An American hotel financier has warned Bermuda should be careful not to frighten off the "handful of lenders" able to deliver the hundreds of millions of dollars needed to build new hotels.

He has spoken out after suffering a second setback in trying to bring huge hotel investment finance to the Island after years of preparation.

Bill Steckroth, president of Florida-based Steckroth Hospitality Group, was involved in an attempt to bring a Regent Hotel to Hamilton in 2003 and 2004.

That deal, worth $100 million, was ended without public explanation by the Corporation of Hamilton in early 2004.

News that the St. George's Renaissance Consortium has now been replaced as the favoured developer for the former Club Med site has again hit his confidence in doing business on the Island as he was one of the financiers involved in the $220 million project to bring a five-star Four Seasons hotel to the East End.

Mr. Steckroth, whose Florida company's website lists dozens of hotels which it has helped to develop, said a big overseas lender he had lined up had viewed the latest developments with dismay.

"I brought the Regent Hotel and helped with the financing for the Four Seasons project. The lender is very aware of what is going on. And there are only a handful of lenders willing to fund these types of developments. You don't want to scare them off," he said.

But Tourism Minister Dr. Ewart Brown, who announced last week that a new developer was now in negotiations to redevelop the Club Med resort, dismissed the warning and said there were financiers lining up to bring big money hotel investment to Bermuda.

Mr. Brown described such warnings as coming from people wishing to spread unsettling "doom and gloom" and said he had taken two calls last Friday from people expressing an interest in getting involved if any projects become available.

He said: "There was a time in Bermuda when we had a reputation as not the place to come to and do business but we are becoming much more user-friendly. We are in a new era as far as bringing developers to Bermuda.

"If this fellow is not interested there are plenty of others lining up to come here."

But Mr. Steckroth is clear that Bermuda should be careful it does not end up as a place that big money investors steer clear of because of developers being turned down suddenly and without explanation after years of negotiations.

He said: "As a hotelier who has spent years attempting to bring several five-star hotel properties to Bermuda, including the financing thereof, I'm perplexed at the continued insensitive nature of the Island Government, both local and national, to the difficulty of this process, particularly in light of the fact that no new hotel has been built since 1972.

"If the international hotel and development community ? a very small business sector where the word travels quickly ? continue to be summarily dismissed and demoralised after spending years of time and millions of dollars in pre-development costs, not to mention the small select group of lenders willing to fund projects of this nature, then the process of constructing any new hotel will become, at best, extremely hard."

By way of contrast, Mr. Steckroth said he was involved in bringing a five-star hotel to Costa Rica and said that country's government was "bending over backwards" to assist the process.

Having been involved in the Regent and Club Med projects that had come to nothing, he warned that Bermuda needed to be careful about its reputation abroad.

He said: "You can't treat people like that. Word is going to spread and you are going to shoot yourself in the foot. If you start dragging developers down the road for a couple a years and treat them like that the reputation spreads.

"There appears to be no control. Someone needs to take the bull by the horns, because what is being done to developers is a sin. Someone should be there with open arms to help them."

Dr. Brown this week unveiled a tourism vision for 2006 and beyond that included the aim of raising the number of guest beds on the Island to 10,000, by "increasing the existing land-zoned tourism" area by 38.5 percent.

In a presentation to the media and tourism industry stakeholders, he said: "To accomplish this objective we will stimulate development and redevelopment by creating and marketing meaningful hotel investment incentives and streamlining cumbersome regulatory processes.

"To ensure our success it will be necessary to provide tax relief and benefits that will assist and encourage hotel owners and developers to upgrade and enhance their product."