The steep run-up in hotel room rates and occupancies in the USA's biggest cities is slowing as discouraged travelers seek alternatives to high-priced stays.

Don't expect hotels to give you a break anytime soon. Industry forecasters such as Smith Travel Research expect rates to jump again next year. But there is some good news: Demand for rooms is stabilizing, so hotels won't be able to boost rates as much as this year.

"It's going to be interesting in 2007 to see how much rate leverage (hotels are) going to be able to retain," says Brad Garner of Smith Travel Research.

Growing resistance from consumers indicates that hotels are nearing "that magic ceiling" for rates, he says. In Manhattan, the USA's most expensive hotel market, the average daily rate reached a record $304 in September, the most recent month for which Smith has numbers.

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