NEW YORK UBS Warburg cut its ratings on several hotels companies as businesses plan to cut back on employee travel and consumer confidence falls. UBS downgraded Host Marriott Corp. and Starwood Hotels & Resorts Worldwide to hold from strong buy. Choice Hotels International, Four Seasons Hotels, Hilton Hotels Corp., Innkeepers USA Trust, Marriott International, MeriStar Hospitality Corp. and MeriStar Hotels & Resorts were downgraded to hold from buy.
UBS also lowered its 2001 and 2002 earnings projections. The brokerage firm said that the high correlation between lodging stock prices and expenditure growth indicates that lodging stock prices are likely to fall as expenditure growth moderates. “The year 2002 could be a better year for U.S. hotel fundamentals and lodging stocks, as demand growth will likely accelerate in an environment of improving economic growth,” said UBS. (2/26/01)