S&P takes action on U.S. lodging companies

Standard & Poor's said it took various rating actions on its portfolio of U.S. lodging companies, as follows:

• The long-term ratings of Global Hyatt Corp. (BBB corporate credit rating), Marriott International Inc. (BBB) and Starwood Hotels & Resorts Worldwide Inc. (BB+) were placed on CreditWatch with negative implications;

• FelCor Lodging Trust Inc.'s corporate credit rating was lowered to B- from B, and its debt ratings were also lowered by one notch. The ratings remain on CreditWatch with negative implications; and

• Choice Hotels International Inc. (BBB/stable), Wyndham Worldwide Corp. (BBB-/negative), Host Hotels & Resorts Inc. (BB-/negative) and Gaylord Entertainment Co. (B/negative) were affirmed.

The agency said the CreditWatch placements for Global Hyatt, Marriott and Starwood reflect the significant pace of decline in the year to date in revenue per available room in the United States and relevant markets outside the United States and data released by Smith Travel Research and other industry sources over the past several weeks, which suggest that S&P's full-year earnings expectations for a number of companies may need to be revised downward.

S&P said the downgrade and continued CreditWatch listing for FelCor reflect a worse operating environment than previously factored into the ratings.

The affirmations reflect Choice Hotels' relatively stable cash flow base and adequate flexibility in its leverage profile, Wyndham's adequate intermediate-term liquidity position, Host's adequate liquidity position and cushion relative to covenants in its credit facility and bond indentures and S&P's belief that Gaylord's rating can withstand the current difficult lodging operating environment and a 2009 EBITDA decline of up to 30%, the agency said.

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