67 WALL STREET, New York - November 25, 2009 - The Wall Street Transcript has just published its Travel and Leisure--Airlines, Hotels, Resorts, Cruise Lines, and Restaurants Report offering a timely review of the sector to serious investors and industry executives. This 37 page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available via The Wall Street Transcript Online.

Topics covered: Consumer Traveler Spending - U-Shaped Recovery in Restaurant Sector - Low-Cost and Network Airlines - Airline Carriers and Online Travel Agencies - Hotel Occupancy Rates - Improvement in Transportation Sector - Upscale Casual and Fast Casual Restaurants - Near-Term Risk in Hotel Space - Fuel Prices a Universal Concern - Restaurant Industry Stability - Increased Consolidation in Airline Industry - Firming of Traffic Trends in Restaurant Space

Companies include: Vail Resorts, Inc. (MTN); Air France-KLM (AFLYY); AirTrans (AAI); Alaska Air Group (ALK); Allegiant Travel Group (ALGT); American Airlines (AMR); Applebee's (APPB); Ashford (AHT); BJ's Restaurants (BJRI); Boeing (BA); Brinker (EAT); British Airways (BAY); Buffalo Wild Wings (BWLD); Burger King Corp (BKC); California Pizza Kitchen (CPKI); Carnival (CCL); Cheesecake Factories (CAKE); Chipotle Mexican Grill (CMG); Choice (CHH); Continental Airlines (CAL); Darden (DRI); Delta Airlines (DAL); Denny's (DENN); DiamondRock (DRH); Domino's Pizza (DPZ); Expedia (EXPE); Famous Dave's (DAVE); FelCor (FCH); Gaylord Entertainment (GET); Great Wolf Resorts (WOLF); Green Mountain (GMCR); Hawaiian Holdings (HA); Home Inns & Hotels (HMIN); Hospitality Properties Trust (HPT); JetBlue Airlines (JBLU); LaSalle Hotel Properties (LHO); Lufthansa (LHA); MHI Hospitality Corporation (MDH); Marriott (MAR); McDonalds (MCD); Mesa (MESA); Morton's Steakhouse (MRT); National Business Travel Association (NBTA); National Mediation Board (NMB); Orbitz (OWW); P.F. Chang's (PFCB); Panera Bread (PNRA); Peet's (PEET); Priceline (PCLN); Republic Airlines (RJET); Royal Caribbean Cruise Lines (RCL); Royal Caribbean International (HST); Ruby Tuesday (RT); Ruth's Chris Steakhouse (RUTH); Sonesta (SNSTA); Sonic (SONC); Southwest Airlines (LUV); Spicy Pickle (SPKL.OB); Starbucks (SBUX); Starwood Hotels (HOT); Strategic (BEE); Sunstone (SHO); Texas Roadhouse (TXRH); UFood (UFFC.OB); US Air (LCC); United Airlines (UAUA); Wyndham (WYN)

In the following brief excerpt from just one of the 25 interviews in the 137 page Special Report, an experienced equity analyst discusses the outlook for the sector and for investors.

Matthew J. DiFrisco is an Executive Director and Senior Analyst at Oppenheimer & Co. who covers the restaurant sector. He came to Oppenheimer in 2008 from Thomas Weisel Partners, where he followed the space with a strong emphasis on mid-cap/small-cap emerging growth companies. Mr. DiFrisco began his equity research career in 1997 at Lehman Bothers and has worked at several houses, including Donaldson, Lufkin & Jenrette, SunTrust Robinson Humphrey and Harris Nesbitt - BMO Group, as he developed and prospered through the Wall Street merger wars of the last 10 years.

TWST: How do you currently characterize the industry and where it sits on that curve? When will companies begin to break out?

Mr. DiFrisco: I think it's really tied to disposable personal income. We've heard a lot of chatter about how unemployment is a lagging indicator and how it doesn't mean that much - the economy should turn before, and the 90% that are employed are going to be better spenders. We're a little skeptical of that in this current environment. I think this is a - and I guess I've overused the term - "new normal." This might not be a typical recovery in that you don't have the credit igniting that 90% that's still employed. So the spending power from that 90% doesn't look as robust as it might have in other recoveries. So we're very much focused on the unemployment level, and I think until you see unemployment improve, you're probably not going to see the restaurants improve meaningfully on a sustainable comp basis.

So the top line same-store sales that drive returns are dependent on disposable income turning and improving through wages and salaries, primarily to make people better spenders and improve consumer confidence. We believe that could happen as early as 2Q 2010, and that's where you might start seeing in aggregate positive comps across a broad group of brands. We're not just thinking that the fourth quarter, having easier comp compares, puts us on a clear path to that. There might be the risk of a head fake in the first quarter, so we're more comfortable at the second quarter as far as a sustainable basis.

TWST: How are the various segments of the industry doing in comparison to each other?

Mr. DiFrisco: It's interesting that people always would think that the higher-income consumer would be able to weather the storm better. I think that's certainly not the case as far as how brands are aligned. The bubble, when it burst, certainly hurt the high-end guys. So if you look at the steak guys, they're anywhere from 18% to 28% down as far as comparable sales, which are tremendous numbers - just a complete exodus from some of those concepts. So you're seeing meal business hit hardest at the upper end; then you go down into the upper-casual diners and some of the faster growers, too, over the last couple of years and decade.

P.F. Chang's (PFCB), for instance, is certainly a lagger - lagging the bar and grill space, and lagging the Olive Gardens (DRI) of the world, and certainly the Texas Roadhouses (TXRH). There are very few brands with positive comps, and those that are seem to be differentiated and category leaders. Buffalo Wild Wings (BWLD) has hung in there relatively well, as it's a differentiated brand. The consumer is finding BWLD to be still a compelling value for them at that price point and for that occasion.

Then you have the fast-food guys as well; they've hung in there to date, and now they have some tougher comparisons to go up against - positive comparable sales for a lot of them still. And that is a segment that is starting to get hit a little bit by the creep in unemployment; and the QSR segment remains a share game still. Consumers really can't find anyplace to trade down away from the value-oriented fast-food guys unless they go home and make their own dinner. I think McDonald's (MCD) remains the best value-positioned brand. So that's certainly been the safe haven, but we see little upside from current levels.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. The remainder of this interview and the 24 other interviews in this Travel and Leisure Report are available for purchase via The Wall Street Transcript Online .

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