Haughton award.

The pay increases in the new four-year contract for hotels were branded "lunacy'' and "ludicrous''.

The outburst came as the 21 members of the Hotel Employers of Bermuda weighed up the costs of the arbitrated deal.

One hotel source said: "I believe most hotels will accept the award, although a minority may not.

"The minority, however, may well be influenced by the others.'' The Bermuda Industrial Union has already agreed to the retroactive settlement, even though most of its wage and benefits demands were rejected.

Prof. Haughton and his Essential Industries Disputes Settlement Board awarded wage rises totaling 14 percent over the four years.

Slight increases in pension contributions in 1993 and 1994 were also awarded.

And hotels were ordered to pay back union dues they failed to deduct from wages.

The contract runs from May 24, 1991 until February 25, 1995.

Yesterday Mr. John Jefferis, managing director of the Elbow Beach Hotel and Development Company, slammed the settlement.

"The Elbow Beach Hotel expresses deep concern over the various components of the board's ruling, particularly with regard to retroactivity and the recommended wage increases.

"Any pay increases at this time are ludicrous, we already have the highest resort labour and ancillary costs in the world, and in this frighteningly competitive global tourism market, if Bermuda is to gain back any market share, wage costs must decrease.

"The wage cost percentage increases recommended by the board are the same or more than adjusted inflation rates in our major markets, thereby further exacerbating our competitive situation''.

Mr. Jefferis claimed the three percent rise proposed for 1993 was "as detrimental to the hotels financial viability'' as the eight and 10 percent increases in the mid-1980s.

"The hotel industry cannot be expected to continue to underwrite the unrealistic standard of living expectations currently perceived as a right in Bermuda.'' Mr. Jefferis said the hotel was considering its options over the award, which he dubbed a "judgement of Solomon''.

Ms Lesley Hayward, general manager of Ariel Sands, said yesterday the costs of the contract were being scrutinised.

"Our accountant is looking at it, and investigating the costs.'' She added: "My initial reaction to the award is that any increases in wages are difficult these days.'' Ms Hayward said it was a "real struggle'' for Ariel Sands to implement the 1991 five percent pay rise, as proposed by the Hobgood Award.

"I presume, however, we will bite the bullet this time, and go along with the award.

"It is supposed to be binding, and I think we should honour it if we possibly can.'' Mr. Wilhelm Sack, manager of Horizons & Cottages, said the proposed pay increases would be a "burden'' on the hotel.

"I think we will follow the guidelines of the HEB over whether we should accept the award.''