"We're starting to look at some properties, but we're not far along enough at this point that we'd have something identified," Bruce Riggins, MeriStar vice president for strategic planning and analysis, shares with GlobeSt.com. "It will probably be the beginning of 2004 before we close on an acquisition. We're not focused on any one part of the market, but we are looking at major metropolitan markets." MeriStar is not the least bit deterred by a hotel market that has not quite recovered from the hard-hitting effects the 2001 terror attacks had on the hospitality industry. "Certainly we think the industry is at the bottom of the cycle, and we think it will rebound in 2004, and will continue to improve," Riggins adds.

Riggins' assessment is in line with that of Marcus & Millichap Research Services, which concludes in its September 2003 National Hospitality Research Report that the Washington, DC area will see rising occupancy rates over the next year, as it has since the start of 2003. "Steady federal government spending will keep occupancy stable for the foreseeable future," the report surmises. "The Washington, DC market has become increasingly attractive to hospitality investors in the past two years as its economy has bucked national trends, fueled by federal government activity."

The current climate presents a win-win situation for MeriStar. "Now is also a good time for us to sell non-core assets that don't have as high growth potential as our remaining properties or the ones we're looking to acquire," says Riggins.