PALM BEACH, FL-Innkeepers USA Trust reported healthy financial gains for full-year 2005, capped by upward trends in all areas during the year's final quarter. The locally based hotel REIT benefited from "positive industry fundamentals, including the return of the business traveler to pre-9/11 levels in many markets," Jeffrey Fisher, president and CEO, said during a conference call.

"Operationally," he said, "our strong results were led by our [eight] Silicon Valley properties " in which RevPAR increased 11.7% in fourth quarter. The properties suffered previously from the dot.com bust. "We believe there is significant room for additional improvements at these properties as RevPAR would have to increase 73% from 2005 levels to reach their historical peak."

RevPAR for the entire portfolio, excluding five properties closed for renovation or conversion, rose 7.2% to $73.21 for the year's fourth quarter, versus the same quarter a year ago. The gain is attributed to a 7.2% increase in average daily rates to $103.42, while occupancy remained unchanged at 70.8%. Total revenue for the final quarter and the full year rose 21%.to $69.9 million and $247.2 million, respectively.

Three properties in particular represent "a significant source of embedded growth for 2007," Fisher said. Two are closed for renovation and conversion, and one is under development. "The permitting process for the Atlantic City and Montvale [NJ] properties has taken longer than expected," Fisher said and projected that Montvale would open in third quarter 2006, followed by the Atlantic City hotel later this year. Both will open under the Courtyard by Marriott brand following an aggregated $21-million conversion investment.

The company expects to break ground this month for its first Embassy Suites hotel. It is a 150-room property in Valencia, CA. The development cost is estimated at $17 million, and completion is expected by late 2006 or early 2007.