At the start of the year, local hotel executives had a bullish set of predictions. Business would boom in 2005, they said, driven by the presidential inauguration and strong business at the Washington Convention Center, along with a recovering world economy and limited supply of new rooms.

They were right on the money, at least through the first half of the year. In the Washington area, revenue per available room, a crucial measure of hotel industry health that takes into account both occupancy and average room rate, hit a record $97.11 through June, up from $86.37 in the same period of 2004.

Most of the higher revenue stems from higher room rates, which averaged $132.80 from January to June, up from $119.42 a year earlier. Occupancy nudged up less dramatically, to 73.1 percent from 72.3 percent.

It's good news for hotel owners that the big jump is coming in room prices rather than occupancy. That's because when a hotel simply raises its price, it usually gets to keep almost all of the extra money. But when a hotel has more guests, it also must pay more for housekeepers, laundry and other services.

-- Neil Irwin