relief thanks to legislation passed by Parliamentarians on Friday.

The Hotels Refurbishment (Temporary Customs Duty Relief) Amendment and Change of Title Act 1998 will now go to the Senate for approval.

The Act gives complete temporary relief from Customs duty for new and existing hotels in respect of capital goods to be used in a capital investment scheme.

Finance Minister Grant Gibbons noted that it followed in the footsteps of 1991 legislation which lowered the duty rate on refurbishment materials to five percent for hotels.

This was later extended to cover materials used by hotels to build additional rooms and facilities and was now being extended further to cover new hotel projects.

Dr. Gibbons said the previous initiatives had proved successful. Figures from between October, 1991, and December, 1997, showed 2,836 applications had been made for the reduced duty by visitor accommodations of all sizes.

This represented a total refurbishment value of some $42.6 million which reflected a total duty relief for these properties of close to $7.5 million.

Projected duty relief for existing properties under the new legislation was between $400,000 and $500,000, said Dr. Gibbons.

Product development was key when it came to improving Bermuda tourism, he continued, and this was what the legislation was trying to encourage.

The legislation eliminates duty on these materials until March 31, 2001. It was for a three-year period, said Dr. Gibbons, to encourage investment in new properties now and to encourage other properties to renovate.

Dr. Gibbons said calls for the relief to be extended to nightclubs and restaurants were also being considered.

Shadow Finance Minister Eugene Cox replied that he felt the legislation was necessary as hotels were the lifeblood of the community.

But he added that he felt Government was doing too little, too late as many properties had already closed.

He called for Government to make hotels receiving the benefits accountable by making their returns available for its auditor to review.

Shadow Tourism Minister David Allen agreed with his colleague. He added that in the process of making Bermuda more competitive in the tourism arena, Government should also find a way to lower room rates to help boost occupancy.

He said Government should extend the duty free benefits to nightclubs and restaurants so they could upgrade their product also.

PLP backbencher Ottiwell Simmons echoed this call.

He also asked how much money would be given up to the hotel industry through the legislation and how many more visitors would be attracted to the Island because of resulting hotel improvements.

Tourism Minister David Dodwell said the legislation would restore hotels to a level of profitability and assist reinvestment in the product which would benefit the Island, he explained.

As far as being too little, too late, said Mr. Dodwell, this was another example of the PLP beating the hospitality industry into the ground.

"When they say it is too late,'' he exclaimed, "they are saying tourism is finished.'' And hotels were accountable for money they spent under the legislation, he noted, as the application process they went through to receive the benefit was very intense.

Dr. Gibbons said Government had limited resources with which to provide a subsidy and hotels were receiving the benefit in this case as they were an integral part of defining the visitor's vacation experience.