Belmond President and CEO Roeland Vos outlined the company’s positive third-quarter results, as well as challenges the company foresees in the fourth quarter of 2016 during an earnings conference call with analysts.
HAMILTON, Bermuda—Belmond benefitted from its well-performing European hotels and the 2016 Summer Olympics in the third quarter of 2016, executives said on the company’s third-quarter earnings call.
Belmond President and CEO Roeland Vos said the Olympic Games in Rio de Janeiro, Brazil, drove year-over-year earnings before interest, taxes, depreciation and amortization at the Belmond Copacabana Palace.
Third-quarter same-store revenue per available room “came in toward the top end of our guidance range with year-over-year growth of 10%,” he said. Total revenue increased 10% compared to the same period in 2015.
The company saw average daily rate increase 8% in the third quarter, while occupancy rose 1%, according to the company’s earnings release. Total adjusted EBITDA was $65.7 million for the third quarter, which is a 25% increase year over year.
As of press time, Belmond’s stocks were up 25.8% year to date. The Baird/STR Hotel Stock Index was down 0.8% for the same time period.
Anticipated challenges in Q4
Belmond is expecting some positive results in the fourth quarter of 2016, but the company’s executives also expect to see a number of challenges during the quarter.
“We had previously advised that there would be a lull in demand for the Brazilian hotels following the Olympics in August,” Vos said. “However, we now believe that this dip will likely be worse than we initially had expected, and it will be compounded here by the general difficult economic conditions in the country, which look like they may impact our hotels more than we had been anticipating so far.”
Hurricane Matthew, which hit the East Coast of the United States in early October, had negative results on the Belmond Charleston Place in South Carolina, he said. Because of the evacuation in Charleston, the hotel shut down for four days.
“(We’re) pleased to report that none of our guests or employees were injured in the storm and that the hotel sustained less than $100,000 of physical damage, primarily consisting of landscaping and some minimal water damage,” he said. “So the impact from a long-term perspective is immaterial. However, there will be an important impact on our fourth quarter results.”
Such factors led Belmond to change its full-year guidance, Vos said. “We are projecting that our fourth quarter same-store RevPAR will decrease year over year,” he said. “And even with a strong 6% constant currency RevPAR growth realized for the year to date through September number, we have modestly tightened our full year 2016 same-store RevPAR guidance to go between 3% and 5%.”
New hire from Starwood
In an effort to strengthen its management team, Belmond hired Arnaud Champenois as SVP of marketing & brand. Champenois has 20 years of experience, and joined the Belmond team in September. His most recent position was VP, brand director for Asia Pacific at Starwood Hotels & Resorts.