May 11--Downtown Chattanooga is adding more than 430 hotel rooms this year -- the largest one-year increase in its history. 

But the big influx in rooms is creating worries among existing lodging operators in the central city who now are facing stiffer competition. 

"The leisure and corporate business has dropped," said Lois Davis, general manager of the Radisson Read House. "Hopefully, it will be short term." 

The Chattanoogan conference center opened 202 rooms at 12th and Broad streets on April 1. Two weeks ago, a new Courtyard by Marriott started business at Second and Chestnut streets with 128 rooms. This summer, a 94-room Hilton Garden Inn will open its doors near the Creative Discovery Museum. 

Downtown developers laud the new rooms, saying the properties will help create the opportunity for more activity in the area. 

"It allows more people to experience our downtown," said Ken Hays, who heads the downtown development group RiverCity Co. 

Karl Oates, general manager of the $12 million Courtyard, said the hotel that opened April 27 was nearly full last weekend for the first time. 

"Last weekend was phenomenal for us," he said. 

Mr. Oates said the hotel's location across from the Tennessee Aquarium and the IMAX Theater has helped fill its rooms on weekends. Because much of its business has been walk-in traffic, occupancy during the week is "still picking up," he said. 

Eric Whitson, the Chattanoogan's marketing director, said that while walk-up traffic isn't its market focus, the facility does gain business when downtown is busy. 

"When the city is full like last weekend, we're seeing overflow," he said. 

He said the Chattanoogan's target market consists of small corporate and association meetings, along with the higher-end leisure traveler. 

The $8.5 million Hilton Garden Inn and the Marriott are expected to be direct competitors, catering to business and leisure travelers looking for moderately priced rooms. The Garden Inn won't be a full-service hotel, but the six-story structure will have a restaurant as does the Courtyard. 

With all the new rooms downtown, existing hotel operators are feeling the pressure. 

Mike Wootten, director of sales and marketing for the Clarion Hotel, said he is "cautiously optimistic" that the new rooms are not going to hurt his business too badly. 

Still, the hotel is gearing up for the competition by carrying out marketing strategies to maintain its customer base, Mr. Wootten said. In addition, a renovation is in the works, he said. 

"We're trying to prepare for the new rooms," he said. 

Ms. Davis said that, while the lodging market is growing in downtown Chattanooga, she doesn't think business is improving fast enough to handle all the new rooms. 

"I don't think it's quite there yet," she said. 

Ms. Davis said the Radisson is doing more discounting of room prices than in the past. She said the hotel is a unique one, and that's a strength. 

"It's a different kind of product. It's built on the history of everything," she said. 

The Chattanoogan, which had its official grand opening ceremony on Thursday with city officials and others attending, is marketing its hotel in regional publications such as Southern Living Travel Guide and newspapers in Atlanta and Huntsville, Ala., Mr. Whitson said. 

For group business, the $43 million Chattanoogan is advertising in trade publications. Mr. Whitson said business in general is about what officials expected, though the restaurant is doing more than was anticipated. 

Mr. Hays said the addition of three new hotels downtown this year creates both a challenge and opportunity for downtown promoters. 

"It makes us all work harder to fill those rooms up, but you don't make progress standing still," he said. 

Mr. Hays said the expansion to the Chattanooga/Hamilton County Trade & Convention Center is scheduled to come on line in a couple of years and an expected increase in business will create more demand for rooms. 

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