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Stock update: Q2 earnings coverage
August 12 2011

Included in this week’s roundup of second-quarter hotel company earnings: IHG reports global RevPAR grew by 6.7%; MGM sees recovery in Las Vegas; and Supertel transitions 90% of its properties to regional management companies.

  • Chatham Lodging Trust said its portfolio ADR grew by 0.7% to US$115.97 during the quarter.
  • IHG saw strong performance across all of its regions in Q2.
  • Supertel reported increases in all three of the key performance metrics.


Every Friday, updates the news of the hotel sector’s publicly traded companies. Following are the updates for: Chatham Lodging Trust; Home Inns & Hotel Management; Hospitality Properties Trust; InterContinental Hotels Group; MGM Resorts International; MHI Hospitality Corporation; Sunstone Hotel Investors; and Supertel Hospitality.

Baird/STR Hotel Stock Index
The Baird/STR Hotel Stock Index
closed Thursday at 1668.35. It was at 1735.79 as of approximately 11 a.m. (eastern) Friday.

Chatham Lodging Trust
Real-estate investment trust Chatham Lodging Trust (NYSE: CLDT) reported growth in all three key metrics during the second quarter. Revenue per available room grew by 3.3% to US$96.49 during the second quarter, occupancy grew by 2.6% to 83.2% and average daily rate was up by 0.7% to US$115.97.

Still, the Palm Beach, Florida-based REIT said it recorded a net loss of US$1.9 million, or 14 cents per share during the quarter, compared to a loss of US$600,000, or 9 cents per share, a year ago.

Chatham’s stock price is down 29.62% year-to-date, closing Thursday at US$12.14 per share.

Home Inns & Hotel Management
China-based Home Inns & Hotel Management (Nasdaq: HMIN) officials said during its second-quarter earnings conference call this week that the company’s pending US$470-million acquisition of Motel 168 will close in September or October.

“This acquisition will create the most geographically diverse (economy) hotel (chain) in China. … We are confident this acquisition will help further Home Inns’ future in the industry,” Sun said. Already, Home Inns is the largest hotel company in China.

Officials declined to disclose Motel 168’s operating metrics during the second quarter. After the deal was announced in May, Executives said the chain’s occupancy as of May was in the low 70% range. Officials also pledged to stabilize average daily rate in 2012 as a focus is put on lifting occupancy.

The company’s stock price closed Thursday at US$34.66 per share and is down 15.38% year-to-date.

Hospitality Properties Trust
Earnings grew to US$44.2 million, or 36 cents per share, from US$15.7 million, or 13 cents per share, during Hospitality Properties Trust’s (NYSE: HPT) second quarter. 

For the quarter, ADR was up 3.5% to US$93.64, occupancy increased by 4.5% to 76.2% and RevPAR increased by 8.2% to US471.35.

The Newton, Massachusetts-based company’s stock price closed on Thursday at US$21.60 per share and is down 6.25% year-to-date.

InterContinental Hotels Group
InterContinental Hotels Group (NYSE: IHG) said operating profit increased to US$269 million (up 21% at constant exchange rates) while revenue grew to US$850 million (up 8% at constant exchange rates) during the first half of 2011.

"In the first half we delivered a strong performance across each of our regions, driven both by increased occupancy from business and leisure travelers as well as progressive rate improvement,” IHG’s chief executive Richard Solomons said in a statement. “Global revenue per available room grew 6.7% with Greater China up 12.7% and the U.S. up 8.2%, where the Holiday Inn relaunch is delivering sustained outperformance.”

The U.K.-based company’s stock price closed Thursday at US$17.13 per share and is down 13.18% year-to-date.

MGM Resorts International
MGM Resorts International (NYSE: MGM) said it earned US$3.45 billion, or US$6.22 per diluted share, during the second quarter, reversing the year-ago loss of US$883.48 million, or US$2 per share. Revenue increased by 16.7% to US$1.81 billion. 

Included in the quarter’s results was a US$3.5-billion gain as a result of acquiring a controlling interest in MGM China Holdings Limited.

“We have shown growth in year over year cash flows throughout the first half and expect those trends will continue. We believe the foundation of the Las Vegas recovery is solid and our business is building,” said Jim Murren, MGM’s chairman and CEO, in an earnings release. “MGM Macau had another record quarter and the acquisition of a controlling interest in MGM China marks an important step in expanding our global operations and profitability.”

MGM’s stock price finished the day Thursday at US$11.17 per share. It is down 24.78% for the year.

MHI Hospitality Corporation
Williamsburg, Virginia-based MHI Hospitality Corporation (Nasdaq: MDH) said RevPAR during the second quarter at its wholly owned properties increased by 8.1% to US$84.19.

MHI Hospitality Corporation experienced a strong second quarter,” Andrew M. Sims, the company’s chairman and CEO, said in a statement. “Operating results were solid with above market year over year increases in RevPAR and hotel (earnings before interest, taxes, depreciation and amortization).

“The company’s hotel EBITDA margin improved for the sixth consecutive quarter on a year over year basis. The company restructured its balance sheet via the issuance of preferred stock, a three year extension and significant pay-down on its line of credit and loan maturity extensions on its Hampton and Jacksonville assets, coupled with an increase in the company’s cash and liquidity positions. All and all, the second quarter 2011 was one of the Company’s most productive quarters in quite some time.”

MHI’s stock closed Thursday at US$2.19 per share and is up 3.79% year-to-date.

RLJ Lodging Trust
Bethesda, Maryland-based RLJ Lodging Trust (NYSE: RLJ) said in its first quarterly earnings release that pro forma RevPAR grew by 9.8%, ADR was up 5.4% and occupancy jumped by 4.2%.

“We are pleased with our accomplishments in the second quarter as we completed our IPO and posted an outstanding increase in RevPAR and margin growth,” Thomas J. Baltimore, Jr., president and CEO, said in a statement. “Improving lodging fundamentals, particularly in the urban and dense suburban markets where our portfolio is located, combined with our aggressive asset management program should allow us to continue to drive meaningful RevPAR growth. Furthermore, with a solid balance sheet, low leverage and ample liquidity, we are extremely well positioned to continue to execute on our external growth strategy.”

The company’s stock closed at US$13.63 per share Thursday and is down approximately 23% year-to-date.

Sunstone Hotel Investors
Sunstone Hotel Investors (NYSE: SHO) said comparable RevPAR at its hotels increased by 7.2% during the second quarter to US$131.89.

“With a new, talented team and a strong focus on operating performance, financial flexibility and transparency, Sunstone is well positioned to drive meaningful returns for our stockholders,” Ken Cruse, president and CEO of the REIT, said in a statement. “As evidenced by our solid growth in revenues, EBITDA and margins during the second quarter, the new Sunstone team is already having a positive effect on the business.”

Sunstone’s stock closed Thursday at US$5.93 per share. It is down 42.59% year-to-date.

Supertel Hospitality
Supertel Hospitality said it transitioned 93 properties (90% of its portfolio) to regional management companies during the second quarter.

The company also said it recorded increases in all three key performance metrics during the quarter. Occupancy was up 4.4% to 63.4%; average daily rate increased by 3.5% to US$101.44; and RevPAR was up 8.1% to US$64.28.

Supertel’s stock price finished Thursday at 97 cents per share and is down 38.61% year-to-date.

Compiled by Shawn A. Turner.

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