longer be a viable industry in Bermuda''.

In a controversial speech on Wednesday, Bank of Bermuda chairman Mr. Eldon Trimingham, said tourism bears a "disproportionate amount of the taxation and there is no point reinvesting in an industry that has little prospect of ever providing a fair return as seems to have been the case for some time now''.

"Our tax system, (a consumptive one) and long may it last, is based on the spending of Bermudians and tourism is an employer of a substantial number of Bermudians,'' he said.

Hotels collect a six percent government room tax for each occupied room and pay required duty rates on overhead, he said.

"Tourism must be made profitable. Perhaps those in some of the financial industry, where there seems not to be a problem with return on investment, should be more aware and responsive to this imbalance which will ultimately undermine the viability of their own business in Bermuda if not soon properly addressed,'' Mr. Trimingham added.

Tourism, a stable political environment and solid infrastructure are the three legs a successful offshore jurisdiction needs to be successful, he said.

"If any one of the three ingredients is missing, any jurisdiction is automatically excluded as an offshore financial centre. There is dry rot in this particular leg (tourism),'' he said.

The Premier's Commission on Competitiveness had solutions and courses of action but "nothing seems to have been done to implement these,'' he added.

Review and appraisal may be underway but "most of all, action is required'', he continued.

In 1992 Premier the Hon. Sir John Swan formed the Commission on Competitiveness, in which tourism was addressed. The commission was set up to consider if Bermuda had become less competitive in the 1980s and early 1990s and if so, what could be doen to reverse the trend.

On the same day as Mr.Trimingham's speech, Southampton West MP Mr. David Dodwell said in the House of Assembly occupancy rates at the Island's hotels were expected to be only "62 percent this year''.

Tourism Minister the Hon. C.V. (Jim) Woolridge, said he has voiced concerns about the Islands tourism industry before, specifically the physical plant and the service, for several months.

"I am not aware of a thrust to reduce taxes (but) I agree with Mr. Trimingham -- product and service need to be improved,'' he said.

"It has been over 20 years since a new hotel has come to Bermuda -- because of delays and disruptions the financials of the proposed Ritz Carlton withdrew,'' he added.

Club Med and the Bermudiana are examples of hotels that have closed on the Island while "two more'' may join them, Premier the Hon. Sir John Swan said earlier this week.

Responding to Mr. Trimingham's comments, one representative of one of the Island's large hotels, said hotels receive a break on duty when they refurbish.