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MeriStar Hotels & Resorts Reports Third-quarter Results

MeriStar Hotels & Resorts, the nation`s largest independent hotel management company, today announced results for the third quarter ended September 30, 2000. Additionally, the company reported that it had completed an agreement with MeriStar Hospitality, a hotel real estate investment trust (REIT), to convert all 106 hotel leases with the REIT to management contracts on January 1, 2001.
MeriStar Hotels & Resorts` 2000 third-quarter revenues rose 13.2 percent to $356.4 million. The company`s net loss was $(0.4) million, or $(0.01) per share on a diluted basis, equal to the prior year`s third-quarter net loss per share. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $4.0 million, compared to $1.7 million in the third quarter of 1999.

Same-store average daily rate (ADR) for full-service, leased hotels increased 7.0 percent to $103.68, and occupancy declined 0.9 percent to 73.8 percent. Revenue per available room (RevPAR) for these hotels improved 6.0 percent to $76.48, compared to the 1999 third quarter.

For all leased hotels, RevPAR increased 5.2 percent to $72.69, ADR rose 6.7 percent to $99.09, and occupancy declined 1.4 percent to 73.4 percent.

``We had strong RevPAR growth across our portfolio, and although operating margins improved, they were lower than expected due to certain cost pressures. This, coupled with higher lease payments, led to lower operating results than originally anticipated,`` said Paul W. Whetsell, chairman and chief executive officer. ``We do not expect expenses to increase at current rates for the long term and therefore, we don`t foresee a long-term impact on operating margins. We continue to work toward additional growth avenues, including the formation of a new joint venture to acquire upscale hotels and the expansion of our Doral brand in the resort, conference center and golf business lines.``