RevPAR increase predicted. - Stock Index - Revenue Per Available Room hotel industry

Recent eonomic reports include mostly positive news. New orders for manufactured goods and new home sales declined during November, while job gains declined to 1,000 in December after four consecutive months of robust gains. These reports indicate a moderation from the 8.2 percent growth during the third quarter to slower, but still strong rates of between 4 percent and 5 percent during the last quarter of 2003 and first quarter of 2004.

PWC forecasts RevPAR to increase 5.2 percent during 2004. However, the conflict in the Middle East and terrorist alerts continue to pose downside risk.

                                   Oct-'03   Nov-'03    Dec-'03 *

U.S. lodging industry RevPAR        3.0%      3.6%     3.0% - 5.0%
  (% change, previous year)

Economic indicators                1Q-'03    2Q-'03      3Q-'03

Real GDP (seasonally adjusted       1.4%      3.3%        8.2%
  at annual rates)

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

Producer prices
  Total                              0.3       0.8        -0.3
  Core                               0.0       0.5        -0.1
Consumer prices
  Total                              0.3       1.0        -0.4
  Core                               0.1       0.2         0.0
Construction                         1.3       0.9         4.5
Manufacturers' orders                1.4       2.4        -1.4
Durable goods orders                 2.2       4.0        -3.1
Personal income                      0.3       0.2         0.5
Personal consumption expenditure     0.0       0.1         0.4
Personal consumption                -0.2       0.1         0.5
  expenditure - real
Leading indicators                   0.0       0.4         0.3

* Preliminary estimate

Sources: Smith Travel Research; U. S. Department of Commerce; U.S.
Bureau of Economic Analysis; U.S. Bureau of Labor Statistics;
Macroeconomic Advisers LLC.

Top Declines

f Gaylord Entertainment Co.   -2.0%
f Ashford Hospitality         -1.6%

Top Advances

d InnSuites Hospitality Trust          44.1%
d Sonesta International Hotels Corp.   19.4%
d Kerzner International Ltd.           17.3%
d La Quinta Corp.                      16.2%
d MeriStar Hospitality Corp.           15.1%

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

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