Arlington Hospitality, Inc. (Nasdaq/NM:
HOST), a leading hotel development and management company, primarily of AmeriHost Inns,
today announced results for the first quarter ended March 31, 2003.
Revenues rose 6.8 percent to $19.2 million, up from $17.9 million in the same period a
year earlier due primarily to an increase in hotel real estate sales and commissions and incentive
and royalty sharing fees, partially offset by a decrease in revenues related to hotel operations.
First quarter 2003 operating loss was $(1.3) million, compared to an operating loss of
$(450,000) in the 2002 first quarter. Net loss was $(1.5) million, or $(0.30) per diluted share,
compared to a net loss of $(758,000), or $(0.15) per diluted share during the same period a year
earlier. The net loss was due primarily to an increase in seasonal hotel operating losses due to a
more severe winter and unusually high energy costs at the company?s hotels, the weak economy
and growing concerns about a war in Iraq.
These results are presented on a insame-rooml? basis, and include the company?s
AmeriHost Inn hotels which have been open for at least 13 months during the period presented.
Occupancy declined 0.4 percent to 49.7 percent, compared to the prior year?s first quarter, and
average daily rate (ADR) decreased 1 percent to $54.89. Revenue per available room (RevPAR)
was $27.30, off 1.4 percent, compared to the 2002 first quarter.
iiAs has been widely reported, the 2003 first quarter was difficult for the entire hotel
industry,lm said Jerry Herman, Arlington Hospitality president and chief executive officer. iOur
AmeriHost Inn hotels continued to outperform their segment of the lodging industry. While the
midscale without food & beverage segment of the lodging industry reported a 1.7% decrease in
RevPAR for the first quarter, according to Smith Travel Research, our 60 AmeriHost Inn
properties opened more than 13 months realized a 1.4 percent decline in same-room RevPAR for
the first quarter of 2003.
irBusiness transient travel remained very soft but our leisure travel component held up
well, especially our weekend business,l? he noted. ioWe attribute this to strong ?backyard?
marketing and a continued focus on building revenues in this tough economy. On a positive
note, our results improved each month over the previous month, with March same-room
RevPAR up 1.1 percent.l?
Herman continued, ioMargins also were under pressure during the quarter, primarily due
to higher energy and insurance costs. However, we took proactive and aggressive measures to
control costs, especially in labor scheduling and other variable costs. The results of these
measures were seen by the end of March, as departmental expenses per room declined during the
2003 first quarter, compared to the same period a year earlier.
iaCost containment will remain a priority. We are testing three property energy
conservation systems and reviewing opportunities to further reduce real estate taxes, insurance
and other costs. In addition, new approaches to revenue enhancement are also a priority, and we
are focusing on new sales initiatives that include the Internet, the military/government markets
and consortia,lv he said.
Herman noted that April continued the pattern of a difficult operating environment,
which was further impacted by the war in Iraq. irOur stabilized AmeriHost Inns continued to
outperform the industry and our segment in April with same room RevPAR down only 1.1
percent, compared to industry RevPAR of negative 4 percent to 6 percent and our segment down
3 percent to 5 percent, according to preliminary Smith Travel Research estimates.le