Sector Snap: Lodging Cos. Face Crucial Season

NEW YORK (AP) — Hotel stocks may be volatile in the next few weeks as the industry's focus shifts from summer to business travelers, but it could present a good opportunity for investors to snag shares, a Goldman Sachs analyst said Tuesday.

Analyst Steven Kent said in a client note that business travel may be slow due to the late timing of the Labor Day holiday, but inevitably businesses will start to send their workers out to visit clients.

"There could be pent up demand as many customers have not been visited in two years and need to be contacted to renew relationships or get contracts or orders," he wrote.

An uptick in business travel will likely lead to improved occupancy and rates, Kent added.

The lodging group is also poised for better operating results and stock performance as supply growth wanes and demand bounces back.

"There are virtually no indicators that supply will once again accelerate anytime soon which gives us increased confidence that this bullish call on the space could work for an extended period of time," Kent said.

The analyst kept Starwood Hotels & Resorts Worldwide Inc. as his top lodging pick, citing foreign currency exchange benefits, less timeshare earnings and decreased volatility on its fee business.

The company's stock added 8 cents to $31.31 in morning trading.

Elsewhere in the sector, Marriott International Inc. gained 27 cents to $25, while Choice Hotels International Inc. climbed 12 cents to $30.