owner Mr. Denton Simons has applied to turn the 24-room hotel into 12 residential units.

His Planning application was filed last week in The Royal Gazette .

The hotel was placed in receivership by the Bank of Bermuda last year for non-payment of banking debts. It was then owned by Mr. Walter Roberts MP, the deputy leader of the Progressive Labour Party.

Mr. Robert's difficulties at the time were compounded by more than $25,000 in law suits against the hotel.

Tourism director Mr. Gary Phillips said he was not surprised to see the Mr.

Simons' application to convert the multi-level hotel overlooking Ely's Harbour into apartments.

"It is my understanding that when he purchased the Somerset Bridge Hotel he intended to shift usage from hotel to residence,'' Mr. Phillips said.

"I also understand that an in-principle approval has been reached.'' When asked about the Somerset Bridge Hotel being the second medium sized hotel to go out of the hotel business following the Glencoe Harbour Club, Mr.

Phillips said: "The critical question is how we can get local investors to invest in properties and operate them as hotels, and be prepared to invest in the hotel industry.'' He added: "There are still a number of properties which are operating and for a number of reasons some hotels don't make it because maybe owners are not able to keep up with the change of the business environment.

"They also may not be able to survive the recession, or they haven't kept up with changes in the market. Certainly some properties have.''