The newly formed Bermuda Tourism Authority has been handed a $23.1 million Government grant to fund tourism initiatives in the coming year.

That figure is $4.2 million — or 15 percent — less than the $27.3 million allocated to Government’s Bermuda Department of Tourism last year.

The BTA, staffed by a team of non-political industry experts, will take over control of product development and marketing strategies from the defunct Department of Tourism at the start of next month. Tourism Minister Shawn Crockwell had previously said that the change was necessary to “maintain continuity and ensure that political interference is removed”.

Despite the cut, Finance Minister Bob Richards said Government “believes” in tourism as “essential to the provision of long-term job opportunities”.

Delivering his Budget statement, Mr Richards said: “Government has made huge commitments to the support and revitalisation of tourism. The Bermuda Tourism Authority and its funding is a manifestation of this commitment, in addition to millions of dollars of tax concessions to the hotel, restaurant and retail sectors.

“This support will continue. There is a clear need in Bermuda for new hotels — hotels bearing top brand names. However, these days, the top brand hotel operators seldom actually develop the physical product themselves, requiring developers to take that risk.”

Mr Richards said that casino gaming was “essential to our initiatives in tourism development” and also in bringing in overseas hotel development. Government is to legalise casino gaming this year after controversially abandoning a pledge to hold a referendum on the issue.

“The gaming model envisioned for Bermuda will be highly structured and regulated,” Mr Richards said.

“No more than three licences will be issued and the model will be based on the successful Singapore casino model.

The Finance Minister said Government needed to invest in port and channel improvements “to enable our cruise line partners to bring their newest, most exciting ships to Bermuda”.

And he said that infrastructure development will provide a boost to the flagging construction industry.

“The infrastructure projects at the airport/causeway, Morgan’s Point and the new hotels will create many opportunities for local contractors, both large and small and result in those investments being multiplied over and over again throughout the Bermuda economy,” he said.

Yesterday BTA chief executive officer Bill Hanbury said it was too early to comment on the grant.

“The Bermuda Tourism Authority is looking at the funding against its budget and we are unable to comment further until we have had time to absorb the information,” he said.

Responding to the Budget, hotel developer Craig Christensen said he was not too concerned about the budget cut.

The head of the company that is developing a $2 billion resort at Morgan’s Point, also welcomed Government plans to move ahead with casino gaming and was looking forward to working with the new Tourism Authority.

“I think we just need to get a clear message out there in terms of how good Bermuda is,” Mr Christensen said.

“My first discussions with the BTA have been very positive. It is a bit too early to say, but I certainly think that taking politics out of business was a good move.”

According to Government statistics released yesterday, 576,373 tourists visited the Island in 2013 — a drop of 33,952 or 5.6 percent on 2012.

Air passenger arrivals were marginally up — from 232,063 in 2012 to 236,343 last year — but cruise passenger arrivals took a hit, falling from 378,262 in 2012 to 340,030 in 2013.

Hotels averaged 57 percent occupancy throughout 2013, an increase of one percent on 2012.

Although visitor spending figures for the full year are not yet available, tourists spent an estimated $319 million in the first nine months of 2013 — a drop of 2.2 percent on the year before.

Spending by air passenger visitors rose to $256.3 million, but cruise passenger visitors spent just $62.7 million — a drop of $10 million on 2012.

The vast majority of air passengers — 72.4 percent — flew in from the US. Canada provided a further 11.7 percent of passengers while ten percent of passengers arrived from the UK.