Thank God, we made it to 2011. While the last two years were agonizing for the hotel industry, most owners and operators finally feel at least cautiously optimistic about the year ahead. We may never again see the prosperity of 2006-07, but 2011 promises to be an interesting year filled with opportunity for the shrewd, the lucky and the bold. Here are some predictions for 2011 from Managing Editor Eric Stoessel and me:

The hotel industry will experience continued improvements in demand, occupancy, rate, RevPAR and profitability. Performance is not yet back to the heydays of the mid-2000s, but nearly every segment and every market has seen gradual but consistent upturns in the past six months. Possible limiting factors include a projected rise in gasoline prices to above $4 a gallon, slower-than-hoped-for job growth and, God forbid, any geopolitical upheavals.

Brand companies will reverse their policies of relaxed standards and get tougher with properties overdue for much-needed renovations. This trend, while critical to keep the nation’s hotel stock in good condition, could push some owners into bankruptcy or loss of flag.

Growth for nearly every brand company will come through collections and conversions. The winners will be the companies with the most compelling stories to keep existing hotels and convert those leaving other systems. The competition will be fierce for the hundreds, perhaps thousands, of properties forced to flip flags.

While conversions will rule, the hotel industry will see the first signs of development activity, particularly in the limited-service segments. Local and regional banks are bound to start more aggressive lending, and when they do, those owners with strong relationships with their bankers will be able find funding for projects that make compelling economic sense.

The volume of hotel transactions will more than double. Some of the activity will be forced sales as owners give up their attempts to hang on to trouble properties. Other sales will be the result of cash-rich REITs and funds nearly desperate to place their investors’ money. Bidding wars for prime properties will be the norm.

At least two major acquisitions, either of brand companies or large hotel portfolios, will be announced. Likewise, after a year of stability at the very top of most major branding companies, there will be at least two changes at the CEO level.

Buoyed by resistance from other travel companies, e.g., the airlines, hotel chains will become more aggressive in negotiating more favorable terms with online travel agencies. However, as juicy a story as it would be, none of the major hotel chains will take the drastic step of severing all ties with the OTAs. Love’em or hate’em, hotels need OTAs.