UPDATE 1-Next six weeks key for hotel demand - Starwood CFO

* Business demand trends over next six weeks key

* Starwood plans to hold costs at current levels

* Starwood looking to securitize more receivables

NEW YORK, Oct 1 (Reuters) - The next six weeks will be an important test of business demand for hotel rooms and will set the tone for the lodging industry in 2010, the chief financial officer of Starwood Hotels & Resorts Worldwide Inc (HOT.N) said on Thursday.

The fall usually marks the return of business traffic for hotels after the more vacation-driven summer season. But business travel, the bread and butter of the hotel industry, slowed dramatically last year.

"The next six weeks are very critical in my point of view, said Chief Financial Officer Vasant Prabhu during a presentation at Deutsche Bank's leveraged finance conference. It is "the first indicator of what next year's trends look like."

The hotel industry is currently embroiled in the toughest economic environment since the Great Depression. Starwood cut its selling, general and administrative costs about 30 percent to contend with falling revenue in the second quarter.

Starwood plans to hold costs at current levels "to the extent we can" even when a recovery emerges, Prabhu said.

He added the company does not plan to invest "a lot of money" in its vacation ownership business, a segment that saw a 35 percent drop in revenue in the second quarter.

"I think we need to be very convinced why it's a good business relative to our fee business, which delivers an extraordinary return," Prabhu said.

Last week, Marriott International Inc (MAR.N) announced it would take a charge as it shrinks its luxury timeshare segment. [ID:N23390186]

Still, Prabhu noted that recent improvements in the securitization markets may allow Starwood to package and sell its timeshare receivables to third parties.

"We will look to securitize more receivables," he said.

The operator of the W, St. Regis and Westin hotels reports third-quarter earnings on Oct. 22. (Reporting by Deepa Seetharaman; editing by Andre Grenon)