scuppered following a complaint by a rival hotelier.

Corporation of Hamilton chiefs have been negotiating with investment company TG International to transform the Par-La-Ville car park into the top resort.

And although a design of the hotel has now been submitted to the Development Applications Board, the application could be turned down after one hotelier filed an objection.

Christian Bay Beach Club President Conrad Engelhardt last night told The Royal Gazette that the proposed hotel should be scrapped -- because established hoteliers were struggling to stay in business.

"Our company objects to any further major hotel construction due to low occupancy levels,'' Mr. Engelhardt said.

"Resort hotels are operating under 50 percent annual occupancy and are losing millions of dollars. Further hotel construction should not be approved until a 70 percent occupancy rate has been achieved.'' If the design is approved and a lease agreement signed, construction could begin next year and the hotel, thought to cost some $60 million, could be up and running by the year 2000.

Last night Corporation Secretary Roger Sherratt would not comment on whether he thought the application would be successful.

But he added that the hotel was catering to a specific market and would not be in direct competition with other hotels.

"This hotel is for a niche in the market,'' he said.

"It's quite unusual in that it's not a tourist hotel but will cater for businessmen, a new market that's been created by the growth in international business.

"I don't think it's the Corporation's job to go around saying what the views of hoteliers should be, but the Corporation, having looked at the submission of the developers, believes there's a great deal of merit in their proposal.

"A hotel would be a major boost for the city. If we're going to have a five star hotel it will also set very high standards and be beneficial to tourism.

It will also provide employment and I know the developers want to build a hotel that Bermudians can be proud of.'' Mr. Sherratt said he did not know when the Development Applications Board would be making a decision about the hotel. But he added that a great deal of consideration had been given by the developers to make sure that the hotel was acceptable.

"The developers have been working very closely with the Corporation to make sure that the design of the hotel is suitable both for the site and the Island,'' he said.

"Certainly from what the Corporation has seen of the design it's considered to be excellent.'' Mr. Sherratt was backed by Tourism Minister David Dodwell, who said he encouraged new development.

"Although, overall, hotels aren't profitable at the moment some are making a profit and some aren't'' he said.

"It would be like telling someone that they can't open up a new restaurant or a new retail store just because some restaurants and retail stores aren't making a profit -- it just doesn't make sense.

"We have already given approval in principle to licence the hotel. I'm encouraged by this new development, and all the other new developments that are going on at the moment because it shows that developers have faith in Bermuda. The last thing I want to do is turn off the tap.

"I have talked about re-engineering our product and this development will give us another marketing opportunity -- we don't have an executive suite hotel.'' Mr. Dodwell added that there were still enough beds in the Bed Bank if hoteliers wanted to expand their business.

"There have been some hotel closures and so there are beds available to be distributed to potential investors,'' he said.