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Bear Stearns Lodging Analyst Remains Bullish Amid an Otherwise Cautious Market

27 July 2000

NEW YORK--(Press Release)--July 27, 2000-- Despite the persisting consensus in the lodging market toward pessimism and undue caution toward the second half of 2000 and 2001, Bear Stearns gaming, lodging and leisure analyst Jason Ader is raising his target prices for the sector.

Ader maintains Starwood Hotels (NYSE:HOT - news), Hilton Hotels (NYSE:HLT - news), Marriott International (NYSE:MAR - news), Extended Stay America (NYSE:ESA - news), and MeriStar Hospitality Corp. (NYSE:MHX - news) at a Buy rating; while Prime Hospitality (NYSE:PDQ - news), Inkeeper USA Trust (NYSE:KPA - news), Hospitality Properties Trust (NYSE:HPT - news), and Host Marriott Corp. (NYSE:HMT - news) are maintained at an Attractive rating.

``Our lodging picks are up 35% year-to-date and have surpassed most of the target prices,'' explains Ader. As growth and the economy remain strong, and consumer confidence and demand in key cities remain robust, Ader believes the likelihood of continued upside earnings surprises will persist.

In addition, he predicts that as interest rate hikes become increasingly unlikely and as oil prices retreat, the economic outlook will continue to be bullish.

Ader notes that while Bear Stearns predicts 4.5% GDP growth in 2001, the consensus is calling for 3.3%. Current lodging industry estimates seem based on 2.5%-3.0% GDP expectations, which leaves much room for upside growth.

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