Hoteliers are hopeful that new Immigration rules allowing exempt companies to purchase tourism residential units will help them during a difficult economic climate.

Hotel occupancy fell by eight percent last year to 51 percent. And hotels which built fractional units did not sell as many as they had hoped due to the poor economy.

Last week in the National Budget, Finance Minister Paula Cox said an amendment would soon be passed allowing the international business sector to acquire an interest in tourism residential units. It is not yet known if the amendment will include fractional units, or will be limited to private units or leasebacks on hotel property.

Fractionals are timeshare arrangements where people pay to have use of a unit for several weeks a year.

Private units refer to those owned by persons who lease them back to the hotel to be rented for several weeks.

Last week Minister Cox said ... work is being done to consolidate the partnership with the international business sector and to continue to foster a warm and welcoming environment for international business in Bermuda.

"A recent policy change on landholding by companies will be [JUMP]reflected in an amendment to the Companies Act. The first stage will permit companies to acquire an interest in residential units forming part of a tourism development.

"This amendment should provide companies that acquire such an interest to have greater security of tenure with respect to accommodation for their staff.

"The policy change is intended to provide a boost for the tourism sector and should have a stimulus effect on the real estate sector as well."

The amendment could refer to fractional units such as those at Tucker's Point and The Reefs, or leaseback units like those planned for Coco Reef and the proposed St. Regis or both.

When asked for a clarification on the amendment Minister Cox said this week: "The exact details of this amendment will be given when it is tabled in the House of Assembly during this session."

John Jefferis, whose Coco Reef development plans to build 66 new leaseback Coco Villas cottages, said the development was "progressing well".

He added that he was pleased with the announcement.

"I would say that it is doubly productive and most innovative," he said. "It is exactly the sort of fresh thinking needed for these fiscally challenging times.

"Companies have previously expressed an interest in our development project."

Ed Trippe, of Tucker's Point, said his hotel has 340 fractional unit shares, 19 percent of the units remain unsold.

"When Tucker's Point was first conceived and we had our early discussions with Government, we stressed at the time that our success was dependent on a joint public/ private sector initiative,"<\p>he said.

"Government's policy changes are very welcome and will definitely provide a stimulus for both tourism and real estate sectors.

"We remain optimistic that the fractional market will recover and unquestionably the Government's policy will assist new sales."

The Chamber of Commerce yesterday issued a statement denouncing this year's Budget. It cited the new legislation as one of the few positives.

Diane Gordon, executive vice president, said "The Chamber applauds the proposal to relax policy regarding acquisition of property in local hotel developments by international companies.

"International business is the cornerstone of the Bermuda economy and every effort should be made to consolidate and nurture this sector."