to win back Bermuda's share of the tourism market from its opponents.

Senior reporter Henry Adderley spoke with the people at the head of a variety of Island accommodations to gain insight into their perceptions of the Island's former top industry. This is the second of a six-part series.

*** After 24 years in the business, Belmont general manager Gordon Slatford knows a thing or two about tourism.

Since joining Forte Hotels -- when it was Trust House Forte -- he has run various properties as a general manager throughout the UK and US before arriving in Bermuda in 1996.

And when asked about Bermuda's present tourism situation, he describes the challenges that the Island is facing as being difficult and diverse.

"It is so complex. That is the most difficult thing. If it was just one or two things it would be an easy fix but it's so, so complex.

"There are two really deep rooted problems and you can't snap your fingers and get a solution. The Island's tax structure raises prices artificially and hotels have unfair competition.

"Then there is a whole plethora of other bits and pieces.'' Mr. Slatford said: "It goes back to absolute basics. Here we have a purchase-tax based economy, not an income tax based economy like our competitors. The tax burden is spread equally to all consumers.'' And that meant Bermuda's economy was kept healthy from taxing tourists.

"Duty is charged on imports and then it is passed on to tourists. For example, tourists come on Island and everything they eat has 30 percent duty added on it.

"In the US, sales tax is no more than ten percent and it would be like having 30 percent VAT in the UK.'' But price is a huge issue for travellers.

"We have to be competitive with pricing,'' said Mr. Slatford. "People have a lot of choices.'' And their range of choices is growing larger day by day.

Cuba is opening up to tourism, he said, and once it sorted out its differences with the US it would become a premium destination.

"We need to be able to sell our product at a price that is commensurate with our competitors. The only way you can try and give the best prices with a fixed overhead is by cutting into your profitability.'' "So what do we do?'' asked Mr. Slatford. "Implement income tax? I don't think so, but somehow the tax burden needs to be distributed in the same way it is distributed in other destinations.'' Another thing people do not talk about when it comes to the subject of tourism in Bermuda is the presence of cruise ships on the Island, said Mr. Slatford.

"Cruise ships came in to Bermuda about ten years ago and hotel profits went haywire,'' he pointed out. "I don't believe in coincidences.'' Potential customers are looking for value for money and they want something special which Bermuda can provide but "they will vote with their pockets'', said Mr. Slatford.

And the ships gave potential visitors a cheap option for getting the Bermuda experience they were looking for.

"There's no doubt that cruise ships bring in a large number of people who, for a small portion of businesses on the Island, may be beneficial.

"But I cannot see how that is really helping the average man on the street.

They do not employ Bermudians, they do not buy produce on Island, the passengers have all their meals on the ship and their entertainment is on the ship.

"The only reason people come ashore is to experience Bermuda then they get right back on the boat. Government gains revenue from the fees it charges but you cannot say they enhance Front Street in any way.'' Mr. Slatford added: "Hotels are here year round, not just when the sun is shining. The playing field is not level. Maybe cruise ships should be kept at secondary locations, that way they would still give people the Bermuda experience on the cheap.'' And the difference between cruise ship prices and hotel prices was extended by the "extras'' on a Bermudian hotel bill and the airfare a traveller had to pay to get to the Island.

"The actual grass roots package hotels charge for is not that outrageous, but then there are extras. For instance, gratuities are significant.'' Mr. Slatford said he did not believe in mandatory gratuities as it did not provide an incentive for people "to go the extra mile''.

Air ticket costs were very significant, said Mr. Slatford, although the Tourism Ministry was doing a "great'' job of trying to address that.

"Airfares are a major problem. They have probably been influenced to some extent by international businesses and the difference in values Bermuda citizens have in comparison to UK and US citizens.

"Why else would airfares be cheaper to Jamaica? "Basically this is a very affluent Island. One can afford the airfares here which is why flying out of the Island costs more than flying into it.'' Values are different for those living in Bermuda, he continued, as costs were different. "The value thing is fairly significant. People say things are not expensive -- even $30 for dinner out for one person -- but everything is more expensive.'' When asked if enough was being done to counter tourism's decline, Mr. Slatford replied: "As long as businesses are going bust, it is not enough.

"There has been significant investment over the years at Sonesta, Elbow and elsewhere. It goes back to the cost of doing business here. That is what Government needs to address -- raw material costs, licensing costs and whatever else there may be.'' GORDON SLATFORD -- Belmont general manager.