Occupancy for 2006 rose slightly over last year's number moving from 63.1% to 63.8%. These numbers are above the average occupancy in 2002, which was 59%, but remained below the long-term trend line of 66.5%. "As occupancy increased we saw an acceleration in supply growth at the same time we're seeing a deceleration in demand growth. Put these two together, the third quarter 2006 was a little bit scary. We actually had more supply growth than demand," Hanson said.

The average daily rate has been steadily gaining since 2002. This year ADR grew to a higher level than 1996. Hanson said ADR in 2006 should be about 6.8% compared to 6.4% in 1996. But real ADR, while strengthening, is below 2000 levels. "So in real dollars, as good as we feel about that average daily rent this year, we're still not back in real dollars to where the industry was in 2000."

Of the top 25 cities across the country, Atlanta, Chicago, Dallas, Los Angeles and San Francisco were among those considered leading lodging markets. Minneapolis and Orlando were the two recovering markets named; while Boston, Miami, New York, Phoenix, San Antonio, San Diego and Seattle were listed as stable.