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NORFOLK, NE-Supertel Hospitality Inc. saw revenues decline 11.7% in the third quarter compared to Q3 2008; a loss of $28.2 million. Net loss for shareholders was $1.4 million, $0.06 per diluted share, according to the company’s earnings report released Monday night.

“We continue to experience a very difficult operating environment, as is the rest of the hotel industry,” says Kelly Walters, president and CEO.

Funds from operations totaled $2.1 million, $0.09 per share, which is a decline from the $5.5 million FFO in Q3 2008. Likewise, adjusted EBITDA declined 43.1% to $5.5 million when compared to 2008′s numbers.

Supertel did outperform the industry standard in revenue per available room, declining only 11.6% as compared to the average decline of 16.9% across the industry. Walters claims the company’s “strategy of concentrating on the limited-service segment due to its historically lower volatility” was what set the hotelier apart from others. <p."We are seeing continuing signs that the decline in RevPAR is beginning to moderate somewhat," Walters says. "We are still closely tied to the economy and until it gets healthier, producing positive RevPAR numbers will continue to be a challenge. We are still in the very early stages of a slowing in the downward trend and agree with industry consultants that it will be at least until the 2010 second half before we get any meaningful traction, as the industry historically lags a rebound in the economy by some six months."

In the majority of product types, Supertel outperformed others in the industry. For example, in its 77 same store economy hotels RevPAR declined 11.1% compared to the industry average of 15.9%.

Supertel disposed of four hotels in the third quarter. The 116-room Masters Inn in Kissimmee, FL sold for $1.6 million. The 120-room Masters Inn in Orlando, FL sold for $3.6 million. The 63-key Comfort Inn in Ellsworth, ME sold for $2.2 million and the 35-room Super 8 in Anamosa, IA sold for $850,000. Of the $5.4 million Supertel made with the sales, $2.4 million was used to pay down additional GE Capital debt.

An additional two hotels have already been sold this year; the 59-key Comfort Inn in Dahlgreen, VA and the 187-room Masters Inn in Kissimmee, FL. Another four assets are currently listed for sale.

“We continue to evaluate our portfolio and periodically will sell, upgrade or reflag certain assets to improve the strength and returns of our portfolio. We have received solid valuations for our properties, despite poor current market conditions,” Walters says. Our focus has been, and will continue to be, on selling some of our older properties to reduce the average age of our portfolio and to retain those assets that we believe will provide the highest possible return on a risk-adjusted basis over a sustained period.”

As GlobeSt.com reported in August, Supertel reorganized its management team naming both a new COO and CFO. Walters says this change has helped the company outperform others hotel companies.

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