Philadelphia this summer because it cannot get agreement with hotels on package deals, The Royal Gazette has learned.

The deal has collapsed because hotels cannot offer rooms at the price and time Apple require, said Tourism Minister David Allen.

With a shortage of hotel beds due to renovations and recent closures, hotels feel they can sell their rooms for a higher rate than Apple was offering.

Officials from Philadelphia-based Apple were on the Island last month trying to salvage the arrangement, but could not reach an agreement with major hotels, including the Fairmont group, Sonesta Beach and Elbow Beach.

The 174-seat Apple charter flight has been running for several years from Philadelphia to Bermuda from May to October, but Mr. Allen said it was running at about half capacity at times last year.

He said the news was not entirely gloomy because Apple is still selling Bermuda but is putting tourists on scheduled flights, boosting the viability of scheduled operations.

Mr. Allen said the Island currently has more airline seats than hotel beds.

"Apple continue to use other scheduled airlines, but they were losing money on the charters because they could not get the hotel beds,'' he told The Royal Gazette last night.

"They could not reach agreement with the hotels for specific levels, though they are still doing Bermuda business on scheduled air carriers.

"They could not justify the charter because they could not get the rooms they wanted at the right time at the right price.

"It's market forces. The hotels feel that they can get rooms filled at the price they want without such an agreement. That's a decision we can't make.'' AIRLINES FLY BUSINESS BUC