Oct 01 2008
Hospitality Industry Taking Hit As Economy Outlook Turns Gloomy
After the $700 Billion bail-out proposal was shot down in the House of Representatives on Monday, Hotel companies’ stocks were among those that took a dive in the biggest dive in two decades.
With the turmoil not subsiding, the outlook for the 2009 travel season has become even gloomier than previous forecasters thought, which added to the punch suffered by hotel stocks.
Goldman Sachs analyst Steven Kent said revenue per available room (RevPAR) in the US Hotels to remain negative well into 2009.
“We think shares will continue to grind lower in the coming months, but we acknowledge that given the past 12 months underperformance it will be more of a slow drip rather than a sharp, rapid decline,” Mr Kent said.
Starwood Hotels & Resorts Worldwide Inc., Morgans Hotel Group Co. and Orient-Express Hotels Ltd. were among those with the steepest declines following the House vote.
