BOSTON--Hotel occupancy rates in Cambridge climbed a whopping 7.1 percent this year, signaling that the darkest days of the local tourist industry recession may be past.

In the first half of 1992, occupancy rose more in Cambridge than in any other part of the state. Occupancy in Massachusetts rose an average of 3.4 percent, according to statistics released, yesterday by the Greater Boston Visitors and Convention Bureau.

But the news was tempered by the fact the overall, the average daily rate for a hotel room fell by 2.1 percent in Cambridge and by 0.7 percent statewide.

At yesterday's news conference in the posh Boston Harbor Hotel on Rowe's Wharf, local industry officials painted a picture of "cautious optimism."

Renewed strength in the convention and commercial travel market in the first half of 1992 led to the increased occupancy, said Ken Wilson, whose company, Hospitality Consulting, prepared the report.

But in Cambridge, hotel managers expressed more caution then optimism.

James D. Collins, the general manager of the Sheraton Commander,

said he was not as confident that he would havea full house in the coming months. But Collinssaid that during the recession, many travelers arebooking on short notice.

Victor Bowen, the reservations manager for theCharles Hotel, said that in recent yeras therecession has hurt his business "incredibly."

But Bowen said he now sees an end to thefinancial hard times. "Its happening slowly...itstill hurts, the rates are lower, but we are goingto get out," Bowen said.

Bowen attributed the rebound in occupancy ratesin part to an increase in Harvard affililatedgroups staying at the hotel. In addition, he said,overflow from Boston conventions is boom for hisand other Cambridge inns.

According to Wilson, Cambridge is the firstbeneficiary of the convention business, whichtravels across the Charles when the downtownhotels fill. Boston hosted several conventionsthis year. In addition, no Gulf War discouragedpeople from traveling this winter. Bothphenomenahelped to drive up occupancy rates in thecity.

Wilson said he fears that if hotel room pricescontinue to fall, the industry could sufferpermanent damage.

In Cambridge the average daily room price inthe first half of 1992 fell by $1.40. Thatdecline, coupled with a rise in inflation, makesindustry watchers nervous that hotels will cutservices, defer needed maintenance and lay offworkers. that could devalue the quality of thearea hotels, which could hurt the industry in thelong run.

Wilson said that prices have declined as hotelscompete for occupants. He said the increasedoccupancy is not a result of the lower rates