group visitor numbers until the summer, Tourism Minister David Allen said yesterday.

Leading hotels, including the two Fairmont Princess hotels, have fewer available rooms due to major renovation work.

Air arrivals for October fell by 19 percent to 28,625 compared to the same month last year, but cruise figures leapt by 29 percent to 28,865.

The Tourism Department statement on the figures said with hotel developments continuing for the next two to three years -- spurred by the Hotel Concessions Act -- air arrivals were expected to continue to be flat.

Mr. Allen said moving the Jazz Festival from October to September had contributed to the slump in air arrivals.

But the renovations and drop in available rooms would mean the industry would need to sit tight until the summer.

Mr. Allen told The Royal Gazette yesterday: "The Jazz Festival moved from October to September to free up some airline seats for group business.

"We had 25 percent more overseas visitors for the Jazz Festival, but that was in September. Group business was down in October from the previous year.

"There were several reasons for that. There is the renovations of the two Princess hotels. The Sonesta management contract was due to expire in autumn and there was a question mark over that.

"All this tended to have a dampening effect, particularly for group business.

"We can expect to continue to see the ramifications of that, particularly for the Southampton Princess, which is our most important meeting hotel.

"There is no question that there are a number of rooms out of circulation through renovation, and convention groups are notoriously skittish about hotels undergoing renovations.

"The dust won't settle, literally and metaphorically, until the summer and it seems we'll just have to bide our time. But when they are upgraded we will have a much stronger product.

"Europe recorded a seven percent increase in American visitors due to the strength of the dollar. We were more expensive for Europeans and the Americans found Europe cheaper than Bermuda.

"So we were hit by a double whammy. The euro is beginning to go up, so we may see some gleam up there. It would be helpful.''