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CHARLESTON, S.C. (AP) — Along much of the East Coast, hotel owners, tourism officials and would-be vacationers kept a watchful eye on forecasts Wednesday as Tropical Storm Arthur churned off Florida, threatening Fourth of July plans for thousands of people.

Arthur, the first named storm of the Atlantic season, was expected to strengthen to a hurricane by Thursday. Though early maps showed it was unlikely to make landfall in the U.S., it was forecast to skim the Outer Banks of North Carolina — a string of narrow barrier islands prone to flooding but popular for beachgoers — as a Category 1 hurricane Friday.

A swath of nearly 200 miles of North Carolina coast was under a hurricane watch Wednesday. A tropical storm watch was in effect for parts of Florida the Carolinas. There and elsewhere up the East Coast, forecasters predicted rain, winds, potential flooding, high surf and rip currents.

The worst of the storm should occur at Cape Hatteras, North Carolina, about dawn Friday, with 3 to 5 inches of rain and sustained winds up to 85 mph, said Tony Saavedra, a meteorologist at the National Weather Service. The storm should move through quickly and be off the coast of New England later in the day, perhaps making landfall in Canada's maritime provinces as a tropical storm, he said.

The motel Shutters on the Banks in Kill Devil Hills, North Carolina, was completely booked for the holiday weekend, general manager John Zeller said Tuesday, but he was considering waiving cancellation fees if the storm continued to track toward the area.

"We have received some cancellations but not too many," he said. "Basically we are telling people to kind of wait and see what happens. ... I think everybody is kind of watching the weather."

On Wednesday, Arthur was about 100 miles (160 kilometers) off Cape Canaveral, Florida, according to the National Hurricane Center in Miami. It was moving north at about 6 mph (9 kph) with maximum sustained winds near 60 mph (95 kph).

About an hour north of Cape Canaveral, the Hilton Daytona Beach Oceanfront Resort's holiday reservations were unaffected by the storm, general manager Tom Manno said.

"In fact we're sold out right through Sunday," he said. "So we haven't experienced any cancellations at all."

But some precautions were taken at the hotel.

"We've gone through all the emergency procedures, the staff is confident, and everything is in place," Manno said. "Right now the weather is good, the winds are pretty calm, and we're hoping it will remain that way."

On Florida's Gulf Coast, the National Weather Service says dry air rotating around Arthur reduced rain chances in the Tampa Bay area. But as the storm moves north, the rain chances will return — just in time for the holiday weekend.

On Hilton Head Island, on South Carolina's southern tip, there was little concern about Arthur — the storm was forecast to pass the island on Thursday well out at sea.

"It's a very busy week on Hilton Head Island. ... It will be a sold-out weekend," said Charlie Clark, a spokeswoman for the Hilton Head Island Chamber of Commerce. "We're expecting a strong weekend and we're not getting calls from visitors asking what's up with this storm."

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Associated Press writer Kyle Hightower in Orlando, Florida, contributed to this report.

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