One of the island's best-known retailers has spoken out on the bleak outlook for his sector, blaming falling cruise arrivals and the US economy for the latest spate of store closings.

Entrepreneur John Casling said that both the current recession and the cruise industry's preference for large mega-ships means that Front Street's remaining retailers will continue to suffer.

"If you go to C-Travel and you pick up a catalogue for Holland America Line, Celebrity Cruises or Norwegian Cruise Line, you'll see that they don't own small ships any more," Mr. Casling said.

"The large vessels, the mega-ships ¿ they can't get through Two Rock Passage, the channel into Hamilton. I believe in constructive criticism, but this is not the Government's fault. Short of blowing up half of Hamilton to make way, how do we address the problem of mega-ships?"

Mr.Casling spoke to the Mid-Ocean News shortly after the opening of his latest retail venture, a high-end gift shop at L.F. Wade International Airport.

In the 1980s and '90s, when visitor numbers were on the rise, Mr. Casling owned a handful of local gift shops selling T-shirts, sunglasses and other tourist merchandise, both on Front Street and outside of town.

Now, with only six cruise ships planning to dock in Hamilton next year, Mr. Casling focuses on his airport shops, his Albuoy's Point sunglass boutique Bling, and his imports business through Bermuda General Agencies.

He brings in fresh flowers that are sold at supermarkets and shops island-wide, and recently added colourful 'designer trash bag' brand Happy Trash to his list of products. Mr. Casling designed the multi-coloured polka-dot bags himself, calling them a "true Bermuda product" and adding that a portion of proceeds go to a Bermuda education charity.

Of his newest retail venture at the airport, he said: "We opened up a small boutique in the international terminal to service the Air Canada and British Airways flights. It's been three weeks and it's going very well. It complements our shop in the main terminal, and was intended to specifically address a segment of the air traffic market that did not shop with us. We sell Prada shades, designer shirts and ties, Cuban cigars ¿ a mixture."

Mr. Casling said that while the advent of mega-ships constitutes a blow to Front Street retailers, the parlous state of the US economy would also take its toll, with fewer Americans able to afford travel to Bermuda, let alone a shopping spree in Hamilton.

"Bermuda is going after the affluent residents of the North Eastern US ¿ that's our market, and they are being hit hard. Most retailers would agree it's been a disastrous year, but there are so many factors that played a part.

"The US economy is in a recession. Most of the investment banks in the US are in crisis mode. People don't normally travel in an election year for some reason ¿ that's a fact. Unemployment in the US is up to six per cent and rising, and companies are laying off thousands and even tens of thousands of people."

Mr. Casling does not place any blame for the island's declining tourism industry on the Government, explaining that US banks will simply not foot the bill for hotel development during a recession.

"I don't believe there's much Government can do," he said. "Other tourist destinations in the US and in the Caribbean are suffering too. The problem we have is that there are so few hotels left.

"This is not the fault of Government ¿ which bank is going to lend money to a developer to build a hotel in Bermuda? Hotel chains want to develop a property to their specifications and then enter into a lease agreement. Money to develop a hotel in Bermuda is absolutely impossible in today's market. Any banker in the world will tell you that."

Mr. Casling doesn't see any immediate solution to the current tourism decline, nor its knock-on effect on the island's retail businesses.

"In the short term, one or two years, I don't believe it will get better," he said.

"No one knows how bad the fallout will be from Lehman Brothers, Bear Stearns and AIG. How many other banks will fall because of this? Americans are definitely not travelling; they're watching every dollar as they don't know if they'll be employed tomorrow. Someone working for Lehman Brothers in January probably planned to bring his family to Bermuda in October. Not any more!"

While Mr. Casling sees gambling in Bermuda as a complex, evocative issue, he believes that casinos will lure both hotel developers and tourists back to the island ¿ and, hopefully, back to Hamilton's shops.

"The only way to get activity? You've got to give the tourists a casino," he said. "In terms of developing hotels, it won't work any other way. We haven't had any new large hotels in 30-odd years ¿ not one. The Newstead is small and involves fractional ownership."

He warned that as long as the US economy remains in crisis, local retailers will suffer, despite any efforts by the Department of Tourism or other bodies.

"I don't know what Government can do," he said.

"You can do all the advertising and marketing in the world. If the traveling public is too scared to travel, as they don't have the money, what do you do? If you go down Front Street right now, there's literally no one in the stores.

"The ones that are still open have deep, deep sales ¿ up to 75 per cent off. There are no cruise ships in Hamilton, air traffic is way down, but there are obvious reasons for it. I just don't know what the answer is."