Source: Bear Stearns
December 6, 1999
NEW YORK, NY -- Despite unparalleled hype and enthusiasm for New Years Eve 1999, hotels may not cash in according
to Bear Stearns senior managing director and lodging analyst, Jason Ader. With the exception of hotels in hot spots
such as Las Vegas and New York City, Ader believes that most hotels will not reach expectation levels they had
set for the holiday weekend. "It's been billed as the party of the century but for most hotel companies it
is looking as if the millennium celebration could be a bust," says Ader.
Sluggish Bookings: Ader's research into the hotel industry has found that many facilities are not fully booked
for New Years Eve and that some have resorted to offering discounts. Ader believes the situation has been hindered
by a number of factors, including:
- Fear of high prices
- Y2K concerns about traveling
- High airline prices
- Desire by many people to stay at home
"It doesn't seem as if there is an overwhelming desire by the masses to celebrate the coming of the new century
in a big way," says Ader. "It seems most people want to forgo high prices and Y2K concerns and are content
to celebrate at home."
Time to Bargain Shop: What is bad news for lodging companies is turning out to be good news for consumers. Because
many rooms remainun sold consumers can now find surprisingly good deals on hotel rooms. "Companies are beginning
to hit the panic button so that they aren't left with many empty rooms on what has been billed as the biggest night
of the century," says Ader. The lodging analyst suggests calling around and using the Internet are two good
ways to find last minute deals that hotels are trying to push.
Still Profitable: Even though it appears expectations will not be met for many in the lodging industry Ader expects
the New Years' weekend will still be profitable. Most hotels only need to fill approximately 55% of their rooms
to turn a profit and Ader is confident that will be accomplished. "Most hotels will do OK, they will probably
even top last New Years numbers, but in the end it won't be the windfall they had been hoping for."
Jason Ader is a senior managing director responsible for equity research coverage of the Gaming, Lodging and Leisure
industries. His division covers a universe of over 100 public companies. According to Institutional Investor, Mr.
Ader is the only leading analyst to be ranked in both gaming and lodging and has been a member of that publication's
"All-America Research Team" for the past five years. In1998, Crains New York Business named Mr. Ader
one of the top 40 people under 40 years of age in New York. To speak with Jason contact Russell Sherman (212-272-5219)
or Christina Conde (212-272-4257).
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 $21.4 billion
in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. The company's
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For additional information about Bear Stearns, please visit our website at http://www.bearstearns.com.
Any recommendation contained in this report may not be suitable for all investors. Moreover, although the information
contained herein has been obtained from sources believed to be reliable, its accuracy and completeness cannot be
guaranteed. Bear Stearns may make markets and effect transactions, including transactions contrary to any recommendations
herein, or have positions in the securities mentioned herein (or options with respect thereto) and may also have
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serve as directors of such issuers. Copyright (c) 1999. All rights reserved by Bear, Stearns Co. Inc.
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CONTACT: Press Contact: Russell Sherman Bear, Stearns Co. Inc. (212) 272-4356