Hotel owners hamstrung by key technical barrier

* Hotel REITS break 200-day moving average

* Later pare losses

* Travel demand remains weak

NEW YORK, June 17 (Reuters) - Shares of hotel owners slumped on Wednesday as some companies broke through their 200-day moving average, a key technical breaking point that could stall the stocks' three-month surge.

FelCor Lodging Trust (FCH.N: Quote, Profile, Research) shares fell as much as 13.5 percent on the New York Stock Exchange, while Host Hotels & Resorts (HST.N: Quote, Profile, Research) fell nearly 9 percent. By noon, both stocks had pared their losses to be above their moving averages.

"From a technical trading perspective, the direction of their stock prices seems to be approaching their 200-day moving average," said Patrick Scholes, an analyst with FBR Capital Markets. "Breaking through the threshold is not a positive for the stock."

Since early March, shares of FelCor have tripled while Host saw its stock more than double. The surge was in tandem with a broad stock market rally and signs of some stabilization in the hotel industry.

Still travel demand has not rebounded to pre-recession levels and group travel, a cash cow for hotels, also remains weak.

FelCor was down 24 cents to $2.72 in noon trading, above the stock's 200-day moving average of $2.67. The drop comes a day after the S&P said it may still cut the company's corporate credit rating pending review of a new loan obtained by FelCor this week. For details, see [ID:nWNA6870]

Host Hotels was down 39 cents to $8.11, well above its 200-day moving average of $7.79. (Reporting by Deepa Seetharaman; Editing by Tim Dobbyn)