Mar. 4--Mostly vacant for more than a decade, Schenectady's eight-story Parker Building on State Street doesn't yet look like much. 

But give it time, said Christopher J. Myers, president of Concord Development Co. of Ballston Lake. By Aug. 1, his company will complete a $3.3 million renovation that will turn the narrow office tower into a 23-room modern, upscale hotel in the heart of downtown next to Proctor's Theatre. 

Not far from the city, restaurateurs Joseph and Elena Mallozzi plan to open Mallozzi's Belvedere Hotel, next to their restaurant, Mallozzi's, on Curry Road in Rotterdam. They hope to fill the 31-room inn with business travelers and some of the banquet guests who have booked the restaurant into 2003. 

And a New York City developer wants to turn Proctor's Theatre in Troy into an upscale independent hotel, to take advantage of limited downtown lodging for visiting Rensselaer Polytechnic Institute professors, health care officials and other business leaders. 

Call them boutiques, upscale independents or niche hotels, but by any definition the businesses represent a mini-boom for the Capital Region. And the proposals come even as the number of independent non-chain hotels continues to decline and the lodging industry seeks to recover from the terrorist attacks. 

"In an era of megas, where Wal-Mart is knocking everyone out and big hotels are everywhere, our business is thriving," said Kathleen Smith, who with her husband, Noel, owns the 16-room Saratoga Arms on Broadway in Saratoga Springs. 

The two, who have owned small hotels in the area for almost 20 years, are planning to double the number of their guest rooms and expand conference capabilities. 

Just why these projects -- offering anywhere from 10 to 40 rooms and rates of $80 to almost $200 a night -- are rising now depends on whom you ask. 

Hotels nationwide were among the businesses slowest to recover from the last recession a decade ago. 

And in recent months, lenders have shied away from hotel projects as the industry reeled from reduced corporate travel and vacationers jittery in the wake of Sept. 11. 

Still, by catering to particular groups, filling voids or capitalizing on their unique communities or historic structures, some smaller independents are growing. 

"A lot of the brands have a lack of differentiation," said Chekitan Dev, a marketing professor at Cornell University School of Hotel Administration in Ithaca. "You can wake up in a hotel a lot of times and not know if you're in a Westin, Hyatt or Sheraton." 

While the chains' marketing power and national reservation system can give independents a run for their money, Dev said some hoteliers around the country are thriving by exploiting their uniqueness. 

"They have to market themselves as a brand of one," he said. 

But the small upscale hotels have difficult roads ahead. 

A decade ago, the Capital Region had about 65 independent hotels, with 4,071 rooms, according to Smith Travel Research, a Tennessee company that tracks properties with 15 rooms or more. By the end of 2001, there were only 59 independents, with a combined 3,451 rooms. National chains climbed from 42 in the region, with almost 6,000 rooms, to 61, with 7,200 rooms, in the same 10-year period. 

But while that was happening, the lodging industry diversified. Travelers today face a dizzying array of options including budget motels, boutique properties, all-suite hotels, extended-stay inns, bed-and-breakfasts and all-inclusive resorts. 

Definitions often vary, and the lines between hotel segments can be fluid. 

The Mansion Hill Inn & Restaurant on Philip Street in Albany has served as a small business hotel weekdays for its 17 years, said Stephen Stofelano, who owns and runs the eight-bedroom inn with his wife, Maryellen. 

But on weekends, it attracts tourists seeking a bed-and-breakfast experience. "And we can be that to them, too," he said. 

Many industry observers, such as Gordon Lattey, a hotel market analyst and vice president of the Albany marketing firm Communication Services, uses "boutique" to describe the smaller, upscale properties that cater to a specific niche in a market, such as university visitors, business executives or female travelers. 

At the other end of the spectrum, Smith Travel Research defines the category as upscale, trendy chains such as W Hotels, Ian Schrager Hotels and Kimpton Hotels. It also includes larger independents with 150 to 400 rooms, with rates averaging more than $150 a night. 

By Smith Travel's definition, boutiques nationwide are seeing harder times today. 

The segment's revenue per available room -- or RevPAR, a measure of occupancy and room price -- grew three times the rate of the industry as a whole in 1999. But by 2001, that important profit measure fell 16 percent at boutiques, compared with a 6 percent decline for the industry as a whole. 

But in the Capital Region, small independents compete in a zone between the mom-and-pop motels and the larger flagged hotels, such as Marriott and Holiday Inn. 

The Mansion Hill Inn often takes overflows from the downtown Crowne Plaza Albany. And the Parker Inn, when it opens in Schenectady this summer, expects to cater to business people who want to be downtown, which is thin on hotel rooms. 

Listings in AAA guidebooks and on the Internet are used to match big-budget TV campaigns and reservation hot lines. 

"They're the great equalizer," said the Mansion Hill's Stofelano. "We got listed there three or four years ago, and our weekends really took off." 

That's not to say the independents don't go through hard times as well. 

In the early 1990s, the Stofelanos got burned on an expansion plan that would have seen their eight-room inn grow to 20 rooms. After buying adjacent parcels and investing in design work and permits, Stofelano said the market fell and the couple couldn't get financing. In the end, they were forced to abandon the expansion plans and refinance, with help from the Albany Local Development Corp. 

But the inn stayed open. 

The new hotels are not just rising around city centers. Another project on the drawing board is the Chatham House, a former hotel and bar in Columbia County. The property, dating to 1859, has been vacant for a dozen years. 

"There are not enough rooms in Chatham proper and there's not enough eating places in Chatham. The demand's not being served," said Butch Lippera, who has owned the three-story building since 1987. 

Using a study that says antiquers, leaf-peepers and others would come to Chatham, Lippera and his wife, Monica, seek investors and state funding to modernize the property and reopen it as a 20-room hotel and pub. 

Ultimately, Cornell's Dev said, the properties need to continue to reinvent themselves to stay one step ahead of the chains. 

Quentin Incao, general manager of Mallozzi's Belvedere Hotel, said the hotel will strive to set itself apart through attention to detail and personal service. 

In addition to amenities such as coffee makers, irons and larger television sets in every room, he said the hotel will have a video library at the front desk and a VCR in every room for guests. 

Kathleen Smith of the Saratoga Arms said it helps to know a community inside and out. 

She went to school with a taxi dispatcher and can get a cab at the height of race season, when there are almost none to be had. 

And she told the story of a groom about 10 years ago who came up from New York City for his wedding. Hours before the ceremony, he discovered he had left his tuxedo pants behind. 

She called the owner of a tuxedo rental shop at home on a Sunday. 

"We got him his tuxedo pants," she said. 

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