Labour Party over the health of the industry.

The House of Assembly on Wednesday approved The Hotels Refurbishment (Temporary Customs Duty Relief) Act Extension Order 1994.

It allows hoteliers to pay only five per cent duty on materials imported to fix up hotels.

Deputy Opposition Leader Mr. Walter Roberts , whose Somerset Bridge Hotel was placed in receivership last year, said the order should be extended to include hotel expansions, or even made permanent.

"More than 30 locally-owned guest houses and hotels have gone out of business in the last five, seven, eight years,'' Mr. Roberts said.

But Mr. Ottiwell Simmons MP, the president of the Bermuda Industrial Union, questioned the need for tax concessions to hotels.

Tourism had done well by Bermuda, and "clearly it should be that the hotels that take the bulk of the dollar of the tourists must have done well,'' Mr.

Simmons said.

"If they have not done well, then it is something wrong with the way that the hotels have been managed.'' Shadow Tourism Minister Mr. David Allen said the Opposition supported the tax break. The PLP had argued "long and loud on the need for assistance to our hotels.'' Finance Minister the Hon. David Saul said the order was first passed three years ago to help hotels during the recession and had been extended twice since, most recently for one year in the last Budget, to the end of 1994.

But most renovations took place in the winter, and Government announced in the recent Budget it would extend the order "one more time'' until June 30, 1995.

During the life of the order, hotels had invested nearly $14 million improving their properties, he said.

Mr. Roberts noted that each time Dr. Saul brought forward the order, he said it was temporary. "This is one piece of legislation that probably should become more permanent,'' he said.

He wondered whether Dr. Saul had considered extending the lower duty to cover material imported to add hotel units. Some hotels were unprofitable because they needed more rooms, he said.

Mr. Simmons said he got "frustrated'' when the subject of hotel relief arose.

"The hotels seem to have a more powerful lobby in this Parliament than any other industry,'' he said.

Although hotels were labour-intensive, hoteliers could not blame their problems on high wages, Mr. Simmons said. "The wages the hotels pay to their employees are among the lowest in the country,'' with many workers relying on tips.

And hoteliers were unique in receiving a break on the employment tax, he said.

During the off-season, they paid less than the five percent employment tax other businesses did. "There is no justification,'' he said.

What other industry had $29 million spent through the Department of Tourism "to ensure that the hotels are successful?'' he asked.

The eight largest hotels claimed a $5-million collective loss, he said. But while their books showed their payrolls increased by $2 million in 1993 over 1992, the amount of employment tax they paid dropped.

And it could be just one of those hotels that lost the entire $5 million, he said.

The 13 smaller hotels in the Hotel Employers of Bermuda had not opened their books lately, but the BIU knew they were making profits, he said.

"Therefore, to apply this across the board means that you are paying the successful ones for no reason.

"We want to ensure that the hotels are successful and are worthy of the concessions they are given,'' he said.

Dr. Saul said hoteliers who made capital improvements like additions of rooms could apply for five-year deferments of Customs duties.

The order was intended to be temporary, and "I don't like at all to be associated with anything that is permanently temporary.''