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Hotel Fever Strikes

Hotel construction soared last year by 64%, the biggest increase since 1994, according to a report by PricewaterhouseCoopers. Room starts totaled 136,500 in 2006, as developers tried to cash in on one of the best periods of hotel profits in 25 years.

One such developer, Sky Development, will soon announce a $200 million mixed-use structure in downtown Orlando (FL), anchored by a 350-room hotel, 120 high-end residences and 515,000 square feet of office space.

Sky�s CEO, Yizhak Toledano, claims that despite all the hotel and timeshare construction in Orlando and the condo bust statewide, he sees opportunity in the city�s downtown, where development is harder because land is scarcer.

Nationwide, a PricewaterhouseCoopers lodging consultant notes, we�re entering the mature phase of the cycle. The development pipeline is accelerating, while profit growth�robust for the past three years�is now slowing as demand has softened in recent months.

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