hotel industry continues as it is, Premier the Hon. Sir John Swan warned yesterday.

But in an interview with The Royal Gazette , the Premier refused to name the endangered property.

His statement came after a top-level meeting on Wednesday between hoteliers and Government representatives saw him call for renewed dialogue between managers and the Bermuda Industrial Union.

Yesterday, Sir John described Bermuda Industrial Union leaders as paralysed by "business as usual'' attitudes that prevented them from recognising economic realities.

And he said current contract arrangements saddled hotels with inefficiency.

"The Bermuda hotel industry is in deep trouble,'' he said.

Hoteliers at Wednesday's meeting presented him with a report portraying the hotel industry with its back to wall.

The Premier, who indicated he accepted their summary, said the industry was in a bind. Hotels were unable to cut costs any more while their guests, more than ever, questioned the high prices charged.

Sir John said he was distressed that there didn't seem to be a positive working relationship between hotel managers and the union to come to grips with the situation.

"There is a major gulf between the hierarchy of the union and hotels management,'' he said. "It's almost a paralysis.'' The Premier said his Labour Minister would try to bring the two sides together. No less than the future well-being of the Island depended on that success.

"It is incumbent upon us to get the hotel industry into reasonable shape, to prepare for any storm on the horizon,'' Sir John said.

"Hoteliers and the union have the capacity to save the Country. Meetings should begin with a view to maintaining the viability of this industry.

Sir John indicated that a change in attitudes was essential.

"Hotel owners have agreed they want to sit down with (BIU president) Mr.

Simmons because they are desperate. They want to reason with him to salvage as much of the industry as they can.'' Sir John emphasised the union must come to grips with a world in which national economies were surviving through downsizing. Worker attitudes elsewhere had changed to the new reality.

"We're competing with that, so we've got to change as well,'' he said.