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Hammons Hotels reports 7.3% increase in revenue

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John Q. Hammons Hotels Inc. announced increased revenues of 7.3 percent over last year's numbers, according to a quarterly report filed by the company Aug. 17.

The report said total revenues for the quarter ended July 3, 1998, were $81.8 million, an increase of $5.6 million compared to the quarter ended July 4, 1997.

The release stated that revenues were up due to the growth of new hotels in the past two years, including two opened during 1998.

In addition, the company's newest hotels, which include those opened this and last year, generated revenues of $15.9 million for the 1998 quarter, compared to $3.7 million in the 1997 quarter.

Room revenues increased $3.5 million but decreased slightly as a percentage of total revenues from 66.4 percent to 66.1 percent. The dollar increase was primarily due to increased room rates from the new hotels, and the resulting increase in the company's average room rate to $91.78, a 12.9 percent increase over the 1997 quarter.

The increased average room rate was partially offset by a 2.8 percentage point decrease in the company's occupancy for the 1998 quarter.

Effective Feb. 6, 1998, the company completed the sale of six hotels to an unrelated party for $40 million, re-

sulting in a gain of approximately $200,000.

Certain of these hotels served as collateral under 1994 and 1995 first mortgage notes. Under the terms of these indentures, the company must provide replacement collateral of equivalent value or apply the net proceeds from the sale to amounts outstanding.

The company has provided, or is in the process of providing, replacement collateral in accordance with the indenture provisions. As of July 3, $27.3 million of cash was restricted for this purpose.

Hammons Hotels has opened two new hotels in the past six months, and has an additional six hotels under construction. The company is continuing to develop new hotels in Topeka, Kan.; Portland, Ore.; Charlotte, N.C., and Grapevine, Texas.

The company formed in September 1994 and had no operations or assets prior to its initial public offering of Class A common stock in November 1994.

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