A stark warning has been issued to Government over changing its attitude to keep foreign investors happy in backing Bermuda tourism.

Recent troubles involving work permits for expatriate staff and the loss of the Marriott name have sent bad vibes to potential backers.

According to one senior hospitality executive, there needed to be a more attractive atmosphere for people who were ready to pump tens of millions of dollars into new facilities on the Island.

"At the moment the overall climate in Bermuda isn't terribly good for investment,'' he said.

"The closure of the Marriott hasn't inspired confidence and the incident with Elbow Beach manager Bill Shoaf sent ripples throughout the hospitality industry.

"Investors need to be given a warm glow by the Government. They almost need a total reversal.

"Government should be going around to people, saying "we really want your investment here, what can we do to assist you?'', rather than investors having to beg for everything.'' With investors lined up for developments including the new Belmont resort, Camberley at the former Club Med hotel, Castle Harbour and the eco-resort at Daniels Head, he said it was crucial that these people were made to feel good about pumping their money into Bermuda.

Red tape and potential pitfalls with work permits all worried foreign backers, who needed some assurance on what control they would have over such issues.

"It is overall investor confidence, with projects costing $100 million people would want some kind of guarantee of return on investment.'' The source said the incident with Mr. Shoaf had shown the potential difficulties facing overseas companies, who wanted the best people at the helm to make their business work.

And for those expatriate bosses, it could be an extremely tricky balancing act in Bermuda -- trying to make a business profitable while being responsive to local needs.

"You need the creme de la creme in Bermuda, it is difficult to make a profit,'' he said.

"Expat general managers either conform and might not be terribly successful or they can cause a ripple -- you have got to be careful in order to be successful.'' He heralded the work of Tourism Minister David Allen, who has done much to restore confidence in the industry, but said there was a need for the entire Cabinet to recognise the need to strike a balance when addressing the issues facing the hotel industry.

Mr. Shoaf is currently on a six month "watching brief'' work permit after Elbow Beach's Saudi owner threatened to close the resort down if he was not granted a renewal.