LaSalle Hotel Properties Reports 19.5 Percent Increase in Revenue
By Kerry Medina
July 19, 2012 10:44 PM
LaSalle Hotel Properties, which bought New York City’s Park Central Hotel earlier this year, announced financial results for the quarter ended June 30, 2012. Revenue per available room (RevPAR) for the quarter increased 3.8 percent to $180.14, as a result of a 5.8 percent increase in average daily rate (ADR) to $215.92, offset by a 2 percent decline in occupancy to 83.4 percent. RevPAR was impacted by renovations at Hotel Roger Williams and Le Montrose Suite Hotel and management transitions at the Donovan House and Hotel Sax Chicago.
Excluding these properties, the company’s portfolio RevPAR increased 5.9 percent for the second quarter. The company’s hotel EBITDA margin for the second quarter was 37 percent, a 152 basis point improvement compared to the comparable prior-year period. The company’s adjusted EBITDA was $85.3 million, an increase of 26.4 percent over the second quarter of 2011. The company generated second-quarter adjusted FFO of $61.8 million, or $0.72 per diluted share/unit, compared to $45 million, or $0.55 per diluted share/unit, for the comparable prior-year period, an increase of 30.9 percent in adjusted FFO per diluted share/unit. Second-quarter revenues totaled $242.1 million, up from $202.6 million last year, an increase of 19.5 percent.
The company invested $16.7 million of capital in its hotels. Major projects included the completion of the 33 guestroom and public space expansion at Hotel Amarano Burbank; the completion of the guestroom, corridor and lobby renovation of Hotel Roger Williams in Manhattan; and the continuation of the guestroom renovation of Le Montrose Suite Hotel in West Hollywood, which has since been completed.
On April 18, 2012, the company declared a second-quarter 2012 dividend of $0.20 per common share of beneficial interest.
“Our second-quarter results were impacted more than we expected by the guestroom renovations at Hotel Roger Williams and Le Montrose and the management transitions at the Donovan House and Hotel Sax,” said Michael Barnello, president and chief executive officer of LaSalle Hotel Properties. “Despite that, we are encouraged by the increase in average rate of our portfolio, which grew 5.8 percent for the entire portfolio. In addition, our portfolio delivered significant hotel EBITDA margin growth and achieved our highest-ever reported quarterly hotel EBITDA margin. On the capital markets front, we closed on a very favorable seven-year term loan and have received commitments on a five-year term loan with excellent pricing, which will enable us to reduce the balance on our senior unsecured credit facility.”
For the six months ended June 30, 2012, RevPAR increased 4.7 percent to $153.97, with ADR growth of 4.8 percent to $198.07, offset by a 0.1 percent decline in occupancy to 77.7 percent. The company’s hotel EBITDA margin was 30.8 percent, an increase of 143 basis points compared to the comparable prior year period. The company invested $35.2 million of capital in its hotels during the six months ended June 30, 2012. The company is updating its 2012 outlook and has incorporated the acquisition of the mezzanine loan and its planned placement of a new five-year term loan. The revised outlook assumes no additional acquisitions or equity issuance for the remainder of 2012.