Bermuda's hospitality industry is still feeling the impact of a global recession, with air arrivals and hotel occupancy down, Premier Ewart Brown said yesterday.

Looking forward, Dr. Brown said projections for luxury hotel demand were expected to rise this year, though they will still remain below 2007 levels.

Figures released yesterday revealed Bermuda's total visitor arrivals gained over the previous year. Fuelled by cruises, 559,000 visitors arrived an increase of one percent over 2008. In 2009 overall air arrivals dropped 10.6 percent.

As a result of lower arrivals hotel occupancy was down. The average occupancy for 2009 was 51 percent, compared to 59 percent in 2008 and 67 percent in 2007.

Dr. Brown gave a "frank and direct" appraisal of 2009's performance in yesterday's address (see story on page 2).

And he said that Bermuda was experiencing the same issues facing luxury hotels in the US, with many predicting occupancy rates will not return to levels seen before 2007 this year.

Last week the CEO of Starwood Hotels Worldwide — which includes the Sheraton chain, St. Regis and W hotels — said it would be necessary to continue reduced room rates for a while before prices can begin to climb again.

"His words are instructive for Bermuda's hoteliers," Dr. Brown said.

However, the Tourism Minister said, Hospitality Internet Marketing News had projected an increase in demand for luxury hotels by five to eight percent.

"The outlook for Bermuda's hotel sector is very similar, although short-term first quarter projections are still lagging somewhat behind last year. The erratic weather that has been causing multiple airline cancellations since the beginning of the year is not helping our cause."

Dr. Brown said the key objectives for the Department of Tourism in 2010 will be to:

• Concentrate marketing and sales efforts on Bermuda's core market, north east United States

• Increase the focus on key secondary markets: UK, Canada and Italy

l Continue efforts to establish tertiary markets, particularly India and China.

Dr. Brown said he hopes to do this by generating interest among new and repeat visitors and building Bermuda's brand through synergistic messaging with all communications media.

Meanwhile, he said, the Tourism Department planned to support hotels and niche market promotions and continue its successful digital marketing strategy.

The department is currently in talks with JetBlue to increase the number of flights from Boston, the Premier said. He added that he welcomed news that American Airlines' daily service from Miami was doing well flights began last November.

"The launch of WestJet's service out of Toronto on May 3, 2010 will be the most significant change in this market in the past 25 years," he said. "The number of available seats will be virtually doubled. This, too, will be a game-changer. We have valued and appreciated Air Canada's long service. I know that they will welcome the opportunity this new competition will provide.

"We will increase our Canadian advertising and will be appointing a sales representative in this market in the coming weeks. We will be actively working with all partners to bring increased Canadian visitors this summer."

The Department is also looking to hold a major event in 2010, in hopes of positioning the Island as a location of choice for destination weddings. Dr. Brown would not give details on whether it was similar to the 'Greatest Job in the World' competition run last year by Queensland, Australia's tourism board. That competition generated approximately $300 million in free publicity for the area.

Dr. Brown would only reveal that ten weddings would take place across the Island on October 10, 2010.

"It will be unique, exciting and will create significant awareness for Bermuda for this particular niche," he said.

The Premier added that sponsorships with the Boston Red Sox and Deutsche Bank golf championship both held in key gateway cities for Bermuda will continue.