"Consistent with the trends in the economy and our industry, Supertel experienced another challenging quarter," says Kelly Walters, Supertel's president and CEO. "During the second quarter, Supertel reported a 12.2% decline in RevPAR which compares well to the industry-wide decrease of 19.5%, according to Smith Travel Research data. Nearly all of our RevPAR decline was due to a 9.1% drop in occupancy, and our average daily room rate declined by only 3.5% while the industry as a whole experienced a 9.7% decrease in ADR."

For common shareholders net income dropped from $1.9 million, $0.09 per share, in Q2 2008 to $0.9 million, $0.04 per share, this past quarter. Funds from operations also fell this quarter. For Q2 2009, Supertel reported an FFO of $3.5 million, $0.16 per diluted share. This is down from the previous year, when FFO totaled $5.6 million, $0.26 per share.

Walters was upbeat about the future of the hotel industry and the company. "Although occupancy softness is being felt throughout the industry, there seems to be ample anecdotal evidence that a turnaround is not far off," she says. "Our seasoned team of general managers indicate that the attitudes of our guests and prospective guests seem to be more positive than in the previous few quarters, but we have not yet seen the impact of improved attitudes in the occupancy numbers. We know this down cycle will end, but we are uncertain as to when the upturn will officially begin."