Hammons continues hotel building spree

Hammons announced his latest plans Sept. 1: a $40-million, 310-suite Embassy Suites Hotel and an adjoining 80,000-square-foot convention center in Concord, N.C. The new hotel and convention center will be owned by Hammons and overlook the city-owned Rocky River Golf Club. The hotel, convention center and Rocky River Golf Club will be managed by Springfield-based John Q. Hammons Hotels Inc. (AMEX: JQH), a national independent builder, developer, owner and manager of upscale, full-service hotels, resorts and suites. Hammons is founder, chairman and CEO of John Q. Hammons Hotels Inc.

Construction of the 10-story Embassy Suites Hotel Concord will begin in November, and a grand opening is scheduled for spring 2006. Strategically located east of Interstate 85 and north of Interstate 485, the hotel site is less than a mile from the popular Concord Mills mall, the 500,000-seat Lowe’s Motor Speedway and Concord Regional Airport. Demand generators such as the University of North Carolina at Charlotte and the world headquarters of Philip Morris are also within three miles of the property. In addition, the hotel will be Hammons’ fifth North Carolina property, and the convention center will be the first of its kind in Concord.

“With the rapid commercial and industrial growth on the north side of Charlotte, Concord is becoming a premier destination for business and leisure travelers,” Hammons said in a press release. “The city is in great need of a convention center and additional full-service hotel ... .”

Two weeks prior to announcing Concord’s development, John Q. Hammons Hotels Inc. sold a California property, the Holiday Inn Select Bakersfield Hotel and Conference Center. Newport Hospitality Group Inc. of Newport Beach, Calif. was buyer.

The Bakersfield property sale illustrates Hammons Hotels’ debt reduction strategy, announced in the company’s second quarter earnings results.

Total revenues for the first six months of 2004, ending July 2, were $229.5 million, an increase of 4.9 percent compared to the first half of 2003. The 2004 results include sales of certain non-strategic hotels.

“We are pleased with our results for the first six months of 2004,” Hammons said in the release. “We believe our outstanding performance, coupled with the planned sale of non-strategic hotels and debt reduction, will continue to have a positive impact on the value of our company for our shareholders.”

Since the beginning of 2003, the company has reduced total debt by more than $29 million, including scheduled principal amortization. Its current portion of long-term debt, totaling $7.5 million, is attributable to scheduled principal amortization on various individual hotel mortgages.

Basic and diluted earnings per share for the six months were $0.34 and $0.29, respectively, compared to basic and diluted earnings per share of $0.06 and $0.05, respectively, for the six months ending July 4, 2003. Net income for the 2004 six-month period was $1.7 million, compared to approximately $300,000 for the same period in 2003.

Although the company is not developing new hotels, Hammons personally has numerous projects in various stages of development, which Hammons Hotels Inc. will manage upon completion. Hammons also has submitted a contract to purchase a site in Fort Worth, Texas, with the intent of developing an Embassy Suites. He opened the Courtyard by Marriott Oklahoma City Downtown/ Bricktown Hotel and arena parking garage in January.

Hammons’ hotel building frenzy

Upcoming developments

• Embassy Suites Hotel and Convention Center-Concord, N.C.

Opening date: Spring 2006

• Marriott Hotel-Normal, Ill.

Opening date: November 2006

• Embassy Suites Hotel and Convention Center-Loveland, Colo.

Opening date: December 2006

• Embassy Suites Hotel and Convention Center-La Vista, Neb.

Opening date: September 2007

Under construction

• Embassy Suites Hotel and Convention Center-St. Charles, Mo.

Opening date: January 2005

• Holiday Inn Express-Springfield

Opening date: March 2005

• Embassy Suites Hotel-Albuquerque, N.M.

Opening date: March 2005

• Embassy Suites Hotel and Convention Center-Hampton, Va.

Opening date: 2005

• Embassy Suites Hotel-Frisco, Texas

Opening date: Spring 2005

• Embassy Suites Hotel-Oklahoma City, Okla.

Opening date: January 2006

• Embassy Suites Hotel-Huntsville, Ala.

Opening date: Early 2006

• Marriott Hotel and John Q. Hammons Center-Rogers, Ark.

Opening date: Summer 2006