Sunstone Hotel Shares Fall On Revenue Declines

NEW YORK (AP) — Shares of Sunstone Hotel Investors Inc. sank on Tuesday after it reported that revenue continued to sink during February, although an analyst was encouraged that the lodging real estate investment trust has repurchased $64 million of its senior notes.

Sunstone shares fell 20 cents, or 8.1 percent, to $2.30 in morning trading. The stock has traded from $1.87 to $21.11 during the past 52 weeks.

Late Monday, Sunstone reported that revenue per available room — a key gauge of a hotelier's performance — dropped nearly 15 percent in February. For the fiscal first quarter through Feb. 28, the measure dropped almost 13 percent year-over-year.

In a report to investors late Monday, Friedman Billings Ramsey analyst C. Patrick Scholes noted that the company's revpar performance was helped by its exposure to the Washington market, which saw a surge of hotel demand around the presidential inauguration.

Excluding Washington, the company's revpar is down more than 17 percent during the quarter so far.

In a conference call with investors on Monday, Chief Executive Arthur Buser said the company has not seen any signs that revpar declines are slowing. "Therefore," he added, "we are running our business assuming that 2009 will be one of the most challenging years the lodging industry has seen."