Air arrivals during the third quarter of this year dropped by 9.5 percent compared to the same period in 2004, but overall visitor arrivals for the third quarter climbed by 1.2 percent ? largely due to the increase in cruise ship passengers.

According to the Quarterly Bulletin of Statistics issued by Government yesterday, a total of 83,474 tourists arrived by air during this year?s peak summer season (July-September).

This figure is down from 92,222 a year ago and brings the total air arrivals for the first three quarters of 2005 to 215,005 ? a fractional 0.5 percent decline from the same period in 2004.

Of this total figure, air visitors from the US fell to 66,664, down 11.5 percent and accounts for the sharpest decrease since the fourth quarter of 2003 when Hurricane Fabian adversely impacted air arrivals to the Island.

The number of visitors from the UK dipped by 2.1 percent, while visitors from ?other? countries dipped by 6.3 percent.

Canadian visitors to Bermuda by air increased modestly to 6,561, up 4.5 percent compared to last year.

The overall arrivals increase of some 1.2 percent can be attributed largely to cruise ship arrivals for the third quarter which rose 10.9 percent to 112,377 passengers ? 11,082 more visitors than the 101,295 passengers that visited Bermuda over the summer season last year.

This increase was attributed partly to an additional two visits to the Island during the summer season by the cruise liner.

The slower pace of air arrivals to the Island translated into lower hotel occupancy rates at all commercial tourist establishments.

There was a sharp decline in the number of visitors staying in small hotels and cottages, a drop of 14.1 percent and a drop of 12.7 percent in private homes ? which catered to nearly 6,000 fewer guests compared to the third quarter of 2004.

The number of visitors staying at resort hotels dipped to 40,730 guests, down by 5.5 percent.

A similar decline was seen in the house keeping accommodations sector which saw 4,758 visitors, down 5.4 percent.

Overall, the majority of air arrivals continued to stay at major resort hotels, which captured a market share of close to 50 percent during the summer season.

The decline in the number of air passengers to Bermuda also translated into a reduction in total expenditure by air visitors, estimated at $101.8 million, a decline of 3.6 percent or $4 million over the same period last year.

Expenditure on shopping, entertainment, transportation and other tourist activities fell a strong 29.4 percent from $59.6 million last year to $42.1 million this year and accounted for $17.5 million less in foreign exchange earnings for the Island.

In contrast, spending on accommodations and food climbed 29.2 percent, or $13.5 million more to $59.7 million.

But total expenditures for hotel rooms remained 22 percent below pre-Fabian spending levels.

While expenditures by cruise ship visitors in the third quarter were estimated at $29.7 million ? 13.8 percent ? or $3.6 million above the level reached in the third quarter of 2004.

Purchases of goods and services by cruise ship visitors included entertainment, souvenirs, transportation, sightseeing and sport activities.

As for hotel employment during the third quarter, by the end of July 2005, 3,280 workers were employed in the hotel industry.

This was 5.8 percent above the level reached in the same period of 2004 and represented an increase of 179 jobs.

Over 50 percent of the increase in jobs can be attributed directly to the opening of new tourist establishments in April this year ? Wyndham Resort and Spa.

While total employment within hotels, cottage colonies and housekeeping units increased, employment within guest houses and micro units fell marginally when compared to 2004 levels.

Major resort hotels remained the largest employer in the hotel industry.

At the end of July 2005, major resort hotels employed 77 percent of all employees in the hotel industry ? a total of 2,531 employees.

The level of employment for cottage colonies and housekeeping units increased 17 percent ? 107 workers ? when compared to the number of employees reported in July 2004.

This rise in employment was due primarily to the emergence of the new cottage colony establishment, 9Beaches, that opened prior to the 2005 tourist season.

While cottage colonies and housekeeping units employed 22 percent of all employees in the hotel industry, representing 733 workers.

Meanwhile guest houses and micro-units continued to employ less than one percent of workers in the hotel industry.