In the fifth in our series of reports on the state of the Bermuda tourism industry, we examine tourism a success story. We have been looking at how far we have fallen since our heyday in the 1980s, why dozens of resorts and hotels, including highly rated ones, have failed and closed, why no one wants to invest in a hotel in Bermuda right now, why no new developer has broken ground despite promise after promise, and what it will take for a new resort to be built, and for the less than 50 hotel properties we have left to be profitable enough to keep their doors open.Small resorts and boutique hotels may be the way to go in Bermuda when it comes to the hospitality business, although it must be said they can’t sustain a tourism industry.And even though they may be profitable for their owners, small hotels say they are still struggling with the high costs of operating in Bermuda.One popular property, Rosedon, told us the continuing rise in the cost of energy has “outpaced our ability to increase revenues over the last ten years”.The 44-room Rosedon hotel is ranked number two out of 29 hotels in Bermuda reviewed on TripAdvisor.com, and rounding out the top three is the 32-room Royal Palms Hotel. (Pompano Beach Club is ranked Number 1, see story tomorrow).People who have stayed at the popular boutique-style properties on the edge of the city, say the rooms are kept clean and pleasing with quality furnishings, and have mini fridges, flat-screen TVs, and Wi-Fi, but more than anything, it’s the staff and warm service guests rave about in their reviews.“Literally, every single staff member I met at this hotel was 1) kind; 2) courteous; 3) genuine + authentic; 4) very professional; 5) very accommodating,” said one Royal Palms reviewer.Someone who stayed at Rosedon wrote: “We came off-season, Jan-Feb, and the weather was slightly scattered showers, but mostly lovely. The staff couldn’t be kinder to us, they’ll arrange day tours, tickets, call for cabs, and there’s lunch and dinner room service (extra) that they’ll serve anywhere on the property that you choose. Heated pool with a small fountain. Incredible gardens. Lovely veranda. Can’t miss with this one!”We spoke to the owners, the Kitson family, and longtime general manager Muriel Richardson about the reasons for Rosedon’s success and what could be done to bring more success to the tourism industry here.Are you pleased with Rosedon’s bookings and occupancy rate overall or are you struggling to fill rooms?We are fortunate to have a dedicated group of owners and managers who are committed to driving success at Rosedon. We continue to benefit from our strategy to move Rosedon towards being a true boutique hotel experience and have worked hard to build on our focus to be ‘Uniquely Bermudian’.We are trying to capture the essence of what Bermuda was 30 to 40 years ago in terms of friendliness and an overwhelming sense of being welcomed.Our work in this regard is paying off as Rosedon is currently ranked as the number one hotel in Hamilton by Trip Advisor and that has translated into increased occupancy.What do you attribute your property’s success to?We offer value for money. We include a full breakfast every morning delivered to your room or private porch. We offer traditional English afternoon tea at 4pm in the main house, including finger sandwiches and homemade Bermudian cakes and cookies. In addition we host a swizzle party every Tuesday evening for the guests.It’s a great way to communicate with the guests in a relaxed environment and hear what they have to say about our island and our hotel. We also offer free transportation to a South Shore beach in Paget.We reinvest in the property and rooms each year, including our gardens, pool, walkways, technology, plumbing etc.Our rooms are individually decorated which helps create a feeling of home away from home for our guests. This year, six of our rooms will be completely refitted with new fabrics and furnishings. We also recently resurfaced the entire upper level of or garden rooms with a cooler blue tile, which is easier to walk on with bare feet and blends nicely with our gardens. At the same time we installed wood floors in eight rooms and upgraded the bathrooms.This summer we will completely redo our royal room bathrooms and upgrade the western walkway. We invest in people and we are a member of Investors in People ... http://www.investorsinpeople.co.uk. If you get the people right, the rest will follow, is the motto. Investors in People is a flexible, tailored and easy-to-use people management standard. They help you to achieve your business objectives by developing and harnessing the skills of your people.What are the top three things that could be done right now that would help your property thrive even more?1. A stronger Bermuda presence by way of marketing in our key markets would help.2. Lower cost of doing business in Bermuda.3. Make it easier to invest in Bermuda.How do costs such as electricity, labour, construction in Bermuda, affect the costs of running an operation and the bottom line?The biggest expense categories on our financials (other than staff wages) are health insurance, electricity and propane gas.The ongoing increase in the cost of energy has outpaced our ability to increase revenues over the last ten years and this has taken a big bite out of Rosedon’s profitability.Why have there been so few properties that have been built in Bermuda since 1972?Operating a hotel in Bermuda is a labour of love ... it is not a get rich quick proposition! Rosedon is fortunate that the Kitson family looks at Rosedon as an extension of their family. Their commitment to not squeeze a profit at the expense of ongoing reinvestment in the property has been a key to our success.