Bermuda's tourism industry is facing an "enormous crisis'' as hotels battle the cost of doing business in Bermuda in order to compete on a world stage, it has been claimed.

At the heart of the problem is the escalating cost of construction, which it is understood has forced many hotels to postpone or even call off renovation work.

And Cambridge Beaches president Mike Winfield said if the Island was to maintain enough rooms to operate at all, then every business and individual involved in the industry has to pitch in.

"We are at the top end of industry room rates and for us to be successful we have got to deliver value for this. Facilities must be at the top end -- that is very challenging,'' he said.

"Tourism is facing an enormous crisis because the world is calling for the infrastructure to improve, that necessitates building -- if you can't afford to do that, what do you do? You go out of business.'' Mr. Winfield said the gradual increase in construction costs, coupled with the cost of products and services on-Island had made it harder to make any real profit.

And as hotels face the demand to upgrade to compete with other destinations, they find construction costs are substantially more than other countries -- which further slashes the return on the investment.

"Hotels I know have decided they are not going ahead with projects because they simply couldn't afford to do them, and couldn't get the return,'' Mr.

Winfield said.

The additional loss of rooms from recent hotel closures and the impending loss of the 400-room Marriott Castle Harbour resort had further diminished the number of rooms on the Island.

"There is a critical mass of hotel rooms, once you go below that you cease to compete -- we are pretty close to that critical mass,'' he said.

Mr. Winfield said there was a need for construction costs to stabilise to allow hotels' revenue to pick up, and it was time that construction companies looked at the hotels as ongoing colleagues, rather than short term "cash cows''.

He said if the industry got together, with the unions, and met with hotel leaders, then there could be scope for future partnerships -- similar to those established by management consultants Monitor -- where the construction industry understands and is sympathetic to the needs of hotels.

Because of the evolutionary nature of the hotel business, building firms should see them as long-term partners where there could be a number of mutually-profitable projects over the years, rather than one lucrative scheme.

And, he said, firms could work with hotels from the plans' conception, suggesting efficiencies -- rather than simply bidding for the finished scheme.

Although Mr. Winfield said he believed the construction costs were a real problem, he admitted that the main issue was getting every organisation and individual to become involved in the tourism product.

Suppliers and tradesmen need to understand what hotels require to supply five star service to their customers, he said.

"It has got to be a universal realisation, this is not the hotel industry bleating, we are all partners in the tourism product, we have to share in the equation,'' Mr. Winfield stressed.

If someone is rude to a visitor, then word spreads amongst that visitor's family and friends -- possibly losing repeat business and forcing hotels to go after new, more expensive trade, he said.

"If someone is paying $500 a day for a room and the telephone is out of order, you can't be told by the phone company it is going to take four to five days to fix it,'' he added.

Mike Winfield