Lodging stocks make gains - Stock Index - Illustration

During the month ending Feb. 17, lodging stocks continued to gain because of improvements of occupancy and room rates as well as several better-than-expected fourth-quarter earnings announcements. As of Feb. 17, the real-estate investment trust index and the lodging C-Corp index were 58 percent and 63 percent, respectively, above their previous-year levels.

Real gross domestic product growth during the first quarter could exceed 4.5 percent, after a 4.3 percent increase during the fourth quarter of 2003. The Index of Leading Indicators grew 0.5 percent during January. The University of Michigan's Survey of Consumers indicated a surge of consumer sentiment during January to the highest level in three years.

PWC's forecast for the first quarter is for revenue per available room to increase 7.1 percent.

                                        Nov-'03   Dec-'03   Jan-'04 **

U.S. lodging industry RevPAR               3.6%      4.8%         3.6%
(% change, previous year)

Economic indicators                      2Q-'03    3Q-'03       4Q-'03

Real GDP (seasonally adjusted at           3.3%      8.2%       4.0% *
  annual rates)

Percentage change from previous month   Nov-'03   Dec-'03      Jan-'04

Payroll employment (absolute change          83        16        112 *
    in thousands)
  Service-providing                          71        32        105 *
  Leisure and hospitality                    31        15         21 *
Retail and foodservice sales
   Total                                    1.1       0.2       -0.3 *

Percentage change from previous month   Oct-'03   Nov-'03      Dec-'03

Wholesale trade: sales                      2.0       0.6        1.0 *
Wholesale tade: inventories                 0.5       0.5        0.6 *
Total business sales                        0.7       0.7        0.9

* Preliminary estimate

** Based on STR weekly data, represents the last 28 days in
January 2004.

Sources: Smith Travel Research; U. S. Department of Commerce; U.S.
Bureau of Economic Analysis; U.S. Bureau of Labor Statistics;
Wall Street Journal.

Top Declines

f MeriStar Hospitality Corp.   -15.1%
f Fairmont Hotels & Resorts     -6.1%
f Kerzner International Ltd.    -5.3%
f FelCor Lodging Trust          -5.1%
f Innkeepers USA Trust          -5.0%

Top Advances

[eth] Lodgian                       24.8%
[eth] InnSuites Hospitality Trust   24.5%
[eth] WestCoast Hospitality Corp.   18.8%
[eth] John Q. Hammons Hotels        17.8%
[eth] Hersha Hospitality Trust      13.0%

Bjorn Hanson, Ph.D., is industry leader, hospitality and leisure, for PricewaterhouseCoopers, which offers hotel consulting, forecasting and analysis services.

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