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SEC ACCEPTANCE

 November 12, 2004

Via Hand Delivery

 Peggy Kim

 Senior Counsel

 Mail Stop 3-9

 Securities and Exchange Commission

 Division of Corporation Finance

 450 Fifth Street, N.W.

 Washington, DC 20549

RE:
MHI Hospitality Corporation (the “Company”)

Form S-11

Pre-Effective Amendment No. 3 to Registration Statement No. 333-118873

Filed November 15, 2004

 Dear Ms. Kim:

 In connection with the filing of
the above-captioned pre-effective amendment (the “Amendment”), we set forth below the Company’s responses to the comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”)
provided in the comment letter dated November 9, 2004 (the “Comment Letter”), relating to the above referenced registration statement.

 We have included the Staff’s comments in the order presented in the Comment Letter and numbered according to the numbering scheme employed in the Comment Letter.
Page numbers included in our responses refer to pages in the marked Pre-Effective Amendment No. 3 to the Registration Statement (“Registration Statement”) and the prospectus included therein (the “Prospectus”).

 Prospectus Summary

1.
Please remove the defined terms in the italicized introductory paragraph. Please revise to use an abbreviated form of each longer term and do not merely use initials.

The Prospectus has been revised in response to the Staff’s comment.

2.
We note your response to prior comment 15; however, we reissue our previous comment because it does not appear that you have fully complied with our comment.

Disclosure has been added on page 2 in response to the Staff’s comment.

 Overview

3.
We note your response to Comment 18, but are unable to determine where you have responded to the comment within the Overview section of your prospectus. Please revise throughout
your disclosure to balance the description of management’s experience with disclosure that management has no experience operating a public company or a REIT.

 Disclosure has been added on page 3 in response to the Staff’s comment.

 Our Initial Properties

4.
We note your response to prior comment 34. Further, we note that you are acquiring the leasehold interests from the same entities to whom you will be subleasing the interests.
Please revise, here and in the main part of the document, as follows:

 · Please clarify whether you are subleasing the entire leasehold interest,

 · Revise to disclose the business purpose of this arrangement,

 · Disclose the terms
of the leasehold interest and sublease arrangement, and

 · Disclose the acquisition cost and further describe the annual lease expense of
$120,000. Does it cover taxes, utilities, maintenance, etc.?

 The Prospectus has been revised at pages 5 and 76 to reflect the Staff’s comment.

 Prospectus Cover Page

5.
We note your response to Comment 12. Please revise to indicate the extent to which affiliates will have a controlling interest in MHI Hospitality Corporation following the
formation transactions.

 Disclosure has been
added on the cover page in response to the Staff’s comment.

 Benefits to Affiliates

6.
Please revise to further disclose the services provided for the restructuring fees, because it is unclear what services are provided for the $2 million fee. For example, disclose
whether these are termination fees.

 Peggy Kim

 November 12, 2004

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 No services will be provided for the restructuring fee; rather, the parties are consolidating the former
management agreements into one agreement and, among other things, reducing the percentage of gross revenue payable to the management company as management fees, and establishing termination provisions and related contractual terms consistent with
the operation of a public hotel REIT. In response to the Staff’s comment we have revised the Prospectus at pages 10 and 109.

 Risk Factors

7.
We note your response to prior comment 52. Although you do not have current plans to enter into joint venture, we note that you may invest in joint ventures in the future. For
example, see pages 50, 59 and 96. Therefore, it appears that the risks associated with joint ventures are material risks to your business. Therefore, please revise to replace the deleted disclosure and we reissue our previous comment.

 Disclosure has been added on page 23 in
response to the Staff’s comment.

 We have recently been organized
and have no operating history

8.
We note your response to Comment 42. Please revise to more specifically describe the risks associated with your lack of operating history, beyond the general reference to
“risks generally associated with the formation of any new business.”

 Disclosure has been added on page 24 in response to the Staff’s comment.

 Our borrowing costs are sensitive to fluctuations in interest rates

9.
We note your response to prior comment 53; however, we reissue our previous comment. It appears that at least $4,838,004 of your debt floats with the prime rate. See page F-16.
Please also revise to quantify any amounts under the proposed credit facility.

 The Company
plans to use a portion of the proceeds of the offering to repay approximately $25.1 million of existing consolidated mortgage debt and will have approximately $25.9 million of outstanding debt following the offering. The debt that will be
outstanding after the offering is fixed rate indebtedness and is not sensitive to fluctuations in interest rates (the terms of the fixed rate debt for the Savannah and Wilmington properties are summarized at page 51 of the Prospectus). The only
floating rate debt that may be outstanding following the offering is the $23.0 million credit facility that the Company intends to enter into with an affiliate of BB&T Capital Markets. We have revised the Prospectus at page 52 to indicate that
the assumed debt to be outstanding following the offering

 Peggy Kim

 November 12, 2004

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 has fixed interest rates. We have also modified the risk factor disclosure at page 23 to disclose the
floating rate nature of the revolving credit facility.

 Risks Related to
the Hotel Industry

 Capital Expenditures

10.
We note your response to prior comment 55 and we note that you have included percentages of gross sales and room sales. Please revise to include estimates of these amounts based
on historical gross sales or room sales.

 Disclosure has been added on page 25 in response to the Staff’s comment.

 Risks Related to Our Organization and Structure

 Failure to qualify as a REIT would subject us to federal income tax

11.
Please discuss all of the risks associated with a failure to qualify as a REIT, including:

 · The risk that distributions to stockholders may be reduced,

 · The risk that the value of your stock will be reduced, and

 · The risk that your ability to raise capital and financing will be affected.

 Disclosure has been added on page 29 in response to the Staff’s comment.

 Risks Related to the Offering

 The number of shares available for future sale could cause our shares to decline

12.
We note your response to prior comment 61. We note that 3,817,036 shares will be issued upon redemption of units. Please revise to describe the date that these shares will first
become available for sale in the public market

 Disclosure has been added on page 34 in response to the Staff’s comment.

 Dilution

13.
Please revise to show the amount of the increase in net tangible book value per share attributable to the cash payments made by the purchasers of the shares in the offering
pursuant to Item 506(b) of Regulation S-K separate from units/shares issued in the formation transactions.

 Disclosure has been added on page 40 in response to the Staff’s comment.

 Peggy Kim

 November 12, 2004

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 Management’s Discussion and Analysis of Financial Condition and Results of Operations Overview

14.
We note your response to comment 66 and you have indicated in your revision on page F-44 that interests acquired from third parties have been marked up to reflect acquisition
costs. Revise your disclosure on page 43, which appears to contradict that revision by indicating that carryover basis is used for interests in hotels acquired from third parties.

 Disclosure has been added on page 44 in response to the Staff’s
comment.

 Financing Strategy

15.
We note your response to Comment 74. Although you have not yet entered into a definitive agreement, please revise to describe the material terms of the credit facility.

 Although the Company has not yet entered into a definitive agreement, we have added
disclosure on pages 51 and 60 to describe the anticipated material terms of the credit facility.

 Environmental Matter

16.
We note your response to prior comment 78. We note that in the second sentence in the last paragraph you state that the presence of the asbestos-containing materials does not, in
your opinion, pose an unacceptable risk and does not violate any law applicable to the property. Please revise to also disclose that you do not believe it poses a material risk, as stated in your response.

 Disclosure has been added on page 78 in response to the Staff’s
comment.

 Our Principal Agreements

17.
We note your response to Comment 81. Please clarify, if true, that MHI Hotels Services receives no fees pursuant to the strategic alliance agreement. Also, please clarify whether
there are fee caps in place pursuant to the management and franchise agreements.

 Disclosure has been added on page 80 in response to the Staff’s comment regarding the strategic alliance agreement.

 Peggy Kim

 November 12, 2004

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 Other than the cap on the management incentive fee disclosed on page 81 of the Prospectus, there are no
other fee caps in place pursuant to the management and franchise agreements.

 Principal Stockholders

18.
Please identify the natural persons who control investment and voting power over the shares held by Elpizo Limited Partnership.

 Disclosure has been added on page 102 in response to the Staff’s
comment.

 Notes to Financial Statements of MHI Hospitality
Corporation

 Organization

19.
Since you view that you have a reorganization of entities under common control with respect to the hotels of MHI Hotels Services Group and not a business combination, please
revise your characterization in the second paragraph under this heading and elsewhere within Form S-11, as necessary.

 The Prospectus has been revised at page F-4 in response to the Staff’s comment.

 Summary of Significant Accounting Policies

20.
Please tell us how you determined that MHI Hotel Services or the Sims family has control of the entity that owns the Holiday Inn Brownstone when it only has a 50% beneficial
interest in such entity (less than majority).

 MHI Hotels Services has managed and maintained an indirect ownership interest in the Holiday Inn Brownstone since August 1998. MHI Hotels Services has a 99% ownership interest in KDCA Partnership, which owns a 50% membership interest in
Brownestone Partners LLC, which owns the Holiday Inn Brownestone. The members of MHI Hotels Services indirectly own the remaining 1% interest in KDCA Partnership. In addition, MHI Hotels Services’ president and chief executive officer, Andrew
Sims, is the managing member of Brownestone Partners LLC. As managing member, Mr. Sims has sole authority to direct the day-to-day operations of the entity save for major transactions and refinancings. In addition, MHI Hotels Services entered into a
Hotel Management contract with Brownestone Partners LLC on August 1, 1998 with a term through August 2008 for the management of the property.

 EITF 02-5 states in paragraph 2 that common control exists when there is common majority ownership by an individual, a family, or a group affiliated in
some other manner. The Company has concluded that the group that controls MHI Hotels

 Peggy Kim

 November 12, 2004

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 Services exerts control over Brownestone Partners, LLC by virtue of the role of one of its members as the
manager of Brownestone, the existence of the long-term management agreement between Brownestone Partners and MHI Hotels Services and the ownership interests in Brownestone Partners by MHI Hotels Services and its members. This analysis is supported
by EITF 96-16 in which the Task Force agreed that the assessment of whether or not the rights of a minority shareholder should overcome the presumption of consolidation by the investor with a majority voting interest in its investee is a matter of
judgment that depends on facts and circumstances. The Task Force further agreed that the framework in which such facts and circumstances are to be judged should be whether the minority rights, individually or in the aggregate, provide for the
minority shareholder to effectively participate in significant decisions that would be expected to be made in the ordinary course of business. In this case, MHI Hotels Services and its control group own 50% of Brownestone Partners and, by virtue of
Andrew Sims’ role as the manager of Brownestone Partners and MHI Hotels Services, LLC’s management contract, make all operating decisions which demonstrates control of Brownestone Partners. Further, the other owner of Brownestone Partners
does not hold a majority interest and thus cannot override the actions of MHI Hotels Services. Based on this, the Company has concluded it is appropriate to treat Brownestone Partners LLC as under common control with the other entities constituting
the predecessor group.

 Consolidation Policy

21.
We note your disclosure which appears to indicate that the Operating Partnership is the only subsidiary that meets the requirements for consolidation. Please address the TRS
Lessee that will exist and how you have determined that consolidation is not appropriate.

 The Prospectus has been revised at page F-4 to reflect the Staff’s comment.

 Commitments and Contingencies

22.
Disclose the indemnification agreements you have entered into which we note you have disclosed on page 54 of Form S-11.

 Disclosure has been added on page F-6 in response to the Staff’s
comment.

 Combined Financial Statements of MHI Hotels Services Group

 Deferred Costs

23.
 We note your response to comment 100. Help us to understand how you determined that the guidance of SFAS 142 is applicable to your franchise

 Peggy Kim

 November 12, 2004

7

application fee. Additionally, please support your treatment of the capitalized amount in note (g) on page F-48.

 Hilton Inns, Inc. and Holiday Inn both require the payment of an application
fee in connection with the granting of a franchise to a new franchisee. Hilton also requires the payment of transfer fees in connection with the assignment or deemed assignment of a franchise license. The initial fees paid to Hilton Inns, Inc. and
Holiday Inn in respect of the Hilton Savannah DeSoto, the Holiday Inn Downtown Williamsburg and the Holiday Inn Brownstone, as set forth on pages F-13 and F-14 of the Prospectus, have been treated as deferred franchise fees that will be amortized
over the term of the franchise agreements. In addition, the fees to be paid to Hilton Inns, Inc. in connection with the assignment of the Hilton Philadelphia Airport license and the deemed assignment of the Hilton Savannah DeSoto and Hilton
Wilmington Riverside licenses have been treated as deferred franchise fees that will be amortized over the life of the franchise agreements.

 The Company believes that consistent with hospitality industry practices and the guidance in SFAS 142, these fees are appropriately deferred until
anticipated revenues are generated by the franchise rights. SFAS No. 142 deals with Goodwill and Other Intangible Assets. Appendix E to SFAS No. 142 defines intangible assets as “assets that lack physical substance.” Paragraph No. 9 of
SFAS No. 142 states “an intangible asset that is acquired individually shall be initially recognized and measured based on its fair value.” The Company believes tha