Hotels lapped up a bookings surge last month as hopes grew for Bermuda's reviving economy.

Occupancy levels soared by seven percent over 1992, and the trend is expected to continue through the summer.

But tourism chiefs yesterday urged caution and vowed no let up in the overseas advertising drive.

Tourism director Mr. Gary Phillips said: "There is a sense of euphoria about the way things are progressing, although we are not complacent.

"We are monitoring things very closely to ensure the momentum continues.'' Assistant director, marketing, Mr. Peter Smith said hotel bosses were keeping their fingers crossed this summer.

Yesterday the Bermuda Hotel Association showed hotels were 83.9 percent full last month.

This compared with 76 percent for last year, and 78.9 percent in 1991.

Predictions for June, July, and August, suggest the momentum will continue.

The projected percentage levels, respectively, are 78.6, 49.6, and 33.6.

Finals levels for last year were 81.4, 73.3, and 71.6.

Mr. David Dodwell, president of the Hotel Association, said the summer month forecasts were up on those for 1992.

"We are, however, hopeful that these numbers will improve as the late booking pattern of our visitors continues.'' The improving picture underlines the optimism of Finance Minister the Hon.

David Saul during his economic statement to the House of Assembly last Friday.

Mr. Phillips, however, was keen to stress the folly of reading too much into the May figures.

"If we are going to be successful the summer is going to be extremely important, particularly July and August.

"We have over the years experienced a slight dip in these months.'' Mr. Phillips hoped advertising would maintain the upswing over this period.

"The Department of Tourism wants to ensure the Bermudian public that what is seen as a fairly successful start to the season in no way means we will become complacent.

"We are monitoring the situation very closely to determine what else we need to do to sustain the momentum throughout the rest of the year.'' Mr. Smith said Bermuda could not afford the luxury of letting up. It was very important for July's occupancy level to be in the 80s.

"While the spring came along really well, and May's figure of 84 percent is good, it does not provide us with the opportunity to assume or be entirely optimistic that business is going to be good in July and August.'' Mr. Smith noted that tourism worldwide was not looking very healthy at the moment.

"Europe is not coming on, and Hawaii has suffered the lowest hotel occupancy levels for April in five years.''