X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

NORFOLK, NE-Supertel Hospitality Inc. released its second quarter earnings report late last week. It showed a 12.3% decline in revenues compared to the same quarter in 2008. Revenues for the quarter totaled $27.9 million.

“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.”

According to the earnings report, Supertel has been fairing better than a majority of the industry. For instance RevPAR for the economy hotels in the portfolio declined only 12%, this is compared to an industry-wide decline of 16.1% in this market. Supertel’s mid-scale hotels, without a food and beverage option, faired worse, seeing RevPAR decline by 14.4% and occupancy by 10.5%.

During the first quarter, Supertel put eight properties on the market. Three of those assets have been sold for a total of $3.8 million. The remaining five hotels are still on the market. “We are actively marketing the remaining five properties and have received positive buyer interest,” says CFO Donavon Heimes. “Financing remains a challenge for buyers; however, we have found that qualified buyers for properties priced under $5.0 million can generally obtain loans from local banks and other sources.”

Supertel owns 120 hotels in 24 states. It’s portfolio includes Super 8, Comfort Inn/Comfort Suites, Hampton Inn, Holiday Inn Express, Supertel Inn, Days Inn and Ramada Limited.

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?

GlobeSt

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.