FFO rose 25% to almost $17 million for the quarter and 53% to $39.3 million year to date. Adjusted earnings before interest, taxes, depreciation and amortization increased 17% to reach nearly $25.4 million for the quarter and 18% to total $67.5 million for the first nine months of the year.

During a conference call, president and CEO Jeffrey Fisher attributed the rise in adjusted EBITDA to a "strong 270-basis-point increase in our operating margins." There was a 5.7% increase in revenue per available room for 65 of the company's 69 properties, excluding the four that were closed for renovation, during the quarter, bringing RevPAR to $82.90. During the same quarter, the average daily rate rose 5.4% to $104.97, and occupancy rose marginally, 0.3%, to 78.97%.

"RevPAR increases were driven predominantly by increases in average daily rate," Fisher said. He added that results at the REIT's eight Silicon Valley hotels "were particularly encouraging," and these properties outperformed the overall portfolio with a RevPAR improvement of 6.5%. "The hotel industry recovery is on solid footing. We believe that the industry will continue to do well for the next few years."

Although Innkeepers did not acquire any assets during the third quarter, Fisher said it continues to target properties in major markets "with strong demand generators and high barriers to new competition." Four Points by Sheraton in Fort Walton Beach lost revenue of about $350,000 due to Hurricane Wilma, and three other Florida properties sustained damage although uninsured losses are expected to be "relatively insignificant," he concluded.