arrivals will be down shows three things.

Air arrivals in July fell, meaning Bermuda will almost certainly experience its worst tourism year since the early 1970s.

Hotel occupancies in July were higher than they have been for 13 years, which is good news.

One reason for the rise in occupancies is the closure of Marriott's Castle Harbour Resort, meaning Bermuda has fewer hotel beds to fill. In basic economic terms, Bermuda's supply for hotel rooms has now reached the point where it meets demand.

That means that the hotel sector has "downsized'' to the point that the remaining hotels can actually make a reasonable return on their investments, at least through the so-called high season.

That good news is tempered by the fact that the high season is shrinking and appears to consist of three months -- June, July and August -- when the hotels can be certain of good occupancies which are needed to keep them going through the lean winter months.

Thus the Tourism Ministry now needs to find ways to encourage visitors to come to the Island in April, May, September and October when occupancies are weak.

Some of the moves already being made, such as moving the Jazz Festival to earlier in September may pay off. But Bermuda still has to ensure that it offers competitive pricing -- from airlines to hotel beds to meal prices -- and outstanding service and facilities to fill hotel rooms all year round.

FUEL PRICES EDT Fuel prices Monday's report on the increase in fuel prices -- to $1.48 a litre, or more than $5 a gallon, shows Bermuda must be among the world's leaders in fuel costs.

It is surprising that Bermuda has not seen the kinds of protests which have wracked the UK and France recently, considering that our prices are higher.

But it is probably due to the fact that few Bermuda residents have to drive the kinds of distances that long distance truckers and others have to put in in Europe.

Nonetheless, the high cost of fuel -- much of which is made of tax -- affects every other price in Bermuda, from the cost of electricity to the cost of a hotel room to almost all other goods and services.

Thus, Bermuda's ability to compete with other jurisdictions is hampered because of one more high cost.

On the other hand, governments have to get revenue from somewhere and the Island does have a solution to the high costs; energy efficiency.

Crude oil is a fossil fuel and, in spite of new oil discoveries and new extraction methods, it cannot last forever. Therefore putting a high tax on it should discourage waste and encourage conservation. Reduced energy use and more efficient uses of electricity, at least until other methods of producing energy such as the sun and wind can be made efficient, is a long term solution both to preserving a diminishing resource and to cutting costs.