SAN FRANCISCO (Bloomberg) - As many as one in five US hotel loans may default through 2010 as the recession means companies are spending less on travel and perks, according to University of California economist Kenneth Rosen.

The value of hotel properties in default or foreclosure almost doubled to $17.3 billion in the second quarter through June 24 from $9 billion at the end of the first quarter, data compiled by Real Capital Analytics Inc. show. The New York-based research firm, which began tracking distressed commercial property in November, expects hotel defaults to increase by as much as $2 billion this quarter, said analyst Jessica Ruderman.

"Hotels without question will have the highest foreclosure rate of any commercial real estate sector," said Mr. Rosen, who runs a real estate hedge fund with $310 million in assets and is chairman of the University of California's Fisher Center for Real Estate and Urban Economics in Berkeley.

Hotel owners are defaulting as room rates and property values tumble and the securitised mortgage market that fuelled an 88 percent gain in US commercial prices from 2001 to late 2008 is dormant. Luxury hotel revenue fell 28 percent in April from a year earlier and has dropped for 12 straight months, according to Smith Travel Research Inc. in Hendersonville, Tennessee. The 29 percent decline in March was the biggest since October 2001.

A third of the $8.6 billion in securities backed by hotel loans due in 2010 are at risk of defaulting, data compiled by credit-rating firm Realpoint LLC in Horsham, Pennsylvania, show.

Barclays Capital downgraded hotel stocks today to a negative rating because of increasing foreclosures and potential bankruptcies. The outlook is "extremely bearish" with more deterioration to come, New York-based lodging analysts led by Felicia Hendrix said in a note to investors.

White Plains, New York-based Starwood Hotels & Resorts Worldwide Inc.; Bethesda, Maryland-based Marriott International Inc. and Silver Spring, Maryland-based Choice Hotels International, Inc. were rated "underweight" by Barclays.

Securitised loans due over the next 12 months total $99.8 billion for all commercial mortgage-backed securities, 20 percent of which are hotel loans, ranking them second after office building loans, according to Realpoint data.

A total of 753 properties bearing the Marriott brand have a combined outstanding securitised loan balance of $10.4 billion.

More than 270 hotels with the Blackstone Group LP's Hilton Hotels Corp. brand have $5.6 billion in debt, Realpoint said.

"We do not expect any significant impact," said Ellen Gonda, a spokeswoman for Beverly Hills, California-based Hilton, in a statement.

A Marriott spokesman referred to comments made in April that the company was focused on cutting costs and would delay certain expenditures and investments to help owners, particularly those who invested at the peak of the market.

Officials at Starwood, Hyatt and Intercontinental Hotels did not respond to requests for comment.