Thank you for sharing!

Your article was successfully shared with the contacts you provided.

FORT LAUDERDALE, FL-Extended Stay America Inc. is expressing optimism about its third-quarter earnings performance in light of the tremendous hit the travel and tourism took following the Sept. 11 terrorist attack on America.

The locally based firm, which is relocating from headquarters in Fort Lauderdale to Spartanburg, SC, is reporting an adjusted net gain of 23 cents per share, a penny more than the market forecast, which matches the EPS the company reported for the same period in 2000.

Including income taxes, cost of an extraordinary item and cumulative effect of accounting charges, the company is reporting a net income gain of $12.98 million, or 14 cents per share, on revenue of $145.7 million for the three-month period, compared with net of $22.7 million, or 23 cents per share, on total revenue of $142.2 million for the same period in 2000.

Announcement of the earnings report comes as the company closed the quarter ended Sept. 30 with a 77% overall average occupancy rate–an 8.5% decrease from the rate reported for the same period in 2000. Revenue per available room also dropped 6.9% for the quarter.

“The Company believes that the declines in occupancy experienced in the third quarter are less than those experienced in the overall lodging industry and are a result of the slowing U.S. economy and a reaction to the terrorist attacks of September 11,” according to a shareholder’s report released Oct. 22.

If current trends hold true, the company advised it could face an eventual 13% to 14% decline in RevPar for the year. That could push fourth-quarter EPS into the range of 9 to 11 cents per diluted share. If demand improves, however, the company advised it could be facing a decline in RevPar of only 4% to 6%.

“Despite the slowing of the U.S. economy and the terrible events of Sept. 11, our business remains very profitable at current occupancy rates,” says George D. Johnson Jr., Extended Stay chief executive officer.

“The current situation will undoubtedly result in a severe contraction of capital for new hotel development. This contraction in capital and supply of new hotel rooms places us in an excellent position to benefit from expected increases in demand as our country recovers from the issues that currently confront us.”

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.