Management's conservative approach to Diamondrock's balance sheet positions it for growth.
Host Hotels boasts a solid balance sheet and well-positioned, upper end lodging properties.
Hospitality Properties' Trust has renegotiated contracts favorably, in our view.
Sunstone's financial health has improved, and it should be able to weather near-term uncertainty.
Strategic has only one unencumbered property, making it difficult to tack on more debt.Should fundamentals deteriorate materially, Strategic may default on its corporate-level debt.Hotel pricing can be sticky, and it may take a long time for average nightly rates to recover to historical levels.If
Ashford faces significant risks from its interest rate exposure and a soft hotel market.
The bulk of FelCor's properties are in suburban locales, which have lower barriers to entry. Adverse supply trends could keep average nightly pricing low even as the economy recovers.Sizable 2011 debt maturities have not yet been addressed.FelCor's preferred holders are in arrears and must be paid
Marriott manages 17 of Diamondrock's 20 properties. We think this means Diamondrock has limited bargaining ability for favorable contracts, and should Marriott's various brands fall out of favor, revenue would sink.Twenty percent of Diamondrock's rooms are in Chicago. A worsening economy there
The bulk of FelCor's properties are in suburban locales, which have lower barriers to entry. Adverse supply trends could keep average nightly pricing low even as the economy recovers.Sizable 2010 and 2011 maturities have not yet been addressed.FelCor's preferred holders are in arrears and must be
With patrons reducing consumption by staying home or trading down, Sunstone's revenue will get squeezed through the recession.Nine of Sunstone's 29 properties are in Southern California, among the hardest-hit regions in the country. Economic recovery there will probably lag the rest of the nation,