Hotel occupancy fell 11 percent in 2009 according to figures obtained by The Royal Gazette.

Bermuda Hotel Association figures also revealed the downward trend is expected to continue, based on projections for the first quarter of 2010.

However, three hotel developers have said they still plan to go ahead with their projects despite the gloomy figures. The Royal Gazette is told complete financing is now in place for both hotel developer Carl Bazarian's Park Hyatt in St. George's and the planned St. Regis in Hamilton, which is already marketing its hotel-serviced, "private residences" to Americans.

And an official with Ariel Sands say the owners have entered into a preliminary agreement with a Canadian developer and "top-end" hotel operator, which could see work begin later this year on redeveloping the property.

The news comes as hotels are dealing with a weak 2009 and fearing a weaker 2010 in terms of occupancy rates. Bermuda Alliance for Tourism Chairman Mike Winfield said he is concerned Bermuda is facing its worst first quarter in memory.

As of December 31,2009 the BHA reported January's occupancy rate is 19 percent, two years ago 26 percent of hotel rooms were occupied in January.

Based on bookings made by December 31 February and March will see 13 percent and 12 percent of rooms occupied respectively.

This is down from 22 percent and 23 percent occupancy rates for February and March in 2008.

Of course, the 2010 figures can, and most likely will change, as visitors book last minute trips.

One hotelier hopes an upcoming 50 percent off sale will entice tourists.

The sale, which is being organised by the Bermuda Department of Tourism, Bermuda Alliance for Tourism and BHA, begins January 17. It will offer guests 50 percent off rooms in participating hotels for the months of February and March.

Opposition spokesman Michael Dunkley said he believes mismanagement has exacerbated declining arrivals due to the recession.

"We fear that tourism, like our retail industry, is facing a do-or-die challenge this year — a challenge that could have been ameliorated with more sensitive, more intelligent, more grounded policies, and less ham-fisted interference by the Minister, now a number of years on the job," he said. "Our chief concern at this point is that the industry, after years in which the Government has mis-marketed the Island overseas and wasted millions of dollars on failed tourism business events, is in a weaker position than it should be to weather the difficult months ahead.

And he questioned why the Government has said little on the Bermuda First, which was released with much fanfare last fall and recommended a tourism authority be created.

"This indicates to us that they are coasting without a plan, without any idea about what to do, without providing leadership," he claimed.

Shawn Crockwell, the Bermuda Democratic Alliance spokesperson for tourism, said his party was sceptical about the occupancy figures.

"The BDA understands from sources in the industry that the overall drop in occupancy for 2009, in fact, far exceeds the reported 11 percent," he claimed. "If this is true, the Government and the Bermuda Hotel Association must come clean with the public so that we all have a true and accurate understanding of the state of our hospitality industry."

And the party has mixed feelings about the 50 percent sales on hotel rooms.

"We appreciate that initiatives such as this are good to stimulate interest and business for hotels but the downside is that the hotels which participate do not make the commensurate profit to adequately maintain their operations," he said. "Also, these types of initiatives are usually for limited periods and visitors usually react adversely when the rates are returned to its marketable level."

He added: " It is our understanding that this was the worst year for hoteliers and Bermuda tourism for the past 40 years. The upcoming winter months will be equally dismal and we expect occupancy rates for the first quarter of 2010 to be worse than last year. However, there may be a glimmer of hope for the summer season but the jury is still out. Much will depend on whether the US economy will continue to improve throughout 2010. What we know for certain is that group/convention business will be virtually non-existent for the foreseeable future."

The Premier's press secretary did not respond for comment.