NEW YORK— UBS Warburg reports that U.S. hotel construction starts have continued to decline, due primarily to the fact that there is less capital being made available for lodging development. While the analyst firm feels that this will have a positive effect on lodging revenues, it also believes “attention should be more focused on demand-growth prospects, which we believe will gradually begin to recover beginning in late 2002 after a rebound in corporate profits begins.” All told, U.S. hotel construction starts decreased 34% in February, to an estimated 81,308 rooms, from February 2001. While February 2002 hotel construction starts were 41% above January 2002 starts, the three-month moving average ended February 2002 was 48% lower than that of the year-ago period, according to the firm. Cities experiencing the largest declines in trailing 12-month construction starts vs. the trailing 12 months beginning one year ago are Los angeles, Houston, Dallas and Detroit.
