The collective salaries of hotel and restaurant employees dropped by almost 40 percent during the first quarter of this year, according to the latest Government statistics.

Meanwhile the total employment income of the Island's international business workers rocketed by 51 percent to $244.8 million.

Staff working in the hospitality industry saw their combined employment income fall by 38.1 percent for a total of $20.9 million for the whole sector, as revealed by the first quarter 2008 Quarterly Bulletin of Statistics.

The employment income for international business has continued to rise for the past five quarters, from $162.1 million in the first quarter of 2007 to $192.2 million for the fourth quarter of last year, with the overall number increasing by more than $125 million from $594.2 million for 2006 to $726 million in 2007.

Meanwhile hotels and restaurants have declined from last year's third quarter at $44.8 million to $40.2 million for the final quarter of 2007.

The last time there was such a big jump was in the second quarter 2006, when income dropped 24.1 percent, but apart from a 50.1 percent rise in the second quarter of last year, any increases have been minimal.

The Island's overall employment income figure rose 14.2 percent, at $761.6 million.

Walter Simmons, chairman of the nightclub and restaurant division of the Chamber of Commerce and owner of Bouchee, put it down to the fact that no one in the restaurant trade was hiring staff or replacing those who have left.

"No one is hiring," he said. "Speaking from a personal point of view, I can tell you that if someone left my business I would not replace them."

In fact, Mr. Simmons said many restaurants are actually looking to lay-off employees instead of taking on more.

"I think we are in a situation right now where we would really be looking to lay off because earnings are definitely down, but we are stretched to the hilt with staff levels as we are.

"Just trying to find staff is an issue for our industry alone and trying to get an overseas worker is a great expense and it has been a huge struggle to find locals as well. The staff that are there now will have to work a few more hours just to fill in for that person who has left, because right now we just cannot afford to replace them as sales are down."

Mr. Simmons said that while 2007 had been a good year for his restaurant business and he was able to recruit another member of staff, so far this year takings were not up on last year.

"We try to advertise a little more in magazines and we wonder whether it pays off - we had to see where we would get the most for our dollar," he said.

"We have noticed that there are a lot less tourists and when you think you have 100 odd restaurants on the Island and you have got thousands of tourists coming in a month, each restaurant is scrambling to get a piece of the pie, and when you consider that 50 percent of those tourists are businessmen, it makes it even harder to attract the leisure tourist."

The Bermuda Hotel Association declined to comment.

Sectors which saw an increase in income compared to last year's first quarter included banking, insurance and real estate ($95.3 million or a $12.5 percent rise), business services ($69.2 million or 9.9 percent), wholesale and retail ($54.9 million or 5.7 percent), public administration ($95.6 million or 6.2 percent), and all other ($115.7 million or 1.4 percent).

Among the decliners were construction ($43.3 million, or a decrease of 0.7 percent) and transport and communication ($21.7 million or -7.5 percent).