Reay notes that while his company's annual survey covers 2006,the industry appears headed for another strong sales year, asillustrated by deals such as the $160 million sale of the AnaheimHilton hotel, reported yesterday on GlobeSt.com. The hotel salesmarket in California this year thus far "shows no signs of slowingdown at all," Reay says.

"Lenders seem to still be very positive on the California hotelmarket and continue to offer very attractive rates, especially onprime hotel assets," Reay says. As long as the California hotelmarket continues to enjoy steady revenue increases and new hotelconstruction remains relatively slow, "We see prices andtransactions rising even higher in 2007," the Atlas presidentsays.

The year 2006 marked the first time that sales volume exceeded$5.1 billion in the 11 years that Atlas has been tracking sales. Atthe same time, the median price per room sold in Californiaincreased 8%, while the average price per room rose 17%.