Acquisitions Propel 159% Spike in Hersha's Q2 Income

Revenue per available room increased 13.3%, and the portfolio's average daily rate rose 4.6% to $105.19, while occupancy increased 8.3% to 77.3%. Acquisitions aside, same store performance also made a strong showing in second quarter. Among the hotels Hersha owned for the entire second quarter of both 2004 and 2005, RevPAR increased 10.2% to $74.73 in the most recent quarter; ADR was up 2.4% to $99.24, and occupancy rose 7.6% to 75.3%.

During a conference call, Jay Shah, president and COO, attributed the same-store results to "robustness in the corporate travel segment as well as the persisting strength in the leisure segment. Many of our hotels are relatively new and in the ramp-up phase," he noted, "which is driving…strong growth in occupancy."

Regarding the second half of the year, Shah said, "our rate of acquisition will really slow up. We have a lot to digest, and we'll focus on internal growth as much as external growth," tightening operations to continue strengthening occupancy, rates and RevPAR, he explained.

Having just raised $60 million in an offering of preferred shares that he said "was oversubscribed," he did not rule out acquisitions, however. "We will continue to acquire in the Northeast and Middle Atlantic. But we will scrutinize carefully," he said, noting that competition is aggressive and prices are rising.