NEW YORK (AP) ¿ Shares of lodging companies traded mixed on Friday as first-quarter results from major hotel companies beat expectations but swine flu curtailed some air travel. This week, Wyndham Worldwide Corp., Starwood Hotels & Resorts Inc. and Choice Hotels International Inc. all reported better-than-expected first-quarter results as each company slashed costs to cope with declining revenue. Last week, Marriott International Inc. also topped Wall Street's forecasts and said demand was showing some signs of stabilization. On Friday, Continental Airlines said it was slashing flights to Mexico, as the health scare exacerbated already weak market conditions resulting from the recession. In Hong Kong, officials ordered a weeklong quarantine of a hotel after one of its guests ¿ a newly arrived tourist from Mexico ¿ tested positive for swine flu. The Metropark Hotel has 200 guests and 100 staff. In a note to investors about online travel agency Expedia Inc., Stifel Nicolaus & Co. analyst George Askew said the swine flu outbreak "creates a significant level of uncertainty over the very near term regarding consumers' appetite for travel."
He added that he does not expect the outbreak to have a lasting impact on the travel industry. Starwood estimated that swine flu may cost the company $4 million to $5 million in earnings before interest, taxes, depreciation and amortization in the second quarter. "There could be some offset as we have had calls at U.S. resorts from groups evaluating shifting from Mexico to the U.S.," said Chief Financial Officer Vasant Prabhu during a conference call with investors. "While it's hard to estimate the short term impact, we know that events like this have no long term impact on our business." Starwood shares lost $1.26, or 6 percent, to $19.60 in afternoon trading. At Marriott International Inc.'s annual meeting on Friday, Chairman and Chief Executive Bill Marriott said his company has also lost some revenue in Mexico as a result of the swine flu. Also Friday, Marriott declared a first-quarter stock dividend. Each Marriott shareholder will receive 0.00369 shares for each share of common stock they own. Cash will be paid out for fractional shares.
Friedman Billings Ramsey analyst C. Patrick Scholes said Marriott's dividend may set a precedent for other lodging companies to make stock dividend payouts. Marriott shares fell 96 cents, or 4.1 percent, to $22.60. Wyndham shares gained 46 cents, or 3.9 percent, to $12.14.