Bermudiana Hotel, a top American hotel executive said yesterday.

Mr. Paul Sonnabend, president of Sonesta Hotels, said the Island should work to overcome its reputation as a costly but dull destination.

Bermuda is "a country that has the highest standard of living in the world, and they have to be creative if they hope to maintain it,'' said Mr.

Sonnabend, whose company operates the Sonesta Beach Hotel on South Shore Road and 15 other properties around the world.

While there may be local sentiments against such changes, "it's a little naive to think they can have everything their own way,'' and "it's going to make it that much tougher to get the tourist dollar,'' he said in a telephone interview from Boston.

Mr. Sonnabend said he knew the Premier's Commission on Competitiveness was examining tourism issues, and he was disturbed recently by a "renewed feeling'' among travel agents and wholesalers "that Bermuda is seen as an expensive destination''.

The Sonesta Beach Hotel has introduced discounts as it tries to compete with other destinations, but the cost of transportation on the Island was often mentioned as an irritant to visitors, he said. The lack of moderately-priced restaurants was another complaint.

And while Bermuda was seen as beautiful, "it is not a very exciting destination in the sense that there is nothing to do''.

Mr. Sonnabend recommended "a Government-operated casino, very much in the Monte Carlo style''.

The vacant Bermudiana Hotel would be an ideal location for the casino, which could be part of an entertainment complex that included a live theatre, a multi-screen cinema, "maybe even something like a bowling alley, and other activities for young people''.

An elegant, upscale casino would not attract hard-core gamblers, because they have plenty of places to wager in America and elsewhere, he said. "Nobody wants to cheapen the Island.'' But two disturbing trends underlined the need for change, he said.

First, while hotel occupancy levels were improving, room rates were falling, and "we're not necessarily making more money''.

Secondly, younger people of more moderate incomes were visiting the Island.

While that was good, they wanted more entertainment and more reasonable prices, he said.

Another complaint was that it was difficult to get on a golf course on the weekend, Mr. Sonnabend said. And advertising by the Department of Tourism "is still very staid''.