New restrictions requiring US citizens must travel with passports could damage tourism, Premier Ewart Brown has warned.

Speaking at the Inter-American Economic Council Congressional Dinner with the Caribbean Community on Wednesday he said Bermuda had turned a corner in tourism with lower airfares and new hotel developers flocking to the Island's shores.

But he added: "I am aware, however, that the imposition of the Western hemisphere Travel Initiative and its concurrent requirement for US citizens to travel with passports has hurt our neighbours to the South.

"In no way seeking to diminish the homeland security needs of the United States, I urge the Council and the Western Hemisphere Subcommittee to examine the effects of this Initiative to ensure that its stated objectives match the outcomes and that our regional economies are not damaged as a result."

Tourism in Bermuda has had mixed results in the second quarter with hotel occupancy levels up to 84 percent, an increase of six percent compared to last year. However air arrivals for the second quarter were down by 1.5 percent to 99,594.

Bermuda Hotels Association CEO John Harvey said he backed the Premier's comments but said Bermuda had directly tackled the issue with aggressive marketing campaigns.

Asked if the passport issue had hurt tourism he said: "It certainly has the potential to — the Caribbean was a bit more damaged than Bermuda.

"Six months ago we had some challenges with group customers because of passports."

While many customers had them, those who didn't were offered incentives to cover the $100 approximate cost of getting a passport to make it worthwhile to still come, said Mr. Harvey.

"We were quite aware and took positive action. The first thing we did was to put on a PR campaign saying 'you have got to get a passport'."

That mantra was pumped out to travel agents and put on promotional literature and had even been commented on by a travel writer talking on breakfast TV in America, said Mr. Harvey.

The rules kicked in this year requiring US, Mexican and Canadian citizens to present passports when travelling by air to the United States from locations in North, Central and South America, the Caribbean and Bermuda.

Before January US vacationers only needed a drivers' licence or other ID. Cruise passengers are still exempt from the new laws until 2009.

Caribbean countries also offered incentives such as free local tours, food and drinks credit and car rental vouchers to help stop a loss of visitors. At one stage Mexico feared it would lose up to two percent of its foreign tourism business this year, equivalent to 318,000 vacationers or around $250 million.

Only about a quarter of US citizens own passports, according to the US State Department figures released in January, although that number is growing.