Owners of fractional units will be able to rent cars while on the Island — in Government's latest bid to ensure the tourism industry remains competitive.

Yesterday Senators in the Upper House passed the Motor Car Amendment (No. 2) Act 2010.

It allows the Minister of Transport to issue permits for hotels to operate a car hiring service to owners and occupiers of their fractional units.

United Bermuda Party Senator Suzann Roberts Holshouser said she was happy to see the Island moving into the 21st Century.

"I think it is important and we support this piece of legislation," she said. Still she questioned why environmentally friendly cars, such as diesel cars, were not mandated for use.

Independent Sen. Walwyn Hughes also asked what requirements drivers would have to undergo to get their provisional licence.

Junior Minister of Tourism and Senator Marc Bean said they would have to complete a medical test by a local practitioner. They would also have to take the computer test and a reversing test at the Transport Control Department.

According to Sen. Bean the number of fractional units on the Island is on the rise. Ten hotels have applied to build a total of around 700 fractional units in Bermuda and currently there are 155 fractional units. This includes 34 at Tucker's Point Club Harbour Court; 102 at Newstead and 19 at the Reefs Club.

These are generally high end units, ranging from between $250,000 and $500,000, Sen. Bean explained.

"They are indeed a significant investment for an individual investor.

"It's not surprising that the developers further report that prospective purchasers are of the view that if they are being asked to invest significant sums in a fractional or six month hotel lease-back unit, then having access to a private car is an essential component of the offering.

"As it currently stands developers have only one car assessment number for their entire hotel complex, which includes the ownership units. These units are typically owned by more than one owner as tenants in common and can consist of between eight to ten owners."

While it was important to reduce the amount of traffic congestions on the Island's roads, Sen. Bean said Government was also committed to rebuilding the tourism product.

Consequently, the number of vehicles at any site cannot exceed ten percent of the number of fractional units or a maximum of ten vehicles — whichever is fewer.