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Stock Update: Hyatt, FelCor, Gaylord, and more
May 7 2010

First-quarter earnings season continued this week, and there were positive signs amid the reports. Some companies, such as Red Lion, reported an increase in RevPAR during the quarter.

By Shawn A. Turner
HNN contributor recaps the performances of hotel-related stocks as they are announced during each quarter. Following is the update for Ameristar Casinos, Ashford Hospitality Trust, DiamondRock Hospitality Company, FelCor Lodging Trust, Gaylord Entertainment Company, Great Wolf Resorts, Hersha Hospitality Trust, Hyatt Hotels Corporation, Las Vegas Sands, Morgans Hotel Group, MHI Hospitality Corporation, Orient-Express Hotels, Pebblebrook Hotel Trust, Red Lion Hotels Corporation, and Strategic Hotels & Resorts.

Ameristar Casinos

Ameristar Casinos (NASDAQ-GS ASCA) of Las Vegas said consolidated net revenues dropped by 4.2 percent to US302.6 million in the first quarter. Operating income declined 23.8 percent to US$52.8 million from US$69.3 million.

“Although we were presented with several challenges during the first quarter, we are fortunate in that some of them are expected to be subject to the law of averages, such as the inclement weather, low table games hold percentages and spikes in health benefits claims,” said Gordon Kanofsky, Ameristar’s CEO, in a news release. “Regardless of the challenges faced, we believe we are well-positioned to handle financial adversity with our lean operating structure, high quality facilities and a strong balance sheet. We also expect our properties to produce highly efficient Adjusted EBITDA growth as the regional economies improve.”


Ashford Hospitality Trust

Dallas-based Ashford Hospitality Trust (NYSE: AHT) said pro forma revenue per available room declined 4.1 percent and average daily rate slipped by 9.4 percent to US$126.99 during the first quarter. Net income attributable to the company was US$5.1 million, down 55.9 percent from US$11.7 million a year ago.

Adjusted funds from operations was 32 cents per share, up slightly from 31 cents per share in 2009.


DiamondRock Hospitality Company

DiamondRock Hospitality Company (NYSE: DRH) said RevPAR fell 3.7 percent to US$95.15 during the first quarter. Adjusted funds from operations for the Bethesda, Maryland-based company were down 18.9 percent to US$12 million, or 9 cents per share, compared with US$14.8 million, or 16 cents per share in 2009.

“First quarter results were above our internal expectations and we experienced positive momentum in almost all of our customer segments. The current forecast for the balance of 2010 is also ahead of our original expectations. With our premium portfolio of hotels, as well as significant investment capacity, we are well positioned to both enjoy the recovery in fundamentals and seek attractive acquisition opportunities,” said Mark W. Brugger, CEO of DiamondRock Hospitality Company, in a news release.


FelCor Lodging Trust

Irving, Texas-based FelCor Lodging Trust (NYSE: FCH) said RevPAR for the company’s 83 consolidated hotels was US$82.87, down 0.5 percent for the first quarter. Adjusted funds from operations was a loss of 17 cents per share and adjusted earnings before interest, taxes, depreciation and amortization was US$38.5 million. Those totals were 8 cents and US$5 million higher than analysts’ expectations.

"The pace of the recovery in the lodging industry has been more robust than anticipated, leading to much stronger than expected RevPAR. The corporate transient, leisure and group segments are improving. Importantly, occupancy gains were strong throughout the week, led by Tuesday and Wednesday, and corporate transient room nights increased 7% during the quarter. Although corporate transient and group occupancies have begun to grow, our visibility into future trends remains somewhat limited, and booking windows are exceptionally short. Therefore, we remain intently focused on gaining market share and optimizing the mix of business to maximize rates," said Richard A. Smith, FelCor's President and Chief Executive Officer, in a news release.
For 2010, the company expects RevPAR to be flat to up 3 percent.


Gaylord Entertainment Company

Gaylord Entertainment Company (NYSE: GET) of Nashville, Tennessee, said total RevPAR increased 1.5 percent to US$279.59 during the first quarter compared with the same period a year ago. Loss from continuing operations was US$1.9 million, or 4 cents per share, compared with income of US$3.5 million, or 9 cents per share, in 2009.

"Our business performed solidly this quarter, and we were encouraged by the improvement and the pace of advance bookings as well as the positive spending trends we observed group customers exhibit across our properties," said Colin V. Reed, chairman and CEO of Gaylord Entertainment, in a news release.


Great Wolf Resorts

Great Wolf Resorts (NASDAQ: WOLF) of Madison, Wisconsin, said first-quarter same RevPAR increased 5 percent to US$242.82, while ADR increased 2.2 percent to US$260.75. Adjusted EBITDA was up 1.9 percent to US$15.4 million.

“Great Wolf Resorts delivered another quarter of solid operating results demonstrating the stability of our business through any cycle,” said Kim Schaefer, chief executive officer, in a news release. “Our results show growth in each of our key operating metrics, further validating that families value the amenities, experience and quality that we offer as the only provider of regional drive-to destination resorts. We are encouraged by the early positive growth trends we are seeing early in 2010 in our group business that will complement our strong peak weekend and holiday periods. We also improved our financial flexibility by completing a first mortgage notes offering that addressed all of our 2011 debt maturities. With an improved balance sheet, a strong operating model and a capital light growth strategy, we believe that we will continue to innovate, grow and generate cash.”

The company increased the midpoint of its full-year adjusted EBITDA guidance to US$67 million from US$66 million.


Hersha Hospitality Trust

Hersha Hospitality Trust (NYSE: HT) of Philadelphia said adjusted funds from operations in the first quarter was a loss of US$1.2 million, compared to income of US$1.2 million a year ago.

RevPAR increased by 4 percent to US$73.01; occupancy increased to 61.3 percent from 57.1 percent; and ADR dropped by 3.1 percent to US$119.02.


Hyatt Hotels Corporation

Chicago-based Hyatt Hotels Corporation (NYSE: H) said its first-quarter RevPAR for comparable owned and leased hotels increased by 11.1 percent to US$118. Adjusted EBITDA grew by 23.1 percent, 21.3 percent excluding the effect of currency, to US$112 million. Net income was US$5 million, down from US$14 million in 2009.

Room rates continue to be “under pressure” especially in North America, but group business is beginning to pick up, said Mark S. Hoplamazian, Hyatt’s president and CEO, said in a statement. Transient demand increased worldwide, he added.


Las Vegas Sands

Las Vegas Sands (NYSE: LVS) said adjusted net income rose to US$53.5 million, or 7 cents per share, compared with US$8.9 million, or 1 cent per share during the same period a year ago.

“Strong top line growth in all our markets, coupled with increases in operational efficiency, contributed to substantial margin expansion and a record financial performance overall,” said Sheldon G. Adelson, chairman and CEO, in a news release.

The company said revenue increased 23.7 percent to US$1.3 billion during the quarter.


Morgans Hotel Group

New York-based Morgans Hotel Group (NASDAQ: MHGC) reported that first-quarter system-wide RevPAR increased by 11.6 percent, or 10.1 percent in constant dollars, to US$189.51. System-wide ADR declined slightly by 0.7 percent, or 2 percent in constant dollars, to US$269.96. Adjusted EBITDA was US$9.2 million, up 43 percent year-over-year.

The company said “the pace of recovery appears to be faster and stronger than anticipated.”

"Our first quarter results reflect an improving environment and a strong turnaround in our business versus the same quarter last year. Importantly, our performance underscores our belief that we are well positioned to come back faster than the overall industry. We are optimistic about the future given our unique competitive advantages and we will continue taking proactive and prudent steps to grow the company with a focus on creating long-term shareholder value,” said Fred Kleisner, Morgans’ CEO, in a news release.


MHI Hospitality Corporation

In the first quarter, Williamsburg, Virginia-based MHI Hospitality Corporation (NASDAQ: MDH) said consolidated RevPAR for all hotels was US$63.69, up 7.1 percent. ADR declined by 7.6 percent, and Occupancy increased to 62.7 percent from 54.1 percent over a year ago.

Funds from operations increased to approximately US$1.2 million, up 7.2 percent.

“We are pleased to report strengthened performance in the first quarter, including gains in Funds From Operations, total revenue and RevPAR, as well as a nearly 45 percent increase in adjusted operating income. We believe this progress is a direct result of our repositioned hotel assets gaining traction within each of their markets. We remain committed to increasing customer share across the portfolio and are cautiously optimistic about stabilizing industry fundamentals,” said Andrew M. Sims, president and CEO of MHI, in a news release.


Orient-Express Hotels

Orient-Express Hotels (NYSE: OEH) said first-quarter same-store RevPAR grew by 5 percent to US$194 while worldwide ADR increased to US$348 from US$338.

Paul White, the Hamilton, Bermuda-based company’s president and CEO, said in a statement that trends are positive for the sector, especially for luxury properties.

The company said the closure of European airspace following the Iceland volcano eruption caused the company to lose US$0.8 million in revenue.


Pebblebrook Hotel Trust

Bethesda-based Pebblebrook Hotel Trust said funds from operations amounted to a loss of US$600,000, or 3 cents per share.

Looking forward to the remainder of 2010, the company said it expects U.S. industry RevPAR to be up 1 percent to 3 percent compared to last year.

Jon Bortz, chairman, president and CEO of the real estate investment trust, said the company remains optimistic it will be able to acquire hotels at “favorable pricing.” Pebblebrook on 6 May executed a purchase and sale agreement to acquire an undisclosed full-service hotel in the Washington, D.C.-Baltimore area for US$67.1 million. The deal is expected to c lose in the next two months.


Red Lion Hotels Corporation

Red Lion Hotels Corporation (NYSE: RLH) of Spokane, Washington, said RevPAR increased by 4.9 percent to US$38.63 from US$36.81 in 2009. ADR was flat at US$80.10, and occupancy increased to 48.2 percent from 46 percent a year ago.

The company’s net loss widened to US$3.6 million, down 9.2 percent from a loss of US$3.3 million a year ago.

“We are very pleased to report a 4.9% increase in RevPAR at the outset of 2010, breaking the trend of RevPAR declines in the preceding six quarters, and in contrast with continued broader industry declines. During the first quarter, we executed on our strategy of capturing more business from the group and preferred corporate segments. We also drove higher rate in the transient segment. To further support our sales and franchise growth strategies, we added key executives in the first quarter with four senior management appointments,” president and CEO Jon Eliassen said in a statement.


Strategic Hotels & Resorts

Comparable funds from operations was unchanged from a year ago for Strategic Hotels & Resorts (NYSE: BEE), the Chicago-based company said in its first-quarter earnings report.

Comparable EBITDA declined by 3.3 percent to US$22 million. Total revenue was US$169.4 million, down 1.5 percent from US$172 million in 2009’s first quarter.

Compiled by Shawn A. Turner.

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