Third Quarter 2021 and Subsequent Highlights
- Net income of
$17 million , or$0.28 earnings per diluted share - Comparable RevPAR of
$66.38 , an increase of 71.4% from the same period in 2020 and a decrease of 4.9% from the same period in 2019 - Adjusted EBITDAre of
$34 million - Adjusted FFO attributable to common stockholders of
$29 million , or$0.47 per diluted share - Sold 15 non-core hotels for a combined gross sales price of approximately
$96 million during the quarter - Repaid
$102 million in total debt during the quarter - Subsequent to quarter end, sold 5 non-core hotels for a gross sales price of approximately
$36 million , resulting in a total of 159 non-core hotels sold sinceMarch 2019 for a combined gross sales price of approximately$768 million - An additional 41 hotels are under contract with qualified buyers, expected to generate approximately
$278 million of gross proceeds, and are generally expected to close in the first half of 2022, subject to market and other conditions
Subsequent to quarter end, as announced today, the Company has entered into a definitive agreement to be acquired through a joint venture between affiliates of
Selected Statistical and Financial Data
(Unaudited, $ in millions, except RevPAR and ADR)
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
2021 | 2020 | % Change | 2021 | 2020 | % Change | ||||||||||||||||
Net income (loss) | $ | 17 | $ | (8) | 312.5 | % | $ | 14 | $ | (136) | 110.3 | % | |||||||||
Total revenues | $ | 142 | $ | 107 | 32.7 | % | $ | 377 | $ | 325 | 16.0 | % | |||||||||
Adjusted EBITDAre | $ | 34 | $ | 8 | 325.0 | % | $ | 68 | $ | 10 | 580.0 | % | |||||||||
Adjusted FFO attributable to common stockholders | $ | 29 | $ | — | N/M | $ | 49 | $ | (14) | 450.0 | % | ||||||||||
Comparable Occupancy (1) | 63.3 | % | 51.6 | % | 1,170 bps | 59.7 | % | 47.1 | % | 1,260 bps | |||||||||||
Comparable ADR (1) | $ | 104.93 | $ | 74.97 | 40.0 | % | $ | 92.30 | $ | 82.26 | 12.2 | % | |||||||||
Comparable RevPAR (1) | $ | 66.38 | $ | 38.72 | 71.4 | % | $ | 55.08 | $ | 38.77 | 42.1 | % | |||||||||
28.5 | % | 12.3 | % | 1,620 bps | 23.1 | % | 8.3 | % | 1,480 bps |
____________________
(1)
N/M = Not Meaningful
Third Quarter 2021 Financial and Operating Results
The Company reported net income of
Comparable RevPAR for the third quarter of 2021 increased 71.4% over the same period of 2020 with 1,058 basis points of RevPAR Index market share decline. The growth in comparable RevPAR was driven by a 40.0% increase in comparable ADR and a 1,170 bps increase in comparable occupancy. The increases in comparable ADR and comparable occupancy were primarily due to increased demand in 2021 as compared to the COVID-19 pandemic impact in 2020. Top performing markets included
Adjusted EBITDAre for the third quarter of 2021 was
Operations Update and Measures to Mitigate Impact of COVID-19
The Company’s hotels’ room demand and rates continued to benefit from leisure travel, certain segments of corporate travel related to essential businesses and being located in drive-to destinations. The following table summarizes select operating statistics for the months of July, August, and
Comparable Occupancy | Comparable ADR | Comparable RevPAR | ||||||||
69.0 | % | $ | 111.85 | $ | 77.16 | |||||
61.5 | % | $ | 102.50 | $ | 63.04 | |||||
59.2 | % | $ | 99.20 | $ | 58.68 |
The Company continues to implement certain cost containment measures with respect to hotel and corporate spending. Accordingly, hotel operating expenses increased at a slower pace than room revenue, primarily due to suspension of buffet-style breakfast service and limited housekeeping services for multi-night stays at many of our hotels.
Dispositions
Since CorePoint announced its initial non-core disposition program of 78 hotels in
Phase 1 | Phase 2 | Total | |||||||||
Total number of non-core hotels: | 78 | 132 | 210 | ||||||||
Full year 2019: | |||||||||||
Number of hotels sold | 43 | 1 | 44 | ||||||||
Gross proceeds | $ | 173 | $ | 4 | $ | 177 | |||||
Portion of net proceeds used to repay debt | $ | 111 | $ | 3 | $ | 114 | |||||
Full year 2020: | |||||||||||
Number of hotels sold | 26 | 35 | 61 | ||||||||
Gross proceeds | $ | 103 | $ | 171 | $ | 274 | |||||
Portion of net proceeds used to repay debt | $ | 64 | $ | 132 | $ | 196 | |||||
First quarter 2021: | |||||||||||
Number of hotels sold | 2 | 7 | 9 | ||||||||
Gross proceeds | $ | 7 | $ | 35 | $ | 42 | |||||
Portion of net proceeds used to repay debt | $ | 6 | $ | 30 | $ | 36 | |||||
Second quarter 2021: | |||||||||||
Number of hotels sold | — | 25 | 25 | ||||||||
Gross proceeds | $ | — | $ | 143 | $ | 143 | |||||
Portion of net proceeds used to repay debt | $ | — | $ | 125 | $ | 125 | |||||
Third quarter 2021: | |||||||||||
Number of hotels sold | 2 | 13 | 15 | ||||||||
Gross proceeds | $ | 8 | $ | 88 | $ | 96 | |||||
Portion of net proceeds used to repay debt | $ | 7 | $ | 80 | $ | 87 | |||||
Fourth quarter 2021 (to date): | |||||||||||
Number of hotels sold | — | 5 | 5 | ||||||||
Gross proceeds | $ | — | $ | 36 | $ | 36 | |||||
Portion of net proceeds used to repay debt | $ | — | $ | 32 | $ | 32 |
Capital Investments
The Company invested approximately
Hurricane Ida Update
During the third quarter of 2021, Hurricane Ida impacted four of the Company’s hotels in
Balance Sheet and Liquidity
As of
As of
(Unaudited, $ in millions)
Debt | Interest Rate | Maturity Date | Principal Balance Outstanding | |||||
CMBS Loan (1)(2) | L + 3.04% | $ | 477 | |||||
Revolving Credit Facility (3) | L + 6.00% | 60 | ||||||
Total | $ | 537 |
____________________
(1) Maturity date assumes the exercise of all borrower extension options. The next maturity date is
(2) As noted in the
(3) Subsequent to quarter end, the Company repaid
Dividends
As previously disclosed, the Company has currently suspended its common stock dividend, resulting in the preservation of approximately
Earnings Call and Webcast
In light of the proposed transaction, the Company will not conduct an earnings call.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements often contain words such as “assume,” “will,” “anticipate,” “believe,” “predict,” “project,” “potential,” “contemplate,” “plan,” “forecast,” “estimate,” “expect,” “intend,” “is targeting,” “may,” “should,” “would,” “could,” “goal,” “seek,” “hope,” “aim,” “continue” and other similar words or expressions or the negative thereof or other variations thereon. Forward-looking statements are made based upon management’s current expectations and beliefs and are not guarantees of future performance. Such forward-looking statements involve numerous assumptions, risks and uncertainties that may cause actual results to differ materially from those expressed or implied in any such statements. Our actual business, financial condition or results of operations may differ materially from those suggested by forward-looking statements as a result of risks and uncertainties which include, among others: completion of the proposed transaction is subject to various risks and uncertainties related to, among other things, its terms, timing, structure, benefits, costs and completion; required approvals to complete the proposed transaction by our stockholders and the receipt of certain regulatory approvals, to the extent required, and the timing and conditions for such approvals; and the satisfaction of the closing conditions to the proposed transaction; business, financial and operating risks inherent to the lodging industry; macroeconomic and other factors beyond our control, including without limitation the effects of the ongoing COVID-19 pandemic or other pandemics or outbreaks of contagious disease; the geographic concentration of our hotels; our inability to compete effectively; our concentration in the La Quinta brand; our dependence on the performance of
Non-GAAP Financial Measures
We refer to certain non-GAAP financial measures in this press release including FFO, Adjusted FFO, Adjusted FFO per diluted share, EBITDA, EBITDAre, Adjusted EBITDAre,
About CorePoint
Contact:
SVP - Finance and Investor Relations
214-501-5535
investorrelations@corepoint.com
Consolidated Balance Sheets (Unaudited)
($ in millions, except per share amounts)
Assets: | |||||||
Real estate | |||||||
Land | $ | 446 | $ | 511 | |||
Buildings and improvements | 1,590 | 1,813 | |||||
Furniture, fixtures, and other equipment | 239 | 293 | |||||
Gross operating real estate | 2,275 | 2,617 | |||||
Less accumulated depreciation | (1,018 | ) | (1,083 | ) | |||
Net operating real estate | 1,257 | 1,534 | |||||
Construction in progress | 2 | 5 | |||||
Total real estate, net | 1,259 | 1,539 | |||||
Right of use assets | 14 | 16 | |||||
Cash and cash equivalents | 174 | 143 | |||||
Accounts receivable | 18 | 13 | |||||
Lender and other escrows | 45 | 35 | |||||
Other assets | 18 | 20 | |||||
Total Assets | $ | 1,528 | $ | 1,766 | |||
Liabilities and Equity: | |||||||
Liabilities: | |||||||
Debt, net | $ | 537 | $ | 810 | |||
Mandatorily redeemable preferred stock | 15 | 15 | |||||
Accounts payable and accrued expenses | 63 | 48 | |||||
Other liabilities | 34 | 36 | |||||
Total Liabilities | 649 | 909 | |||||
Commitments and contingencies | |||||||
Equity: | |||||||
Common stock, | 1 | 1 | |||||
Additional paid-in-capital | 971 | 963 | |||||
Accumulated deficit | (95 | ) | (109 | ) | |||
Noncontrolling interest | 2 | 2 | |||||
Total Equity | 879 | 857 | |||||
Total Liabilities and Equity | $ | 1,528 | $ | 1,766 | |||
Consolidated Statements of Operations (Unaudited)
(in millions, except per share amounts)
Three Months Ended | Nine Months Ended | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Revenues: | ||||||||||||||||
Rooms | $ | 139 | $ | 105 | $ | 369 | $ | 318 | ||||||||
Other | 3 | 2 | 8 | 7 | ||||||||||||
Total Revenues | 142 | 107 | 377 | 325 | ||||||||||||
Operating Expenses: | ||||||||||||||||
Rooms | 58 | 52 | 161 | 171 | ||||||||||||
Other departmental and support | 20 | 20 | 59 | 59 | ||||||||||||
Property tax, insurance and other | 10 | 14 | 37 | 45 | ||||||||||||
Management and royalty fees | 14 | 11 | 37 | 32 | ||||||||||||
Corporate general and administrative | 10 | 7 | 24 | 21 | ||||||||||||
Depreciation and amortization | 33 | 39 | 108 | 121 | ||||||||||||
Gain on sales of real estate | (29 | ) | (27 | ) | (81 | ) | (59 | ) | ||||||||
Gain on casualty | — | (4 | ) | (3 | ) | (7 | ) | |||||||||
Impairment loss | 4 | — | 4 | 54 | ||||||||||||
Total Operating Expenses | 120 | 112 | 346 | 437 | ||||||||||||
Operating income (loss) | 22 | (5 | ) | 31 | (112 | ) | ||||||||||
Other Income (Expenses): | ||||||||||||||||
Interest expense | (6 | ) | (9 | ) | (20 | ) | (35 | ) | ||||||||
Other income (expenses), net | 1 | 3 | 3 | 5 | ||||||||||||
Total Other Expenses | (5 | ) | (6 | ) | (17 | ) | (30 | ) | ||||||||
Income (loss) before income taxes | 17 | (11 | ) | 14 | (142 | ) | ||||||||||
Income tax benefit | — | 3 | — | 6 | ||||||||||||
Net income (loss) | $ | 17 | $ | (8 | ) | $ | 14 | $ | (136 | ) | ||||||
Weighted average common shares outstanding: | ||||||||||||||||
Weighted average common shares outstanding - basic | 57.1 | 56.7 | 57.0 | 56.6 | ||||||||||||
Weighted average common shares outstanding - diluted | 61.3 | 56.7 | 61.0 | 56.6 | ||||||||||||
Earnings (loss) per share: | ||||||||||||||||
Basic earnings (loss) per share | $ | 0.30 | $ | (0.14 | ) | $ | 0.25 | $ | (2.40 | ) | ||||||
Diluted earnings (loss) per share | $ | 0.28 | $ | (0.14 | ) | $ | 0.23 | $ | (2.40 | ) |
RECONCILIATIONS
The tables below provide a reconciliation of
“EBITDA.” Earnings before interest, income taxes, depreciation and amortization (“EBITDA”) is a commonly used measure in many REIT and non-REIT related industries. We believe EBITDA is useful in evaluating our operating performance because it provides an indication of our ability to incur and service debt, to satisfy general operating expenses, and to make capital expenditures. We calculate EBITDA excluding discontinued operations. EBITDA is intended to be a supplemental non-GAAP financial measure that is independent of a company’s capital structure.
“EBITDAre.” We present EBITDAre in accordance with guidelines established by the
“Adjusted EBITDAre.” Adjusted EBITDAre is calculated as EBITDAre adjusted for certain items, such as restructuring and separation transaction expenses, acquisition transaction expenses, stock-based compensation expense, severance expense, and other items not indicative of ongoing operating performance.
The Company believes that EBITDAre and Adjusted EBITDAre provide useful information to investors about it and its financial condition and results of operations for the following reasons: (i) EBITDAre and Adjusted EBITDAre are among the measures used by the Company’s management to evaluate its operating performance and make day-to-day operating decisions; and (ii) EBITDAre and Adjusted EBITDAre are frequently used by securities analysts, investors, lenders and other interested parties as a common performance measure to compare results or estimate valuations across companies in and apart from the Company’s industry sector.
EBITDA, EBITDAre and Adjusted EBITDAre are not recognized terms under GAAP, have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income (loss), cash flow or other methods of analyzing the Company’s results as reported under GAAP. Some of these limitations are that these measures:
- do not reflect changes in, or cash requirements for, the Company’s working capital needs;
- do not reflect the Company’s interest expense, or the cash requirements necessary to service interest or principal payments, on its indebtedness;
- do not reflect the Company’s tax expense or the cash requirements to pay its taxes;
- do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
- EBITDAre and Adjusted EBITDAre do not include gains or losses on the disposition of properties which may be material to our operating performance and cash flow;
- do not reflect the impact on earnings or changes resulting from matters that the Company considers not to be indicative of our future operations, including but not limited to discontinued operations, impairment, acquisition and disposition activities and restructuring expenses;
- although depreciation, amortization and impairment are non-cash charges, the assets being depreciated, amortized or impaired will often have to be replaced, upgraded or repositioned in the future, and EBITDA, EBITDAre and Adjusted EBITDAre do not reflect any cash requirements for such replacements; and
- other companies in the Company’s industry may calculate EBITDA, EBITDAre and Adjusted EBITDAre differently, limiting their usefulness as comparative measures.
Because of these limitations, EBITDA, EBITDAre and Adjusted EBITDAre should not be considered as a replacement to net income (loss) presented in accordance with GAAP, discretionary cash available to the Company to reinvest in the growth of its business or as measures of cash that will be available to the Company to meet its obligations.
“Hotel Adjusted EBITDAre” measures property-level results at the Company’s hotels before corporate-level expenses and is a key measure of a hotel’s profitability. The Company presents
“Comparable Hotel Adjusted EBITDAre” measures property-level results at the Company’s Comparable hotels before corporate-level expenses and is a key measure of a hotel’s profitability. The Company presents
“Comparable Hotel Adjusted EBITDAre margin” represents the ratio of
Funds from operations (“FFO”) and “Adjusted FFO”. We present Nareit FFO attributable to common stockholders and Nareit FFO per diluted share (as defined below) as non-GAAP measures of our performance. We calculate funds from operations (“FFO”) attributable to common stockholders for a given operating period in accordance with standards established by Nareit, as net income or loss (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains or losses on sales of certain real estate assets, impairment write-downs of real estate assets, discontinued operations, income taxes related to sales of certain real estate assets, and the cumulative effect of changes in accounting principles, plus adjustments for unconsolidated joint ventures. Adjustments for unconsolidated joint ventures are calculated to reflect our pro rata share of the FFO of those entities on the same basis. Since real estate values historically have risen or fallen with market conditions, many industry investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For these reasons, Nareit adopted the FFO metric in order to promote an industry wide measure of REIT operating performance. We believe Nareit FFO provides useful information to investors regarding our operating performance and can facilitate comparisons of operating performance between periods and between REITs. Our presentation may not be comparable to FFO reported by other REITs that do not define the terms in accordance with the current Nareit definition, or that interpret the current Nareit definition differently than we do. We calculate Nareit FFO per diluted share as our Nareit FFO divided by the number of fully diluted shares outstanding during a given operating period.
We also present Adjusted FFO attributable to common stockholders when evaluating our performance because we believe that the exclusion of certain additional items described below provides useful supplemental information to investors regarding our ongoing operating performance. Management historically has made the adjustments detailed below in evaluating our performance and in our annual budget process. We believe that the presentation of Adjusted FFO provides useful supplemental information that is beneficial to an investor’s complete understanding of our operating performance. We adjust Nareit FFO attributable to common stockholders for the following items, and refer to this measure as Adjusted FFO attributable to common stockholders: transaction expense associated with the potential disposition of or acquisition of real estate or businesses; severance expense; share-based compensation expense; litigation gains and losses outside the ordinary course of business; amortization of debt issuance costs; reorganization costs and separation transaction expenses; loss on early extinguishment of debt; straight-line ground lease expense; casualty losses; deferred tax expense; and other items that we believe are not representative of our current or future operating performance.
Nareit FFO attributable to common stockholders and Adjusted FFO attributable to common stockholders have limitations as analytical tools and should not be considered either in isolation or as a substitute for net income (loss), cash flow or other methods of analyzing our results as reported under GAAP. Nareit FFO is not an indication of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to fund dividends. Nareit FFO is also not a useful measure in evaluating net asset value because impairments are taken into account in determining net asset value but not in determining Nareit FFO. Investors are cautioned that we may not recover any impairment charges in the future. Accordingly, Nareit FFO should be reviewed in connection with GAAP measurements. We believe our presentation of Nareit FFO is in accordance with the Nareit definition; however, our Nareit FFO may not be comparable to amounts calculated by other REITs.
ADJUSTED EBITDAre NON-GAAP RECONCILIATIONS
(unaudited, in millions)
Three Months Ended | Nine Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Net income (loss) | $ | 17 | $ | (8 | ) | $ | 14 | $ | (136 | ) | |||||
Interest expense | 6 | 9 | 20 | 35 | |||||||||||
Income tax benefit | — | (3 | ) | — | (6 | ) | |||||||||
Depreciation and amortization | 33 | 39 | 108 | 121 | |||||||||||
EBITDA | 56 | 37 | 142 | 14 | |||||||||||
Gain on sales of real estate | (29 | ) | (27 | ) | (81 | ) | (59 | ) | |||||||
Gain on casualty | — | (4 | ) | (3 | ) | (7 | ) | ||||||||
Impairment loss | 4 | — | 4 | 54 | |||||||||||
EBITDAre | 31 | 6 | 62 | 2 | |||||||||||
Equity-based compensation expense | 2 | 3 | 7 | 8 | |||||||||||
Income from lease modification | (1 | ) | — | (1 | ) | — | |||||||||
Strategic alternatives exploration expenses | 1 | — | 1 | — | |||||||||||
Income from terminated sale contracts | — | (1 | ) | — | (1 | ) | |||||||||
Other, net | 1 | — | (1 | ) | 1 | ||||||||||
Adjusted EBITDAre | $ | 34 | $ | 8 | $ | 68 | $ | 10 | |||||||
Additional information:
- Other, net represents additional income and expenses that are not representative of our current or future operating performance, which are individually less significant. For the three and nine months ended
September 30, 2021 , other, net includes$1 million and$2 million of business interruption insurance proceeds, respectively. For the three and nine months endedSeptember 30, 2020 , other, net includes$2 million and$4 million of business interruption insurance proceeds, respectively.
HOTEL ADJUSTED EBITDA AND TOTAL REVENUES
NON-GAAP RECONCILIATION
(unaudited, in millions)
Three Months Ended | Nine Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Adjusted EBITDAre | $ | 34 | $ | 8 | $ | 68 | $ | 10 | |||||||
Corporate general and administrative expenses (1) | 6 | 4 | 15 | 12 | |||||||||||
40 | 12 | 83 | 22 | ||||||||||||
Impact of non-comparable hotels(2) | (1 | ) | (2 | ) | (5 | ) | (2 | ) | |||||||
$ | 39 | $ | 10 | $ | 78 | $ | 20 | ||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Total Revenues | $ | 142 | $ | 107 | $ | 377 | $ | 325 | |||||||
Impact of non-comparable hotels(2) | (5 | ) | (26 | ) | (39 | ) | (84 | ) | |||||||
$ | 137 | $ | 81 | $ | 338 | $ | 241 | ||||||||
____________________
(1) Reflects adjustments to exclude the effects of corporate general and administrative costs not already adjusted in calculating Adjusted EBITDAre.
(2) Includes the impact of hotels sold that are excluded from the
(3)
ADJUSTED FFO NON-GAAP RECONCILIATION
(unaudited, in millions)
Three Months Ended | Nine Months Ended | ||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||
Net income (loss) | $ | 17 | $ | (8 | ) | $ | 14 | $ | (136 | ) | |||||
Depreciation and amortization | 33 | 39 | 108 | 121 | |||||||||||
Gain on sales of real estate | (29 | ) | (27 | ) | (81 | ) | (59 | ) | |||||||
Gain on casualty | — | (4 | ) | (3 | ) | (7 | ) | ||||||||
Impairment loss | 4 | — | 4 | 54 | |||||||||||
Nareit defined FFO attributable to common stockholders | 25 | — | 42 | (27 | ) | ||||||||||
Equity-based compensation expense | 2 | 3 | 7 | 8 | |||||||||||
Non-cash income tax expense (benefit) | — | (3 | ) | — | (2 | ) | |||||||||
Amortization expense of debt issuance costs | 1 | 1 | 1 | 7 | |||||||||||
Income from lease modification | (1 | ) | — | (1 | ) | — | |||||||||
Strategic alternatives exploration expenses | 1 | — | 1 | — | |||||||||||
Income from terminated sale contracts | — | (1 | ) | — | (1 | ) | |||||||||
Other, net | 1 | — | (1 | ) | 1 | ||||||||||
Adjusted FFO attributable to common stockholders | $ | 29 | $ | — | $ | 49 | $ | (14 | ) | ||||||
Weighted average number of shares outstanding, diluted | 61.3 | 56.7 | 61.0 | 56.6 | |||||||||||
Adjusted FFO per diluted share | $ | 0.47 | $ | — | $ | 0.80 | $ | (0.25 | ) |
____________________
Additional information:
- Other, net represents additional income and expenses that are not representative of our current or future operating performance, which are individually less significant. For the three and nine months ended
September 30, 2021 , other, net includes$1 million and$2 million of business interruption insurance proceeds, respectively. For the three and nine months endedSeptember 30, 2020 , other, net includes$2 million and$4 million of business interruption insurance proceeds, respectively. - Weighted average number of shares outstanding, diluted presented above may differ from weighted average number of shares outstanding, diluted presented for GAAP purposes when there is a net loss and all potentially dilutive securities are anti-dilutive. There are no dilutive securities for purposes of calculating net loss or negative FFO.
CERTAIN DEFINED TERMS
Average daily rate (“ADR”) represents hotel room revenues divided by total number of rooms rented in a given period. ADR measures the average room price attained by a hotel or group of hotels, and ADR trends provide useful information concerning pricing policies and the nature of the guest base of a hotel or group of hotels. Changes in room rates have an impact on overall revenues and profitability.
“Occupancy” represents the total number of rooms rented in a given period divided by the total number of rooms available at a hotel or group of hotels. Occupancy measures the utilization of our hotels’ available capacity, which may be affected from time to time by our repositioning, property casualties and other activities. Management uses occupancy to gauge demand at a specific hotel or group of hotels in a given period. Occupancy levels also help us determine achievable ADR levels as demand for hotel rooms increases or decreases.
Revenue per available room (“RevPAR”) is defined as the product of the ADR charged and the average daily occupancy achieved. RevPAR does not include bad debt expense or other ancillary, non-room revenues, such as food and beverage revenues or parking, telephone or other guest service revenues generated by a hotel, which are not significant for us.
RevPAR changes that are driven predominately by occupancy have different implications for overall revenue levels and incremental hotel operating profit than changes driven predominately by ADR. For example, increases in occupancy at a hotel would lead to increases in room and other revenues, as well as incremental operating costs (including, but not limited to, housekeeping services, utilities and room amenity costs). RevPAR increases due to higher ADR, however, would generally not result in additional operating costs, with the exception of those charged or incurred as a percentage of revenue, such as management and royalty fees, credit card fees and booking commissions. As a result, changes in RevPAR driven by increases or decreases in ADR generally have a greater effect on operating profitability at our hotels than changes in RevPAR driven by occupancy levels.
“RevPAR Index” measures a hotel’s fair market share of its competitive set’s revenue per available room.
“Comparable Hotels” are defined as hotels that were active and operating in our system for at least one full calendar year as of the end of the applicable reporting period and were active and operating as of
HOTEL COUNT RECONCILIATION
As of | 315 | |
Hotels sold | (44) | |
As of | 271 | |
Hotels sold | (61) | |
Other (1) | (1) | |
As of | 209 | |
Hotels sold | (9) | |
As of | 200 | |
Hotels sold | (25) | |
As of | 175 | |
Hotels sold (2) | (15) | |
As of | 160 | |
Hotels sold subsequent to quarter end (3) | (5) | |
As of | 155 | |
Total hotels sold | 159 |
_____________
(1) In the second quarter of 2020, the Company permanently disposed of one hotel, 140 rooms, that was subject to a ground lease
(2) The Company sold 15 hotels in the third quarter of 2021, totaling 1,753 rooms. Of these properties sold, one was located in each of the following locations:
(3) From
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