SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

                [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                For the quarterly period ended September 30, 1997


               [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                         Commission file number 33-67848


                      ESSEX HOSPITALITY ASSOCIATES III L.P.

               (Exact name of registrant as specified in charter)

                                    DELAWARE
         (State or other jurisdiction of incorporation or organization)

                                   16-1422266
                      (I.R.S. Employer Identification No.)

                               100 CORPORATE WOODS
                            ROCHESTER, NEW YORK 14623
                     (Address of principal executive office)

       Registrant's telephone number, including area code: (716) 272-2300

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

                      Yes        X                 No
                               -----              -----
As of  November  1,  1997 a  total  of  4,000  Limited  Partnership  Units  were
outstanding.


<PAGE>



                                     PART 1
                                     ------

                              FINANCIAL INFORMATION
                              ---------------------

 Item 1.   Financial Statements
--------------------------------------------------------------------------------

                      Essex Hospitality Associates III L.P.
                                 Balance Sheets
                           September 30, 1997 and 1996


                        ASSETS                          1997           1996
                        ------                          ----           ----

 Investments in real estate, at cost
            Land                                     1,546,151      1,700,151
            Land improvements                          438,234        438,234
            Buildings                                7,250,564      7,247,114
            Furniture, fixtures and equipment        1,998,855      1,921,087
                                                   -----------    -----------
                                                    11,233,804     11,306,586
            Less:accumulated depreciation             (976,220)      (517,432)
                                                   -----------    -----------
               Net investments in real estate       10,257,584     10,789,154

Cash and cash equivalents                               16,079        216,110
Restricted cash                                         56,484         17,115
Deferred costs:
            Debt issuance costs                      1,060,289      1,060,289
            Franchise fees                              85,500         85,500
            Other deferred costs                        70,846         70,846
                                                   -----------    -----------
               Total deferred costs                  1,216,635      1,216,635
            Less: accumulated amortization            (814,343)      (555,431)
                                                   -----------    -----------
                                                       402,292        661,204

Other assets                                           168,528        142,275
                                                   -----------    -----------
Total assets                                        10,900,967     11,825,858
                                                   ===========    ===========

               LIABILITIES AND PARTNERS' CAPITAL
               ---------------------------------
Accounts payable and accrued expenses                  230,417        128,308
Accounts payable - construction                         13,502         17,500
Due to affiliate                                        50,000           --
Mortgage notes payable                              10,000,000     10,000,000
                                                   -----------    -----------
               Total liabilities                    10,293,919     10,145,808
                                                   -----------    -----------

Commitments (note 5)

Partners' capital                                      614,378      1,710,582
            Less notes receivable from partners         (7,300)       (30,532)
                                                   -----------    -----------
               Total partners' capital                 607,078      1,680,050
                                                   -----------    -----------

Total liabilities and partners' capital             10,900,997     11,825,858
                                                   ===========    ===========

See accompanying notes to unaudited financial statements.




<PAGE>




                      Essex Hospitality Associates III L.P.
                              Statements of Income
               For the Quarters Ended September 30, 1997 and 1996



                                                   1997          1996
                                                  ------         -----

 INCOME
       Rooms                                     1,053,000       971,680
       Other income                                 48,049        51,285
                                                ----------    ----------
          Total income                           1,101,049     1,022,965

EXPENSES
       Rooms                                       276,714       278,249
       Administrative and general                   85,279        99,963
       Property taxes                               34,476        19,128
       Repairs and maintenance                      41,671        51,334
       Advertising and promotion                    57,142        43,739
       Management fees                              50,790        50,189
       Utilities                                    49,482        48,493
       Commissions expenses                         41,156        32,355
       Franchises fees                              36,416        33,917
       Partnership management fees                  14,108        13,940
       Insurance                                    11,115         8,798
       Depreciation & amortization                 162,898       146,031
       Miscellaneous                                16,728         3,203
                                                ----------    ----------
          Total expenses                           877,975       829,339
                                                ----------    ----------

             Operating income                      223,074       193,626

       Interest expense                            250,000       250,000
                                                ----------    ----------

NET INCOME (LOSS)                                  (26,926)      (56,374)
                                                ==========    ==========

Net income (loss) - general partners                  (269)         (564)
Net income (loss) - limited partners               (26,657)      (55,810)
                                                ----------    ----------
                                                   (26,926)      (56,374)
                                                ==========    ==========

Net income (loss) per unit - limited partners           (7)          (14)
                                                ==========    ==========


See accompanying notes to unaudited financial statements.




<PAGE>





<TABLE>
<CAPTION>

                      Essex Hospitality Associates III L.P.
                            Statements of Cash Flows
               For the Quarters Ended September 30, 1997 and 1996


                                                                               1997          1996
                                                                              -----         ------
<S>                                                                         <C>          <C>      
 Cash flows from operating activities
        Cash received from customers                                         1,089,227     1,036,409
        Cash paid to suppliers                                                (693,905)     (685,302)
        Interest received                                                          873           941
        Interest paid                                                         (250,000)     (250,000)
                                                                            ----------    ----------
           Net cash provided by operating activities                           146,195       102,048
                                                                            ----------    ----------

 Cash flows from investing activities
        Increase in restricted cash                                               (809)         --
        Payments for fixed asset additions                                     (36,295)       (4,416)
                                                                            ----------    ----------
           Net cash used in investing activities                               (37,104)       (4,416)
                                                                            ----------    ----------

 Cash flows from financing activities
        Partner capital contributions                                            1,010         1,010
        Advances from affiliate                                                (54,111)         --
        Partner distributions                                                 (101,010)     (101,010)
                                                                            ----------    ----------
           Net cash used in financing activities                              (154,111)     (100,000)
                                                                            ----------    ----------

 Net increase (decrease) in cash and cash equivalents                          (45,020)       (2,368)

 Cash and cash equivalents - beginning of period                                61,099       235,593
                                                                            ----------    ----------

 Cash and cash equivalents - end of period                                      16,079       233,225
                                                                            ==========    ==========


 RECONCILIATION OF NET INCOME TO NET CASH FLOWS
 ----------------------------------------------
    FROM OPERATING ACTIVITIES:
    --------------------------

 Net loss                                                                      (26,926)      (56,374)

 Adjustments to reconcile net income (loss) to net cash used in operating
   activities:
        Depreciation and amortization                                          162,898       146,031
        Changes in:
           Accounts payable                                                     14,470          (252)
           Other assets                                                         (4,247)       12,643
                                                                            ----------    ----------
                                                                               146,195       102,048
                                                                            ==========    ==========
</TABLE>

 See accompanying notes to unaudited financial statements.





<PAGE>







                      ESSEX HOSPITALITY ASSOCIATES III L.P.
                        (A Delaware Limited Partnership)

                          Notes to Financial Statements
                           September 30, 1997 and 1996

(1)   ORGANIZATION

      Essex  Hospitality  Associates  III L.P. (the  Partnership)  is a Delaware
      limited   partnership  formed  on  August  2,  1993  for  the  purpose  of
      purchasing,  leasing  or  subleasing  undeveloped  land and  constructing,
      owning  and  operating  up to four new  Hampton  Inn,  Homewood  Suites or
      Microtel  hotels under  franchises  or licenses to be obtained  from these
      national lodging chains. The Partnership financed its activities through a
      public offering of notes and limited  partnership  units.  Microtel Hotels
      were  constructed in Birmingham,  Alabama and  Chattanooga,  Tennessee and
      began  operations in September 1994 and September 1995,  respectfully.  In
      April 1995, construction of a Hampton Inn hotel in Rochester, New York was
      completed  and the  hotel  began  operations.  The  Partnership  does  not
      anticipate raising additional capital and, therefore, no additional hotels
      are expected to be developed.

      The  Partnership's   general  partners  are  Essex  Partners  Inc.  (Essex
      Partners),  a subsidiary of Essex Investment Group, Inc. (Essex), and John
      E.  Mooney,  President  of Essex  Partners  and Essex.  Management  of the
      Partnership and the hotels is the sole responsibility of Essex Partners.

      The  following is a general  description  of the  allocation of income and
      loss. For a more comprehensive description see the Partnership Agreement.

          Income from operations  will be allocated 99% to the limited  partners
          and 1% to the  general  partner  until  the  amount  allocated  to the
          limited  partners  equals the cumulative  annual return of 8% of their
          contribution. Any remaining income from operations is allocated 80% to
          the limited  partners and 20% to the general  partners.  Income on the
          sale  of any or all of the  hotels  is  allocated  99% to the  limited
          partners until each limited  partner has been  allocated  income in an
          amount  equal to $1,000 per Unit owned by the limited  partners and 1%
          to the general partners.  Thereafter, income on the sale of any or all
          the hotels is allocated in the same manner as income from operations.

          Losses from operations  will be allocated 80% to the limited  partners
          and 20% to the general partner in the amounts sufficient to offset all
          income which was  allocated 80% to the limited  partners.  Thereafter,
          operating  losses are allocated 99% to the limited  partners and 1% to
          the  general  partners.  Loss on the sale of any or all of the  hotels
          will be first allocated in the same manner as losses from  operations,
          except  that  the  allocation  of such  loss  would  be made  prior to
          allocations of income from operations.  All other losses are allocated
          99% to the limited partners and 1% to the general partners.



<PAGE>



ESSEX HOSPITALITY ASSOCIATES III L.P.
(A DELAWARE LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 AND 1996
PAGE 2

(1)   ORGANIZATION (CONTINUED)

      In 1995 and 1996, losses from operations were allocated 99% to the limited
      partners and 1% to the general partners.

      Under the Partnership agreement, cash distributions will initially be made
      99% to the  limited  partners  and 1% to the general  partners.  After the
      limited partners have received a minimum cumulative annual return of 8% of
      their contribution,  additional  distributions may then be made 80% to the
      limited  partners and 20% to the general  partners.  The limited  partners
      have received the minimum  cumulative  return of 8% due as of December 31,
      1996.

      Under  the  Partnership's  initial  offering  from  1993 to 1995,  limited
      partnership  capital of  $3,986,320  was  raised,  less  syndication  fees
      including selling  commissions and legal,  accounting,  printing and other
      filing costs of $491,473.  Cumulative  distributions  to limited  partners
      through September 30, 1997 were $976,718.

      Essex Partners and its affiliates received  substantial fees in connection
      with the offering of notes and limited  partnership  units and development
      of hotels.  Management  and other fees  related  to the  operation  of the
      hotels and the  Partnership  are due annually to Essex  Partners (see note
      6).



(2)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      BASIS OF ACCOUNTING
      -------------------

      The financial  statements of the Partnership  were prepared on the accrual
      basis of accounting  in  conformity  with  generally  accepted  accounting
      principles.

      INVESTMENT IN REAL ESTATE
      -------------------------

      Investments in real estate are stated at cost.  Depreciation is calculated
      using the  straight-line  method over the  estimated  useful  lives of the
      assets.

      DEFERRED COSTS
      --------------

      Costs of issuing  mortgage notes payable are amortized on a  straight-line
      basis over the term of the notes.

      Franchise  fees paid for the right to own and  operate  the hotels will be
      amortized  on a  straight-line  basis  over  the  term  of  the  franchise
      agreement, beginning when a hotel is placed in service.


<PAGE>



ESSEX HOSPITALITY ASSOCIATES III L.P.
(A DELAWARE LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 AND 1996
PAGE 3



(2)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

      INCOME TAXES
      ------------

      No provision for income taxes has been provided since any liability is the
      individual responsible of the partners.

      RECOGNITION OF REVENUE
      ----------------------

      Revenues  are  recognized  as  earned  in  accordance   with   contractual
      arrangements for each transaction.

      USE OF ESTIMATES
      ----------------

      The  preparation of the financial  statements in conformity with generally
      accepted  accounting  principles  requires the managing general partner to
      make estimates and assumptions  that affect the reported amounts of assets
      and  liabilities at the date of the financial  statements and the reported
      amounts of income and expenses during the reporting period. Actual results
      could differ from those estimates.

      RECLASSIFICATION
      ----------------

      Certain amounts in the prior year's financial statements were reclassified
      to conform with the current year's presentation.



(3)   SALE OF LAND

      In 1996,  the  Partnership  sold land  adjacent  to the hotel  with  final
      settlement in January 1997 of $86,782. A loss of $67,218 was recognized on
      the transaction.



(4)   MORTGAGE NOTES PAYABLE

      Mortgage Notes payable bear interest at 10% per annum and mature  December
      31, 1998,  unless  extended by the  Partnership  to December 31, 1999 upon
      payment  of an  extension  fee  equal  to  .5%  of  the  principal  amount
      outstanding,  or December 31, 2000 upon payment of an extension  fee equal
      to 1% of the  principal  amount  outstanding.  The notes are  secured by a
      first mortgage on the hotels and underlying land.


<PAGE>





ESSEX HOSPITALITY ASSOCIATES III L.P.
(A DELAWARE LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 AND 1996
PAGE 4



(5)   FRANCHISE, ROYALTY AND MARKETING FEES

      The Partnership entered into franchise  agreements with Microtel Franchise
      and  Development  Corporation  (MFDC)  for  the  Birmingham,  Alabama  and
      Chattanooga,  Tennessee  sites.  Total  initial  franchise  fees paid were
      $50,500.  In addition to the initial fee, the  Partnership  is required to
      pay a monthly  royalty  fee of 2.5% of gross room  revenues.  The  monthly
      royalty fee increases to 3% of gross room revenues in the event between 50
      and 100  Microtel Inn hotels are opened for business and 3.5% in the event
      100 or more  Microtel  Inn hotels are  opened.  During the third  quarter,
      1997,  the 50th  Microtel  Inn hotel was opened.  The monthly  royalty fee
      increased to 3% in September  1997. In 1996, the Franchisor  established a
      system of  advertising,  thus  requiring the  Partnership to contribute an
      additional 1% of gross room revenues to pay for the cost of such a system.
      The franchise  agreement also requires the Partnership to maintain certain
      insurance  coverage,  to meet certain standards with respect to furniture,
      fixtures,  maintenance and repair,  and to refurbish and upgrade the hotel
      not more than once every 5 years to conform to the  Microtel  Inn  hotel's
      then-current  public image. The term of the agreement is 10 years, with an
      option to renew for an  additional 10 years,  subject to  compliance  with
      certain conditions.  Microtel royalty and advertising fees totaled $17,800
      and $15,743 during the third quarter, 1997 and 1996, respectfully.

      The  Partnership  has also  entered into a license  agreement  with Promus
      Corporation (Promus) to operate a Hampton Inn hotel for the Rochester, New
      York site.  An initial  franchise  fee of $35,000 was paid. In addition to
      the  initial  fee,  the  Partnership  is  required to pay Promus a monthly
      royalty fee of 4% of gross room revenues, a monthly  marketing/reservation
      fee of 4% of gross room  revenue and a monthly  amount  equal to any sales
      tax or similar tax imposed on Hampton Inn on payments  received  under the
      license    agreement.     The    Partnership    incurred    royalty    and
      marketing/reservations  fees of  $47,405  and  $45,344  during  the  third
      quarter 1997 and 1996, respectfully.

      Promus  requires the  Partnership  to establish a capital  reserve  escrow
      account based on a percentage of gross  revenues  generated by the Hampton
      Inn hotel  which  will be used for  product  quality  requirements  of the
      hotel.  Cumulative  funding  of the  reserve  for the first  five years of
      operation  increases  from 1% to 5% of gross revenues and stabilizes at 5%
      for the term of the agreement. The capital reserve cash escrow account was
      $56,484 and $17,115 at September 30, 1997 and 1996, respectively.

      The franchise  agreement  impose certain  restrictions  on the transfer of
      limited  partnership  units.  MFCD and Promus restrict the sale, pledge or
      transfer of units in excess of 10% and 25%,  respectively,  without  their
      consent.



<PAGE>





ESSEX HOSPITALITY ASSOCIATES III L.P.
(A DELAWARE LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 AND 1996
PAGE 5



(6)   RELATED PARTY TRANSACTIONS

      A summary of the compensation,  fees and  reimbursements to be received by
      Essex  Partners  or their  affiliates  under the terms of the  Partnership
      agreement follows:


<TABLE>
<CAPTION>

                                                                              3rd Qtr.        3rd Qtr.
TYPE OF FEE                  AMOUNT OF FEE                                     1997            1996
-----------                  -------------                                      ----            ----


<S>                          <C>                                               <C>             <C>   
Property Management          4.5% of gross operating revenues from             50,790          50,189
Fee                          the hotels

Partnership                  1.25% of gross operating revenues                 14,108          13,940
Management Fee               from the hotels

Accounting Fee               $675 per month                                     6,075           6,075


Refinancing Fee              1% of the gross proceeds of any                        0               0
                             refinancing of any or all of the hotels

Sales Fee                    3% of the gross sale price of any of all               0               0
                             of hotels

                                                                              $70,973         $70,204
                                                                              =======         =======

</TABLE>


<PAGE>




ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
------  ---------------------------------------------------------

The  Partnership  was formed on August 2, 1993. In 1995, it completed its public
offering  of  first  mortgage  notes  and  limited  partnership  units,  raising
$13,986,320.  The first  Partnership  property,  a  102-room  Microtel  hotel in
Birmingham,  Alabama,  opened in September,  1994. The two remaining Partnership
properties  opened in 1995,  a 118-room  Hampton Inn in  Rochester,  New York in
April and a 100-room Microtel in Chattanooga in September.

The major revenue  source for the  Partnership's  properties  is room  revenues,
which  generated 96% of the operating  revenues for the Partnership in the third
quarter,  1997.  Room revenues  generated are dependent on a property's  average
occupancy and average daily rate.  Room revenues for the third quarter 1997 were
8% higher than the third  quarter,  1996.  Room  revenues at the Hampton Inn and
Chattanooga Microtel Inn properties increased compared to 1996.

The Birmingham Microtel Inn achieved an average occupancy of 66% for the quarter
with an average daily rate of $34.87,  as compared with an average  occupancy of
65% in the third  quarter,  1996,  and an  average  daily  rate of  $35.03.  The
increase  in  occupancy  produced  a  $1,500  increase  in  room  revenues.  The
Birmingham  Microtel  generated  approximately  21%  of the  Partnership's  room
revenues for the quarter, compared to 22% in the third quarter, 1996.

The Hampton Inn achieved an average  occupancy  of 80% for the quarter,  with an
average daily rate of $75.91,  compared with an average occupancy of 71% for the
third  quarter  1996 and an  average  daily  rate of  $69.05.  The  increase  in
occupancy  and average  daily rate caused room  revenues to increase by $37,100.
The Hampton Inn generated around 54% of the Partnership's  room revenues for the
quarter, compared to 55% for the third quarter, 1996.

The average  occupancy for the Chattanooga  Microtel Inn for the quarter was 79%
with an average  daily rate of $36.46,  compared to the third  quarter 1996 when
occupancy  was 61% with an  average  daily rate of $33.35.  The  improvement  in
occupancy  caused room revenues for the quarter to exceed the third quarter 1996
by $42,900.  The manager at the  Chattanooga  Microtel Inn was replaced in 1996.
The new manager  hired is from the  Chattanooga  area and has  several  years of
experience in the hotel industry. The new manager instituted extensive marketing
programs to build the  awareness  of the hotel  within the  Chattanooga  market.
Occupancies  began to improve in January,  1997.  The  Chattanooga  Microtel Inn
generated  around  25% of the  Partnership's  room  revenues  for  the  quarter,
compared to 23% for the third quarter, 1996.

Operating income for the third quarter  increased $29,400 over the third quarter
1996,  to  $223,000.   Interest   expense   remained  at  $250,000,   since  the
partnership's  mortgages  require  payments of interest  only at a fixed rate of
10%. The  Partnership's  net loss for the quarter was $27,000  compared to a net
loss of $56,000 in the third quarter,  1996. The Partnership  generated $146,000
from  operations,  compared  to$102,000 in the third  quarter,  1996.  Investing
activities  required cash of $37,000 in the third  quarter  1997,  primarily for
asset replacements. In 1996, investing activities required cash of $4,000 in the
third quarter for asset replacements. Financing activities used $154,000 in cash
in the third  quarter,  1997.  Significant  financing  activities  for the 


<PAGE>



third  quarter  1997  included  the  payment  of  $100,000  in  limited  partner
distributions and the repayment of $54,000 in advances from the Managing General
Partner.  The third quarter 1996 financing activities were primarily composed of
the payment of $100,000 in limited partner distributions. The Partnership's cash
and cash equivalents decreased $45,000 in the third quarter, 1997, compared to a
decrease of $2,000 in 1996.

Total assets decreased  $925,000 in 1997 due primarily to the $718,000  increase
in depreciation and amortization and a $200,000  decrease in unrestricted  cash.
Total  liabilities  increased  $148,000 from an increase in accounts payable and
accrued expenses and in due to affiliate.  Partners' equity decreased $1,096,000
from two factors,  the payment of $400,000 in  distributions to limited partners
and the net losses of $696,000  generated  between October 1, 1996 and September
30, 1997.

CAPITAL RESOURCES AND LIQUIDITY
The Partnership  expects to obtain sufficient  liquidity from operations to fund
all operating  costs. In addition to operations,  the  Partnership  will require
liquidity to provide for repayment of outstanding debt. The Partnership's  first
mortgage  notes in the principal  amount of  $10,000,000  mature on December 31,
1998.  The  Managing  General  Partner  would  prefer to replace  the notes with
conventional  financing from a bank or other institutional  lender. The Managing
General Partner believes the environment for  conventional  financing for hotels
has improved  such that there is  reasonable  probability  that the  Partnership
would be able to obtain sufficient  conventional  financing to replace its first
mortgage  notes.  However,  if  conventional  financing  is not  available,  the
Partnership  can extend the maturity date of the first  mortgage notes for up to
two years upon payment of extension fees.

The Microtel  franchise  agreements  require the  Partnership  to refurbish  and
upgrade  its  Microtel  Inn hotels not more than every five  years.  The upgrade
would include replacing soft goods such as bedspreads and drapes, new carpeting,
equipment such the front desk system,  telephone system and the key system.  The
Partnership  is  replacing  soft goods as needed and expects it will satisfy the
Microtel  franchisor's  requirements without any major additional  expenditures.
The front desk  system,  telephone  system  and key system at the  Partnership's
properties were new at the time the properties were constructed and are expected
to meet Franchisor  specifications for the next several years. Equipment such as
televisions and heating and cooling units are expected to have a life of between
five and ten years and can replaced as  required.  Not all units will need to be
replaced in the same year, so that management  expects that the expenditures can
be spread over several years.

The  Hampton Inn license  agreement  requires  the  Partnership  to  establish a
capital  reserve  escrow  account  based on a percentage  of gross room revenues
generated by the Hampton Inn hotel. The reserve will be used for product quality
requirements of the hotel.  Cumulative funding of the reserve for the first five
years  increases  from 1% to 5% of gross  revenues and  stabilizes at 5% for the
term of the  agreement.  The  Partnership  expects to fund the reserve from cash
from  operations,  and the reserve  should be  sufficient  to fund major capital
improvements  as required.  At September 30, 1997,  the capital  reserve  escrow
account was $56,484.

<PAGE>

                                     PART II
                                     -------

                                OTHER INFORMATION
                                -----------------
                                
                                



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
------  --------------------------------

        a.     EXHIBITS
               --------

               None

        b.     REPORTS ON FORM 8-K
               -------------------

               None





                                   SIGNATURES
                                   ----------

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                     ESSEX HOSPITALITY ASSOCIATES III L.P.
                                     -------------------------------------
                                            Registrant



Dated:  November 13, 1997            /s/ Lorrie L. LoFaso
                                     ------------------------------------
                                     Essex Hospitality Associates III L.P.
                                     Essex Partners Inc.
                                     Lorrie L. LoFaso
                                     Vice President and Chief Accounting Officer