The luxury hospitality market is feeling the full impact of the global economic downturn in more ways than one, as companies cut back on lavish trips to top hotels and resorts in offshore destinations.

But it is less to do with the money needed to finance the excursion and more about the public's perception of how it is being spent that is putting firms off visiting the likes of Bermuda.

That is the view of Ed Trippe, president of Tucker's Point Club, who believes that businesses do not want to be associated with taking trips for meetings in such places in the face of public discontent during the current financial crisis. "It is a scary time," he admitted.

"If you read any publication, even if you are talking about the Caribbean or downtown New York or London, the hospitality industry has been decimated.

"If you add that to a very troubled economy where business and leisure travel is well off and on top of that the perception of AIG (American International Group) and any banks taking TARP (Troubled Assets Relief Programme) money having what are seen as lavish social events in the current economic climate, the effects are felt on the meeting market business.

"The impact on the hospitality industry of that market being decimated is that everyone is just struggling and the effect on Bermuda is just terrible.

"But that perception of travel for business has to change and it has to come back to the norm and until that happens this industry is going to continue to struggle."

However, Eric Brooks, chief operating officer at Tucker's Point Club, said that his resort was the exception to the case, with only two cancellations being made since bookings were taken, one of which was a small group and the other which moved its reservation to 2010.

He added that Tucker's Point Club's new hotel and spa was perfectly located for businessmen coming to the Island, near the airport, and was the right size for board of directors meetings and small groups of senior executives, where they could book a block of 15 to 25 rooms at a time.

Mr. Trippe said that the hotel and spa had been finished late and significantly over budget, but added that the delay and extra cost was down to wanting to provide the best quality product to its guests and customers, with each room costing about $1 million to build and furnish.

"We were fortunate because we owned the land before we started and we spent, in addition to having the land, $1 million per room," he said.

Mr. Trippe said the hotel and spa was already well-financed by the Bank of Bermuda, BF&M and Argus and work on the development was at an advanced stage before the economic turmoil struck last year.

But he revealed that while the resort's first Residence Club had a full membership, the second one had remained at 55 percent subscribed (or 65 rooms full) since the fall-out from the financial markets struck, despite a significant amount of interested parties being attracted to the idea of fractional and whole ownership and the facilities available at the hotel and spa, including the fitness centre, restaurant and conference room, who could invest in the future.

Mr. Brooks said that the hotel's main business was group bookings, followed by the leisure market, with a good volume of trade expected in the opening weeks after it officially opened its doors on Friday and with plans to hold a gala opening on Thursday April 30, including around 300 guests, such as Premier Ewart Brown, Governor Sir Richard Grozney and film stars and celebrities Michael Douglas and Catherine Zeta Jones on the invite list.

"One of the things that has happened, particularly in the last nine months, is that the lead time for the leisure reservations has shortened to the point where people are reserving two or three weeks before, instead of before when it was one year in advance when you checked out one year, for the next year," he said.

"We have a very robust market here - we are focusing on gateway cities for group and leisure bookings and we are in those markets constantly and working on key travel enhancements.

"If you are on the East Coast, you can arrive in Bermuda in time for lunch and play 18 holes before dinner on your arrival day - Bermuda gets knocked for being an expensive destination, but when you factor that in, for your total vacation dollar, what you get on your arrival day, suddenly it begins to make a lot of sense."

David Dodwell, president of The Reefs Club, said the effect of the downturn in the economy had hit his business the same as the rest of Bermuda, particularly its new residence club.

"I think in the private club residence business has slowed, if not ground to a halt, because it is discretionary - the customers are either buying a second home or it is a luxury," he said. "So it has been understandably quiet."

But he said the one positive to take out of all this was the fact that the new development would be up and running in six to eight weeks, when potential new clients would be able to see it in action.

"I am very optimistic of the project," he said.

"In my view, this is going to be absolutely the right product coming out of the recession and it is a good opportunity on the fractional side of things with people able to get more value for their money by investing in it.

"The good thing is that The Reefs will be ready for when the economy turns around and we will then be in a position to take advantage of it."