The proposed development of the former US Naval Air Annex should have a positive impact on the Island's tourism industry.

Robert Davies, the chief executive of Morgan's Harbour Investment Ltd., said the two principal components of the development -- the golf course and the hotel -- would create this impact.

"They work together closely. The impact on tourism should be significant. The importance of this project is that it is of world class quality.

"Bermuda's tourism had been dormant. I think we are part of the solution.'' The plans are for a 200-room luxury hotel with top of the line facilities, a championship golf course, a 400-berth marina and residential village on the 250-acre property.

The size of the hotel will cater for the provision of top of the line amenities which are expected in luxury hotels while not losing the intimacy associated with small Bermudian cottage colony style hotels.

The name of the proposed operator/owner has yet to be released.

Mr. Davies said this would be forthcoming shortly and stressed that he was very excited about this aspect of the development which has always been considered an important part of the project.

He noted: "The hotel is the last piece of the puzzle. We are trying to put it in place. The hotel group in question operate resorts at the luxury end of the market.'' The resort will aim to attract high-end individual clients and the conference and incentive markets comprised of small business groups of up to 150 people at the senior executive level who were looking to have amenities on hand and easy access to activities, he continued.

"We have done a lot of research and there is huge potential in this area which is not being fulfilled in Bermuda's market,'' said Mr. Davies This market potential was further reinforced by Bermuda's proximity to North American gateway cities. Caribbean hotels were enjoying success in this area despite being further away from these gateways.

However resort hotels were tough to make work worldwide, admitted Mr. Davies, and Bermuda offered its own particular constraints including higher development and operating costs.

Making the hotel work on an economic basis was the challenge Morgan's Harbour was facing, he pointed out.

Factors including proposed developments and the number of hotels being put on the market were creating the need for further analysis of the on-Island tourism situation.

And Mr. Davies noted that Morgan's Harbour wanted to make the economics of the project work whether the hotel was built during its launch phase or not.

The $86 million first phase of the project will comprise of all the work needed to get the resort open and fully operational.

"The hotel could be then also but we are not sure yet,'' he said.

If it could be done it would provide the icing on the cake and help fulfil the group's tourism objectives on the Island while giving the development an international flag on the world stage.

A guaranteed maximum price contract is in place with AMEC Morse Diesel to act as construction managers for the work. The firm specialises in marine related work and is presently working on the Hong Kong airport development.

Local contractors will be used where ever possible, stressed Mr. Davies.

The hotel will tie in with the championship golf course being designed by Jack Nicklaus which will be open to the public and visitors staying at other hotels.

The size of the hotel will allow space on the golf course for others and the Nicklaus signature on it will ensure it is of high profile.

"Anyone who knows good golf would be able to recite where Jack Nicklaus' golf courses are,'' said Mr. Davies.

It will be operated by the British PGA and cater to visitors coming to the Island by allowing them to book tee times in advance which should provide encouragement for potential visitors to choose the Island.

The marina will create further opportunities for tourism by creating the potential for a boom in sport fishing. This was an area Bermuda had a tradition in but it had not been fully developed.

"Sport fishing attracts wealthy customers,'' noted Mr. Davies.