of discounts and promotions aimed at breaking the cycle that saw occupancies hit rock bottom last year.

Although early measures show the travelling market is ready to spend money, hoteliers believe promotions and discounts are vital to improving visitor numbers.

Visitor arrivals in the first weeks of the year show Bermuda is far from out of the woods despite clear indications the US economy is moving toward recovery.

January's total of 8,356 was the lowest since 1986. The result was 7.3 percent below January, 1992 when the recession was at its deepest.

Marriott's Castle Harbour Resort opened on Saturday after a 10-week shutdown with promotional discounts aimed primarily at its past customers.

Its repeat guest promotion offers one free night at the hotel for a three-night purchase. Children can also stay for free in the same room as their parents as well as eat for free as long as their parents are on a meal plan.

Hotel manager Mr. Roger Borsink said there was nothing unique to the promotions because the weak market is nothing new.

"We've been coming up with packages for several years now because the market is so extremely soft,'' he said. "Also, our competitors are very determined and their rates are lower than ours even with the discounts.'' "People are still very cautious about spending their money,'' he added.

"They want good value and the key will be to deliver it once they are here.'' Sonesta Beach Hotel, which opens its doors on March 18 after a 21 month shutdown, has the most aggressive discounting campaign.

The hotel is advertising a super-saver rate that is well below last year's minimum rates, director Mr. David Boyd said. Its lowest rate is $99 a night per person without meals.

The Sonesta rates, which are available to all tour operators and travel agents, is the basis of a $450,000 advertising campaign the hotel considers vital to improving its occupancy levels.

"We feel at Sonesta we must improve our occupancies dramatically over last year and we're ready to sacrifice room rate to get it,'' Mr. Boyd said.

"Our workers did not get a full year's work last year. We had lay-offs in the high season. Between 20 to 100 people were not getting a full week's work at any given time. This was not unique to Sonesta.'' Mr. Boyd said the move to bolster occupancies at the expense of room rates was a "major departure from the way Sonesta has looked at operating the hotel''.

"We've pushed hard in the past to get a high room rate but with the shortness of the season we need to go for heads in beds. That's what our staff needs and what the support services of Bermuda need.'' Princess Hotels has a children stay-free and eat free plan in operation. But regional vice-president Mr. Stephen Barker says the promotions which are aimed at the baby boomers market are continuations from previous years.

"We've done well with them before. I know other hotels are jumping on the bandwagon but we've been doing it for a number of years.'' Discounting does not appear to have trickled down to smaller properties whose occupancy requirements are not as demanding.

Mr. Stephen Martin of Bermuda Small Properties -- an association of 11 guest houses -- rejected price discounting as " not an appropriate way to develop'' business''.

He said the Small Properties had prices that were well established and right for the market.

Like Mr. Borsink, Mr. Boyd described the travelling market as extremely price sensitive.

"People are travelling but they're still extremely price sensitive,'' he said. "It's the same tourist that came to us before but they're not willing to spend $430 for a deluxe room and a meal plan.''