000 a year), mature (air visitors’ average age is between 35 and 54; cruise-ship passengers are slightly older), and many are “repeat” customers. The island has always enjoyed a solid market of repeat visitors—Bermudaphiles who come year after year for decades. Leisure travelers make up 69 percent of the market, business visitors 19 percent, and those who come to visit families and friends who live and work on the island account for 12 percent. Shopping, soft adventure, cultural pursuits, and the more typical beach experience are the norm.

There are constant calls from industry watchers for Bermuda to offer better service to match prices, and lower airfares to attract more visitors—something that discount carriers such as JetBlue are now offering. Having evolved from a winter resort to a midsummer escape in the 20th century, Bermuda is today a multiseasonal destination challenged to offer attractions and events that appeal to visitors looking for more than sunburns and rum swizzles. While travelers still seek relaxation, they also want to know more about the destination they choose, a worldwide trend.

As a result, Bermuda has focused on developing cultural and events-oriented tourism, with an emphasis on island heritage, grassroots traditions, and community involvement. The Parks Department is gradually revamping the chain of centuries-old forts throughout the island, and a foundation is forging ahead with restoration of the UNESCO World Heritage Site of St. George’s. At the island’s other end, the historic military buildings of the Royal Naval Dockyard—now the port for almost all cruise ships to the island—may turn into a third major town, complete with loft living and a new slate of retail, craft, and entertainment outlets. And Bermuda’s majority black community is beginning to celebrate its cultural roots and milestones through museums, street festivals, poetry, film, and theater.

Bermuda’s government is focusing on big-draw attractions like October’s Music Festival, January’s International Race Weekend, and the PGA Grand Slam of Golf. Ecotourism is another facet of the industry with largely untapped potential, though there has been growing interest in activities such as whale-watching trips, birding tours, and other outdoor pursuits.