FelCor Reports Third Quarter 2016 Earnings

FelCor Lodging Trust Incorporated (NYSE: FCH) today reported results for the third quarter ended September 30, 2016.

Third Quarter Highlights
  • Same-store RevPAR decreased 0.7% compared to the same period in 2015.
  • Net loss was $4.9 million ($0.08 per share) versus a net loss of $8.1 million ($0.10 per share) for the same period in 2015.
  • Adjusted FFO per share increased 12% to $0.28 from the same period in 2015.
  • Adjusted EBITDA increased $2.0 million to $67.1 million from the same period in 2015.
  • Sold two hotels (Renaissance Esmeralda Indian Wells Resort and Holiday Inn Nashville Airport) for aggregate gross proceeds of approximately $108 million.

"Our room revenue was impacted negatively this quarter by a combination of softer demand, tropical storms, and aggressive discounting programs offered by some of our brands. However, increases in non-room revenue, our various cost containment initiatives implemented earlier this year and our Wyndham guarantee enabled us to meet our Adjusted EBITDA and Adjusted FFO per share expectations," said Troy A. Pentecost, FelCor's President, Interim Senior Executive Officer and Chief Operating Officer.

"During the quarter, we also made progress with our planned hotel sales, selling both the Renaissance Esmeralda and the Holiday Inn Nashville and continuing the marketing process with Jones Lange LaSalle for our three New York hotels. While our primary focus remains on the asset sales, we also are moving forward with our planned redevelopment projects," added Mr. Pentecost.

"Our Board of Directors and management team remain confident in our strategy to drive long-term stockholder value. We are dedicated to continued strengthening of our balance sheet and creating capacity for accretive investments," concluded Mr. Pentecost.
 

Third Quarter Hotel Results
     
Third Quarter
2016     2015     Change
Same-store hotels (37)
RevPAR $ 159.78 $ 160.95 (0.7 )%
Total hotel revenue, in millions $ 204.8 $ 203.1 0.8 %
Hotel EBITDA, in millions $ 66.9 $ 67.4 (0.7 )%
Hotel EBITDA margin 32.7 % 33.2 % (50) bps
 

RevPAR for our 37 same-store hotels decreased 0.7% (to $159.78) from the same period in 2015. The change reflects a 0.6% increase in average daily rate, or ADR, (to $195.33) and a 1.3% decline in occupancy (to 81.8%). Several of our markets, accounting for 42% of total room nights, experienced softer transient and group demand, and many of our hotels in the Southeast were negatively impacted by weather. Additionally, some brands implemented programs designed to drive more direct bookings and decrease online travel agent dependence, which resulted in more rate discounting across our portfolio than anticipated. While these programs did, and may continue to negatively impact our RevPAR, we expect the offsetting reduction in online travel agent commissions will result in greater profitability. In the meantime, we are working closely with the brands to optimize their discounting and maximize profitability at our hotels.

If you liked this article you might like

Bullish and Bearish Reversals for This Week

Pebblebrook Hotel Trust Is a Great Stock to Buy Right Now

Litt Lights Way to 3 REIT Opportunities

FelCor Lodging (FCH) Stock Slumping, JMP Securities Downgrades

Mortgage Insurers Catch the Eye of EJF Capital

Mortgage Insurers Catch the Eye of EJF Capital