A major tourism review is under way amid alarm over the sharp fall in holidaymakers to Bermuda.

Tourism Minister the Hon. David Dodwell said the department's Budget would be scrutinised.

For instance, the study would examine whether advertising dollars were being well spent.

"We are looking at the allocation of spending,'' he said yesterday.

His comments came as more gloomy figures were released about the Island's number one industry.

The Bermuda Quarterly Bulletin of Statistics bring dismal news on many fronts -- air visitors, hotel industry employment, retail sales, and construction projects.

The second quarter figures, compared with those for the same period in 1994, show: Some 129,518 visitors flew into the Island -- down 4.9 percent; Spending by air visitors was put at $150.1 million, an 8.9 percent decline; Guest houses suffered a 17.7 percent drop in occupancy levels; Hotel industry employment at the end of April, 1995, stood at 4,016 workers, a 1.9 percent decrease; Liquor store sales dipped two percent;and The value of construction came to $8.4 million, a 33.9 percent decline. The main projects included work at the Bulls Head Car Park, the Bank of Butterfield and Bermuda College.

But it has not all been bad news.

Overseas spending by Bermudians -- often blamed for difficulties faced by local stores -- went down by 2.7 percent year-over-year.

An estimated $6.1 million worth of good was declared during the second quarter.

While travelling residents forked out an increasing amount on computer equipment, tools and machinery, spending on jewellery, watches, toys and sporting items plummeted.

The report also revealed 64,926 cruise ship passengers came to the Island -- an increase of 1.6 percent -- and spending by them was estimated at $16.5 million. This was slightly up on 1994.

In addition, it emerged 57 new homes were added to the housing stock -- 18 more than the same period last year.

Mr. Dodwell said he had found nothing "startlingly new'' in the second quarter statistics. The downward trend in air arrivals was already well known, he said. "It's obviously very disappointing, and we are trying to do something about such things, but I'm not surprised.'' Mr. Dodwell said one measure to boost Bermuda's image was the new November-March marketing campaign. Government has decided to fork out $2.5 million this winter in a bid to improve the slowest part of the season, and fill empty hotels.

Under the campaign, visitors are asked to "come bask in a different warmth'' -- with "bask'' referring to rest and relaxation and "warmth'' highlighting the friendliness of Bermudian people and the temperature in comparison to the US.

There was also the January-March temperature guarantee scheme offering visitors a 10 per cent reduction in their room rate, free admission to cultural and historical places of interest, a transport pass and discounts in many shops when temperatures did not reach 68-degrees.

Advertising would be appearing in trade publications such as Travel Weekly and consumer magazines such as Conde Nast Traveller and Walking . Said Mr.

Dodwell: "The campaign is an attempt to focus on the fact there are two seasons in Bermuda, November-March and April-October. And, to some degree, they attract different customers.'' Mr. Dodwell said further moves to boost tourism could emerge from the review of his Ministry's Budget.

"We are in the process of looking at marketing for the next year with the clear intention of working out short-term objectives and doing something about next year's numbers. We are also looking at long-term objectives and trying to turn a decline into a trend of incline.'' Mr. Dodwell said promotion and the advertising of "on-Island activities'' would be examined. He expected the reports on the review to hit his desk by the end of this month, or the middle of November.