Tourism Minister Renee Webb let the cat out of the bag last week when she announced that the successful bidder for the Club Med property in St. George's would have to build a hotel first before it developed any accompanying condominiums.

She made the statement when she revealed that the St. George's Renaissance Consortium had been given a six-month exclusivity contract to redevelop the long vacant property.

On the face of it, the consortium's plans look promising. It would replace the current behemoth with a smaller 90-room hotel which would host off-season performing arts groups, thus boosting entertainment in St. George's and Bermuda at the same time that the old town got a hotel again.

The plans also include a 90-condominium complex. Ms Webb told the media two weeks ago and again last Friday that a condition of Renaissance getting the final contract was that the hotel would be built before the condos, adding that her job was to increase the number of hotel rooms in Bermuda, not to build condos.

She is right about that, but in making the statement, she virtually admitted the failure of the Government to add hotel rooms at the wide range of hotel redevelopments across the Island.

Tucker's Point at the old Castle Harbour Hotel, Palmetto Bay, Belmont and Sonesta all have plans to revitalise their hotel properties. But all intend, or had intended, to build condos first, and in in several cases it is a valid question of whether the hotel rooms will ever be built.

That has to be placed against a backdrop of hotel closures on the rest of the Island.

The Tourism Ministry recently released its report on the economic impact of tourism in 2002. Conducted by Total Marketing and Communications, it replaces the first class documents compiled by Dr. Brian Archer, whom the PLP disposed of.

The new report's value is limited because it only provides comparative figures for 2001, the worst tourism year on record. So any increases on tourism spending and related economic benefits inevitably rise, but how they stand compared to the still poor, but at least better years of 2000 and earlier is a mystery.

Having said that, it does contain one table which makes for terrifying reading. This is the number of hotel room losses and gains in November, 2001.

Since then, nine properties have closed and two have opened, with a net loss of 446 beds.

The additions came from the Wharf Hotel and the Erith guest house. None of the new developments planning condos as well have added any rooms.

While the Government has talked up the "revitalisation" of tourism, the policy of allowing mixed use properties has done nothing for tourism so far.

Based on Ms Webb's statements, this is due in part to the fact that the Government policy failed to require developers to build the hotel before or concurrently with their condo developments.

The developers argue that any hotel development that does not have a residential component is doomed to failure and they are probably right.

And Bermuda needs housing, although it is highly debatable whether the Island needs this kind of housing.

But the bottom line is that the existence of a loophole that does not require the hotel segment of the property to be built is an indictment on the Government and the developers.