marriott and hilton face the prospect that a broader recession could threaten business in europe as well as fee income citigroup analysts say after riding the revengetravel boom hotel operators hilton worldwide holdings inc and marriott international inc now face the prospect of a broader recession that could threaten business in europe as well as fee income citigroup analysts said analysts at the firm downgraded both hilton hlt and marriott mar to neutral from buy in a note late tuesday shares of hilton finished 15 lower on wednesday marriott lost 23 the downgrades add to analyst concerns about rising prices and their impact on the travel industrys resurgence following two years of pandemic restrictions wolfe research in a note last week said travel demand was likely to moderate as the economy slows and downgraded travelplanning websites booking holdings inc bkng expedia group inc expe and tripadvisor inc trip citi analysts echoed that sentiment in their tuesday note citi economists anticipate the us will enter a recession in the second quarter of 2023 the analysts said at this juncture the downturn is seen as relatively mild but the likelihood of a synchronized global downturn is rising now estimated at 50 both hilton and marriott had more than 200000 rooms under construction the analysts said noting that while both were well equipped to withstand an economic slowdown next year there are potential soft spots the analysts said that while hiltons leased properties make up a relatively small contributor to overall earnings around 8 of operating cash flow on a normalized basis we note that the bulk of exposure is to germany and the united kingdom both of which are seen as either in or entering recession they added relatively unfavorable lease structures for these properties can have an outsized impact on earnings marriott meanwhile has benefited from creditcard fees which the analysts said made up 15 of its fee income but they noted with us credit card balances to nominal income approaching prepandemic levels and loans growing at an elevated pace growth for this segment could slow hilton stock has fallen 13 so far this year with marriott down 4 over that time by comparison the sp 500 has fallen 16 year to date