Shares in this hotel owner are down 8% since issue 144/Feb 04 (Hold for the Upside-$0.59). The stock has been hit by a triple whammy of late, but this is the tough hotel industry so surprises should be expected. Firstly, the perception is that the bird flu in Asia will have a negative effect on inbound tourism. The resulting share price fall has seen the stock removed from the S&P/ASX 200 index, which has resulted in some fund managers selling their shareholdings and further depressing the price. And the terrorist attack in Madrid last week will make things even tougher for anyone in the tourism business. On the positive side, the operating results to 31 December 2003 were quite pleasing. Operating revenue excluding asset sales rose 9.7% to $88.2m while a net profit of $2.49m for the period was an improvement on the small loss in the previous corresponding half-year. The group actually now has the capacity to pay more than four cents in dividends but, in our opinion, has made the prudent move of paying down debt instead. However, the board does expect to recommence distributions from June 2004. Most of the risks we outlined in our initial recommendation in issue 132/Jul 03 (SPECULATIVE BUY up to $0.54-$0.50) still apply. So this isn't a stock for conservative investors. But, with the proviso that it doesn't represent more than a few percent of your portfolio, we're once again upgrading our recommendation. SPECULATIVE BUY to $0.55.