Visitor arrivals into Bermuda are up, new air carriers have entered the market and tens of millions of dollars are being invested in new hotels across the Island.

However there is growing concern that the business traveller is bolstering the arrivals numbers and that too much emphasis is being placed on the traditionally lower spending cruise ship passenger.

Year-to-date figures for September reveal a 30.5 percent increase in the business traveller sector, compared to a 4.9 percent dip in vacationing tourists, compared to the previous year.

According to Jon Crellin, general manager of the Fairmont Hamilton Princess, this year's occupancy figures are at their highest for several years.

Mr. Crellin said: "Our largest customer segment is the business traveller, at 50-60 percent, and this is driven by international companies on the Island.

But with the arrival of low cost carriers out of Boston and New York, such as jetBlue, we have seen improved occupancy levels, with many people coming here for a leisure weekend.

"In terms of occupancy, this year will be the highest year in the last five years."

In guest houses, it has also been a booming summer. Patricia Harvey, owner of the Little Pomander Guest House in Paget, said: "Occupancy has gone up dramatically.

"It's the first time in 20 years I've been full all summer. This is the best year I've ever had, and I think the airlines with the lower cost fares have a lot to do with it."

She said: "I think the Government is doing an excellent job."

John Harvey, chief executive officer of the Bermuda Hotel Association, said: "For 2007, every month we've seen improvements in the figures. "Attractive marketing combined with competitive packaging with our airline carriers has seen positive results."

He said he was "optimistic" for the future but warned Tourism not to take its eye off the ball.

"We have to be cautious about what could happen with the US economy next year," said Mr. Harvey. "We need to be vigilant and ready for change. We've got to keep a keen eye on what could happen in the year ahead."

One change currently forcing a domestic readjustment is the withdrawal of cruise ships from Hamilton, with Dockyard to become the Island's major port.

Some retailers in Hamilton have expressed concern to Government that their businesses will suffer.

Kristi Grayston, owner of gift shop Pulp and Circumstance and the co-chair of the Chamber of Commerce's retail division, said: "We do not anticipate a change in our sales figures but there are a lot of retailers, some of whom specifically market to cruise ship passengers, who are very nervous.

"I do, however, think that most people on the cruise ships in Dockyard will come to Hamilton. Tourists will use the buses and ferries, so I don't think it's going to have a significant impact. Hamilton is the capital and people will want to come here."

Recent figures from the Department of Tourism showed a 6.9 percent increase in visitors in September. The year-to-date ratio of visitors to Bermuda was: tourists 65 percent; those visiting friends and relatives 13 percent; business 15 percent; and conventions, six percent.

While business travellers represent less than a sixth of arrivals, September showed a month-to-month rise of 34.6 percent in this segment, compared to a 4.6 percent increase in tourists on vacation.

August revealed a 3.1 percent dip in vacationers compared to a 23.9 percent rise in business travellers. The year-to-date figures in September showed a 30.5 percent increase in this sector, and in contrast vacationers were down 4.9 percent.

Based on the September statistics from the Tourism Department, air arrivals have increased 2.79 percent, with 243,294 arrivals this year so far, but cruise ship passengers have increased by 7.22 percent, to 308,217.

The 2006 Economic Impact Report for the Department of Tourism says overall arrivals rose by 23 percent last year, to 635,272, compared to 516,846 in 2005. Of these however, the majority were cruise ship passengers at 336,299. While air arrivals increased by 11 percent to 298,973, cruise visitors have risen by 36 percent since 2005.

These travellers traditionally spend less than air passengers and while cruise ship visitors accounted for 53 percent of arrivals in 2006, they only contributed ten percent to the tourist expenditure.

The Premier however, has said: "A cruise ship passenger is better than no passenger, and until our hotels are up and running we want to make sure there's a strong complement of cruise passengers coming into Bermuda."

The total visitor spend on tourism-related goods and services rose by $57 million last year to put $449 million into the Island's economy. In contrast, the Tourism Department's 2006 budget of $40.3 million averaged a spend of $63 per visitor.

The Economic Impact Report — an independent study, states: "The number of visitors to Bermuda in 2006 is the most the Island has witnessed in the past 30 years."

But it should be noted air arrivals have still not reached the levels of the 1980s — 476,859 in 1987; 425,915 in 1988; 416,891 in 1989; and 433,650 in 1990.

Dr. Ewart Brown, Premier and Minister of Tourism, has said more hotel beds are needed to bring in these air travellers, but the spate of hotel projects is causing concern that the Island's infrastructure will not cope, particularly with the additional housing needed to accommodate resort staff.

In order to alleviate the strain, Dr. Brown says he has commissioned a development consultant to phase the resorts in.

The PLP was re-elected to Government in 2003 on a platform which promised new airline services and value-added Cruise Line Agreements.

In 2006, Bermuda saw the return of Princess Cruises after a four-year absence, with the new Crown Princess joining vessels from Norwegian Cruise Lines, Royal Caribbean and Celebrity in visiting the Island.

New air carriers have arrived, opening up gateways such as Miami (American Airlines), Detroit (Northwest Airlines), Philadelphia (US Airways), Chicago (United Airlines), Boston (jetBlue) and Frankfurt (Lufthansa).

In addition, the arrival of Zoom this year has broken British Airways' monopoly on the London Gatwick route, resulting in cheaper transatlantic fares all around.

And millions of dollars is being invested into hotels, with projects under way at Newstead Belmont Hills, Fairmont Southampton, Fairmont Hamilton Princess, Coco Reef, Tucker's Point and Ariel Sands.

The former Wyndham resort is to become the Southampton Beach Resort, while Club Med, Lantana, and the Golden Hind properties are also earmarked for redevelopment.

Bermuda is also anticipating the arrival of luxury brands St. Regis, Ritz-Carlton and Jumeirah.