Average daily room rates in the Los Angeles area are expected toclimb a healthy 4.5% next year to $126.50, according to a newforecast by the LA office of San Francisco-based PKF Consulting,following up a strong 5.6% increase in 2000 and an even better 9.4%hike the year before. Occupancy is expected to reach 76.2%, up from75.8% this year and 73.6% in '99.

"Hoteliers have been able to successfully push the average dailyrate, which continues to climb faster than the rate of inflation,"says Bruce Baltin, SVP of PKF's Downtown office. Those strong gainsare a far cry from the early 1990s, when occupancy dropped and roomrates fell due to the recession and a "stay-away" attitude amongtravelers in the wake of the 1992 riots.

With land for big new projects scarce, Baltin and other expertssay many hoteliers will focus on renovating their existingproperties next year. Demand for rooms in well-located areasremains strong, and owners can often raise rates dramatically aftera major rehab has been completed.