Faced with falling bookings, the Island's hotels considered doubling the current $400 credit offer for four-night stays to $800.

But industry sources say the idea was scrapped because not all the hotels involved could agree on it and another promotion to boost bookings is said to now be on the table.

Visitors paying $200 or less for a room in Bermuda might have got away with an almost zero balance on checkout, had the idea been agreed to. It was hoped guests in turn, would increase spending in hotel restaurants and bars and on tours.

Tourism Director William Griffith confirmed: "It (an $800 credit) was discussed but there was no substantive agreement."

Mr. Griffith added: "Nobody ever wants to discount but the fact of the matter is these are different and challenging times and such times require different actions."

The Fairmont Southampton sold a whopping 14,000 room nights in just four days with its recent $99 a night promotion, putting pressure on the Island's other hotels to reduce their rates or come up with promotions.

As part of Tourism's '400th anniversary sizzling summer offer', more than a dozen participating hotels in Bermuda are currently offering guests a credit of $400 for stays of four nights or more.

And four-night packages as low as $672 a person including accommodation at hotels like Surfside and The Wharf suites are being offered from gateway cities such as New York and Boston.

The World Travel and Tourism Council predicts the Caribbean region will see a staggering almost eight percent downturn in business this year.

And at the recent Caribbean Hotel and Tourism Association conference, Duane T. Vinson, of Smith Travel Research, noted: "The decline in demand has not been that significant, but the room rates and revenue decline has been great and that is the real concern."

He added: "The Caribbean, in comparison to other warm weather destinations around the world, is down in demand by 6.5 percent compared to double digit declines in other destinations."

He pointed out that high-end luxury properties are discounting more and that business and corporate travel as well as meetings and conventions are off significantly, which also has a greater impact on the larger hotels.