confidence in and building on one's strengths.

Kicking-off yesterday's marathon take-note debate on Government's Cruise Ship Policy, Minister of Tourism David Dodwell told Members of the House of Assembly the new policy builds on Bermuda's preferred status as cruise destination.

After Alaska, Bermuda is the second most popular cruising destination in the world, said Mr. Dodwell. And Government's new policy extends a number of concepts critical to not only keeping Bermuda ahead of it's Caribbean competition, but ensuring the Island retains its image as a safe, clean, uncrowded place to vacation.

The concept of "balance'' was a central concern of the two committees which framed the new policy, said Mr. Dodwell: "(The new policy) recognises the critical role cruise ships play in the local economy and also the impact they have on the hospitality industry. We recognise that balance is important -- a balance between those visitors arriving by air and those arriving by ship.'' His Opposition counterpart David Allen meanwhile warned that already more and more visitors were dissatisfied with Bermuda holidays.

And he claimed there was also a deep resentment in the cruise ship industry over Government's policies towards the business.

At present air arrivals comprise 69 percent of the Island's total number of visitors while cruise ship passengers take up the remaining 31 percent, said Mr. Dodwell.

Looked at another way however, the air traveller -- on average -- spends five times more money in Bermuda than the ship-board traveller.

In contrast to land-based tourism, cruise ships are not a significant contributor to the Bermuda economy, said Mr. Dodwell. They do not buy fuel, supplies, pay taxes, or employ Bermudian labour as does the hotel and hospitality industry. Passengers however do make use of the Island's infrastructure.

Under the new policy five ships -- and maximum of 6,000 visitors daily -- will be permitted to sail to Bermuda. That number however does not include the 2,818 crew member who work on the ships.

Mr. Dodwell told the House the policy recognises the limits of Bermuda's resources to accommodate more: "We believe the concept of a comfortable carrying capacity is important.'' Another positive aspect of the new policy is the stability it affords cruise-line principals by extending ten-year contracts to sail here.

MPs debate new cruise ship policy From Page 1 "We are the envy of cruise destinations for quality, reputation, and control,'' said Mr. Dodwell . Cruises to the Island routinely average 100 percent capacity and the cruise lines know this.

So stable -- and valuable -- are the Bermuda contracts said Mr. Dodwell, that Celebrity Cruise Lines actually built the Zenith and the Horizon to sail specifically to the Island.

An added attraction of limiting the number of ships is it effectively controls competition, creating the image of the Island as an "exclusive, top of the market'' destination he said, and those with the ten-year contract feel their investments are protected.

On the controversial subject of permit fees Mr. Dodwell told the House he clearly understands the cruise line owner's perspective: "No one wants to pay more money.'' But cruise line owners -- while balking at Government's original fee structure -- accepted the principal of the permit fees; Mr. Dodwell then read to the House correspondence with Norwegian Cruise Lines, Celebrity Cruise Lines, and Royal Majesty Cruise Lines where counter-offers -- accepting the permit-fee principal -- were offered.

The Minister described the fee structure -- to be implemented at the start of the 1998 season -- as a sliding scale setting rates at $4-per-berth per night.

During the months of September and October, the fees fall to $2-per-berth.

Government meanwhile stands to collect $1.75 million dollars from the new permits, he said.

That money will subsequently be used to improve the Island's transportation system which at present, said the Minister, draws the most criticism in tourism exit surveys.

Meanwhile the present per-passenger tax of $60 remains unaffected, he said.

Mr. Dodwell also downplayed "mutterings'' from Shadow Tourism Minister Mr.

David Allen, that the fee structure would "chase away'' the cruise lines. The fact Carnival Cruise Lines is so eager to sail here proves otherwise, he pointed out.

Regarding Carnival, Mr. Dodwell did inform the House he received a formal communication on Thursday indicating their interest in sailing to Bermuda, but Carnival, and the issue of a sixth regular west-end caller, will have to be settled under the parameters of the new policy.

He cautioned however Celebrity -- under the terms of its ten-year contract -- has the right of first refusal.

The Minister also indicated Government has in the past received overtures from the Ports of Baltimore and Canaveral, Florida; but must be cautious when entertaining such proposals.

Shortly after receiving a communication from the Port of Baltimore Mr. Dodwell told the House, he received a call from US Airlines expressing their opposition to the service.

Mr. Dodwell admitted not everyone could -- or would -- be pleased by the new cruise ship policy. The policy however reflected the need for balance, an appreciation of the Island's comfortable carrying capacity, and an understanding how the cruise lines impact the local economy.

Mr. Allen attempted to torpedo the policy.

And he warned the House of Assembly that already more and more visitors were dissatisfied with Bermuda holidays.

He claimed there was also a deep resentment in the cruise ship industry over Government's policies towards the business.

Mr. Allen reminded MPs that cruise ships were in a sense all-inclusive holidays of the type found in many Caribbean islands.

He said that some sectors in Bermuda regarded the industry as "public enemy number one.'' But Mr. Allen added: "People are going to take cruises no matter what -- is has been estimated in the US that there are 70 million people who are potential cruisers who haven't taken cruises yet.'' And he said: "The reason it's been successful is that it's been an attractive package.'' He added that perhaps Bermuda should be looking more at the type of all-inclusive package that cruise ships could offer, including holidays for special interest groups or even dialysis patients as one line has done.

Mr. Allen said: "Rather than crying in our beer, we should think about how we can make our facilities more attractive with family activities and lure people away from cruise ships.'' But Mr. Allen said the new cruise ship policy was not the answer to providing a boost for Bermuda's beleaguered visitor industry.

He repeated that a weekend caller was needed -- and Dockyard was the ideal berth for a regular cruise ship on Saturdays and Sundays.

Mr. Allen said the dock constructed at a cost of more than $2.1 million dollars at Dockyard lay empty four days out of seven -- and would be empty five out of seven after a Government decision to allow a caller split between Dockyard and Hamilton from next year.

He added: "It's simply poor management for a UBP Government which supposedly prides itself on sound management -- it's a blunder of the first order.'' And he said that the last day of the split cruise would be in Hamilton which risked crippling Dockyard entrepreneurs as statistics showed cruise passengers spent most money on the last day of their trips.

He added: "Half a loaf is not going to support these rents -- half a loaf is not going to keep the entrepreneurs up there.'' And he said: "Moving the Celebrity ship to Hamilton is not in this policy, but it's a direct result, in my opinion.'' Mr. Allen claimed that cruise ship operators were angry over the annual permit fee -- and would pass it on to passengers.

Mr. Allen added that taxi drivers and sightseeing boat operators, as well as retailers, were in favour of a weekend ship.

He admitted that the PLP were against "wholesale Sunday opening'' -- but that Dockyard was self-contained and having it open all weekend would not undermine Sunday as a day of rest for the family.

Mr. Allen added that hotels should stop attacking cruise visits and instead try and learn from cruise lines' marketing techniques and also try to piggy-back business of passengers by impressing them with onshore facilities.

In addition, he said, hotels could be given tax incentives to make them more competitive -- including lowered taxes for the off-season.

But he said the permit fee was "just a knee jerk reaction which had not been well-thought through.'' And he added: "This Government, which has priced the hotel business out of business, is now intent on doing the same thing to the cruise ship business -- and the bottom line is Bermuda will become more expensive than ever.'' He pointed out that Government had contributed to what the cruise ship policy document branded a poor local entertainment scene by granting permits to non-Bermudian artistes for years.

And he called for major hotels to be forced to provide night clubs "just as they have to provide elevators'' and for local entertainers to be allowed to use cruise ships as a vehicle for their talents.

Mr. Allen warned: "It would be a fatal error to delude ourselves that world, including the cruise ships, will always be beating a path to our door.'' He said: "I believe that with this cruise ship policy we have burned a lot of bridges -- but it's not too late for Government to clean up its act and repair the damage with the cruise ship companies.'' But Long-time Tourism Minister C.V. (Jim) Woolridge , the Works and Engineering Minister, said: "The cruise ships don't employ one Bermudian, the cruise ships only come six months a year.

"And there is no point in going on a ship for peanuts -- the people who are working on cruise ships are from the Third World.'' Mr. Woolridge added that the Meridian had been losing money "for years'' and the cruise line provided a brand new ship, the Zenith , but the owners said they must be able to have a two-dock market as a marketing tool.

And he said that 1980 had been a record year for tourism -- but the Island's image had been wrecked by an Island-wide strike the following year.

Mr. Woolridge added that several members of the Opposition "had been down at the airport driving visitors away.'' He said: "This is the most fickle, yet the most lucrative business in the world.'' And he said a balance had to be struck between the different kinds of visitor, locals and the international business community to ensure the Island's appeal did not disappear under a mass of bodies.

Mr. Woolridge said Bermuda had enjoyed success as a tourist destination because it was special -- and not like other resorts.

Turning to entertainment, he said it had never been Government's role to provide it.

But Government had encouraged entertainment, although there was a limit to what it could do.

"You can lead a horse to water but you cannot make it drink,'' he said.

Mr. Woolridge added it was not true for the Opposition to maintain Government had done nothing to help taxi drivers.

Opposition backbencher Leon (Jimmy) Williams praised Mr. Allen's "excellent'' presentation.

But he tore into Mr. Woolridge for emitting "a lot of hot air''.

He said Mr. Woolridge devoted his energies to attacking Mr. Allen, rather than focussing on the cruise ship policy document.

Mr. Williams said he was sure the glossy document cost an "astronomical sum of money''.

"Who are they trying to impress?'' he asked.

Mr. Williams accused Government of paying no heed to the effect of ships on the environment, in particular the destruction of Bermuda's reefs.

He also criticised the twin-port concept, saying it did not work.

"This document is not going to solve the problems in our hotels...we have a policy in place that does not serve Bermuda.'' Mr. Williams turned his mind back to when the business community asked for two ships in Hamilton -- which were to stay there -- two in St. George's and one in Dockyard.

The Tourism Minister at the time, however, was responsible for two weekend cruise ships which caused St. George's to become "cluttered'' with passengers.

Mr. Williams went on to bang the drum for local entertainment.

"Why can't our visitors listen to Bermudian music...it's important we encourage Bermudians to get more involved.'' It was important for Bermudians to put aside their differences and unite, he declared.

"What keeps us all together is the ocean,'' he said, prompting laughter from Government benches.

Mr. Williams said there was a clear contrast between the cruise ship document and the Commission on Competitiveness report.

"It's like day and night, the differences between them.'' Finance Minister Grant Gibbons expressed disappointment at what he was hearing from Opposition benches: trips down memory lane, quick fixes and no real understanding of the bigger picture.

The Opposition talked about more spending, but made no attempt to show where the money was going to come from, he said.

"We had the usual litany of complaints, but nothing constructive, just a lot of political rhetoric.'' Dr. Gibbons believed it important to strike a balance between cruise ship passengers and air arrivals.

It was wise to think in terms of a "comfortable carrying capacity''; how many cruise ship passengers Bermuda could take at one time.

"A volume strategy is not appropriate for Bermuda.'' Dr. Gibbons said it was revealing to compare the respective per head contributions of cruise passengers and air visitors.

In 1995, there were 170,000 cruise passengers, who contributed some $37 million.

This contrasted with 388,000 air arrivals who contributed $555 million.

The difference in income was six percent set against 94 percent.

Dr. Gibbons said the contrast in direct and indirect contributions to Government from the two sources was just as graphic.

He added money spent on transport -- taxis and cycles etcetera -- showed further huge differences.

Only in the retail sector did cruise passengers spend the type of money most people would expect.

The fact was, said Dr. Gibbons, having too many cruise passengers detracted from the quality of vacation experienced by air visitors.

It made sense, therefore, to limit the number of cruise passengers to Bermuda.

Dr. Gibbons said Mr. Allen had underscored the need for marketing.

However, he believed improving the product was more important than the marketing side.

Nowadays it was not sufficient just to have attractive beaches, blue water and friendly people.

Bermuda had to provide a "value added'' experience with improved vacation packages.

"If we are going to improve our product it's inescapable we are going to need to spend more money.'' On permit fees, Dr. Gibbons pointed out Government did not charge cruise ships anything for their contracts.

It was, therefore, sensible to have a permit fee which the market could bear, he said.

He stressed the fee was to be levied on the cruise ship, not the passenger.

But he was not so naive as to believe passengers wouldn't be affected.

Dr. Gibbons said the twin port concept was a "customer-driven'' one.

Shadow Finance Minister Eugene Cox said Bermuda had to safeguard its tourism industry because it was labour-intensive.

He went on to criticise UBP members who had unfairly taken potshots at Mr.

Allen.

Mr. Cox said Government should be cautious about continually using visitors as sources of revenue.

"I think we have got to find other ways of finding income.'' Mr. Cox said placing a cap on cruise ship passengers was an idea that had to be considered.

And he said the PLP had been saying for years visitors needed local entertainment.

Mr. Cox also called for more to be done to help the taxi industry.

Taxi drivers were already heavily regulated.

"They cannot raise their rates without getting permission from Government,'' he said.

There was a frustration among taxi drivers because they were not making the kind of money they used to bring in.

Too often, Government used a sledgehammer to treat cabbies rather than "kid gloves,'' Mr. Cox added.

Environment Minister Irving Pearman said there were only two foreign entertainers in Bermuda's major hotels -- a fact which contradicted the perception held by the Opposition.

The two hotels were Hamilton Princess and Southampton Princess. And in both these properties there was a cadre of local entertainers.

Mr. Pearman added that the $60-per-berth charge had never been questioned by the cruise companies.

And he claimed that the average charge per head in other cruise destinations was in the $10-$15 range -- but that charge could levied in four or more different ports.

He said: "It's not a prohibitive issue -- it's not one cruise lines have found a deterrent to attracting their capacity.'' Mr. Pearman added that in the '80s, 180,000 visitors landing on the Island from cruise ships were met with an infrastructure which could not cope with the load.

He said: "We are very conscious of the delicate balance of Bermuda. The capacity takes so many at any given point. If we take more, the value goes.'' Mr. Pearman added that Bermudians tended to be very self-critical -- but said that on his travels abroad, he realised that other people thought very highly of the Country, even though Islanders might not see it.

He admitted many businesses were concerned about their futures this year, particularly in connection with the twin port policy.

And he stressed: "The focus has to be on enhancing our air visitor arrivals because they employ the majority of our people. It is the worker who gets the greater contribution from air visitors and that's the way we have to go.'' But he added: "There are several new business-related ventures taking place in Dockyard -- possibly there is more optimism here to be more successful than we are giving ourselves credit for.'' Shadow Minister of Transport Dennis Lister pointed out that Dockyard cruise passengers moved around the area and contributed dollars to the local economy.

And he repeated claims that in a twin port visit, the first area visited always lost out.

He said: "The small business in the West End and the West End in general will suffer.

"The tourist will also lose out because they won't get to take advantage of the full range of attractions which the West End offers.'' Mr. Lister added that the PLP had been calling for a unified transport authority -- as suggested in the cruise ship document -- for years.

He added that MPs for West End areas had been calling for better transport links for residents for a long time -- and if transport was improved for residents, visitors would also benefit.

Mr. Lister also took issue with claims that cruise ships paid too little for Bermudians to be interested in working on them.

He said: "We have a lot of young men who are bewildered at the moment and time at sea may be just what they need.'' Shadow Minister of Community and Cultural Affairs the Rev. Trevor Woolridge cautioned against sacrificing the good of the Island as a whole for the tourist dollar.

And Rev. Woolridge -- a former taxi driver -- pointed out that cabbies were the only business who faced direct competition from Government in the form of the bus service.'' He said that taxi trips per head for four to six passengers could work out cheaper than the total paid in bus fares -- with the added advantage of a door-to-door service.

But he said visitors were told taxis were "too expensive a proposition''.

He added that water taxis -- although a superficially attractive proposition -- would mean further trouble for the beleaguered taxi industry.

He questioned how many water taxis would be permitted and the size they might be and asked how many taxi drivers would be able to trade in a land licence for a water taxi plate.

Rev. Woolridge said: "Just because the customer wants it, do we give it to them at the expense of our own people?'' He added that Bermuda has chased ships at the height of the cruise boom and did not maintain the Island's infrastructure as it should have done.

He said: "The problem is that they are now fighting against each other rather than complementing each other.'' And Rev. Woolridge warned against structuring the transport system to visitors -- which would leave residents out in the cold.

He added that taxi drivers already felt "hard done by'' by the last rates increase and the new suggestions would worsen their situation.

But UBP backbencher Tim Smith said: "If you do not have the customer in front of you, you don't have a business.

(To be continued Monday)