Government's decision to extend GlobalHue's contract as Bermuda's tourism advertising agency was wrong on a number of counts.

First, it is good practice to review advertising agencies every few years, especially at a time of economic turmoil when the global tourism is changing rapidly and advertising agencies are hungrier than ever for business.

GlobalHue's predecessor Arnold Worldwide was reviewed after four years, and lost the contract.

Of course, if the customer is totally satisfied with an agency's performance, then conducting such a review after three years, which is how long GlobalHue has had the contract, may not be necessary.

So how has GlobalHue done? The agency itself takes credit for improving tourism's performance in 2006 and 2007 when total arrivals rose by some 27 percent compared to 2005 and spending rose by more than $119 million.

It said earlier this year: "The fact is that during the time that GlobalHue worked with Bermuda Tourism in 2006, on-Island expenditure increased by $48.9 million (14.3 percent) in the first year, and another $53.8 million (13.8 percent) in 2007. The on-Island spend in 2007 was over $100 million greater per year than it was in 2005. Clients hire agencies to help them deliver results and grow revenues. GlobalHue has achieved that for Bermuda Tourism."

Quantitative measures of the effectiveness of advertising campaigns are hard to come by, so if the agency wants to take credit for that, no one can stop it, even if some may feel that other factors, notably the big increase in cruise ship calls in those years, may have contributed. What the agency has not mentioned to date is tourism's performance in 2008, when tourism arrivals plummeted by 16 percent and spending dropped by $112 million to $401 million, almost back to the 2005 figure of $394 million.

In part, this was due to the reduction in cruise ship visits in 2008 which led to a $13 million fall in cruise visitor spending, but air arrivals also fell 13.7 percent to below their 2005 levels and air visitor spending dropped $100 million in the year.

And 2008 also saw the economic crisis begin, and no doubt GlobalHue will want to place some of the blame there, but it must take some responsibility for the decline if it took credit for the gains.

Even allowing for the recession, so how did Bermuda and GlobalHue do compared to its competitors? In 2006, air arrivals rose by 11 percent, which was among the best in the region, but in 2007, they edged up just 2.2 percent, which put the Island in the middle of the pack. And in 2008, Bermuda's performance on air arrivals wasn't just bad, it was the worst in the Caribbean region with the exception of Guyana.

By that measure, GlobalHue should not be given a free pass for the next two years. In the last 12 months, it has not delivered.

That statement can be made without reference to the concerns that Auditor General Larry Dennis raised about $1.4 million that he believed had been mismanaged under the terms of GlobalHue's contract, although it begs the question of, if those concerns are valid, did they affect Bermuda's poor tourism performance in 2008.

Nor need reference be paid to some of the allocations of advertising spending, which have been criticised in the advertising trade press, except to ask if a different allocation might have led to an improved result.

But those are questions that the Ministry of Tourism certainly should have been asking itself, if not GlobalHue. And it makes the case for a full agency review compelling. But instead, GlobalHue has been given a two-year extension and more money to spend.

That makes no sense. GlobalHue should have been required to rebid for this contract in competition with the rest of the industry.