showing visitor numbers fell by 1.54 percent to 543,126 compared to 1999.

And although Tourism Minister David Allen refused to make a prediction about this year's numbers, the industry was dealt another blow when he acknowledged that a replacement cruise ship for the Crown Dynasty is unlikely to be found this season. The news will come as a blow to struggling retailers in Dockyard who hoped another ship will be lined up for this season.

The drop in visitors means that last year was the worst the industry has suffered in 21 years. Despite that fact, Mr. Allen said the Island was moving in the right direction, with visitor satisfaction increasing.

But Bermuda Hotel Association President Billy Griffith said a realistic target would be to ensure numbers do not fall further this year.

And he ruled out a return to the 1999 figure of 551,601 visitors.

Air arrivals were down by 7.27 percent to 328,305, but cruise numbers shot up by 8.84 percent to 209,272. Total bednights fell by 12.5 percent to 1,315,549 for the year.

Mr. Allen said the closure of the Marriott Castle Harbour had removed 14 percent of the Island's beds, so a bigger drop in bednights than 12.5 percent might have been expected.

Announcing the figures yesterday, he said: "We have had difficult circumstances, but we're encouraged to know that visitor satisfaction is going up, and visitor expenditure is going up, and these are the key barometers.

"We knew we were going to be down by a thousand beds but we are positioning ourselves.

"There will be no quick fixes and it is going to be a long haul, but we are heading in the right direction. The key statistics show we are moving in the right direction.

"We hope we can hold our own, but an important thing is occupancy is up. We have a prescription in hand in improving the product, improving service levels, and we have the (public-private sector) conduit alliance, and the Hotel Concessions Act.

"I can't predict, but we are laying down plans and I am optimistic we are moving in the right direction.'' Referring to the search for a replacement for the Crown Dynasty Mr. Allen revealed that he had received an offer of another ship within the past 24 hours,.

But he said he did not want to make a quick decision and he was not optimistic one will be available until next year.

He said: "We continue to have discussions. We had a communication in the last 24 hours about an offer of another ship.

"We are determined to make the right decision for Bermuda in the long-run, we are not going for the quick fix.

Visitor numbers fall again "I am confident there will be a replacement, whether its this year or next year. It looks increasingly likely it will be next year.'' The Tourism Department has been in discussions with other cruise lines since February after the ship's owners, Commodore Holdings, who have filed for bankruptcy protection in the United States, were unable to give an assurance that a replacement would be found.

Mr. Allen said 13 other Caribbean islands experienced visitor slumps last year of between 1.5 percent and 26 percent - though some did see increases.

Mr. Griffith, who was also at the press conference, said: "Looking at all the factors what's likely is that we will probably not go back to 1999 levels and our objective is to at least maintain the 2000 levels and not lose any more air levels.

"It's going to be a struggle based on the available hotel stock. It's a challenge, but we're in the game.'' The total number of visitors to hotels fell by 9.9 percent, but occupancy rates topped 60 percent for the year for the first time in a decade.

The Island was now chasing top end tourists who would provide maximum yield for the Island's economy, said Mr. Allen.

The Tucker's Point development on the site of the former Marriott Castle Harbour will only have 300-400 rooms, but they will command more than $500 a night -- far more than the Marriott could charge.

Larger hotels experienced a 15.2 percent drop in air visitors to 166,125, and small hotels dipped by 4.3 percent to 40,390.

But cottage colonies were up 1.4 percent over the year to 26,259, and housekeeping apartments rose by 14.1 percent to 18,279.

The Island continued to lose air arrivals from the United States, which were down 9.5 percent to 253,714. Canada was static at 30,617. UK arrivals were up 2.1 percent to 28,721 while European visitors plunged 11.6 percent to 6,591.

Mr. Allen said that through the Hotel Concessions Act, properties all over the Island were carrying out improvements.

The only way forward was to improve product and service, and he said there were some encouraging signs in the annual figures.

Spending by air visitors went up from $1,342 to $1,369 and the satisfaction level increased. The average spend of a cruise visitor dropped by a dollar to $151.

Those "very likely to return'' was up by three percent to 83 percent, and those "very likely to return in the next year or two'' also increased from 52 percent to 56 percent.

CHART Visitors in 2000 How did they get here?