Here on the south side of the city, surrounded by abandoned warehouses, a pilgrimage is under way to the most haunting stop in the travels of the Rev. Martin Luther King Jr. By day visitors stroll along the balcony of the Lorraine Motel, rubbing their hands where the blood of the slain civil rights leader stains the walkway outside the room where he spent his last night.

By nightfall, however, there is a painful reminder that, 18 years after King's death -- and on the observation of the first federal King holiday -- the dreams of converting the Lorraine into a respected memorial have not been realized.

The establishment today is a haven for hookers who ply their trade in the same rooms where the King entourage once planned civil rights marches and discussed his inspirational speeches.

Although this is a matter of much discontent among the motel management, there is no doubt that were it not for the hookers and the business they bring in, the Lorraine Motel may well have been sold and bulldozed to the ground years ago.

"Our struggle is simply to maintain the motel by any means necessary," said Jackie Smith, the motel desk clerk. "This is the only significant monument to King in the city. If it folds, there are people who want to take it over and turn it into just another commercial property."

In 1982, a group of Memphis residents formed the Lorraine Civil Rights Museum Foundation and bought the 65-room motel at a bankruptcy auction for $144,000. Today, the group is trying to raise money to turn the motel into an educational center and museum. Until that day arrives, they have allowed the former owner, Walter Bailey, to run it as a motel.

"If we had just boarded the place up, vandals would have torn it apart," said D'Army Bailey, a Memphis lawyer and president of the foundation. "This is the best situation we can hope for now."

During many of King's early visits to Memphis, the Lorraine was the only motel where he could stay. In fact, it was the only black motel in the city for years and catered primarily to black middle-class travelers from across the country.

With the advent of integration, however, those same patrons began opting to stay at finer hotels. But not King. He nearly always returned to the Lorraine, even when the motel began to slip into disrepair.

Despite the incongruity of the motel's guest list today, the spirit of Martin Luther King Jr. is overwhelming for many visitors. With the window from which James Earl Ray fired the fatal shot located on a hill just across the street, patrons of the motel frequently stand on the balcony and point in a scene reminiscent of published photos taken moments after King's assassination.

Room 306, where King was staying on April 4, 1968, has been turned into a glass-enclosed shrine. Sharing the space is memorabilia from Lorraine Bailey, the motel manager who had a cerebral hemorrhage after learning of King's death and died of a heart attack the next day.

A few years ago, someone broke into the shrine and stole a watch and ring that had belonged to Bailey. Several items, including a plate on which King had eaten his last catfish dinner, were removed by foundation officials fearing that they, too, might be stolen.

Last week a team of former and current Smithsonian Institution officials visited the Lorraine to exchange ideas with city officials about a museum. Their proposal, which could include a laser beam following the trajectory of the fatal bullet from the window across the street to the balcony, is expected to be completed this spring.

Planners see the Lorraine of the future as a place that would play personal tribute to King and place his role in the larger context of the civil rights movement, starting as far back as the American Revolution and including black Bostonian Crispus Attucks, the first American to die in that struggle.

But for now, visitors must find meaning in the Lorraine where they can -- in a few tattered copies of Jet magazine and photos of King placed inside a glass cabinet.

"This was the most appropriate place for him to die," said Calvin Brown, 60, the motel's self-styled tour guide for the last 13 years. "He was the Moses of our people. Moses dealt with Egypt. Memphis is a city in Egypt. Moses wanted to lead his people across the Red Sea and into the promised land. Here we are on the Mississippi with Arkansas -- the 'land of opportunity' -- on the other side."

As night falls over the Lorraine, ladies of the night enter the lobby of the motel, take a seat and simply wait for customers to come looking for them.

"There is no question that this place should be remodeled," said one of the women, who calls herself Champagne. "It's a shame that on the other side of town you have a Graceland Mansion for Elvis Presley, the king of rock and roll, and on this side of town, you have this hole in the wall for the king of civil rights."

Champagne, a heavy-set woman with fake plaited hair, and her companion, Melody, a thin woman with a blond wig, both were 10 years old when King was killed.

"The room where he died means one thing to me," Melody said. "But the rooms where I work mean something else altogether."

The Rev. Marvin Booker, an associate pastor at the First Baptist Beale Street Church, entered the lobby with a reporter and greeted the two women.

"When you think about who King was trying to help -- you find two perfect examples right here," he said, pointing to the women.

"He was a man of the people," Booker said. "I saw him make gamblers drop their dice and join in marches. We're talking about a man who advocated an economic bill of rights for the downtrodden, a radical redistribution of wealth and power, forcing the federal government to yield to the mandate of justice." Champagne suddenly looked up and thoughtfully stroked her cheek. "So that's why he was killed?" she asked.

The prostitutes usually leave the motel around daybreak and the clientele of men in pickup trucks and Cadillacs are replaced by station wagons of families and friends. Today, they arrive from everywhere: A Buddhist monk from Japan who chanted and prayed, U.S. Rep. Harold E. Ford (D-Tenn.), who laid a wreath outside the motel room door, a busload of elementary school children from Mississippi, firemen from the station just across the street, policemen from the precinct around the corner, sanitation workers from the Martin Luther King Labor Center a few blocks away.

And among them are many whites who sometimes just stand and stare tearfully.

"I admit that I had been prejudiced about blacks," said Thomas Motschman, 60, of Memphis. "To tell you the truth, my wife would die if she knew I was here, because the Lord has not touched her yet. I was a choir director for seven years, but all I had been doing was singing notes. One day I heard the songs and I just wanted to come here today to thank God and Martin Luther King for opening my eyes, my ears and my heart."