Bermuda's hotels are closely monitoring the threat of war in Iraq but say it is too early to tell what effect it will have on tourism.

Bermuda Hotel Association (BHA) president Norman Mastalir said yesterday he had only heard of a handful of cancellations of small business meetings but nothing significant.

In his ultimatum for Saddam Hussein to leave Iraq by tonight, President George W. Bush warned Americans they could face further terrorist attacks.

If that happens and air travel out of the US is affected, there is nothing Bermuda will be able to do, said Mr. Mastalir.

Mr. Mastalir, the managing director of the Fairmont Southampton Hotel, told The Royal Gazette yesterday that there had been no cancellations at his hotel, although some people had enquired about cancelling if their travel plans are affected.

He said the joint public/private sector Bermuda Alliance for Tourism (BAT) did not have contingency plans in place for war, but it was monitoring the crisis.

"We've had nothing so far (at Southampton). In other hotels I've heard of a couple of small meeting cancellations, but nothing of significance," he said.

"Our short-term bookings until yesterday were very strong, but it's too soon to tell. "Obviously President Bush had some pretty stern words of warning, not just for Saddam Hussein, but for Americans, telling them to expect terrorism and retaliation.

"There aren't any special plans in place (at BAT). We've discussed it at length and are watching it carefully.

"We've a lot of offers in the marketplace, a lot of special discounts, and we are prepared to meet and react quickly if need be.

"If there is travel disruption because of additional terrorism in the US, there isn't anything we will be able to do other than wait and see.

"We are monitoring closely to see what happens over the week will tell us lots about what's to come."

Last month, the Caribbean Hotel Association (CHA), to which Bermuda belongs, announced it was developing contingency plans for the war.

These included policies to protect visitors who were stranded in the Caribbean if war breaks out, and a public relations campaign to highlight the safety and close proximity of the region to the US.

The CHA wants to encourage governments to waive the room tax for guests who are stranded due to the war.