The law gives Bazarian International 5 years to get the hotel operational or lose the right to develop the site. The hotel is expected to open in 2012.

The Veendam is a relatively small ship, accommodating 1,300 passengers and 500 crew, and enabling it to dock in both Hamilton and St George.

Richard D. Meadows, Executive Vice President, Marketing, Sales and Guest Programs for Holland America Line said, ‘Veendam is ideal for this itinerary. She is a premium mid-size ship, the perfect size to navigate the narrow entrances to the harbors in Hamilton and St. George’s. Veendam’s guests are able to step off the ship right in the center of each town. Ships larger than Veendam must tie up at the Dockyard facility a considerable distance from both towns. With overnight stays in Hamilton and St. George’s, guests will truly have the time to explore Bermuda and gain an appreciation of its culture, its people and its history as well as the time to relax on the island’s beaches, play a full round - or two - of golf on its world-renowned golf courses or partake of the many activities offered.’

The airline was founded in 2001 by Scottish brothers John and Hugh Boyle and employed over 700 staff in the UK and Canada. The airline has advised passengers to contact their credit card companies for refunds and seek alternative flights with other airlines.

The news comes as a big blow for Bermuda who had hoped to bring the star to the island. Woods qualified for the event last year, the first time it had been held in Bermuda, but withdrew for personal reasons.

The PGA Grand Slam of Golf tournament will be held at the Mid Ocean Club in Bermuda on October 14 – 15 2008. Tickets are available from www.pga.com.

It is anticipated that the land will be used for a new course that will be part of the Park Hyatt hotel, set to open in 2011.

Premier and Tourism Minister Dr Ewart Brown announced the decision in the House of Assembly last week. Cruise ships would also be allowed to open bars, shops, and allow entertainment while docked, all prohibited under current legislation.

The Government have defended the plans, stating that Bermuda is losing its competitive edge in the cruise market, particularly the ability to attract smaller ships capable of docking in Hamilton and St George.

Cabin tax for ships visiting Hamilton and St George has also been waived for 3 years.

Government also announced that the hotel currently being developed by Bazarian International on the old Club Med site in St George’s will be managed by the Park Hyatt hotel group. It is expected to open for business in 2011.