The price performance of hotels by region was mixed in the third quarter of 2023. The Midwest, Mid-Atlantic, Mountain, and West South Central posted positive quarterly and year-over-year results. In contrast, New England and the South Atlantic regions struggled, and the Pacific region recorded only slight year-over-year gains. Hotels in non-gateway cities continued to outperform those in gateway cities. Transaction volume fell year-over- year and quarter-over-quarter. However, volume is up this quarter for large hotels and hotels in gateway cities. Based on moving averages, a “hold” signal is indicated for large hotels, with a “buy” signal for small properties. That said, the situation calls for keeping your gunpowder dry, given that the standardized prices of both large and small hotels have softened. Hotel interest rates for both Class A and Class B and C hotels rose about 3.6 percent this quarter and approximately 4 percent year over year, even as credit spreads tightened and the delinquency rate on hotel loans fell this quarter. Looking at commercial property categories, the delinquency rate on hotels is now lower than both retail and office properties. As in the prior period, the borrowing costs still exceed the return on hotels. Expect to see an uptick in the price of large hotels in the next quarter, while prices for small hotels falter, based on our leading indicators of hotel price performance. This is volume 12, number 3 of the hotel indices series.