Hotel analyst reports signs of stabilization
Hotel analyst reports signs of industry stabilization, but conditions remain weak
The hotel sector is showing some signs of stabilization although industry conditions remain difficult, said a Friedman Billings Ramsey analyst on Wednesday.
C. Patrick Scholes said his contacts -- hotel revenue managers from large private hotel companies -- indicated that transient bookings, especially in the leisure segment, may have seen their steepest declines, but that room rates remain weak. As for groups business, Scholes said the pace of cancellations seems to have slowed, although fewer bookings are being made for 2009.
He also noted that the summer travel season should help spur demand in some "drive-in" markets, like New York, Washington and Boston.
Shares of Marriott International Inc. fell $1.51, or 6.7 percent, to $21.18, while shares of Starwood Hotels & Resorts Worldwide Inc. lost $1.43, or 6.8 percent, to $19.70.
In addition, Scholes maintained an "Outperform" rating on InterContinental Hotels Group PLC, which reported its first-quarter results on Tuesday. InterContinental said that its profit dropped 56 percent in the first quarter, but deep cost cuts helped the company beat analysts' expectations.
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Source - Yahoo Finance
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