Bermuda has long been known as an affluent destination for discerning Americans, so it came as no shock when the Premier announced a weakening US economy has caused arrivals to fall.

Overall visitor arrivals slipped by more than four percent in the first six months of this year compared to 2007. Visitors from the US were down more than 14 percent. Total air arrivals dropped ten percent.

Premier Ewart Brown himself said the Island would face three "thin years" and would be required to rely on its "creativity to keep numbers up".

And with inflation rising in the US, some tourists are less than thrilled with the prospect of visiting the Island.

Don Emery said: "I live in Boston, but have had the great pleasure of visiting Bermuda twice, having stayed at Cambridge Beaches and the Lantana Colony Club. I think that it is the most beautiful place I have ever been on vacation.

"My comment is this: Bermuda has become so expensive, in terms of room rates and dining, that I cannot return and I feel that is what is keeping tourists from coming.

"Unless hotels offer less expensive packages, I think people will go elsewhere."

Many have raised concerns across tourism-related sectors.

Duty-free shopping is one of the options being raised, as a way to entice visitors who do come to spend more. The Opposition United Bermuda Party raised the topic several weeks ago and many retailers have backed the call for duty-free shopping, particularly those in Hamilton who say they are now struggling as a result of the decision to move large cruise ships from the Island's capital to Dockyard in the West End. "We're finding it really hard," said one shopkeeper who asked not to be named. "I don't think it helps that Hamilton is pretty ugly at the moment. There is just so much construction and cranes are everywhere. People don't seem to want to walk around for long and they certainly aren't coming several times during their stay as they used to when cruise ships were docked at Front Street.

"I think if we could say the prices were duty-free it could help out a lot and at least get them into the shops to look around."

The Hamilton trader's comments echoed the sentiments of Chamber of Commerce head Philip Barnett and the Chamber's retail sector spokesman Sommers Cooper. And it appears the Government has given the backing to the plan with it being discussed and labelled as a "mid-term" goal at a recent tourism summit. Certain retailers are already in talks with the Ministry of Finance to increase this tourism-specific offering according to a press release issued after the summit.

Shopkeepers aren't the only ones facing tough times - hoteliers are concerned by falling occupancy rates. From January to May, hotels reported declines as great as 10 percent in occupancy rates. For the five-month period overall occupancy rate was down 5.61 percent compared to the first five months of 2007. Frank Stocek, chairman of the Bermuda Hotels Association, said projections for November and December looked weak as well.

He noted that hotels may notice a fall in business visitors in particular: "The US economy and election make it very difficult for meeting planners to justify having their meetings out of country or state," he said.

He added that the cancellation of some flights and closure of hotels have also impacted the industry this year. He added that a large amount of the decrease in hotel occupancy was at the two Fairmont hotels, the Hamilton Princess and the Southampton, which had both seen a blockbuster year in 2007.

But some smaller establishments, such as the Rosedon, are doing fine.

Lesline Williams, reservations manager at the Hamilton property, said: "So far we haven't seen a change compared to last year. A lot of our clients are business people and they are still coming. We find that weekends are not normally fully sold out because business travellers usually arrive on Mondays, but we have had periods where every room is full."

Looking ahead, while both the Tourism Minister and Chamber boss have predicted a slow few years ahead there are some plans in the works to try and turn things around. At the recent tourism summit it was suggested that increased marketing presence in the New York could immediately help the Island. Investigating Charlotte, North Carolina, as a potential year-round market from which to pull visitors is a long-term goal for the Ministry of Tourism.