Hospitality Properties Trust today announced its financial results for the fourth quarter and year end 2011, and the group is firmly back in the black, with profits up significantly for the fourth quarter and for 2011 as a whole compared with the losses it saw in 2010.
Net income for the group rose to $30.7 million for the fourth quarter of 2011, compared with a net loss of $100.4 million for the same quarter last year. For the year as a whole, net income was $160.6 million, compared with a net loss of $8.5 million in 2010.
Normalized funds from operations, (normalized FFO), for the fourth quarter were $96.8 million, a slight dip from last year, which saw normalized FFO of $104.5 million. However, normalized FFO was up slightly for the year over all, increasing to $407.5 million, from $400 million, in 2010.
Rate, occupancy and revenue per room for the group’s hotel portfolio all saw slight increases compared with last year, for both the fourth quarter and the year as a whole. For the fourth quarter of 2011, average daily room rate increased 4.9 percent to $94.63; occupancy increased 1.2 percent points to 67.2 percent; and revenue per available room increased 6.9 percent to $63.59. For the whole year, average daily room rate increased 3.7 percent to $93.84; occupancy increased 2.6 percent to 71.9 percent; and revenue per available room increased by 7.6 percent to $67.47.
Worry spots included the 200-plus hotels in the group’s portfolio being managed by Marriott International and InterContinental for HPT. Both Marriott and InterContinental failed to meet their contractually obligated minimum returns. HPT exhausted the remaining $200,000 from Marriott’s security deposits to help cover its $11.6 million gap, and Marriott provided $9.1 million of guaranty payments to HPT. InterContinental’s hotels were short $8.4 million, with HPT applying the available security deposit to cover these shortfalls.
HPT completed the acquisitions of two Royal Sonesta Hotels in January for $150.5 million. HPT announced plans to put 21 of its Marriott hotels on the block; the collected properties have a net book value, after impairment writedowns, of approximately $123 million at the end of last year. This month, HPT entered an agreement to sell one of these 21 hotels, a full-service Marriott hotel in St. Louis, for $35 million, excluding closing costs. HPT expects to complete this sale in the second quarter of 2012.
