Gazette analysis shows.

Statistics drawn from Government-published documents show the industry in the midst of a decline.

A review of visitor spending -- adjusted for inflation -- since 1976 shows the industry locked in decline despite individual years that broke the trend.

The overall decline in visitor contributions to the economy can be seen in the chart on Page 2 which tracks their total spending since 1976 in constant dollars.

In 1976, visitors spent $145.7 million in Bermuda. In the fiscal year ending in March 1994, visitors spent an estimated $138.7 million when spending was adjusted for inflation.

Finance Minister the Hon. David Saul last week touted the March tally as part of the Island's "first real growth in the economy since 1989''.

Spending plummeted between 1989 and 1993, before starting a recovery last year. But it does not hide the fact that spending has failed to come anywhere near the levels achieved in the late 1970s and the record year of 1980.

The Commission on Competitiveness focussed on the situation in the opening pages of its report tabled last month in Parliament.

"It is disconcerting, even shocking, that in the face of enormous growth in world tourism, Bermuda is losing tourism both absolutely and relatively,'' the commission said.

"Bermuda has been a world leader in developing tourism as a major industry and base for its economy.

"Now tourism is declining. Since 1980, Bermuda has lost 8.4 percent of its hotel rooms and 21.7 percent of its regular visitors.'' Perhaps the decline is most starkly revealed in an analysis of Government tables revealing how much each visitor spent in 1976 constant dollars between the years 1986 and March 1994.

The numbers show visitors spent an average $340 in 1986. It then fell to a low of $316 in 1993, the depth of the recession. In the year ending in March it had climbed to $319.6.

Although the year ending in March was an "encouraging recovery'' from the years of recession-induced decline, it does not alter the fact that the industry is and has been in trouble.

One Commission on Competitiveness participant, who asked not to be identified, said: "The industry has been in trouble throughout the 1980s. I don't think people have focused on it because international business has taken up the slack.

"If it weren't for international business Bermuda would have been in decline through the 1980s.'' The participant noted that tourism used to contribute about 60 percent of the Island's gross domestic product -- the total value of all goods and services produced in the Bermuda economy.

"In 1992 that contribution was down to 33 percent with international business about 30 percent, Government and other services the rest,'' he said. Dr. Saul said Government awareness of tourism's decline prompted it to build second and third legs to the economy to earn foreign currency.

"There is no question that over the last 20 years, visitor spending in constant dollars has gone down,'' he said. "Tourism will no longer sustain Bermuda's lifestyle, hence we built international business to support it.'' Dr. Saul said declining visitor spending was a combination of a number of factors.

For one, the Island has fewer hotel rooms to generate revenue. Significant losses include the closure of Club Med and the Bermudiana in the late 1980s.

"They represent a lot of spending power that hasn't come to fruition,'' Dr.

Saul said.

Another reason is the "considerable amount of discounting'' by large and small hotels to fill beds. Dr. Saul said the discounting was in response to growing worldwide competition for visitors who themselves have become more cost-conscious.

Another factor was the growing tendency among travellers to take shorter, more frequent trips.

Despite tourism's significant decline, the Commission on Competitiveness said the Island cannot give up on the industry.

"While international business has been growing, it cannot replace tourism. It employs far fewer people, the income is not widely distributed and it is dependent upon tourism.

"It, too, could be threatened by declining tourism... The infrastructure of hotels, communications and airlift provide the necessary support to allow international business to operate.'' IN DECLINE -- The table above shows total visitor spending in Bermuda in constant 1976 dollars.