Gaming is the way forward for Bermuda, said Premier Ewart Brown as he announced air arrivals fell by ten percent in the first three months of this year.

He said that with rival destinations in the Caribbean moving in that direction, the Island will have to decide whether to include gambling as part of its tourism product.

"We have very little opportunities to earn foreign exchange and I believe when Bermuda understands the full economic impact of gaming and some other issues they will see that the very future of the Country is at stake," Dr. Brown, who is also Tourism Minister, said.

A total of 28,865 people flew to the Island between January and March compared with 32,235 persons over the same period last year.

Part of the drop was attributed to severe winter storms in the US which caused a total of 45 flight cancellations.

The total number of air, cruise and yacht visitors combined represented a seven percent drop in arrivals this year — a total of 30, 078 people visited.

Hoteliers are likely to get an extension on payroll tax relief, Dr. Brown said.

"The first quarter of 2010 remained as challenging as the first quarter of 2009 and, as a result, Bermuda continued to experience declines in visitor arrivals.

"It should be recognised, however, that the first quarter is not our peak period and will account for approximately 15 percent of all business activity that will be realised for 2010. For this reason alone there is room for some optimism as we take a look at the business trend for the next few quarters."

The Premier revealed the numbers at a press conference yesterday where he also spoke about plans for the upcoming Bermuda Music Festival and gave an update on Morgan's Point. Dr. Brown said hotels and airlines were predicting a better summer this year than last [See story Page 6].

When it came to gambling, which has been spearheaded by the Premier, he said a decision had not yet been made on the next step.

Last month an overwhelming number of Members of Parliament, within and without Government, said they would not support a bill to legalise gambling on the Island during a discussion in the House of Assembly.

Some have suggested the Premier, who spearheaded the idea, could take it to the people via a referendum.

Yesterday he said: "My office has received a number of e-mails, phone calls and letters about that question. There has been no decision as to whether we will have a referendum. If there is going to be any new developments I will alert the media.

"Let me say this on gaming, ultimately I don't see how Bermuda can avoid the issue forever. Just last week Jamaica confirmed this legislation, St. Lucia passed theirs.

"Eventually Bermuda will deal with the issue and I believe it will be to the betterment of the Country and economy. We do not have revenue streams to strengthen our economy at the moment."

Dr. Brown also announced that this year's Bermuda Music Festival will take place September 30 through October 2. Under a new format Government will only inject $800,000 into the event, the rest will be the responsibility of the producer.

Previously Government paid millions for the annual show which has seen the likes of Beyonce and Lionel Richie grace Bermuda's shores. Dr. Brown said his department had already recommended a promoter who has submitted a bid to run the event and is now waiting on Cabinet approval.

He added: "We anticipate a full announcement of this year's venues, and full line-up, before the end of June."

As for tax relief for hoteliers, who saw room occupancy in the first quarter drop to 35 percent, Dr. Brown said he was "almost sure" the Ministry of Finance would be extending their payroll tax exemption until the end of the calendar year.

When asked for an update on proposed developers for Morgan's Point, Dr. Brown said they were still in talks.

"Progress is always being made," he said. "Meetings were held as recently as yesterday. The developers are trying to provide the Government with what it needs, and of course secure financing.

"The second part when it comes to Morgan's Point, is we have managed to confirm an appointment in Washington during our annual visit to Capitol Hill. We have now added a visit to the Pentagon to discuss with the US Navy if they have any serious interest in coming back to clean up the baselands. We want an answer yes or no. The US has a lot of cleaning up to do, and we don't want to give the impression that we are high on their priority list, but we want to get an answer yes or no, so we will know whether that responsibility of cleaning it up will be ours or the US will agree to do it."

Morgan's Point was left heavily polluted with asbestos, metals, petroleum products and other chemicals when the American military left the Island in 1995. Government have estimated it will cost $35 million to fix up.

The peninsula, which straddles Southampton and Sandys, has been left to decay but the Southlands Ltd. company wants to build a luxury resort there. They are currently in talks with Government to swap land in Warwick for the former baselands.