I am pleased to report that our first quarter results exceeded both guidance and consensus estimates as a result of the strengthening of the U.S. lodging fundamentals and the favorable market concentration of our hotels. In the first quarter, our portfolio delivered 8.8% RevPAR growth. Our RevPAR growth outperformed first quarter industry RevPAR growth by almost 100 basis points. Top line growth contributed to 119 basis point expansion in hotel adjusted EBITDA margins, as high profit flowed through from both rooms and food and beverage departments. Our margin expansion is especially impressive since more than 1/2 of the RevPAR growth was derived from growth in occupancy as opposed to rates.It is our outperformance during the quarter and improved conviction in the lodging recovery that enabled us to significantly increase our 2012 guidance, which I will discuss in a few minutes. Finally, the portfolio gained more than a full point of market share during the quarter. The outperformance was broad throughout the portfolio with 18 of our 23 hotels exceeding budget. As expected, the Boston market continues to benefit from a favorable 2012 convention calendar. The Westin Boston Waterfront achieved RevPAR growth of over 22%. Additionally, our 4 New York City hotels exceeded expectations and achieved even better RevPAR growth than the overall New York City MSA. Our recent acquisition, the Lexington Hotel in New York City, led the group, delivering RevPAR growth of over 13%. Our 2 Courtyards in Midtown also delivered combined double-digit RevPAR growth. The strength of the New York market was one of the catalysts in raising 2012 guidance. Salt Lake City, as we discussed in our prior call, is really taking off as a result of the opening of the over $1 billion City Creek Center by Topman [ph]. Our Salt Lake City Marriott now enjoys a Main & Main location as a result of the City Creek development. First quarter RevPAR increased at this hotel an amazing 35%.
The Chicago market benefited from strong conventional volumes. The Chicago Marriott Downtown increased RevPAR 9.4%. The Oak Brook Hills Chicago Marriott appears to have turned the corner with first quarter RevPAR growth well into the double digits as result of strengthening of the Chicago submarkets. Bethesda, a small hotel for us [ph] underperformed as DC continues to be challenging. And the Worthington Renaissance actually had a solid quarter taking into consideration the tough Super Bowl comp. Overall, we remain bullish on the growth potential of our portfolio.To put our upside in perspective, if our portfolio of 23 hotels only reaches prior peak levels of 2007, and we project much greater growth, that will mean that we will see $80 million in additional hotel EBITDA growth from last year's results, equivalent to 48% growth over 2011. The first quarter results certainly show us on the right trajectory. Before discussing the balance sheet strength and revised guidance, we do want to provide investors with a few updates. First, construction has begun on the future Hilton Garden Inn Hotel in Times Square that we have under agreement. At approximately $450,000 per key, we think that this deal will deliver a great return for our shareholders. Delivery is expected within 24 months. This hotel will be our fifth hotel in New York City. Second, the Allerton Hotel, which is a distressed debt opportunity we took advantage of, continues to play out as we discussed on our last call. We anticipate that this will get wrapped up later this year and expect to either end up with ownership of the hotel or a new note with a par value at a substantial premium to our cost basis. Third, I'm happy to report some exciting developments with the 712-room Lexington Hotel in New York City. We completed the $170 million financing of the Hotel that allowed us to repay our corporate revolver and build our cash war chest. Additionally, we signed a franchise agreement during the quarter to convert the hotel to a Marriott Autograph Collection brand, after completing a transformational $30 million renovation scheduled for early 2013. Our team see significant rate upside for this hotel from both the renovations and the brand conversion. Read the rest of this transcript for free on seekingalpha.com