Business is booming for Bermuda's boat cruise and charter operators despite companies making cutbacks and tourist numbers plummeting.

Gavaska Lodge, who took over MV Longtail Crusies earlier this year, said it was a case of so far, so good for his new enterprise.

But tourist arrivals fell with a 22.9 percent drop inMay this year, as only 68,048 visitors came to the Island compared to 88,327 during the same period in 2007, according to the latest figures released by Government during Parliamentary Questions this week.

And with a slowdown in the global economy allied to a falling dollar, many firms are tightening their belts and not splashing out on lavish parties and events.

Mr. Lodge, however, who runs cruises for parties, weddings, birthday and office parties, and other functions, as well as a Happy Hour Booze Cruise on Fridays, said he has seen a steady stream of business since he took charge of the operation.

"We do mainly local work, so that keeps going, and a few tours for cruise ships, which is only one day a week," he said.

"But other than that the local stuff is doing really well we do a lot of parties and that kind of thing, which always prove popular. "

The busy period for Mr. Lodge is on Fridays and at weekends and although he has had the boat for less than a year, he is already reaping the benefits of high demand in the summer season.

"So far we are satisfied with what we are doing," he said. "The Happy Hour Booze Cruise has proved a real hit with locals, ex-pats and visitors it is all pretty mixed groups."

Bees Evans, owner of Charter Bermuda, said business had been doing well too considering the current economic situation.

"We have actually been doing fantastically well," he said.

"It has been a better year than the one before, but I think we have been fortunate because we get most of our business from cruise ships operating out of St. George's and Dockyard."

The latest Government statistics show a 10-percent decline in hotel occupancy in May and a four-percent drop in April, compared to the same months last year.

Norman Mastalir, managing director of Fairmont Hotels Bermuda, said business was behind schedule so far this year, linked to the current state of the US economy, while he was also concerned about numbers for the last quarter of 2008 in a US presidential year, as well as the disruption caused by Tropical Storm Bertha.

"Our group business, which is composed of corporate meetings, incentive travel and conferences, is way down as compared to last year as companies respond to concerns about the economy in general," he said.

"Fairmont is particularly concerned about where the numbers will head in the last quarter of the year as the US election becomes a focus, as it has historically reduced the number of travellers coming out of the States.

"And to add insult to injury, Bertha didn't help. Though we don't have the final numbers in yet, the storm had a significant impact on a full week of business due to the length of time it took for the storm to develop and pass by Bermuda."

Meanwhile several businesses have reportedly been cancelling a number of social functions and events, such as boat trips and cruises as they start to feel the financial pinch.