Fitch lowers ratings outlook on 3 hotel companies

NEW YORK - Fitch reduced its ratings outlook on three major hotel companies Friday, citing the significant deterioration in the hotel and travel industries during the fourth quarter.

Fitch lowered its outlook on Marriott International Inc., Starwood Hotels & Resorts Worldwide Inc. and Host Hotels & Resorts Inc. to "Negative" from "Stable." At the same time, Fitch affirmed Marriott's investment-grade issuer default rating, or IDR, at "BBB," Starwood's investment-grade IDR at "BBB-" and Host Hotels' non-investment grade IDR at "BB+."

Despite weakening trends throughout the year, Fitch said U.S. lodging credit profiles showed enough flexibility to maintain ratings until the fourth-quarter, when operating trends deteriorated more significantly.

Fitch said its outlook also reflects its view that the world economy is experiencing a severe global recession that is likely to last well into 2009.

The ratings agency expects the companies to manage their businesses by focusing on cost control, preservation of capital and liquidity. Fitch said it believes Marriott has the greatest amount of flexibility to maintain its current IDR, followed by Starwood, then Host.

In afternoon trading, Marriott shares fell 41 cents, or 2.6 percent, to $15.62. The stock has traded between $11.88 and $37.89 during the past 52 weeks. Starwood shares gained 11 cents to $15.59.

Host Hotels' stock jumped 43 cents, or 6.2 percent, to $7.34. During the past 52 weeks, the stock has traded between $4.77 and $18.81.

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