Orlando claims the distinction of being home to the most economically priced hotel rooms in the country but that may change a bit next year as 4,700 high-end rooms deliver in the metro area. This influx is being sparked by business travelers attending expositions at the four million-sf Orange Country Convention Center who want lodging with five-star amenities. Among the half dozen hotels slated for debut is the $37-million Westin Grand Bohemian, which will charge an average of $200 to stay for a night in one of its 250 rooms. Marriott International has a two-hotel project that will open with 1,584 rooms. One of them, with 584 rooms, will be managed by Ritz Carlton and charge an estimated average of $350 per night. The other, located next door, will feature 100,000 sf of meeting space. Walt Disney is getting in on the luxury market as well with its 1,307-room Animal Kingdom Lodge near the Animal Kingdom Park, which will bring the entertainment company's hotels operating on its property to 21.

In the Southwest, the standout is the Denver hotel market, which boasts daily rates nearly $17 and occupancy rates up to 10% above those of competing locales. Since 1999, overall occupancy has gone from 68.2% to 70.2% and room rates have climbed from $84.76 last year to $87.84. Next year, two major hotels are scheduled to open; the 500-room, $115-million Westin at Denver International Airport and the 1,100-room, $220-room Hyatt Regency across from the Colorado Convention Center.

In Texas, just 10,070 rooms came to market, bringing the state's third quarter total to more than 291,000. Austin enjoys the highest occupancy rate, 65.8%, followed by Houston, 63%, and San Antonio, 62.4%. Ft. Worth comes in at 61.1%, Dallas at 60.7%. In the Lone Star State, there is more expansion and rehabs of lower-rate, extended-stay properties than new construction due largely to concerns by lenders about a market slowdown, according to Douglas Sutton, vice president of Source Strategies in San Antonio. He is quick to note that he doesn't foresee the bottom falling out of the market, however. "We may not grow at breakneck pace, but we do look for growth," he says.

During the late 1990s, a lot of hotel rooms were constructed in Portland and only now is the market recovering from this build up, albeit nicely, according to Ed Dundon of Ed Dundon & Co., a brokerage that focuses on hotels. Developers around the country regard the city as promising for investment but they are leery of coming in right now. He also says that capital is scarce for purchases due partly to the warning earlier this year by the FDIC that the city was at risk of overbuilding both hotels and multifamily housing. Unfortunately, the warning, which did not take the future demand growth into account, has been a factor in the slow growth of hotel rooms here, Dundon says. In March, for example, a dozen hotels with about 1,100 rooms were being built and that has now dwindled to five hotels with approximately 800 rooms. All things considered, however, he remains optimistic. "We're not in a boom, but we're not in an unhealthy or declining market, and its pretty steady with prospects for improvement," Dundon notes.

Thanks to tourists and business travelers, average room rates in Los Angeles next year are forecast to hit $126.50, a 4.5% increase that follows a robust 5.6% rise in 2000, according to PKF Consulting. Going forward, the emphasis here will be on renovation of hotel properties and less on large new projects because of the scarcity of land, says Bruce Baltin, senior vice president with PKF. Also, a major makeover often allows owners to raise their rates dramatically, he says.

In Orange County where the expansion of the Anaheim Convention Center will be completed soon and a new Disney theme park is to open next to Disneyland, hotel owners are expecting an exceptional year. PKF expects average daily rates to escalate 5.5% to $118.42, an improvement over the 3.8% increase this year and the low 2.3% rise in 1999. Occupancy rates are projected to surge from 72.3% in 2000 to 74.5 next year despite a 7.4% increase in supply.

For the full story, click on:SoCal Hoteliers Expect More Gains in 2001

Room occupancy rates in New York City are the best in the country and the cost of a night's lodging remains high. Even as some reports predict a slowdown in hotel stays, research by Lodging Econometrics says that the city should not feel the impact because there are few projects in the works and the demand for rooms is high. Projects now under development are the 863-room, $300-million Westin New York at Times Square, the largest hotel to be built here in a decade. Also, a 74,000-sf, 29-floor limited-service hotel is planned for 35th Street in the Murray Hill section, and a 12-story building at 299 Madison Ave. has been remodeled into a hotel known as the Library, which features a yacht-inspired design to reflect its small rooms.

Alex Finkelstein, Connie Gore, Brian K. Miller, David W. Myers and Amy Vaughn contributed to this story.

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