NEW YORK (Reuters) - Host Hotels & Resorts Inc. (NYSE:HST - news), the largest U.S. hotel real estate investment trust, on Wednesday said third-quarter funds from operations more than doubled, helped by an increase in room rates and a recent acquisition.

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The company also said it expects revenue per available room, a key measure of the lodging industry's health, to increase 6 percent to 8 percent next year.

The forecast, which is similar to the outlook of an increase of 7 percent to 8 percent by Marriott International Inc. (NYSE:MAR - news) last week, helps set expectations for growth next year in the face of a slowing U.S. economy.

"That appears reasonable at this point," Deutsche Bank analyst Chris Woronka said. "2007 is shaping up to be a pretty solid year as well."

Funds from operations (FFO) -- a closely watched performance measure for real estate investment trusts (REITs) -- rose to $152 million, or 28 cents per share, from $74 million, or 19 cents per share, a year earlier.

The company's FFO met the average forecast of analysts polled by Reuters Estimates.

Net income after dividends on preferred stock was $38 million, or 7 cents a share, compared with a year-earlier net loss of $11 million, or 3 cents a share.

Over the last few years, lodging companies have benefited from limited growth in supply and strong business travel demand, allowing them to raise room rates.

But with the U.S. economy showing signs of slowing down and supply in the industry creeping up, the growth in revenue per available room is expected to slow.

Occupancy levels are close to their peak and further increases in revenue per available room are likely to be driven almost exclusively by higher room rates, Woronka said.

Host, which owns hotels under brand names that include Ritz-Carlton, Westin and Hyatt, said revenue increased 40 percent to $1.1 billion.

Sales were boosted by Host's acquisition of more than two dozen hotels from Starwood Hotels & Resorts Worldwide Inc. (NYSE:HOT - news) earlier this year.

Comparable hotel revenue per available room, a key measure of the health of the lodging industry, rose 9.1 percent. Room rates increased an average of 10.5 percent, while occupancy declined by 1 percentage point.

Host said it expected comparable hotel revenue per available room to increase by 7 percent to 8 percent in the fourth quarter and 8 percent to 8.75 percent for all of 2006.

The company expects FFO per share of 55 cents to 58 cents for the fourth quarter and $1.50 to $1.53 for the full year.