MeriStar Hotels & Resorts, Inc. (NYSE: MMH), the nation`s largest independent hotel management company, today announced results for the first quarter ended March 31, 1999.
Earnings rose to $1.5 million for the 1999 first quarter, or $0.06 per share on a diluted basis, $0.02 ahead of consensus analyst expectations. Revenues for the period increased to $325.8 million, and earnings before interest expense, income taxes, depreciation and amortization (EBITDA) for the quarter was $5.8 million.
First quarter revenues advanced substantially over the same period in 1998, led by strong gains in both rooms and food and beverage sales. Same-store average daily rate (ADR) for full-service, leased hotels increased 1 percent to $108.27, while occupancy rose 3.5 percent to 71.1 percent. Revenue per available room (RevPAR) for these hotels improved 4.4 percent to $76.96, compared to the same period last year.
``Our proven management and marketing programs and our ability to successfully reposition properties after strategic renovations continues to yield strong RevPAR gains for our owners,`` said Paul W. Whetsell, chairman and CEO of MeriStar Hotels & Resorts.
``So far this year, we have added six properties to our management portfolio,`` he said. ``Our full-service third-party management contract expansion was accelerated by the formation of MeriStar Investment Partners, an investment partnership between our company, Oak Hill Capital Partners, L.P., and MeriStar Hospitality Corporation (NYSE: MHX - news). In March, the partnership acquired four hotels and has plans to acquire up to 10 additional properties over the next year. MeriStar Hotels & Resorts will manage all hotels acquired by the partnership.
``We have also signed agreements to manage three Hilton Garden Inns that are currently under construction. This gives us a substantial pipeline of future contracts to augment our on-going efforts to grow the company,`` Whetsell said.
``Operations were positively impacted by margin improvements, mainly due to operating synergies, purchasing systems and job consolidation,`` said David E. McCaslin, president of MeriStar Hotels & Resorts. ``Renovated ballrooms and meeting space helped us drive additional food and beverage revenue. Our operating teams are capitalizing on all the benefits of our company`s size, which results in greater profitability for ourselves and our owners.``
MeriStar Hotels & Resorts leases or manages 215 hotels with 44,990 rooms in 34 states, the District of Columbia, Canada and the U.S. Virgin Islands.