THE pilot, in a strong southern drawl, intoned: ''Now you sit back and enjoy the southern hospitality.'' Familiar with the American Deep South, I raised a quizzical eye aboard the flight to Sydney. As if hearing my unspoken question, the captain added: ''Southern hemisphere that is.'' We were on a trip to Australia's Blue Mountains to enjoy a ''Christmas'' celebration known as Yulefest. Nothing unusual in that, except that it was June. Santa, trees, lights, all the trappings of a WesternChristmas were on offer in June, July and August. But when we alighted into the cold, but not quite Christmas air, the Sydneysiders were disappointingly down to earth when asked about Yulefest. ''It's basically a beer drinking festival,'' said the ticket collector at Sydney's Wynyard station. Peter Dayton, a coach driver at Murrays Coach Tours, said: ''Like mother's or father's day, it's a commercial thing.'' Lottie Fenton, a Sydney resident for eight years, had never even heard of the affair. Nor had the concierge at a leading Sydney hotel. Had they no cheer? Undaunted, we set off in our hire car, westward into the Blue Mountains, so named because the sun's rays refract blue off the oil secreted by the eucalyptus tree. Approaching the area by car from Sydney, there was no mass of land standing majestically ahead, instead, the road steadily ascended into small villages atop a dissected plateau. According to the Blue Mountain Holiday Book, the Yulefest tradition began about 13 years ago, when a group of nostalgic Irish visitors - staying at the Mountain Heritage Country House Retreat in Leura - found themselves longing for the type of Christmas they had enjoyed at home. The cold weather seemed as good an excuse as any, so they asked the hotel for a traditional dinner with all the Christmas trimmings. It was so successful they returned the following year and a tradition was born. Other visitors clamoured for the food and more inns joined in the festivities. In Leura, we tried to stay at the Mountain Heritage Country House Retreat but, according to manager Noeline McGrath, the hotel was booked up. An international congress meant the Yulefest had been cancelled that weekend. Christmas cancelled? Normally it would have broken our hearts, but in Leura there were plenty of inns still celebrating. We stayed, instead, at the Leura Resort Hotel which, during the Yulefest, was decorated with Christmas lights and trees. Although it was June, the start of the Yulefest season, many of the inns were already booked up. We were told that advance reservations at the height of the season in July and August were essential. Christmas shows at the Hotel Clarendon in Katoomba were already sold out. ''The event is so popular, it's spreading,'' said Leura Resort Hotel front desk manager Robert White. ''The Southern Highlands now have one.'' Ambling along one of many walking paths in the dramatic Blue Mountains range we found even the children were convinced. ''Look what I got for Christmas,'' one small child said, as she thrust a red-haired gnome into our faces and then, unable to stop, ran on. In the evening, other children waited with great expectation for the cameo appearance of Santa. Throughout the tourist-frequented towns of Leura, Katoomba, Medlow Bath, Mount Victoria and Wentworth Falls, Yulefest cheer filled the air. But proprietors in the area were not all overflowing with the Christmas spirit. ''It's a huge thing in terms of administrative booking,'' said a sighing Mr White. ''And by the time it's over, three months later it's the real Christmas.'' Margot Teal, owner of The McClintock in Katoomba, preferred to say nothing. She just rolled her eyes and exchanged looks with co-owner and husband, Arthur. Some restaurants, such as the charming Cafe Bon Ton, off the main strip of Leura, had gone so far as to declare themselves Yulefest free, according to Bon Ton waiter Laurie Atlee. And who can blame them, such dramatic scenery as the Blue Mountains offers surely needs no excuse to attract visitors. And traversing the Jacobean caves - stone illuminated like crystal - the celebration makes even less sense. A synthetic Christmas set among such natural beauty seems completely out of place. But ignore the Christmas, the Santas and the false white beards and you will find a region of breathtaking beauty. How to get there Qantas has flights to Sydney daily. Cost: $8,800 for an economy class return (offered by Wallem Travel). Visa: required.