One of the biggest signs that the region's hotel players aretaking a beating, Washington-based MeriStar Hospitality Corp., thenation's third-largest hotel REIT called off its $2.7 billionmerger with FelCor Lodging Trust of Irving TX late last week. In astatement released at the time the merger was terminated, FelCorpresident and chief executive, Thomas Corcoran Jr., blamed theterrorist attacks. "The termination of this merger is the result ofthe recent tragic events and their subsequent adverse impact on thefinancial markets," Corcoran said. MeriStar has sense announcedsignificant changes in its business. Paul Whetsell, who echoedCorcoran's sentiments, will remain chairman and chief executive ofMeriStar Hospitality, a REIT, and MeriStar Hotels & Resorts, amanagement company. John Emery, who had been chief operatingofficer of the REIT, was named COO of the management company also.And Bruce Wiles, who was chief investment officer of the REIT, wasgiven that role at MeriStar Hotels as well. Emery had been CIO atthe management company.

Not only was MeriStar adversely affected, but also Bethesda,MD-based Marriott International and Host Marriott--the nation'slargest hotel REIT--have seen their outlook tumbles, as one of theMarriott properties near the former trade center towers wasdestroyed, and another was severely damaged. Marriott employeessaid they would donate their vacation pay to 1,100 fellow companyworkers who may lose their jobs because of the terroristattacks.

The attacks destroyed the Marriott World Trade Center, whichstood in the towers' shadow and seriously damaged the MarriottMillennium Hotel across the street from the trade center. Allworkers from both hotels will remain on the Marriott payrollthrough October 5, and then the donated time will kick in for thosein need. Some 1,500 Marriott workers have donated the equivalent of$2 million in vacation days and personal leave time for thosedisplaced from the two hotels, a Marriott spokesman said.

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