After a strong showing from Marriott International yesterday, more hotel companies came forward with their third-quarter numbers today.
Top of the list is Hyatt Hotels Corp., where net income came in at $32 million during the third quarter, a number that is actually down from the same time last year when net income was $55 million. RevPAR increased 7.6 percent compared to the third quarter of 2013. In the U.S., full-service hotel RevPAR increased 8.9 percent over the same period last year, while select-service RevPAR increased 9.7 percent.
Adjusted EBITDA during the quarter was $179 million, an increase of 12.6 percent versus $159 million in adjusted EBITDA during the same quarter last year; however, when including variables, such as the accounting impact from operations in unconsolidated ventures and gains on sales of real estate, reported EBITDA came in at $170 million, a decline versus $190 million in reported EBITDA during the year ago quarter.
Eleven hotels were opened in the quarter.
"The global economic environment continues to be healthy for travel demand, particularly in the U.S.," said Mark Hoplamazian, president and CEO of Hyatt Hotels Corp. "We continue to open new hotels in important markets," including the Park Hyatt New York and Hyatt Herald Square New York and the Grand Hyatt Dalian and Hyatt Regency Suzhou in China.
"On the transaction and asset recycling front, we recently received proceeds of more than $350 million from the sale of Hyatt Residential Group, Park Hyatt Washington and three joint venture hotels. We expect to close on the sale of 38 select-service hotels for approximately $590 million next month. The transaction market continues to be active and we currently have seven full service hotels and six select-service hotels listed for sale.
Looking forward to 2015, Hoplamazian was optimistic, particularly about groups and rate growth. "Looking ahead, group pace for 2015 is up approximately 8 percent, providing further opportunity to grow rates and improve margins through higher rooms and food and beverage revenues. Combined with strong demand and limited new supply in many U.S. markets, the multiple earnings tools in our business model position us well for future years."
The REITs
Meanwhile, a host of REITs, led by Host Hotels & Resorts, delivered solid numbers. Host's net income rose to $144 million from $19 million at the same period last year. Total revenues increased to $1.29 billion from $1.21 billion, a year ago, besting analyst expectations.
Comparable RevPAR improved nearly 8 percent for the quarter, driven primarily by strong rate growth of 6.4 percent, coupled with a 1.1-percentage-point increase in occupancy, which reached 79.9 percent at the company's comparable hotels. On the domestic front, hotels had a 7.7-percent increase in RevPAR for the quarter driven by a 6.2-percent increase in average room rate and an increase in occupancy to over 80 percent.
At FelCor Lodging Trust, same-store RevPAR increased 12.3 percent; RevPAR for comparable core hotels increased 9.8 percent. Adjusted EBITDA increased $6.3 million to $61.1 million, and same-store adjusted EBITDA increased $10.8 million, or 21.9 percent, to $60.0 million. The REIT also sold three non-strategic hotels for aggregate gross proceeds of $37 million. It also agreed to sell three other hotels for aggregate gross proceeds of $102 million.
"I am very pleased with our performance in the third quarter. This strong growth reflects the successful execution of our strategic plan and transformation of our portfolio," said Richard Smith, president and CEO of FelCor. "We have positioned FelCor to deliver sustainable growth by assembling a high-quality and diverse portfolio and will continue to leverage our strengths to create additional shareholder value."
Hersha Hospitality Trust reported third-quarter funds from operations of $24.5 million compared with $24 million last year. Net earnings for the quarter were $4 million compared with a loss of $1 million a year ago. Revenues for the quarter were $113 million compared with $90.3 million in the prior year.
"Hersha’s third quarter performance clearly demonstrates the embedded growth and strategic value of our young, high-quality, urban-transient portfolio," said Jay Shah, Hersha’s CEO. "The consolidated portfolio’s 12 percent RevPAR growth was primarily the result of increasing transient demand in our concentrated urban gateway markets, which allowed our operators to drive a 6.9-percent increase in rate during the third quarter. "The delivery of our ground-up development projects and our large-scale renovation projects, which were undertaken in the early part of the recovery, positions the company to grow operating cash flow from rate-driven revenue growth and return capital to our shareholders."