Last Friday, thousands of people waited in line to buy memorabilia from the famed Plaza Hotel, most of which is being converted into residential condominiums, resulting in a loss of 807 hotel rooms. During the past three years, more than 3,000 hotel rooms in the city have been lost due to conversion to condominiums. However, since 9/11, 11 new hotels, with 2,358 rooms, have been added, the largest being the 45-story, 863-room Westin New York in Times Square.

During the taping of my television show last week, I had the opportunity to ask six industry leaders their views of the hotel market.

“The best and highest value use for a hotel is to convert to residential condominiums, nevertheless many people are interested in developing hotels in New York City,” the managing director of Starwood Capital Group, Jeffrey Eisenberg, said.

Richard Born, principal of BD Hotels, which owns and operates 17 hotels in the city, is bullish on New York: His company is developing three new hotels in Manhattan. “In 2001, the industry was devastated, yet today, in many aspects the business has never been better,” he said.

Sam Chang, president of MCSAM Hotels, said, “I’m building five hotels below Canal Street and plan to build at least six in Brooklyn and Queens over the next two years.”

“Everyone from around the globe wants to come to New York City and it is helping the hospitality industry,” Mr. Eisenberg said.

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The good news is that not everyone who is purchasing a hotel is planning to convert it into residential condominiums. In January, Highgate Holdings and a Goldman Sachs-sponsored fund paid $200 million for the 935-room Park Central Hotel at Seventh Avenue between 55th and 56th streets. Mark Gordon, the managing director of Sonnenblick Goldman, which sold the Park Central, said “the hotel had the right dynamics for conversion into a residential condominium, yet the buyer decided it was better to maintain the property as a hotel.”

Next week, Highgate Holdings and the Carlyle Group will be closing on the $34 million purchase of the leasehold for the 300-room Crowne Plaza United Nations at 42nd and Second Avenue, which is owned by InterContinental Hotels Group. InterContinental has 35 years remaining on the lease. It is believed that Highgate will continue to operate the property as a hotel.

Last year, Intercontinental Group sold the 27-story, 208-room Intercontinental CPS to Anbau Enterprises, which is converting the property into 65 cooperative residential apartments, selling for more than $1,600 per square foot.

The owner of the nearby, 605-room Essex House at 160 Central Park South have reportedly retained Sonnenblick Goldman to market the property. It could fetch close to $450 million. A number of years ago, part of the hotel was converted into condo apartments. The conventional wisdom is the property will continue to be operated as a hotel.

Another property up for sale that will probably remain a hotel is the famed Algonquin at 44th Street between Fifth and Sixth avenues.

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Last week it was announced that Saudi Prince Alwaleed bin Talal, a partner with Millennium & Copthorne Hotels in the sale of the Plaza Hotel to Elad Properties last year, is interested to purchasing the 348-room hotel in the renovated facility in 2006. The hotel will have 188 rooms and 160 condominium hotel rooms. The condominium rooms will be sold to investors who will be allowed to use them for a maximum of four months a year. During the balance of the year, the hotel will operate the rooms and the revenues will be shared. The Trump International Hotel & Tower at One Central Park West has the same setup.

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A few months ago, the City Council, at the urging of the New York Hotel and Motel Trades Council, briefly considered limiting conversion of hotels with more than 300 rooms to residential condominiums. The president of the union, Peter Ward, is continuing to push for legislation. “The hospitality industry has a problem; it allows a developer to purchase a property with extraordinary value for condominium development which can be delivered without tenants,” he said. “We will go toe to toe with any developer to save hotels from conversion.”

A number of developers, including Richard Born, who has three new hotel projects in Manhattan, question the need for legislation. One hotel owner said: “The proposed bill in the City Council does not go to the essence of the constitutional legality of the action. The bill results in no compensation to hotel owners and is thus clearly a ‘taking’ without just, or any, compensation.”

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The general manager of the Omni Berkshire Hotel and regional manager for Omni Hotels, Ofer Nissenbaum, said, “This is the first time that it has been affordable and a bargain to visit New York City. The prices Europeans are paying are inexpensive as compared to hotels in Europe.”

Travelers are spending close to $800 a night for a room at the Mandarin Orient at the Time Warner Center. Occupancy rates in city hotels are more than 90%. Sam Chang’s 4-year-old Howard Johnson on Houston Street in the Bowery has had 99% occupancy over the past five months at room rates averaging $160 per night.

Even though hotel occupancy and room rates are nearing all-time highs, profits are lower. Real estate taxes have increased by close to 300%; energy, employee benefits, and general insurance costs have nearly doubled.

“Immediately after 9/11 only a handful of lenders were interested in lending for hotels. said Frank Anderson, a senior vice president at HSH Nordbank. “Today, hotel lenders have increased by 500%, offering funds for developments all over the city.”

Sam Chang is planning to build name-brand franchise hotels with limited service throughout the city. In addition to the five hotels he has under construction east of Canal Street, he is developing four in Brooklyn, five in Queens, a boutique hotel in Union Square, and a budget hotel on 35th Street and Fifth Avenue. With the exception of the Union Square hotel, all will offer travelers affordable room rates ranging from $100 to $200 per night.

Mr. Born is developing an 83-room boutique hotel on Greenwich Street in TriBeCa, a 140-room boutique on Third Street and the Bowery, and a budget 300-room hotel with very small rooms on 51st and Second Avenue.

“Looking forward in the next 10 to 15 years, I expect large convention hotels to open near the Javits Center and on Hudson Boulevard in the rezoned Hudson Yards,” Mr. Born said.

Due to a combination of factors including the cost of land and construction, it is difficult today to build a hotel larger than 200 rooms. The cost of the Mandarin Orient was over $1 million a room. Nonetheless, over the next two years, more than 30 hotels will open across the city.

The future is bright for the hospitality industry in New York City.

Mr. Stoler is a vice president at First American Title Insurance Company of NewYork. E-mail mstoler@firstam.com.