The commentary by experts on hospitality industry hotel real estate values was that transaction numbers fell in the third quarter.There is also a review on boutique hotel valuations that brought more light on acquisition and disposition price points for this growing sector of the lodging business. In terms of general hotel values and transactions, LW Hospitality Advisors Dan Lesser reported some good news for investors looking to capitalize on improving hotel income fundamentals. In its study, the average hotel deal fell below 250 rooms and to an average price per room of approximately $172,000. An example of that was the Villa Florence, a “162 room boutique hotel” bought by a REIT. Of course, the downside to that news was the price per room was a whopping $414,815. This is typical of the premium that a location in San Francisco commands among other cities. “Lesser also said now that most public REITs are out of the buying game thanks to declines in their stock price—and, by extension, their capital base—investors based outside the United States might have an opportunity to step up.” Read more from these experts on the hospitality industry on the other transactions here. In another report by HVS International Steve Rushmore, his hotel development advice suggests building now to open in 2013or 2014. He also addresses the issue of high cap rates in that it is a product of low mortgage rates and a lot of cash chasing certain deals. In our opinion as a hotel advisor and based on the above experts on the hospitality industry analysis, the boutique hotel lodging sector should enjoy increased demand incurring more hotel real estate transactions and higher values per room. However, secondary markets, unlike the major cities, are where the boutique style hotel segment has more room to grow.