HOTEL stocks continue to lag behind the rest of the market as they have struggled through another sluggish week. While the market had set records on Thursday and yesterday, hotel stocks have failed to move up with the general market. They either made nominal gains or slight losses, reflecting the lack of buying interest from investors. Recent announcements of the closure of two hotels in Kowloon - the Ambassador Hotel and Fortuna Hotel - and the redevelopment of the sites into commercial buildings reflects the sentiment that commercial buildings provide a quicker and higher return on investments. Investors are therefore of the view that hotel stocks do not appear to be attractive given the current climate. However, the Hong Kong Tourist Association has warned that the territory will face a room shortage in a few years' time and that investing in hotel projects is therefore still viable. Hong Kong and Shanghai Hotels was the best performer of the week, rising four per cent to $7.80. Mandarin Oriental continued to fall after reporting poor results for the first half of the year, sliding 0.25 per cent to $7.75. Shangri-La Asia continued to post a strong performance since its listing in June, rising 2.3 per cent to $6.65.