Posted on: Tuesday, October 1, 2002

Hotel stocks fall as analysts trim estimates

By Jeannine DeFoe
Bloomberg News Service

NEW YORK — Marriott International Inc., Hilton Hotels Corp., and Starwood Hotels & Resorts Worldwide Inc. stocks fell after analysts at two investment companies cut earnings estimates citing the drop business travel since last year.

Marriott, the largest U.S. hotel company, fell $1.49 to $28.99 as of 4 p.m. in New York Stock Exchange composite trading, Hilton fell 31 cents to $11.38, Starwood fell 74 cents to $22.30 and Four Seasons Hotels Inc. fell 31 cents to $32.04.

The slump in business travel since the U.S. economy went into recession last year means that hotel companies are unlikely to earn as much in the second half of this year and in 2003 as expected, Lehman Brothers Holdings Inc. analyst Joyce Minor and Joe Greff of Fulcrum Global Partners said today.

"We have seen little to signal the return of the business traveler, the key segment to the lodging industry recovery," Minor wrote in a report. Both Minor and Greff cut their 2003 earnings estimates for Hilton, Starwood and Marriott below the consensus estimates of analysts polled by Thomson First Call.

Business travel hasn't returned as expected after the Sept. 11 terrorist attacks and recession.