Efforts to lure European vacationers to the Island are paying dividends, Tourism Minister David Allen revealed yesterday.

Close to 5,000 United Kingdom visitors came to the Island during the first quarter of this year - a 36.6 percent increase over the same period last year.

For the rest of Europe the figure (856) was 46.6 percent above last year.

But air arrivals from the United States and Canada dropped by one percent and 4.9 percent respectively.

Arrivals from the rest of the world were up 13.4 percent, at 1,561 visitors.

Overall, 41,324 visitors arrived on the Island by air during the first three months of the year - up 2.9 percent.

Mr. Allen said the numbers vindicated the Ministry's approach to diversifying its marketing efforts.

"Visitors from the United Kingdom and Europe are staying an average of 9.1 nights and 8.7 nights respectively, for the quarter - nearly double the average length of stay for visitors from the United States."

He said Bermuda was the first destination to show some recovery from the effects of September 11, compared to other places in the region where visitor numbers are on a steep free-fall.

Cruise ship arrivals were down 48.1 percent from the same period last year - a result of having one less cruise ship. But private yacht visits were up almost 74 percent.

A total of 42,180 visitors arrived on our shores - up just one percent from last year.

Hotel occupancy figures were up three percent on average. But broken down, the figures reveal that the major hotels and cottage colonies were largely responsible for the trend.

Those properties increased their occupancy levels by five percentage points each, while the small hotels lost some ground.

The larger hotels did better primarily as a result of group business.

"We've still got a lot of work to do," said Billy Griffiths of the Bermuda Hotel Association. "There's still a lot of ground to cover."

He added that some 11 of the smaller properties are participating in a promotion which gives a fifth night stay free. And a "lucrative agent incentive" will be put in place.

"We will also be meeting all of our key partners in June to assess where we are at."

Mr. Allen stressed that the industry was extremely competitive - Barbados had copied Bermuda's Companion Flies Free promotion during their off season. And travellers were making bookings at the last minute partly as a result of post September 11 security concerns, but also because they were looking for the best deals.

April figures are not yet in, but Mr. Griffiths said that projections done 30 days ago suggested a month with negative or no growth.

This month is expected to be down as well but June and July are expected to pick up

Mr. Allen said the outlook for the summer months was positive. A number of "exquisitely positioned" events - such as the Shipwreck Festival in September and a "reinvented" Jazz Festival, as well as the Neo Soul Festival - are expected to boost visitor numbers.

"This year is still going to be a very tough year," said Mr. Harvey. "It's a recovery year."

Asked whether the industry will be able to sustain its reinvestment efforts for much longer, Mr. Harvey said : "I see no reason why we can't stick to the wicket."