Interstate Hotels Corporation (Nasdaq:IHCO), one of the largest independent hotel management companies in the United States, today announced results for the third quarter ended September 30, 2001.
For the third quarter of 2001, the Company reported a net loss of $4.4 million compared to a net loss of $4.2 million reflecting earnings per share of $(.72) compared to $(.66) for the same period last year. Earnings before interest, income tax expense and depreciation and amortization (EBITDA) were $1.1 million versus $0.3 million in the third quarter of 2000. Total Company revenues decreased by $55.8 million in the third quarter of 2000 to $10.1 million in the third quarter of 2001 as a result of the conversion of the Equity Inns leases into management contracts on January 1, 2001. The lodging revenues related to the leased hotels that were recorded in 2000 are not reflected in the Company’s 2001 financial statements, as the Company records revenues from management fees only.
The Company incurred a loss on impairment of real estate of $3.0 million in the third quarter attributable to its 20% non-controlling interest in a partnership that owns the Renaissance Worldgate Hotel in Kissimmee, Florida. The weakness in the U.S. economy during the first three quarters of 2001 coupled with the severe downturn in the Orlando market after the September 11th terrorist attacks have resulted in the hotel’s financial difficulties causing the Company to write-off its investment in the third quarter.
Revenue per available room (RevPAR) for comparable U.S. full-service hotels managed by the Company decreased 19.1% for the quarter to $77.20 from $95.44 for the same period in 2000. Average daily room rate (ADR) decreased to $116.20 from $122.98, while occupancy rates declined by approximately eleven percentage points from 77.6% to 66.4% in the third quarter from a year ago. The Company’s third quarter RevPAR growth was adversely impacted by the continued weakness in the U.S. economy which was further affected by the September 11th terrorist attacks.
Interstate Hotels Corporation operates approximately 135 hotels with more than 27,000 rooms in 36 states in the United States as well as Canada, the Caribbean and Russia. For more information, visit www.interstatehotels.com.