The average selling price per room was $70,308, which the reportsays demonstrates a 16% increase off the cyclical bottomestablished in 2002. Furthermore, when all transactions wereaccounted for--including merger and portfolio acquisitionactivity--850 hotels with nearly 120,000 rooms changed hands havinga total value of a record high $8.5 billion.

"It was a banner year for transactions," says Patrick Ford,president of LE. "There were 573 fee-simple transactions in2003--just 14 fewer than the high of 587 set in '02, but theaverage hotel size, at 139 rooms, and total sales proceeds, at $5.6billion, set records."

The report attributes these results to an unusually large numberof individual transactions greater than $10 million each. LEreports that in 2003, 133 hotels were sold for at least $10 millioneach, compared to 76 the year before. "Opportunity funds and equitygroups purchased properties that had faltered during the traveldownturn and were being pruned from investor portfolios," pointsout Ford. "Many had strong locations, were in need of reinvestmentfor renovation and repositioning, and were ultimately reflagged tostronger brands in order to take advantage of an economy on theupswing. He predicts that history will show this to have been aperiod of great opportunity to acquire these assets.