Hammons Hotels earnings rise 7.2% in first quarter

John Q. Hammons Hotels Inc. reported May 5 its total earnings for the first quarter were up $22.2 million, or 7.2 percent. Both figures represent earnings before interest, taxes, depreciation and amortization expenses (EBITDA) were accounted for.

Total revenue for the quarter ended April 3 was $79 million, up 11.9 percent from $70.5 million total revenue in the first quarter of 1997. A net loss of $969,000 was reported by the company, which its release attributed to fixed charges associated with opening seven hotels in 1997 and the first quarter of 1998.

"The EBITDA results for the first quarter are ahead of our expectations," said John Q. Hammons, chairman and chief executive officer. "Our movement toward upscale and upper upscale hotels is driving our (revenue per available room), and we are most encouraged to see it growing at almost twice the pace of the industry's ... growth rate in the first quarter."

The company sold six Holiday Inn hotels on Feb. 6, which resulted in a $200,000 book gain.

Jan. 12, Hammons Hotels opened an Embassy Suites in Tampa, the 15th hotel the company has developed in less than three years.

Three more hotel openings are expected in 1998: the World Golf Resort Hotel and Convention Center in St. Augustine, Fla.; the Capitol Plaza Hotel in Topeka, Kan.; and Embassy Suites Hotel in Portland, Ore.

Average room rate for the quarter was $90.20, up 12.6 percent from the same period in 1997 when the figure was $80.08. For the hotel industry, average room rates were $79.44 in the first quarter, a 5.3 percent increase from the year before.

Hammons Hotels' occupancy rate in the first quarter was 61.4 percent, down 1.8 percentage points compared to an industry average occupancy rate of 59.9 percent, down 0.3 percentage point from 1997's first quarter.

Revenue per available room for Hammons Hotels was $55.37, up 9.3 percent from $50.64 in the first quarter of 1997. The industry average was $47.59, a 4.7 increase from 1997.

"In absolute terms, we achieved a 16.3 percent (revenue per available room) premium to the industry," Hammons said. "With fewer hotels being constructed in the upscale and upper upscale price segments, we believe these segments will be the place to be in the future."[[In-content Ad]]