PKF's Houston office is still calculating year-end numbers, butKeeling says occupancy rallied to 69.1% in the first 10 months of2001. At this time last year, the city had a 67.1% hotel occupancy.Daily rates have remained flat and the Galleria and Medical Centerareas carry slightly lower occupancy rates, but overall Houston'shospitality industry has been unaffected by local and nationalevents, he reports.

Keeling does predict, however, 2002 and 2003 will be off yearsfor the local hospitality industry due to large-scale constructionplanned for the George R. Brown Convention Center. Consequently,the city will lose valuable convention business until 2004, whichKeeling predicts will be a banner year.

Until recently, there were only 1,800 rooms in Houston's CBD."The CBD turns down more business than it can accommodate," saysKeeling.