By TERENCE MURRELL, Guardian Business Desk

The British Colonial Hilton is weathering the storm of declining tourist arrivals, despite the impact the underperforming sector has on other hotels. Its durability has been facilitated by its focus on conference and meetings business, both domestic and international, and its projections for the slower September to October period, which factored in lost revenue from half of its rooms being out of the occupancy pool.

The hotel is in fact undergoing a $15 million renovation exercise, which began in August, with the first phase scheduled to be completed by end of the year, and phase two by the middle of 2009. The hotel is 'essentially' operating at full occupancy, though only 50 percent of its rooms are in use.

"Hilton is in a unique position," said Jermaine Wright, the hotel's director of sales and marketing. "Half of our rooms are out of inventory and the remaining rooms are constantly sold out. We are very excited by the ongoing renovations, which include a new executive lounge, improved food and beverage facilities, and the creation of a sophisticated bar product.

The expansion of the Colonial Hilton's meeting room and board space should be complete by November, according to Wright. Conference space at the property is being expanded from 10,000 sq. ft. to 17,000 sq. ft., to facilitate the growth and expansion of meetings, conference and convention business, a niche which has proven to be quite lucrative for the hotel.

"Its all about facilitating our clients, many of whom are business persons and corporate entities," noted Wright.

A number of hotels, most recently Baha Mar's Sheraton property - with a 30 percent occupancy rate - have had to adjust to declining business during a time of the year normally plagued with lower numbers of tourists, but compounded by financial woes in the all-important United States, where over 95 percent of Bahamian tourists originate.

A recent survey released by the Bahamas Hotel Association (BHA) also revealed the concerns of hoteliers about declining sales, higher operating costs, and the U.S. economy.

According to the Central Bank, tourism arrivals during the first half of the year contracted by 2.2 percent to 2.37 million, in comparison to the same period in 2007. This decline was lead by the cruise sub-sector, which declined by 3.8 percent. Both New Providence and Grand Bahama experienced decreases of 5.9 percent and 14.7 percent, respectively, though a silver lining can be seen in the performance of the Family Islands, which experienced an 11.7 percent increase.