The three hotels, with almost 800 rooms, are the 325-room Mall of America Grand, the 250-room Ramada (formerly flagged as a Sheraton) and the 204-room Exel Inn. The Ramada was torn down last year, while the Exel and Grand are expected to go this spring. But before the last two go, hotel developers have already submitted proposals to the city for hotels that would add 2,100 rooms.

The nation's hotel market, along with the rest of the travel industry, has suffered in the aftershock of the Sept. 11, 2001 terrorist attack, the SARS outbreak and the recent recession, and the Twin Cities is no exception, says Steve Sherf, a hotel market analyst with GVA Marquette Advisors. Hotel occupancy has dropped significantly in the last few years, as have room rates.

But things are improving, especially at hotels along the Interstate 494 strip. The I-494 strip had an occupancy rate of 61% in the first half of the year, better than the other two big Twin Cities hotel markets in Downtown Minneapolis and Downtown St. Paul, according to a survey by GVA Marquette.