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» FelCor Lodging Trust Inc. Q1 2010 Earnings Call Transcript
» FelCor Lodging Trust Incorporated Q2 2009 Earnings Call Transcript
» FelCor Lodging Trust Inc. Q1 2009 Earnings Call Transcript
With that, I will turn it over to Rick.Rick Smith Thanks Steve, good morning everyone, thank you for joining us for our second quarter call. It was a very busy and productive quarter for us both operationally and regarding the balance sheet. During the quarter, we exceeded the high end of our internal expectations for EBITDA by $3 million, FFO per share by $0.04, and RevPAR by more than 2%. Further, we are increasing our guidance for the full year significantly from what we set forth in May. Our new full year guidance is in line with First Call estimates, which clearly indicates that the variant in the analysts’ second quarter estimates is the difference between quarters at least partially. As I do not know what is in the various analysts’ models, I simply cannot speak to that. The only thing that I can speak to is that we are increasing our full year guidance based on much better than expected growth relative to our prior expectations for the second quarter and for the remainder of the year. Now, given the disconnect in the second quarter, while we are not giving full quarterly guidance, I will tell you that the split between the third and fourth quarter is approximately 52%, and 48% respectively for the remaining year EBITDA. Hopefully that will take care of that going forward. Our operational focus continues to be on maintaining our high market share index and maximizing flow-through. Our market share is on pace with where we expect it to be for the first half of the year and we are very pleased with that. Flow-through to budget once again exceeded our internal expectations. 80% of the incremental revenue was driven by occupancy and yet we were able to flow 62% of that incremental revenue to the bottom line. Going forward, we will look to drive rate through remixing business to take advantage of the increase in corporate and group demand and to limit expense, which we have done to this point.
Demand growth continues to accelerate both in transient and groups. During the quarter, transient room nights increased 4%. More importantly, corporate transient increased 7% compared to prior year. Total group rooms increased 18% in the quarter led by a 24% increase in corporate group. Occupancy levels are beginning to strengthen, and the number of compression days are increasing to the point that allows to push rates in certain markets and on certain days of the week. Tuesday and Wednesday nights were more than 80% occupied during the quarter with occupancy up more than 9% to prior year during those days.In addition to pushing rates where we can, our asset managers continue to be very focused on remixing business as those opportunities arise. While that is an ongoing process that will take some time to complete, we are pleased with the trending. As a result, ADR increased in June for the first time since September of 2008. Importantly, premium corporate or borrow [ph] rate increased 5% as all of the pricing is set off of the borrow rates, this was positive movement and a good indicator for future pricing traction. Group pace has also improved significantly. We started the year with group pace down 13% and as of the end of June, we are tracking up 2%. This improvement has been steady and we expect it to continue as we continue to see booking patterns strengthen. So demand continues to improve and we have not seen any signs that this is changing. Lastly, new supply continues to remain low and is lower in our markets than the industry at an average of 0.9%. We also expect this trend to continue. Read the rest of this transcript for free on seekingalpha.com