UBS Warburg Cuts Lodging Stock Price Targets

SAN FRANCISCO—UBS Warburg has cut stock price targets for nine of the 10 hotel companies it follows. According to a Reuters report, the investment firm forecasted average room revenue would fall 2% in 2003 while management expenses rose as companies continue cutting travel budgets to lower their own expenses in the currently weak economy. Hotels were behind target in October, typically one of the best business travel months, UBS Warburg analyst Keith Mills said, predicting many hoteliers would give glum forecasts with this quarters earnings reports. “Hotels are finding they are not meeting their occupancy targets. They are cutting their rates more than they thought they had to (in order) to attract business, and they are more aggressively going after small- or medium-sized group business,” Mills said. Host Marriott Corp. last week reported a sharply wider third quarter loss and said the current slump in business travel would extend into next year. Reuters