"By the end of the 2004 first quarter, we expect to have substantially completed our asset disposition program, at which time our process of upgrading our 73 core hotels will be well under way," says MeriStar COO Bruce Wiles. "As of year-end, we had cash on hand of approximately $275 million and expect additional asset sale proceeds of $110 million to $130 million. These funds will be used to fund this renovation program, make selective acquisitions and pay down debt." About $100 million will be spent on the renovations this year, and an additional $125 million next year. Much of the renovation process will entail guest room and corridor upgrades, but there will be some changes to public spaces as well.

MeriStar's timing appears to be right on the money. According to numbers generated by PricewaterhouseCoopers LLP, occupancy levels at US hotels are expected to increase to 61.2% this year, up 1.9% from 2003. And in a PwC presentation, Dr. Bjorn Hanson concludes that, "2004 will be the year of robust demand growth in this cycle."