expand further on the Island.

The owners of Surf Side Beach Club have agreed a deal with a number of Washington D.C. based businessmen, who will trade as Potomac Holdings (Bermuda), to sell the 37-unit Warwick facility.

It is expected that the deal -- which has to be agreed by the Government -- will be concluded by the end of the month for an undisclosed amount.

And the group behind the transaction say they are looking at other opportunities on the Island, and hope to establish headquarters here for their hospitality, information technology and e-commerce.

Plans for a $2 million Surf Side development, adding three upmarket units, are still alive but will be on hold for at least a year.

Surf Side president Michael Naess said the sale came after the most successful year in the hotel's history -- and on the brink of what could be an even better season.

Mr. Naess, who is to stay on in an advisory capacity for a period, reassured staff that their jobs were safe, adding that general manager Bryony Harvey is also remaining.

"We had a number of inquiries over the last couple of years from people who wanted to close the hotel and convert it into condos,'' said Mr. Naess.

"We have always refused, but these peoples' objectives are the same as ours, to continue to operate as a hotel, improve and upgrade.

"They have indicated they like the expansion project and will carry it on.

Understandably, the present shareholders are reluctant to take the risks -- they have other priorities.''