After tumultuous 2013, Morgans slow out of the gate in 2014

For Morgans Hotel Group, 2014 couldn't have come any sooner. The hotel company was and is still badgered by shareholder revolt, appeals for the company to sell, tough-to-swallow financial numbers and, finally, in March, an elimination of a third of its corporate staff (by doing so, Morgans anticipates achieving annualized savings of approximately $10 million).

But the company's first-quarter numbers, while not gleaming, show improvement.

Adjusted EBITDA was $8.2 million in the first quarter of 2014, a 10-percent increase over the same period in 2013. The Delano South Beach generated the strongest operating results with EBITDA increasing by 11.8 percent.

Revenue per available room system-wide comparable hotels increased by 2.5 percent on a year-over-year basis during the first quarter of 2014. While there was an increase, occupancy and avergae daily rate did not move much, improving 1.7 percent and 0.7 percent, respectively.

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New York was a drag. RevPAR there decreased 1.1 percent in the first quarter over the same period in 2013, with a decrease in ADR of 2 percent.

Things were better on the West Coast, which generated 10.7-percent RevPAR growth in the first quarter over last year at the same time, led by the Clift hotel, where RevPAR increased by 11.1 percent.

Other highlights:
    •    In February 2014, Morgans refinanced its $180-million mortgage loan secured by Hudson in New York and its $100-million revolving credit facility secured by Delano South Beach, replacing these obligations with nonrecourse mortgage and mezzanine loans in the aggregate principal amount of $450 million due February 9, 2016, with three, one-year extension options.  
    •    On May 1, 2014, the Company implemented a property-level restructuring at its owned, joint venture and managed hotels. As a result, the company anticipates achieving additional annualized savings of approximately $9 million at its owned, joint venture and managed hotels.

Currently, the company's total consolidated debt, excluding the Clift lease, was $615.4 million. It has approximately $129.1 million in cash and cash equivalents.

DEVELOPMENT
The Company currently has agreements to manage hotels that are financed and under construction, including a Mondrian project in London, a Mondrian project in Doha, Qatar, and a Delano project in Moscow. Additionally, the Company has a license agreement with MGM Resorts International for a Delano in Las Vegas following a renovation and conversion of MGM's THEhotel, which is scheduled to open in the fall of 2014, and a franchise agreement for a Morgans Original in Istanbul, Turkey.

MORE Q1
Other hotel companies and REITs reported their Q1 numbers. Extended Stay America's revenue jumped 5.3 percent, RLJ Lodging's adjusted FFO increased 21.5 percent to $53.5 million, and Strategic Hotels & Resorts had a 19.5-percent increase in comparable EBITDA.
 

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