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Tickers in this Article: MAR, HOT, LCC, AMR, DAL
Although the travel and lodging stocks have moved appreciably higher off bear market lows, recent data from the travel and lodging industry indicates that no rebound in business travel has occurred despite recent talk about stabilization in the economy.

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Flying Low
The International Air Transport Association (IATA) reported that premium travel by passengers on airlines fell 23.6% in May 2009, on a year over year basis. The IATA defines premium travel as passengers who buy business or first class tickets. This was slightly worse than April, when it fell 22%.

Air travel on economy tickets was down also, but at a more reasonable decline of 7.6%. These statistics are especially bad for the airline industry, because premium travel can comprise up to 10% of tickets sold, but as much as 30% of revenue.

Tightening Their Seatbelts
Although this data point is several months old, recent news from the industry confirms that the trend is continuing. AMR Corporation (NYSE:AMR) reported earnings last week and had a net loss of $319 million. Gerard J. Arpey, the CEO of American Airlines, called the results "obviously disappointing" blaming the results on the global economic downturn, volatile fuel prices, challenging capital markets and even the H1N1 virus.

The airlines are desperately trying to cut costs to cope with the new environment. U.S. Airways (NYSE:LCC) just announced the firing of 600 workers at its various locations around the U.S. Some are even trying to raise fares where they can. Delta Airlines (NYSE:DAL) just raised fares by $10 on some domestic routes. The company is also cutting capacity and offering buyouts to some of its employees.

Lodging No Better
Data on lodging also shows a weak environment, with Smith Travel Research reporting declines in the three key performance measures that it tracks. The group said that for the week ending July 11, 2009, the industry's occupancy fell 9.7% to 60.3%. The average daily rate dropped 9.6% to $93.97. Revenue per available room (RevPAR) decreased 18.4% to finish at $56.65. This data is reinforced by data from the hotel operators themselves.

Marriott International, Inc (NYSE:MAR) released earnings last week, and reported that RevPAR for the second quarter fell 23%. The third quarter is not expected to be any better as Marriott projects a similar RevPAR decline range of 20-23%.

Investors will get more clarity this week on lodging stocks as Starwood Hotels & Resorts (NYSE:HOT) reports earnings on July 23. Starwood Hotels & Resorts has sold off from its recent high of $26, perhaps in anticipation of news similar to that of Marriott.

The Bottom Line
Investors who bid up the lodging and travel stocks in anticipation of a rebound in business travel have seen their hopes dashed as the latest round of industry data and earnings reports show a recovery is a distant dream. (For more, check out 7 Ways To Save On Summer Getaways.)

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