All is not lost on the tourism front, according to delegates at the Caribbean hotel and Tourism Investment Conference being held in Bermuda this week.

In spite of the war in Iraq and sustained weakness in the global economy, tourists still want to travel and there are good reasons for them to come to Bermuda.

But Bermuda needs to be on the top of its game to make that happen, and it is not yet clear that the Island has everything in place to make that happen.

As advertising agency head Peter Yesawich warned, this week, consumers are very aware of pricing and quality trends and are more choosy than ever about how they spend their vacation budgets.

The good news is that the vast majority of Americans are still keen to travel and Bermuda and Caribbean destinations are still seen as being safe.

And if the Iraq war does turn out to be short, then Americans are very likely to travel over the summer, Bermuda's most important season.

If the war becomes protracted, then all bets are off.

But consumers generally are very aware of pricing trends and it is very difficult to get them to pay top dollar for anything, especially when they know that of they wait long enough, they will get a bargain.

"A vigilante consumer emerged in the 1990s. The shift is from brand loyalty to price loyalty," Mr. Yesawich said.

That is bad news for Bermuda, which has become dependent on repeat visitors and has built-in costs that make it impossible to compete with cheaper destinations.

But that does not mean that all is lost. By offering superior facilities, service and experiences, Bermuda can still make a success of tourism.

But Bermuda must get its message out into the travel market by all means possible, it must ensure that it is seen as offering value, it has to make every visitor feel special and it has to promote itself as a safe and secure destination.

That requires more emphasis on service and friendliness, first class food and entertainment, reduced crime and excellent facilities.

Some of these pieces of the puzzle are already in place. The Fairmont hotels and other properties have done an enormous amount to bring their facilities up to date. Entertainment remains a sore point.

Bermudian friendliness is sometimes overrated and the public awareness campaign now being conducted by the Department of Tourism needs to emphasise the point. We all need to recognise that the customer is king, no matter how bad a day we are having.

Bermuda can be competitive on price by adding value to existing packages rather than cutting prices.

One area that is of growing concern is the number of properties that are supposedly for visitors but are tending to focus more on building residential properties.

While the Island's fixed costs may demand mixed use developments, it is to be hoped that Government has locked these developers into completing their hotel developments. If not, the Island will find itself with a lot of high priced homes and no benefit for the tourism industry which actually earns foreign exchange and creates jobs for Bermudians. And that has to be the bottom line.