get into the guest house business.

Marketing agency owner Mr. Wendell Pond is converting a five-studio apartment building on Pitt's Bay Road into six self-contained housekeeping units.

The Development Applications Board has granted him in-principle approval for the change of use.

"The bottom seems to have dropped out for studios,'' Mr. Pond said. "We would have had to reduce the rents drastically to remain in the market.'' He said rents for studios have dropped to the $600 range -- with rents for one-bedrooms also dropping to around what studios were going for before the slump.

As a consequence, he said people in studios are moving to one-bedroom apartments.

Mr. Pond added the apartment building, known as Harnett House, was "very conducive'' to being turned into guest accommodations.

"I think we will do equally as good, if not better, with tourist accommodations,'' he said.

He also noted that the market for guest units with mini-kitchens was growing as tourists become more cost conscious as a result of the recession.

"A lot of tourists now days are looking for a place they can do their own cooking as opposed to going out for meals,'' he said.

Mr. Pond, who sells timeshare units in Florida to Bermudians, said he will market the units himself.

However, as Mr. Pond optimistically gets into the guest house business, others are getting out.

The owners of Blue Horizons Guest House on South Shore Road in Warwick have applied to the DAB to change its use to a three-apartment house.

Although the applicant Mrs. Priscilla Augustus would not comment, her husband Daniel said business this summer had not been good.