Hotel REIT's Q2 Revenue Jumps 28%

ORLANDO-With its recent acquisitions in Phoenix and San Francisco, locally based hotel REIT CNL Hotels & Resorts reported a 28.5% increase in Q2 revenue and a 20.1% increase in year-to-date revenue.

Revenue for the second quarter was $436.3 million and for year-to-date was $841.1 million. On May 19, the company acquired the remaining 56% interest in the JW Marriott Desert Ridge Resort & Spa in Phoenix for approximately $65 million. On June 16, CNL acquired the remaining 51.85% interest in the Courtyard San Francisco Downtown hotel for approximately $10 million. During the quarter, CNL also sold two Wyndham hotels to an affiliate of the Blackstone Group for $42.5 million, for an estimated net gain of approximately $5.2 million.

"We are aggressively pursuing opportunities to build on our distinctive portfolio of high-end assets and are continuing to deliver consistent operating performance," says CNL Hotels & Resorts CEO Thomas Hutchison III.During Q2, the company reported RevPAR for its 90 adjusted comparable properties increased 10.5% to $119.62 compared to the same period last year. RevPAR for adjusted comparable properties increased 9% year-to-date. As a result, hotel and resort operating profit margin for adjusted comparable properties was 32.5%, which represents a 1.4 percentage point increase. "Strong demand growth relative to the muted supply growth continues to lift rates, positively impacting margins and reinforcing our position in the upside of the lodging cycle," says CNL president and COO John Griswold. "Our results benefited by the solid performance this quarter in our relative markets, particularly Dallas, Seattle and Hawaii."

The company reported net income increased $5.2 million to $47 million year-to-date. Adjusted EBITDA increased 29.3% during 2Q to $119.1 million and 19.9% to $242.9 million year-to-date. Adjusted FFO per diluted share increased 32.1% in 2Q to 37 cents and 16.7% to 84 cents year-to-date.