NEW YORK Investors and analysts have seen some warning signs indicating that the lodging industry isn t a safe haven for stockholders, according to a report in The Wall Street Journal. Bookings by transient travelers are down from last year and convention and meetings bookings have been falling off during the past few weeks, leaving hotels scrambling to fill blocks of rooms. Boston, Chicago, New York and San Francisco have reported more hotel rooms sitting empty and/or rooms selling for lower prices, said the paper.
Furthermore, many travelers are choosing cheaper hotel rooms. Marriott said that it has noticed lately that RevPAR has been rising at its limited-service brands while dropping at its full-service Marriott and Renaissance hotels.
As previously reported by HOTEL BUSINESS., Goldman Sachs recently cut earnings estimates on seven lodging stocks, including Marriott, Starwood, Four Seasons, Hilton and Wyndham International. A number of analysts expressed concerns about Hilton and Starwood in particular, because the two companies real estate poses additional recession risks and because both are led by chief executives with only a few years of experience in hotels.
Marriott, run by the son of its founder, receives slightly more confidence from some analysts. “They re growing faster than other hotels, and they re doing it with other people s money,” said Mark Greenberg, a portfolio manager with the Invesco fund group. (3/26/01)
SOURCE:The Wall Street Journal