properties attracting fewer and fewer guests, the head of the Bermuda Hotel Association has admitted.

BHA president Mr. David Dodwell, general manager of the Reefs Beach Club, said he fully endorsed warnings from accountant Mr. David Lines and former Premier the Hon. Sir David Gibbons last week that the lack of cash being spent on hotel refurbishment could lead to long-term disaster.

The fact that eight major hotels had cut refurbishment spending from $20 million in 1987 to $3.6 million this year was "alarming'' and a "sign of crisis'', said Mr. Dodwell.

"It's an indication of the inability to continue to rehabilitate and refurbish the plant and keep it up to date.'' Not enough is being spent on the latest kitchen equipment and the most attractive furnishings, he said.

Faced with continued falls in occupancy and revenues, along with high operating costs, hotels were torn between spending cash to keep their doors open and spending on refurbishment.

"A decline in investment in physical plant means that you fall behind your competitors worldwide and as a result the destination falls behind.

"You end up in this awful spiral where the less you spend on renovation the quality of the product declines, therefore the less people you attract. Then revenue goes down and your losses increase and then you're back at the beginning of the cycle.

"We're cognitive of our responsibilities to keep our physical plant up, but it's a tough row to hoe when owners are looking at their investment and they're losing money and they're deciding how much money to spend.

"In all the boardrooms, local and foreign, this question is being wrestled with. What level of re-investment do we look at to get us to the level of product that we can then attract customers to?'' One solution was to borrow money for refurbishment, but owners were asking themselves if they would be able to repay the loan.

Another was for new owners to come along with new money, as with Elbow Beach.

"But with Elbow Beach you have a very philanthropic group, and there are not hundreds of Elbow Beach owners running around the world.'' At the end of the day, higher occupancy and better profits would not return just by keeping hotels up.

Better times would also have to be based on the overall attraction of Bermuda compared to other destinations, the service and facilities on offer, and the training and attitude of employees.

Hotel owners had to be confident that when the recession ended, Bermuda would start to turn around.

"We're not ready to jump back on the bus yet,'' he said. "We have to wake up as a country and recognise that we're not competing with ourselves, but with the world. The Country as a whole needs to look at the problem.'' Mr. Dodwell said the tourism committee of the Premier's Commission on Competitiveness was ideally placed to begin the investigation needed.

More gloom descended on the tourism industry with the release of October's visitor arrivals figures, which show a 0.8 percent decrease on the same month last year.

US visitors were down 7.3 percent to 30,044, but this was offset by a 78 percent increase in Canadians, to 4,179, and an 18.7 percent increase in Britons, to 2,073. Europeans were down 0.3 percent to 592.

So far this year total arrivals are down 2.2 percent to 461,872.