Sep. 2, 2002 - MONTEGO BAY, Jamaica - It's midday on a Wednesday in the slow month of August, but a cruise ship is in the harbor and Jimmy Buffett's Margaritaville with its 52 flavors of margaritas is jumping. 

Margaritaville sits at the end of the "Hip Strip" -- an eclectic stretch of bars, restaurants and other tourist-oriented businesses that lines seaside Gloucester Avenue. Nonetheless, the action here belies the reverberations from 9/11 on MoBay -- as Jamaica's tourism capital is popularly known -- and the rest of the island. 

Tourism is Jamaica's most important industry, accounting for 50 percent of its foreign exchange earnings and nearly 10 percent of its gross domestic product, and any changes are closely tracked. 

The impact from Sept. 11 was almost immediate. In the last four months of 2001, Jamaica's tourist earnings declined by 19 percent. Tourism earnings were off by 7 percent for the year, while stay-over visitors dropped by 3.5 percent in 2001. 

This year has also been a difficult one for tourism. Stay-over visitors during the first six months of 2002 declined 10.6 percent, compared to the same period a year ago. While the numbers improved in July and August, both September and October are shaping up as bleak months. 

Still, Jamaica has survived better than most of its Caribbean counterparts. Many here give much of the credit to Air Jamaica, the national airline that flies to more Caribbean destinations than any other company. 

Not coincidentally, its chairman -- Gordon "Butch" Stewart -- is also the chairman of Sandals, the MoBay-based all-inclusive resort chain. While other airlines were canceling or reducing service, Air Jamaica -- despite a big financial hit -- kept a full schedule. 

"I don't think we were hit as hard as other islands, even though we did suffer," says Mark Kerr-Jerrett, president of the Montego Bay Chamber of Commerce. "It had to do a lot with the fact Jamaica has a solid name in the marketplace, and we have our own airlift." 

Craig Martin, general manager of the Wyndham Rose Hall and Country Club, also credits Air Jamaica's new fleet of planes and its "very reactive management" for helping keep Jamaica in the game after 9/11. 

"The airline really came to the table with advertising and marketing and sales to bring people back to Jamaica," Martin says. 

So far this year the airline has about 64 percent of the U.S. tourism share to Jamaica, says Chris Zacca, Air Jamaica's deputy chairman and chief executive officer, and it brings half of all visitors to the island. 

The nagging question now for Jamaican tourism is how much will the global economic downturn, U.S. stock market gyrations and fallout from Sept. 11 affect the coming winter season? 

Opinions vary, but they're all couched in hopeful optimism. 

"It's a million-dollar question," says Fay Pickersgill, Jamaica's tourism director. "We always like to remain optimistic, but you know, clearly, that it's not the best time for travel." 

The Tourist Board, in hopes of generating some winter-season business, plans to begin a $3.3 million advertising campaign in North American and European markets in late October or early November. It will be based on the One Love theme of the late reggae star Bob Marley. 

"We still have space for the winter season, which is not a good sign," says Joanne Robertson, general manager of the family owned and operated 50-room Coyaba Hotel. "It all depends on what happens next, and I think everybody is still kind of waiting for the other shoe to drop." 

Unlike larger hotels, Robertson says, the Coyaba does only limited discounting and measures its success by earnings, not room occupancy. 

"But the unfortunate part, since Sept. 11, is that all of a sudden now the big guys are scrambling," she says. "They're dropping rates; they're giving deals. They have 400 rooms to fill and so all of a sudden we're competing at a level that we never expected that we would have to." 

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(c) 2002, The Miami Herald. Distributed by Knight Ridder/Tribune Business News.