MeriStar Hotels & Resorts, Inc. (NYSE: MMH), the nation`s largest independent hotel management company, today announced results for the fourth quarter and year ended December 31, 1999.
Earnings for full-year 1999 improved 103 percent to $6.7 million, or $0.24 per share on a diluted basis, compared to $0.13 per diluted share in 1998. Revenues for the 12 months increased 19 percent to $1.3 billion. Earnings before interest expense, income taxes, depreciation and amortization (EBITDA) for 1999 were $23.3 million. Results for the year were in line with consensus analysts` expectations.
Same-store average daily rate (ADR) for full-service, leased hotels improved 1.2 percent to $102.56 in 1999, while occupancy rose 2.3 percent to 72.1 percent. Revenue per available room (RevPAR) increased 3.5 percent to $73.94, compared to 1998. RevPAR for all leased hotels advanced 3.3 percent to $69.99. ADR improved 1.7 percent to $97.24, and occupancy increased 1.6 percent to 72.0 percent.
``We are pleased to have exceeded or met analysts` expectations in every quarter during our first full year of operations,`` said Paul W. Whetsell, chairman and CEO of MeriStar Hotels & Resorts. ``We concluded the year with earnings per share 33 percent above estimates at the beginning of the year. We continue to see benefits from our size, which allows us to achieve economies of scale in purchasing, cross-market our properties and share management and marketing expertise in local and regional markets.``
Fourth Quarter Results:
Earnings for the 1999 fourth quarter rose $0.8 million, or $0.03 per share on a diluted basis, compared to the same period a year earlier. Revenues improved 4 percent to $306.3 million over the 1998 fourth quarter. EBITDA for the 1999 fourth quarter was $3.2 million. Earnings per share exceeded consensus analysts` expectations by $0.01.
Same-store ADR for full-service, leased hotels in the 1999 fourth quarter advanced 2.7 percent to $100.84, while occupancy declined 1.1 percent to 65.6 percent. RevPAR rose 1.7 percent to $66.16, compared to the 1998 fourth quarter.
All leased hotels in the 1999 fourth quarter, showed a 1.8 percent improvement in RevPAR to $62.62. ADR rose 3.1 percent to $95.55, and occupancy decreased 1.4 percent to 65.5 percent.
``While we exceeded consensus analysts` expectations in the fourth quarter, revenues in the last two weeks of December fell far short of expectations,`` Whetsell pointed out. ``Guests` fear of potential problems associated with Y2K caused a significant number of last-minute cancellations at our resort and certain urban properties. We responded quickly but were unable to fully compensate for the sudden imbalance. In addition, we experienced several delays as we completed the two-year, $375 million renovation program for MeriStar Hospitality. Our January RevPAR results are back on track with our expectations.``
Whetsell noted that in 1999, the company added 26 new management contracts, including eight in the fourth quarter. ``Our Doral Golf division also made significant strides, ending the year with 10 golf courses under management. We see continued growth opportunities in both hotel and golf course management and are examining a number of other avenues to broaden our leisure management base. MeriStar Investment Partners, our joint venture with Oak Hill Capital Partners and MeriStar Hospitality (NYSE: MHX - news), acquired seven hotels in 1999 and expects to complete the fund by the end of the first quarter,`` Whetsell noted.
``During 1999, we strengthened our management and expertise, particularly in sales, marketing and information technology,`` said David E. McCaslin, president of MeriStar Hotels & Resorts. ``We have already begun to benefit from these key additions and expect that they will generate long-term benefits for our company.``
MeriStar Hotels & Resorts operates 233 hospitality and leisure properties with more than 46,000 rooms and 10 golf courses in 34 states, the District of Columbia, Canada, Puerto Rico and the U.S. Virgin Islands.
For more information about MeriStar Hotels & Resorts, Inc. and MeriStar Hospitality Corporation, visit the companies` Web site: www.meristar.com.