Morgans Hotel Group Posts Greater Loss

The company's first quarter revenue came in lower than a year ago, causing its net loss to widen.
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On May 4, 2009,

Morgans Hotel Group

(MHGC)

reported that its net loss in Q1 FY09 widened, hurt by lower revenue. Net loss attributable to common stockholders for the quarter stood at $10.59 million, or $0.36 per share, compared to $7.53 million, or $0.23 per share, in the prior year's quarter. The most recent consensus estimate was for a loss of $0.40 per share.

Total revenue plunged 32.8% to $54.28 million from $80.73 million a year ago. Revenue from the rooms dropped 38.0% to $28.60 million from $46.16 million, while revenue from the food & beverage slumped 26.7% to $19.49 million from $26.57 million in Q1 FY08. Moreover, other hotel revenue declined 21.0% to $2.75 million from $3.47 million in the year-ago quarter. Finally, management fees slipped 24.0% to $3.45 million from $4.54 million on a year-over-year basis.

Occupancy rate owned-comparable hotels declined 1,420 basis points to 64.90% from 79.10%. Revenue per available room (RevPAR) fell 39.0% to $154.27 from $252.82, while average daily rate (ADR) decreased 25.6% to $237.71 from $319.62. RevPAR for System-wide comparable hotels decreased 39.2% to $169.85 from $279.33, while ADR shrunk 26.2% to $265.81 from $359.96. The occupancy rate was 63.90%, down from 77.60% in the prior year's quarter.

Recently, Hard Rock opened a new and expanded joint concert hall and added approximately 65,000 square feet of meeting space.

The company expects its FY09 RevPAR were to decline on average 20.0% to 25.0%, adjusted EBITDA to be between $45.00 million to $60.00 million. Furthermore, Boston Ames and Mondrian SoHo are currently targeted to open in Q4 FY09 or early FY10.