Some of Bermuda's major hotels look set to lay staff off as high season bookings look increasingly grim.

The Sonesta Beach, Southampton Princess and Princess hotels may issue lay-off notices to workers if occupancy levels drop below 70 percent -- the agreed cut off point for discharging employees.

One hotel president issued a grim prognosis for the summer, saying the projections were looking grim. And his fears were confirmed by other managers, who are hoping late bookings will boost their numbers.

Some hoteliers were surprised by a story in The Royal Gazette , which quoted Tourism Minister David Allen as saying Bermuda was "sold out right throughout the summer''.

But yesterday Mr. Allen, while agreeing with the thrust of the story, disputed the quotation. He also moved to set the record straight.

Most properties have had a good June but the months of July and August -- the height of the season -- are falling behind in reservations, pinning hopes on last minute vacationers.

John Harvey, president of the Bermuda Hotel Association, said it was unusual to have lay-offs in July and August.

Dennis Tucker, president of the Sonesta Beach resort, said it was the worst he had seen it for many years.

"It is not good at all. We are reviewing the situation on a daily basis. We will be posting lay-off notices in July and August,'' he said. "We are very concerned.'' He also questioned how the US advertising campaign could be hailed a hit if calls to 1-800 phone numbers were not converting into bookings.

Both the Sonesta and Southampton Princess have been hit by a lack of family bookings, with Americans taking their pick of destinations or increasingly spending their holidays in the US.

And with wholesalers accounting for much of their business, rooms can stay empty right until the last minute.

And Allan Trew, manager of the Southampton Princess, also predicted some lay off days across the board but was hopeful that a surge in late bookings would prevent it.

The hotel is presently looking at an occupancy rate of 70 percent for July -- at the same time last year it was 78 percent.

"In the past three years we have had some lay-offs, but at the same time these are supposed to be our busiest months,'' said Mr. Trew.

"We are certainly hoping things will pick up. Things can change very quickly.'' The Hamilton Princess is also expecting lay-offs in a year when bookings are behind those of previous seasons.

But general manager Michael Kaile pointed out July and August is traditionally a quieter time for the business-orientated hotel, when many of its clients are on their own vacations.

Hotels warn of lay-offs September and October bookings were beginning to look strong again, he said.

Mr. Harvey said he hoped that 1999 was a unique year and that things would improve next year.

"Historically these months have been pretty favourable,'' said Mr. Harvey.

"But these are the challenges we have to face.

"Many destinations are competing for US families, they are travelling domestically a lot. A lot are also staying at home or being attracted to Europe.'' Last night, Mr. Allen said the Department of Tourism was working with hotels to promote package deals to bolster late season bookings.

And he said a quotation made in a Royal Gazette story that the Island was "sold out right throughout the summer'' required the entire tourism picture to be put into perspective.

The Minister said he had stated that hotels had experienced some sell-out periods in June and that the momentum had to be carried through the rest of the summer.

"This past week we met with the Bermuda Hotel Association and it was collectively agreed to work to aggressively promote those value-added programmes that the major hotels are offering,'' he said.

He added that the hotels had been a "little slow to come to the wicket'' in getting the special offers together.

Shadow Tourism Minister David Dodwell said he did not believe the ad campaign had been a success and called on the Minister to justify the promotion because the "business is not there''.

"Calls to 1-800 numbers are not always conversions and there are many other sources of those calls,'' Mr. Dodwell said.