Press Release
December 5, 2000
New York, NY -- Bear Stearns Senior Managing Director and Lodging Analyst Jason Ader, in response to growing weakness
in the US economy, downgraded the lodging sector today. Citing a clear correlation between the economy and the
lodging industry, Ader lowered his rating on six prominent lodging stocks. ``There seems to be little doubt that
the economy is slowing,'' said Ader. ``And history has shown that when the economy suffers, so do hotels.'' While
Ader notes that an economic slowdown has already been incorporated into some of the stock prices, he believes the
downturn could be worse than anticipated. In addition, further speculation that the risk of a recession is increasing
will further depress the sector. ``Slowing economic trends could be enough to instill fear into investors and drive
multiples lower,'' concluded Ader.
The Bear Stearns analyst downgraded the following stocks:
Better Early than Late
In January, when Ader upgraded the lodging sector, he cautioned investors that the call may be a bit premature
and, in fact, it was, as stocks drifted downward for a period before rising. In the end, however, investors enjoyed
a healthy increase in the sector; large-cap lodging stocks are up more than 25% year to date. This time the results
could be similar. ``We believe this call may also be a bit early, but we believe in this situation it is much better
to be the first one to react to a downturn than the last,'' commented Ader.
Not a Total Disaster
While a continued deterioration in the economic sector has brought about pessimism, the Bear Stearns analyst is
by no means predicting a cataclysmic downturn in the lodging industry. In fact, the analyst believes the industry
is better positioned to weather a downturn than it was during the last major economic slowdown in the early 1990s.
``Investors shouldn't lose faith in the lodging industry,'' said Ader. ``There are a number of strong companies
that will thrive in good economic times. It's just that this is probably a good time to take a breather.''
For More Information
To obtain the full lodging analysis or to speak with Jason Ader, members of the press can contact Laura Conover
at 212-272-8768 or Russell Sherman at 212-272-5219.
Founded in 1923, Bear, Stearns & Co. Inc. is a leading worldwide investment banking and securities trading
and brokerage firm, and the major subsidiary of The Bear Stearns Companies Inc. (NYSE:BSC). With approximately
$24.8 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide.
The company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed
income sales, trading and research, private client services, derivatives, foreign exchange and futures sales and
trading, asset management and custody services. Through Bear, Stearns Securities Corp., it offers prime broker
and broker dealer clearing services, including securities lending. Headquartered in New York City, the company
has more than 11,000 employees located in domestic offices in Atlanta, Boston, Chicago, Dallas, Los Angeles, San
Francisco and San Juan; and an international presence in Beijing, Buenos Aires, Dublin, Hong Kong, London, Lugano,
Sao Paulo, Seoul, Shanghai, Singapore and Tokyo. For additional information about Bear Stearns, please visit the
firm's Web site at http://www.bearstearns.com.
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Contact:
Bear, Stearns & Co. Inc., New York
Media Contact:
Russell Sherman, 212/272-5219
RussellSherman@bear.com