Performance factors positive - Stock Index - Federal Open Market Committee - Illustration

Following the Jan. 27-28 FOMC meeting, the Federal Reserve left the target Federal Funds rate unchanged at 1 percent. However, in its statement, the committee changed the wording of its expectation for the duration of the current rate target. According to the futures market, investors assign an 80 percent probability to the increase of the Federal Funds target during June, an expectation that has led to increases of interest rates of treasury bills and mortgages.

The U.S. economy experienced strong growth during the second half of 2003. The recovery of corporate profits and GDP growth during 2003, combined with the continued consumer confidence and a weaker dollar, are positive factors for the industry's performance during 2004.

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

U.S. lodging industry RevPAR
  (% change, previous year)                3.0%      3.6%      4.8%

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

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

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

Producer prices
  Total                                     0.8      -0.3       0.3
  Core                                      0.5      -0.1      -0.1
Consumer prices
  Total                                     0.0      -0.2       0.2
  Core                                      0.2      -0.1       0.1
Construction                                0.9       4.5       0.4
Manufacturers' orders                       2.4      -1.4       0.0
Durable goods orders                        3.9      -2.3       0.0

* Preliminary estimate

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 Fairmont Hotels & Resorts   -6.5%
f Hilton Hotels Corp.         -5.9%
f Intrawest Corp.             -4.3%
f Marriott International      -3.4%
f Gaylord Entertainment Co.   -2.6%

Top Advances

[eth] Wyndham International         85.9%
[eth] InnSuites Hospitality Trust   55.2%
[eth] Lodgian                       34.6%
[eth] WestCoast Hospitality Corp.   26.0%
[eth] Jameson Inns Co.              23.8%

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

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COPYRIGHT 2004 Gale Group