The hotel industry suffered a 37% drop nationwide. San Francisco, with only 42% of its rooms occupied, was in the lead, suffering a 55.4% drop in occupancy for the week ending Sept. 22. This figure is based on comparison with occupancy levels from a year ago.

With the exception of San Francisco, where significant room rate reductions were occurring way before the September 11 attack, most California hotels have not had to lower rates. Instead hotels have chose to maintain their average daily rates, according to Ernst & Young.

The industry, suffering from lower corporate and leisure travel levels, will continue to experience losses in revenue and reductions in occupancy rates. But all is not lost, according to a recent Jones Lang LaSalle Hotel report, which says that there are both risks and opportunities in this market change.