The Department of Tourism is scrapping its controversial link-up with American firm Sales Focus.

The company — which replaced long-serving Bermudians in the North American Tourism Office last July — will not have its contract renewed when it expires in six months.

It comes amid reports of low morale and frustration at Sales Focus' alleged inexperience in the tourism industry and lack of Bermuda knowledge.

American staff are said to have had to visit Bermuda twice to try to get a better feel of the Island they are supposed to be selling as a tourism destination.

Premier and Tourism Minister Ewart Brown's outsourcing manoeuvre prompted an outcry nine months ago when it emerged the Ministry of Tourism and Transport had broken its contractual agreement with Bermuda Public Services Union.

The Ministry said in a statement released yesterday: "The Bermuda Department of Tourism will not renew its contract with Sales Focus.

"Department of Tourism officials have officially notified the company in accordance with contractual stipulations. The Sales Focus contract is due to expire in about six months.

"Sale Focus was hired to sell Bermuda to prospective clients as part of a sweeping overhaul of the North American Tourism operation in New York.

"The new structure in the New York Office is streamlined considerably versus the previous structure, placing less financial strain on the public purse."

New Director of Global Operations Ann Shutte, based in New York, stated: "Sales operations all over the world are re-evaluating their organisations and making changes. So in that respect this is a good time for us to do the same.

"The buying habits of our customers have changed over the last six months and we are aligning our organisation to the market."

Staff who were devastated at being ousted last year said they had mixed feelings about the news.

They said they felt proven right that Sales Focus has not worked out in the long-term, but that they were not happy if tourism has suffered as a result of the events of the past nine months.

One person who was made redundant last summer but has been in regular contact with those still in the office told The Royal Gazette yesterday: "The people still working will be elated at this news. They were all hoping Sales Focus failed, to prove to Government that they got rid of the wrong people.

"But it's a double-edged sword. We're happy that the contract won't be renewed but we also did not want Bermuda tourism to suffer."

Regarding the Ministry's explanation for the non-renewal, the ex-staff member said: "Buying habits have not changed in the last six months. Absolutely not.

"Sales Focus did not have the skills to meet the needs of Bermuda tourism.

"They were inexperienced and could not make the deal."

During last month's budget debate on Tourism Dr. Brown told the House of Assembly: "You are aware that this department went through some significant changes during the latter half of 2008. The objective was clear, the Ministry was obligated to fashion the organisation to suit the present day business model for the travel industry.

"The sales function was outsourced to Sales Focus Inc. and this team is primarily tasked with securing leisure, meeting and affinity group business. These sales managers are located in New York, Boston, Philadelphia, Washington, Atlanta and Toronto and are an integral part of the BDOT team."

The plan to outsource was initially stalled when Bermuda Public Services Union took the Ministry to Supreme Court over its failure to hold consultation over the move.

Permanent Secretary Cherie Whitter had told staff the Ministry of Tourism and Transport had been planning the move for months but the Premier had kept it quiet because: "Unfortunately, that is the way Government works."

However, BPSU argued if it had been consulted it may have been able to suggest alternatives to redundancies, which workers said split families and left them precious little time to find new homes, jobs and schools for their children on the Island.

Between ten and 12 Bermudians were said to have lost their jobs. Dr. Brown claimed five Bermudians were working for Sales Focus, but insiders say the true figure is lower than that. Staff also say Sales Focus is using the same sales model that had always been used, leaving them questioning what was gained by outsourcing.

The Premier has said outsourcing would improve efficiency but the Department of Tourism has refused to comment when asked how much the contract is worth.

The Department of Tourism did not respond when asked how it rated Sales Focus' performance.