If you tried to book a hotel room in Manhattan tonight, expect to pay at least $300 for a two-star hotel. Today, getting a room at the last minute is like getting a ticket for the seventh game of the World Series. People have short memories and forget that four years ago, the hospitality industry was in the basement. No one wanted to visit New York City. Occupancy had dropped by more than 10%, and the average room rate dropped by more than $50. Few investors wanted to own hotels, and the few that were open in Lower Manhattan were in financial distress. The hospitality industry in the region is booming now, and a number of new hotels are set to open over the next few years.

Richard Born, principal of BD Hotels, one of the most active owners of hotels in the region, said, “We are finishing 2005 having returned to the unprecedented highs reached in 2000. Occupancy has equaled the levels of 2000, and rates have exceeded 2000. The combination, of course, has resulted in revenue per room and revenues at historic highs. The only negative comparison is that since operating costs have risen about 25% over the past five years, net income is still well below the levels achieved in 2000.”

The regional vice president of Omni Hotels, Offer Nissenbaum, who is also general manager for Omni Berkshire Place, said, “Demand is exceeding the actual supply in Manhattan. There are no rooms available, with the exception of Sunday evening. In the upper upscale hotel segment, at this present time, room rates are starting at $575 and rising to $750 for a room. The first two weeks of December are New York’s version of the Super Bowl, and guests who have previously visited during the season expect to pay a higher rate. In January, the guests will be able to secure rooms at a significant discount.”

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Public companies, real estate investment trusts, and individual investors show interest in owning hotels in New York City. The managing director and principal of Sonnenblick-Goldman Company’s International Lodging & Hospitality Group, Mark Gordon, said, “NYC is the best hotel market in the world. The city has multiple demand generators, is dramatically under hoteled, has a negligible amount of new supply in development, and has extremely high barriers to entry. Plus, if an upscale hotel company wants to have a significant international presence, it must have a flagship hotel in the city.”

Last month, Starwood Hotels & Resorts Worldwide agreed to sell a portfolio of 38 hotels in New York, Boston, and other cities to the Host Marriott Corporation for $4.1 billion in stock, cash, and assumption of debt. Two of the hotels sold are in Manhattan: the 1,746-room Sheraton Hotel & Towers and the 688-room W Hotel in Times Square. Last month, Strategic Hotel Capital, a private company whose principal shareholders are affiliates of Goldman Sachs, and other investors sold the 35-story, 646-room New York Marriott East Side at 525 Lexington Ave. and East 49th Street to a fund managed by Morgan Stanley Real Estate. They paid $287 million, or $442,272 a room, for the property, which was built in 1924. A number of prominent hotels were sold this year and will continue to operate as hotels. These include the Essex House, Algonquin, and the Rihga Royal.

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Hospitality and financial leaders are bullish for next year. A recent report, “Emerging Trends in Real Estate 2006,” issued by the Urban Land Institute and PricewaterhouseCoopers, said, “Business center hotels have roared back and resorts are gaining momentum. Executive road warriors fill rooms, and a weak dollar fuels foreign tourism. A lack of inventory helps drive pricing power ahead of any new supply, which will be several years off.” The report also noted, “Condominium conversions also helped constrict supply in some major markets,” especially in New York. In 2006, condominium converters will be offering for sale hotel rooms that are being renovated for conversion into residential apartments. Properties include the former Stanhope Hotel, the Plaza Hotel, the Intercontinental on Central Park South, the Barbizon, Sutton Hotel, Gramercy Park Hotel, the Sheraton Russell, the Regent Hotel at 55 Wall St., the Olcott Hotel, the Mayflower on Central Park, and rooms at the Essex House and the St. Regis.

A number of hotels will open in 2006. Early next year, the first Residence Inn by Marriott, a 357-suite hotel on West 39th Street, and the 210-room, 16-suite Courtyard by Marriott New York Upper East Side at 410 E. 92nd St. Later in the year, the six-story, 83-room Downtown Hotel at Greenwich and North Moore streets plans to open. Across from the Time Warner Center, the Pomeranc family will be completing the renovation of 6 Columbus Circle. Later in the year, the Pomeranc family plans to finish an 18-story building with a 102-room hotel, which will feature 32 luxury condominiums at Allen Street between Houston and Stanton streets on the Lower East Side.

Early next year, construction is slated to begin on Andre Balazs’s 344-room Standard Hotel on West 13th Street between Washington and West streets in the meatpacking district. In the spring, Ian Schrager and RFR Realty expect to complete the renovation of the Gramercy Park Hotel. Other Manhattan openings include the 80-room Rockefeller Center Hotel at 25 W. 51st St.; a 150-room Hilton Garden Inn Tribeca at 6 York St.; a 45-room hotel, the Loft, at 130 Duane St. Also slated to open are a Four Points by Sheraton Soho Village at 66 Charlton St., a 92-room Wingate Inn, at 233-235 W. 35th St., a 188-room Holiday Inn Express at 232 W. 29th St., and a 70-room Comfort Inn at W. 39th St.

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More hotel rooms are also coming to Brooklyn. The 83-room Downtown Hotel will open at Fourth Avenue and Union Street. A few blocks away, the 13-story Smith Hotel, with 93 rooms and 50 residential condominiums, is slated to open in June at Smith Street and Atlantic Avenue. A 213-room limited-service hotel is scheduled to open in July at 171 Liberty St. In the fall, construction is expected to be finished on the Muss Organization’s 24-story expansion of the New York Marriott at the Brooklyn Bridge, which will create 282 additional rooms in downtown Brooklyn.

“In 2006, we expect occupancy to remain very high and average rates will increase by approximately 10%,” Mr. Nissenbaum said.

“As far as the future of NYC hospitality, the near term seems positive with strong demand continuing into the first half of ’06,” Mr. Born said. “The factors that could derail our industry are the national economy and increased inventory. As has always been the case, the local hotel industry is sensitive to national economic trends. In fact, it is perhaps the first industry to feel a slowdown when the economy suffers.”

The senior vice president and international head of hospitality and leisure for HSH Nordbank in New York, Frank Anderson, said, “I am extremely bullish on hotel lending in Manhattan. The recovery post-9/11 has been remarkable. Due to supply contraction with conversions from hotel to condominium, it is clear that revenue per average room growth above inflation should continue unabated for the foreseeable future, barring any event risk disruption. We would be happy to deploy capital to several hotel transactions in 2006 in the region.”

A growing number of domestic and international travelers are flocking to New York City. And a combination of factors is boosting the hospitality industry around the nation, but especially in the Big Apple.

Mr. Stoler is a television broadcaster and senior vice president at First American Title Insurance Company of New York. He can be reached at mstoler@firstam.com.