The third-quarter reporting season is upon us, and a couple of hotel companies and one REIT are reporting strong returns, buoyed by confident hotel operators operating amid a healthy industry and macro-environment.
La Quinta Inns & Suites
La Quinta's pro forma total adjusted EBITDA increased 13.6 percent to $109.3 million. Pro forma net income increased 17.9 percent to $21.0 million. System-wide comparable RevPAR increased 8.9 percent, ADR increased 4.6 percent and occupancy increased 282 basis points.
The hotel operator also grew its existing franchise base by 8 percent over the last 12 months with a reported minimal capital investment. Its franchise pipeline increased to 196 hotels, including over 16,000 additional rooms.
"Our third quarter results demonstrate another quarter of solid performance delivered across our key metrics, including strong RevPAR, franchise unit, and EBITDA growth, and EBITDA margin expansion," said Wayne Goldberg, president and CEO of La Quinta. "Overall, the lodging industry remains healthy, with a steadily improving economy and strong transient travel demand. La Quinta is extremely well-positioned to continue to capture this demand as we capitalize on our refreshed and upgraded portfolio and our repositioned brand."
LaSalle Hotel Properties
On the REIT side, Bethesda-based LaSalle Hotel Properties reported higher revenue and funds from operations, on quarterly results that topped its own expectations.
The hotel owner had third quarter revenue of $308 million, compared to $270 million at the same time last year. Net income rose to $98.2 million compared to $28.5 million a year ago.
LaSalle's funds from operations climbed 26 percent to $87.6 million.
Revenue per available room rose 11.5 percent on room rates that were up 10.2 percent from a year ago, and a 1-percent gain in occupancy..
"United States demand exceeded our expectations during the third quarter and industry ADR continued on its trajectory of strong growth," said President and CEO Michael Barnello. "The increase in RevPAR exceeded the high end of our outlook and was driven almost entirely by double-digit ADR growth."
LaSalle's third quarter was highlighted by its sale of the Hotel Viking, in Newport, R.I., for $77.0 million.
Yesterday, we documented IHG's record-breaking third quarter. In the U.S., RevPAR was up 8.7 percent in the third quarter and 7.5 percent in the first nine months, the strongest quarterly U.S. RevPAR growth in 8 years.
IHG opened 8,000 rooms and signed 16,000 rooms in the quarter. Its pipeline now stands at 190,000 rooms with over 45 percent under construction.
Richard Solomons, CEO of InterContinental Hotels Group, said: "We delivered our best quarterly RevPAR performance in over two years with growth in each of our four regions. Performance in the U.S. was particularly strong where RevPAR was up 8.7 percent, demonstrating the excellent momentum in the business and the success of our winning strategy."