"Our lodging picks are up 35% year-to-date and have surpassed most target prices," explains Ader. He predicts that interest-rate hikes will become increasingly unlikely and that oil prices will retreat, resulting in a "bullish" economic outlook, with a 4.5% GDP growth in 2001. Current lodging industry estimates seem based on 2.5%-3.0% GDP expectations, "which leaves much room for upside growth," he says.
What would change his outlook? "If a sharp drop in economic activity occurs," he states, "with 2001 GDP predictions falling below 2.5%, the ratings would likely turn negative. But, as long as the economy is strong and consumers have money to spend, we predict growth for the lodging sector."
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