Prime Hospitality Corp.
(NYSE: PDQ), a leading hotel owner, operator and franchisor, reported its
results for the first quarter ended March 31, 2001.
Net income for the first quarter of 2001 was $9.6 million, or $.21 per
share, compared to net income of $10.5 million, or $.22 per share, for the
first quarter last year. Prior year results included the operations of the
Frenchman`s Reef Resort Hotel which contributed a net additional $.03 per
share before its sale in March 2000.
“Our results for the first quarter were impacted by the slowdown in the
economy,” said A.F. Petrocelli, Chairman and Chief Executive Officer of Prime.
“A significant number of key customers reduced their travel budgets which
affected occupancy at our upscale AmeriSuites and full-service hotels. Our
mid-priced Wellesley Inn & Suites brand, however, performed well in this
environment with REVPAR rising by 7.1% during the quarter.
“We are responding to this challenging economic environment by
implementing a number of new initiatives designed to increase the visibility
of our brands,” continued Petrocelli. “Beginning next month, we will be
running advertisements on national cable television for AmeriSuites and on
national radio for our Wellesley brand. In addition, we are expanding our
rewards program for our brands to include both rooms and airline miles and
intend to roll out the new program in the third quarter.
“Our efforts over the past two years to divest real estate, reduce debt
and retire shares have put us in a strong financial position,” commented
Petrocelli. “With our leverage at just 34% of capitalization, we are in an
excellent position to withstand a continued softening of the economy.”