Ask any hotelier in Bermuda whether it's possible to make a profit, let alone get a decent return on investment from a "pure hotel", especially a new building, in Bermuda, and the answer will almost certainly be "no".

That's because construction and labour costs are still stratospheric, and competition on rates around the world is so stiff that making money is exceptionally difficult.

That's why most new hotel developments, and some older properties, have been working through a new business model.

In essence, the developer will build condos, residences and fractional units and sell them, with one of the lures being that the buyer will get a range of hotel services in return. The customer also has the option, and sometimes the obligation, to let the hotel lease back the rooms when they are not in use.

This approach looks good on paper. Profits from the sales of the residential-style units can be used towards the construction of the hotel itself. And the residential unit owners should use the hotel's facilities, thus providing a steady revenue stream as well.

At the same time, the leaseback option gives the hotelier flexibility to expand or contract the number of hotel rooms on offer, depending on demand.

That, at least, is the theory. And in good economic times, perhaps it would work. But the downturn in the global economy seems to have run the model onto the rocks, if the number of hospitality loans being written off by Bermuda's banks are any guide.

Sales of high priced vacation homes died, credit evaporated and people stopped travelling; a perfect storm, especially if you had just finished construction.

Last week, the House of Assembly was told that owners of residences at Tucker's Point, who could previously only stay for 90 days, would now be able to stay year-round.

This was a change made "as a matter of urgency" said Minister Zane DeSilva.

That the owners would like to stay longer is no surprise as the villas are being sold for between $3 million and $4 million.

And if these were standalone homes, as opposed to hotel residences, they would easily qualify for sale to non-Bermudians under the current foreign ownership restrictions.

And of course, everyone in Bermuda wants tourism to succeed.

Still, that does not mean that all caution should be thrown to the wind, and this change goes against general government policy on foreign land ownership.

For most non-Bermudians, ownership can only be had if a property exceeds a certain value. And if that property is currently in the hands of a Bermudian then it cannot be sold to a non-Bermudian.

Similarly, Bermudians married to non-Bermudians must apply for a licence to own a Bermuda property, and going forward, are restricted to owning just one property until they qualify for Bermuda status.

But if you are a non-Bermudian of sufficient means, you can buy a residence at Tucker's Point, and one assumes many other hotel developments in future, and live there year-round.

This newspaper does not necessarily object to that idea. The announcements that non-Bermudians own several thousand acres of land in Bermuda, although no one seems able to say just what they are, have always seemed overblown. Many non-Bermudian homeowners spend and invest a great deal in Bermuda and should be welcomed.

But the new policy for Tucker's Point seems to turn the overall policy on its head. In essence, it gives more rights to the visitor than it does to a Bermudian and raises the possibility that more of these kinds of properties will be built for sale in the future.

This is a substantial policy change being taken with almost no public debate.

It also seems to presage a very different form of tourism going forward. Tucker's Point is a beautiful property, but its hotel segment is fairly small at just 88 hotel rooms. It is to keep the hotel going that this concession is being granted. The big question is this: if this does not work, then what will?