Sector Snap: Hotel Companies Advance

NEW YORK (AP) — Shares of most publicly traded hotel companies gained on Thursday after a Goldman Sachs analyst upgraded the sector to "Attractive" from "Neutral."

Steven Kent cited the shrinking supply pipeline, cost containment programs throughout the industry and easier revenue comparisons in the second half of the year.

Additionally, Kent upgraded Starwood Hotels & Resorts Worldwide Inc. to "Buy" from "Sell." The stock gained $1.14, or 5.1 percent, to $23.52 in afternoon trading. It has traded between $8.99 and $50.89 during the past 52 weeks.

Kent noted that Wall Street's earnings expectations for the hotel sector have been cut so low that beating them could become the standard. The analyst said, however, that he expects revenue per available room to remain negative for the next few quarters.

Revenue per available room, or revpar, is a key gauge of an hotelier's performance because it measures both occupancy and room rate.

Kent said Starwood should benefit from its greater operating leverage as the supply pipeline continues to decline and revpar begins to recover. He also highly recommended shares of Marriott International Inc.