George's-only ship in 1994, cruise ship insiders say.

Interviews yesterday indicate that Bermuda's new ship arrangements in 1993 could undermine the economic viability of a ship committed to the Old Town.

Sources said that bigger Bermuda ships and more than a dozen other ship visits would leave little room for a small St. George's vessel in the highly competitive cruise market.

Their comments came just days after Chandris Celebrity Cruises told Government it would not add a third vessel to its New York-Bermuda run in 1994.

Although the company has not commented on the decision, it is understood it felt Bermuda's plans to host two new ships next year created more supply than demand.

In exercising their contract rights, Kloster Cruises is replacing the 725-passenger Westward with the 1,250-passenger Dreamward while Royal Caribbean Cruise Lines is replacing the 1,012-passenger Nordic Prince with the 1,412-passenger Song of America .

The two new ships will add 28,000 more berths to the Bermuda cruise market -- an increase tantamount to a fifth regular calling ship.

The new ships, along with Chandris's Horizon and Meridian , could see the Island hosting more than 150,000 visitors a year, or a high-season increase to 6,000 visitors a week from 5,000 this year.

One highly placed US source said any newcomer to the market would be vulnerable to the tough competition, particularly if it is a small ship as required by the Tourism Ministry.

Under current Tourism specifications, the St. George's-only ship must be about 500 berths -- a small vessel in an industry now dominated by huge ships like Song of America .

"A smaller vessel has to have decent (passenger) yield,'' he said. "It can't get trapped into discounting rates (to attract passengers). It must be full most of the time to make money.'' The cruise official indicated that 150,000 berths would be too much for Bermuda. Rate cuts were likely if the US economy wasn't buoyant.

"Someone is going to get caught in the crossfire and it's always the new entrant,'' he said.

The official thought St. George's itself could support a cruise ship if the market was in good shape.

"St. George's in a good economy with a strong market could probably support the ship on its own. But you need the (US) northeast really cooking to make it happen.'' The official also defended St. George's as a good cruise destination in itself.

"It's a nice shore-side experience,'' he said. "The way it feels and looks is very much a part of the Bermuda experience. Hamilton has got the hustle and bustle.'' Some cruise officials say St. George's on its own is not a good cruise destination. It has been described as too sleepy, with too little action. And its retailers have been accused of failing to cater to passengers with longer store hours.

History also indicates the Old Town was a weak draw. Bermuda Star Line's ship used to berth for a day and then move to an anchorage rather than remain alongside.

When Nordic Prince began its regular week-ending visits in the early 1980s, the ship was excluded from Hamilton because of the exclusive Home Lines contract. Nevertheless, her Friday morning arrivals at St. George's lasted just a few hours before she shifted to Hamilton to take the berth of a departing Home Lines ship.

When the Home Lines agreement ended, "you couldn't get a single soul to commit to St. George's,'' one Bermuda-based source said.