Management and workers at Bermuda's leading hotels announced yesterday that they have struck a new three year pay and conditions deal.

The agreement between the Hotel Employers of Bermuda (HEB) and Bermuda Industrial Union (BIU) covers five leading hotels and around 2,500 staff, and it is usually serves as a benchmark followed by other hotels around the Island.

Neither side would disclose details of the collective bargaining agreement, but it does involve pay increases for staff.

In a joint statement issued yesterday, unions and management said the deal reflects the tough conditions hotels have been experiencing and have gone through since the September 11 terrorist attacks on the United States.

BIU president Derrick Burgess said the negotiations were different from previous years because of the hard time facing hotels.

"Both sides got together some months ago and thoroughly examined the past and current financial condition of the hotel industry, which was hit pretty hard after September 11," said Mr. Burgess. "It was obvious to all of us that this set of negotiations had to be different from previous negotiations, and with some give and take, we reached agreement."

HEB chief executive John Harvey said: "Both the hotels and employees had to bear the brunt of the ill effects and aftermath of 9/11 and, therefore, we concentrated on the financial challenges that both the hotels and the employees have had to, and will continue to, endure.

"The Bermuda hotel industry is currently competing aggressively in the international tourism arena, however, we will work together to overcome our local and overseas obstacles and, hopefully, all of our member hotels and employees will be rewarded."

HEB represents the Fairmont Hamilton and Southampton Princess Hotels, Sonesta Beach Hotel, Elbow Beach, and the Harmony Club.

In 2000, for the first time in decades, negotiations between the sides were concluded without the help of outside mediators, in what management and unions hailed as a new era of co-operation.