UPDATE 1-Felcor Q3 FFO meets Street, cuts FY09 view

* Q3 FFO of $0.14/shr meets Street view

* Cuts FY09 FFO/shr view to $0.31-$0.34

* Q3 RevPar down 17.5 pct

Nov 3 (Reuters) - Real estate investment trust Felcor Lodging Trust Inc's (FCH.N) quarterly funds from operations fell 68 percent, but met Wall Street estimates, and slashed its 2009 FFO outlook, citing low demand for its premium and corporate services.

For 2009, Felcor now sees adjusted FFO of 31 cents to 34 cents a share, down from its August forecast of 74 cents to 86 cents a share.

Analysts on average were expecting the lodging REIT to report 70 cents a share, according to Thomson Reuters I/B/E/S.

Chief Executive Richard Smith said, "We expect fewer room nights for the premium corporate and group segments during the fourth quarter, compared to our previous expectations."

For the third quarter ended Sept 30, Felcor reported adjusted FFO of $9 million, or 14 cents a share, compared with $28.7 million, or 45 cents a share, a year earlier.

Operating expenses for the quarter fell 21 percent to $232.5 million.

Analysts on average were expecting FFO of 14 cents a share.

FFO is a key performance measure for the REITs, because it excludes the profit-reducing effect of depreciation.

Revenue per available room (RevPar), an industry metric of fiscal health, fell 17.5 percent at its 85 consolidated hotels, as both occupancy and average daily rates declined.

The hotel industry is suffering the toughest economic environment since the Great Depression, with sluggish demand from leisure customers and corporates.

A decline in business travel has hurt upscale and luxury hotels in the past year, hurting margins for hotel owners and forced them to cut costs and slow development.

Shares of the Irving, Texas-based REIT closed at $3.24 Tuesday, on the New York Stock Exchange. (Reporting by Biswarup Gooptu in Bangalore; Editing by Unnikrishnan Nair)