The din of construction works in hotels in the past year is the sound of new foundations being laid for the revival of Bermuda's flagging tourism industry, according to Bermuda Hotel Association (BHA).

Tourism Minister David Allen told delegates at the opening of the Society of American Travel Writers conference at the Fairmont Southampton Princess on Wednesday that around $500 million of works are currently underway or in the pipeline, with $349 million of these receiving tax breaks under the Hotel Concessions Act.

The unprecedented building boom is a recognition from Island hoteliers that if they are going to charge some of the highest room rates in the world, then they have got to deliver a product to match.

The first island hotel to fully grasp the importance of upgrading in a big way was Elbow Beach, which in 1998 spent $40 million in upgrading the grounds, pool, lobby, penthouse, some of the suites and resurfacing the tennis courts. It was revealed this month that the hotel is spending tens of millions in building a new European type spa, a new ballroom, some luxury suites, and renovating the cottages in a move designed to take it to five star status.

Almost every hotel has had workmen in carrying out serious upgrades. And new hotels are in the pipeline, including the $250 million Rosewood Tucker's Point Club on the site of the Marriott Castle Harbour Hotel and a rebuilt Belmont Hotel.

BHA president William (Billy) Griffith believes both Government and the industry have fully grasped the importance of getting the fundamentals of bricks and mortar as well as service right.

Allied to a new recovery programme spearheaded by the private/public sector Bermuda Alliance For Tourism and a carefully targeted marketing drive for this winter and summer, Mr. Griffith is predicting that the turnaround will begin next year. Given that this year is the worst on record - down 15 percent for the first six months on last year - that would hardly be difficult, but he is confident the Island will begin moving in the right direction.

He told The Royal Gazette yesterday: "What the existing hotel owners are doing is carrying out the initial recommendations of the Monitor group a few years ago, that has flowed into the Bermuda Alliance for Tourism.

"What it is addressing is what the customer and what the competition are saying. Bermuda's tourism industry is making a much-needed adjustment to be able to compete in a much healthier way than before.

"Albeit there has been a reduction in the number of hotels and now the business is not as strong as it could be, there is a recognition that the product should be improved, and what we are seeing now is testimony to that. There is also now an organised strategy through BAT as to where we are going."

He added: "It is our significant feeling that we will have much more solid marketing programmes for winter this year and summer 2002 than we did this year, which will encompass hotels, restaurants and the retail sector in a way not seen before."