Bermuda's tourism industry has received another massive blow with the news that one of the Island's biggest hotels is to close at the end of the summer.

Yesterday bosses of the Marriott Castle Harbour Hotel ended recent media speculation over the resort by confirming that it will close at the end of the 1999 season. The closure means that 300 staff at the hotel will lose their jobs by October.

But company bosses are not ruling out that the resort could open its doors to visitors at some point in the future.

And The Royal Gazette has learnt that Bermuda Properties Limited, the company that owns the resort, is currently in negotiations with three major investment companies to map out a plan to plough millions of dollars into the property.

It is understood that a five-star overseas company could be on the verge of making a massive investment into the hotel, turning the resort into the jewel of Bermuda's tourism crown within the next two years.

In a press statement yesterday BPL president Ed Trippe blamed financial losses for closure.

Yesterday's statement read: "Castle Harbour employees have been informed that the Marriott Castle Harbour Hotel will close at the end of the 1999 season.

"Mr. Ed Trippe, president of Bermuda Properties Ltd, announced the closure at a meeting of the hotel staff on Wednesday afternoon.

"Mr. Trippe indicated that the decision to close was taken because of continuing losses and a need for a major investment in the hotel and resort.

"Bermuda Properties was working on a plan to rebuild the hotel and resort and negotiations were continuing.

"Bermuda Properties Ltd plans to keep the Castle Harbour golf course open, although significant improvements are planned as part of the resort's redevelopment plan''.

A company spokeswoman later dismissed rumours that the site was being sold and also confirmed that the Ship's Hill townhouse village development, to be built on Marriott property, will still be going ahead. In the past BPL bosses have insisted that the multi-million dollar development is crucial to the hotel's survival.

The spokeswoman also denied that a $70 million lawsuit against the Marriott company, launched when hundreds of hotel guests were struck down by food poisoning last year, had anything to do with the hotel's closure.

Marriott will close doors in September "The hotel is closing but we do have a plan for the future and we are working on this,'' the spokeswoman said.

"We're closing because of the continual losses. Bermuda needs a big influx of investors and we are working diligently on that. We can't say whether it's going to be closed indefinitely or not.

"We are planning to rebuild the hotel and the resort and we are working diligently to make that happen. The decision to close was a difficult one.'' Last night Tourism Minister David Allen, who is currently in Dallas, could not be contacted to comment on the news.

But a BPL spokesman said that, while the Minister was concerned about the closure, he was also very supportive of the redevelopment plan.

Shadow Tourism Minister David Dodwell also adopted a positive outlook.

He said that the news of the closure came as no surprise and added that, in the long term, Bermuda would have a far better resort with which to attract visitors.

"It's a short term hit to affect a long term gain,'' Mr. Dodwell said.

"I feel for the employees but in the long run they will be better off. I congratulate BPL in taking this major step to renovate the hotel.

Last night Bermuda Industrial Union president Derrick Burgess said his organisation was already taking steps to set up a re-training programme for hotel staff facing the axe.

But he also echoed the comments of Mr. Dodwell, saying that, in the long term, a revamped Castle Harbour hotel would do much to boost the Island's tourism industry.

"It's not good news for the staff and certainly trying to find 400 jobs in November, when other hotels are already slowing down, is not going to be easy,'' Mr. Burgess said.

"But if retraining is going to happen it has to start now. We are trying to work to put something in place to make it a little easier.

"But I believe that the Castle Harbour is in the best location in Bermuda and the best location to be a five-star resort. We are just hoping that the investors come on board. It's a five-star chain and if they do it will be a real asset to the Country.

"The thing is a lot of our hotels have fallen below the standard that's being set worldwide. It's going to take some investment into our hotels to bring them up to standard.''