The Opposition UBP's suggestion that tax relief should be given to hotels to help fill beds during the tough economic climate is already being done, Government said last night.

Shadow Tourism Minister Michael Dunkley had commented on the second quarter's arrivals figures calling them "historically low" after it emerged that air arrivals were the lowest between April and June for almost 30 years.

He suggested Government should help struggling hotels and grant them and their employees payroll tax relief as well as eliminating the hotel occupancy tax to reduce the cost of a Bermuda vacation.

But the Government hit back saying it had already afforded payroll tax relief to hoteliers, starting in the fourth quarter of 2008. The current relief agreement expires January 31, 2010.

The Ministry of Finance has also allowed hoteliers to defer payment of hotel occupancy tax.

Bermuda Hotel Association President J.P. Martens said: "The Hotel Owners Committee met with the Premier and Minister of Tourism in January and again in July in response to the severe downturn in bookings due to the economic slowdown in our main feeder markets.

"The Bermuda Government has subsequent to these meetings agreed to payroll tax relief which under the current agreement expires January 31, 2010 as well as deferment of hotel occupancy tax payments.

"The aforementioned in conjunction with a number of sales and marketing initiatives have been of great help to all the members of the Bermuda Hotel Association during these extremely challenging times".

The Premier's press secretary said the Government and hotels first began speaking about the current economic climate early this year and added: "The Government of Bermuda remains responsive to this critically important sector of our economy."

The next meeting between the two is scheduled to take place in October. Monday tourism's quarterly bulletin revealed that 74,979 tourists flew to the Island between April and June, a 14 percent decline compared to the same period last year, and the lowest figure since a modern system was implemented to record arrivals in 1980.

Conversely, cruise arrivals, though down three percent since last year, were double what they were a decade ago.

This year 124,552 people have arrived on the Island by cruise. The boom in cruise ship arrivals, which began in 2006, means the overall arrivals figure for the quarter was the fifth best in 30 years.

People flying into the Island are known to outspend those arriving by cruise.