a US tour company that swallowed the deposits of hundreds of vacationers.

And to protect customers facing cash losses, the Bermuda Collection of hotels will absorb any vacation deposits lost to Carolina Express Tours Inc. "We will not penalise the customer,'' said Mr. William Mulder of Stonington Beach Hotel. "The Collection will absorb that loss.'' The decision could see the seven-member Collection writing off two-day deposits amounting to $300 per customer.

But hoteliers contacted this week indicated the amount of business sent to the Island by Carolina Express was not significant.

The company conducted most of its business with Island destinations such as Jamaica, St. Thomas and Aruba.

For the Bermuda Collection, the area represented by Carolina Express -- Tennessee, Virginia and the Carolinas -- was being explored for business opportunities.

The move was to take advantage of Bermuda air links with Raleigh-Durham and Charlotte, North Carolina.

Although dealing with a travel wholesaler went against Collection policy, it insisted any business be done on a cash up front basis, not with vouchers.

Since news of the company's collapse was received, local properties have been busy re-booking their customers.

The Carolina Express situation stands in contrast to the collapse in the mid-1980s of wholesaler Haley-Martin Tours, one of the largest suppliers of Bermuda vacations.

Bermuda hotels were left holding worthless vouchers for thousands of holidaymakers.

The Bermuda Government eventually stepped in with more than $1 million to protect exposed hotel properties.