HotelNewsNow.com recaps hotel-related financial news each week. Following is the update for: Chesapeake Lodging Trust, FelCor Lodging Trust, Hyatt Hotels Corporation, Morgans Hotel Group, Red Lion Hotels and Strategic Hotels & Resorts.
The Baird/STR Hotel Stock Index was at 2004.67 as of 10:25 a.m. this morning. It closed Thursday at 2018.47.
Chesapeake Lodging Trust
Chesapeake Lodging Trust (NASDAQ: CHSP) announced it has entered into a credit agreement to obtain a US$115-million, two-year secured revolving credit facility with a syndicate of banks, including Wells Fargo and JP Morgan Chase.
The amount that the real estate investment trust can borrow under the revolving credit facility is based on the value of the Company's hotel properties included in the borrowing base, as defined in the credit agreement. Borrowings under the revolving credit facility bear interest equal to LIBOR, plus 3.75%, subject to a LIBOR floor of 2.00%. The credit agreement contains standard financial covenants, including certain leverage ratios, coverage ratios, and a minimum tangible net worth requirement. Subject to certain conditions, the facility allows for a one-year extension.
• Read “Chesapeake closes US$115m credit facility.”
FelCor Lodging Trust
Irving, Texas-based FelCor Lodging Trust (NYSE: FCH) said second-quarter net income was US$22 million. Revenue per available room for FelCor, which went public six months ago, was US$90.62, up 5.6%.
"We are pleased with our performance this quarter, achieving better than expected operating results and significant improvement on our balance sheet. Lodging fundamentals continue to improve, and occupancy is recovering faster than we anticipated. As the lodging recovery takes hold and corporate demand improves, we are taking advantage of stronger occupancies to remix our customer base and drive ADR. ADR for our portfolio increased during June for the first time in nearly two years, driven by an increase in transient ADR. We are in the early stages of a recovery and expect the robust growth in demand to continue and supply growth to remain moderate. This dynamic is building pricing power and leading to earlier and stronger EBITDA growth than previously anticipated," said Richard A. Smith, FelCor's President and CEO in a news release.
Hyatt Hotels Corporation
Chicago-based Hyatt Hotels Corporation (NYSE: H) said net income attributable to Hyatt totaled US$25 million, or 14 cents per share, compared to a loss a year ago of US$50 million, or 34 cents per share.
Comparable owned and leased hotel revenue per available room increased 9.6% (9.4% excluding the effect of currency) compared to a year ago.
“We are pleased with improved transient demand experienced by many of our properties in the second quarter,” said Mark S. Hoplamazian, Hyatt’s president and CEO in a news release. “At several properties, particularly those in international markets, average rate increases resulted in strong RevPAR growth versus the second quarter last year. Our fees increased over 16% due to RevPAR growth and new hotels in our portfolio. The group booking cycle continues to be short but we saw increased levels of booking activity for future periods during the second quarter. We experienced strong margin performance in our owned hotels despite the fact that the revenue increase was driven primarily by occupancy gains.”
• Read “Hyatt reports Q2, year-to-date results.”
Morgans Hotel Group
Morgans Hotel Group (NASDAQ: MHGC) said net income increased to US$434,000, up from a loss of US$115,000 a year ago in the second quarter.
The New York-based company said RevPAR for systemwide hotels increased by 13.3%. The growth was led by the company’s New York hotels, which saw a 23.1% increase in RevPAR. (http://www.morganshotelgroup.com/company.aspx)
"We delivered strong results for the second quarter, outperforming industry growth averages across all key performance metrics, demonstrating once again that Morgans is well positioned to come back faster and stronger than the industry as the economy improves,” said Fred Kleisner, CEO, in a news release. “RevPAR was up 13% for the quarter, more than doubling the industry average, driven by rising occupancies as well as a significant improvement in ADR, which showed positive growth for the first time since 2008. We also continued to make excellent progress in strengthening our balance sheet, as illustrated most recently by the London and Mondrian in SoHo loan extensions. As we move into the second half of the year, we are confident in the prospects of our key markets and we remain focused on driving increased long-term value for our shareholders."
Red Lion Hotels
Red Lion Hotels (NYSE: RLH) of Spokane, Washington, reported a second-quarter loss of US$62,000, compared to income of US$1.4 million a year ago.
RevPAR for owned and leased hotels dropped 1.8% , while average daily rate rose 0.2% and occupancy also decreased by 1.2 points.
Strategic Hotels & Resorts
Strategic Hotels and Resorts (NYSE: BEE) of Chicago said net loss improved to a loss of US$38.6 million from a loss of US$78.2 million a year earlier in the second quarter. North American RevPAR increased 7.3%.
The company is optimistic that industry fundamentals will rebound.
