Hersha Hospitality Trust Results

Hersha Hospitality Trust Reports Q2 2017 Comparable Portfolio RevPAR Growth of 1.0%

Hersha

- Q2 2017 Net Income of $74.0 Million, or $1.75 per Share

- Q2 2017 Comparable Portfolio RevPAR Growth of 1.0%

- Completes 24 Month Capital Recycling Campaign

- Adjusts 2017 EBITDA & ADJUSTED FFO Guidance

Hersha Hospitality Trust (NYSE: HT), owner of high quality hotels in urban gateway markets and coastal destinations, today announced results for the second quarter ended June 30, 2017.

Second Quarter 2017 Financial Results

Net income applicable to common shareholders was $74.0 million, or $1.75 per diluted common share, in the second quarter 2017, compared to net income applicable to common shareholders of $102.2 million, or $2.33 per diluted common share, in the second quarter 2016. The decrease in second quarter 2017 net income and net income per diluted common share was primarily due to a decrease in gains on the disposition of hotels during the period.

Adjusted Funds from Operations (“AFFO”) in the second quarter 2017 was $34.7 million. AFFO per diluted common share and OP Unit in the second quarter 2017 was $0.77, a 13.5% decrease from AFFO per diluted common share and OP Unit of $0.89 in the second quarter 2016 as a result of lower operating income and certain non-performance related items including an increase in state and municipal taxes along with a non-cash tax accrual at the Company’s Taxable REIT Subsidiary (“TRS”). The Company’s weighted average diluted common shares and OP Units outstanding were approximately 44.9 million for the three months ended June 30, 2017, compared to approximately 46.0 million for the three months ended June 30, 2016. An explanation of certain non-GAAP financial measures used in this press release, including, among others, AFFO, as well as reconciliations of those non-GAAP financial measures, to GAAP net income, is included at the end of this press release.

Mr. Jay H. Shah, Hersha’s Chief Executive Officer, stated, “Despite headwinds in several of our markets, our portfolio once again outperformed in our selected submarkets and within our competitive sets during the second quarter. RevPAR growth, however, did not keep pace with escalating wage growth and rising operating expenses in many of our markets causing the portfolio to face increasing margin pressure. Looking ahead, we will continue to focus on a defined mix of cost controls, aggressive asset management strategies and revenue management initiatives.”

Mr. Shah continued, “During the second quarter, we continued to execute our strategic repositioning and completed our 24 month capital recycling campaign. During this two year period, we sold approximately $850 million of mature stabilized hotels and successfully deferred $278 million of taxable gains with $816 million of accretive acquisitions in strategic urban gateway and coastal destinations. In addition to refining our portfolio’s market mix to urban gateway and coastal destinations, our improved portfolio quality focuses our capabilities on hotels with higher RevPAR and EBITDA growth trajectories in our core markets. We also strategically shifted our EBITDA contribution into higher growth markets such as the West Coast, Boston and Washington, DC, moving away from markets that will face more headwinds over the next few years. The West Coast (22%), Boston (13%) and Washington, DC (17%) clusters contributed approximately 52% of total consolidated EBITDA in the second quarter 2017 compared to approximately 47% for the second quarter 2016 while New York City’s consolidated EBITDA contribution declined to 21% from 27% over the same period.”

Second Quarter 2017 Operating Results

Revenue per available room (“RevPAR”) at the Company's 41 comparable hotels increased 1.0% to $197.03 in the second quarter 2017. The Company’s average daily rate (“ADR”) for the comparable hotel portfolio increased 1.5% to $228.13, while occupancy decreased 49 basis points to 86.4%. Excluding the challenging South Florida market, our RevPAR grew 1.9% to $204.93, aided by a 1.7% increase in ADR. Hotel EBITDA margins for the comparable hotel portfolio decreased 70 basis points to 38.3%.

Excluding Hyatt Union Square and Sanctuary Beach Resort, which reported disproportionate margin deterioration due to renovations in connection with the re-concepting of the restaurant and bar at both hotels, the Company’s comparable Hotel EBITDA margins increased 10 basis points. The best performing market during the second quarter was the Company’s Boston portfolio, which reported 6.5% RevPAR growth to $253.06. Hersha’s Boston, West Coast and Philadelphia portfolios reported 6.5%, 3.4% and 3.0% RevPAR growth, respectively, in the second quarter 2017.

West Coast

The West Coast portfolio, which includes California and Seattle, consisted of eight hotels as of June 30, 2017. In the second quarter 2017, the Company’s comparable West Coast hotel portfolio reported RevPAR growth of 3.4% to $196.09, driven by a 5.5% ADR increase to $232.91. The West Coast portfolio’s outperformance was driven by The Ambrose Hotel and Hotel Milo assets, recording 14.4% and 10.9% RevPAR growth, respectively. The Company’s West Coast portfolio reported Gross Operating Profitability (“GOP”) and Hotel EBITDA margins of 51.1% and 40.9%, respectively, in the second quarter 2017. Hotel EBITDA margins excluding the Sanctuary Beach Resort increased 200 basis points to 41.2% as a result of strong flow-through of 111.8%.

New York City and Manhattan

The New York City portfolio, which includes the five boroughs, consisted of 10 hotels as of June 30, 2017. In the second quarter 2017, the Company’s comparable New York City hotel portfolio reported RevPAR growth of 2.2% to $224.83, driven by an occupancy increase of 184 basis points to 94.6%. The Manhattan portfolio consisted of seven hotels as of June 30, 2017. The Company’s comparable Manhattan portfolio reported RevPAR growth of 1.5% to $247.49 driven by an occupancy increase of 216 basis points to 94.7%. In the second quarter 2017, the Company outperformed the greater Manhattan RevPAR by 190 basis points, and has outperformed the Manhattan market in 12 of the previous 14 quarters as a result of a young, well-located and purpose-built hotel cluster in-tune with travelers’ tastes and preferences. Hersha’s Manhattan portfolio reported GOP and Hotel EBITDA margins of 51.2% and 37.9%, respectively, in the second quarter 2017. Hotel EBITDA margins excluding the Hyatt Union Square decreased 220 basis points to 42.5% and were primarily impacted by increased labor costs.

Financing

As of June 30, 2017, the Company maintained significant financial flexibility with approximately $59.6 million of cash and cash equivalents and full capacity on the Company’s senior unsecured credit facility. As of June 30, 2017, 41.0% of the Company’s consolidated debt was fixed rate debt or hedged through interest rate swaps and caps. The Company’s total consolidated debt had a weighted average interest rate of approximately 3.63% and a weighted average life-to-maturity of approximately 3.8 years.

Acquisitions

On June 29, 2017, the Company acquired the AAA Four-Diamond 294-room Westin Hotel in Philadelphia, PA for $135 million. The Westin is particularly well located in the heart of Philadelphia’s 45 million square foot office district in close proximity to Center City’s unique demand generators including the new Comcast Innovation and Technology Center, Rittenhouse Square, City Hall, the Pennsylvania Convention Center, and University City. The Westin is also part of the iconic Liberty Place mixed use complex that includes 2.4 million square feet of office, retail, food hall and residential space in addition to an underground parking garage. The hotel was originally opened as a Ritz-Carlton in 1990 and has maintained the brand’s hallmarks including marble finishes, extensive handcrafted millwork, and oversized guestrooms and bathrooms. In addition, the Westin has 16,600 square feet of meeting space including a 7,500 square foot ballroom.

Dispositions

On June 8, 2017, Hersha completed the sale of three Hyatt House hotels which were sold unencumbered of debt and generated taxable gains of approximately $67 million. The portfolio sale included the 142-room Hyatt House in Pleasant Hill, CA, the 128-room Hyatt House in Pleasanton, CA, and the 164-room Hyatt House in Scottsdale, AZ for $130.5 million.

Dividends

Hersha paid a cash dividend of $0.4297 per Series C Preferred Share, $0.40625 per Series D Preferred Share, and $0.40625 per Series E Preferred Share for the second quarter ending June 30, 2017. The preferred share dividends were paid July 17, 2017 to holders of record as of July 1, 2017.

The Board of Trustees also declared cash dividends totaling $0.28 per common share and per limited partnership unit for the second quarter ending June 30, 2017. These common share dividends and limited partnership unit distributions were paid July 17, 2017 to holders of record as of June 30, 2017.

2017 Outlook

The Company is updating its operating and financial expectations for full-year 2017 to account for second quarter transactions and operating results through June 30, 2017. The Company’s expectations do not build in any additional acquisitions, dispositions or capital market activities for 2017. Based on management’s current outlook and assumptions, the Company’s 2017 operating expectations are as follows:

         
    2017 Current Outlook   2017 Previous Outlook
($’s in millions except per share amounts)   Low   High   Low   High
Net income   $90.00   $96.00   $79.00   $89.00
Net income per share   $2.12   $2.25   $1.86   $2.10
                 
Comparable Property RevPAR Growth   0.00%   2.00%   0.00%   2.00%
Comparable Property EBITDA Margins   -1.00%   0.00%   -1.00%   0.00%
                 
Adjusted EBITDA   $171.00   $177.00   $162.00   $172.00
                 
Adjusted FFO   $101.00   $107.00   $94.00   $104.00
Adjusted FFO per share   $2.25   $2.38   $2.08   $2.31
                 

About Hersha Hospitality Trust

Hersha Hospitality Trust (HT) is a self-advised real estate investment trust in the hospitality sector, which owns and operates high quality hotels in urban gateway and coastal destinations. The Company's 51 hotels totaling 7,804 rooms are located in New York, Washington, DC, Boston, Philadelphia, Miami and select markets on the West Coast. The Company's common shares are traded on The New York Stock Exchange under the ticker “HT”.

   
HERSHA HOSPITALITY TRUST
Balance Sheet (unaudited)
(in thousands, except shares and per share data)
 
June 30, 2017 December 31, 2016
Assets:
Investment in Hotel Properties, Net of Accumulated Depreciation $ 2,051,750 $ 1,767,570
Investment in Unconsolidated Joint Ventures 3,567 11,441
Cash and Cash Equivalents 59,600 185,644
Escrow Deposits 7,218 8,993
Hotel Accounts Receivable, Net of Allowance for Doubtful Accounts of $43 and $91 12,374 8,769
Due from Related Parties 6,330 18,332
Intangible Assets, Net of Accumulated Amortization of $5,488 and $4,532 17,105 16,944
Other Assets 38,224 39,370
Hotel Assets Held for Sale   -     98,473  
Total Assets $ 2,196,168   $ 2,155,536  
 
Liabilities and Equity:
Line of Credit $ - $ -
Unsecured Term Loan, Net of Unamortized Deferred Financing Costs 707,740 663,500
Unsecured Notes Payable, Net of Unamortized Deferred Financing Costs 50,604 50,578

Mortgages Payable, Net of Unamortized Premium and Unamortized Deferred Financing Costs

311,850 337,821
Accounts Payable, Accrued Expenses and Other Liabilities 71,108 65,106
Dividends and Distributions Payable 17,590 26,050
Liabilities Related to Hotel Assets Held for Sale - 51,428
Deferred Gain on Disposition of Hotel Assets   81,269     81,314  
Total Liabilities $ 1,240,161   $ 1,275,797  
 
Equity:
Shareholders' Equity:

Preferred Shares: $.01 Par Value, 29,000,000 Shares Authorized, 3,000,000 Series C, 7,700,000 Series D and 4,000,000 Series E Shares Issued and Outstanding at June 30, 2017 and December 31, 2016, with Liquidation Preferences of $25 Per Share

$ 147 $ 147

Common Shares: Class A, $0.01 Par Value, 104,000,000 Shares Authorized at June 30, 2017 and 90,000,000 Shares Authorized at December 31, 2016; 41,827,466 and 41,770,514 Shares Issued and Outstanding at June 30, 2017 and December 31, 2016, respectively

418 418

Common Shares: Class B, $0.01 Par Value, 1,000,000 Shares Authorized, None Issued and Outstanding at June 30, 2017 and December 31, 2016

- -
Accumulated Other Comprehensive Income 209 1,373
Additional Paid-in Capital 1,198,941 1,198,311
Distributions in Excess of Net Income   (295,523 )   (364,831 )
Total Shareholders' Equity 904,192 835,418
 
Noncontrolling Interests - Common Units and LTIP Units   51,815     44,321  
Total Equity 956,007 879,739
       
Total Liabilities and Equity $ 2,196,168   $ 2,155,536  
 
HERSHA HOSPITALITY TRUST        
Summary Results (unaudited)
(in thousands, except shares and per share data)
Three Months Ended Six Months Ended
June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016
Revenues:
Hotel Operating Revenues:
Room $ 114,461 $ 113,166 $ 205,230 $ 207,645
Food & Beverage 15,010 8,914 25,746 16,124
Other Operating Revenues   7,545     5,549     13,992     10,707  
Total Hotel Operating Revenues 137,016 127,629 244,968 234,476
Other Revenue   988     94     1,034     100  
Total Revenues   138,004     127,723     246,002     234,576  
 
Operating Expenses:
Hotel Operating Expenses:
Room 23,749 22,405 45,053 45,157
Food & Beverage 11,856 6,801 21,413 13,103
Other Operating Revenues   40,917     36,694     77,323     73,358  
Total Hotel Operating Expenses 76,522 65,900 143,789 131,618
Hotel Ground Rent 894 892 1,701 1,785
Real Estate and Personal Property Taxes and Property Insurance 8,068 7,949 15,694 17,105
General and Administrative 4,071 4,582 7,267 7,576
Share Based Compensation 2,527 1,873 3,956 4,279
Acquisition and Terminated Transaction Costs 1,124 55 1,824 1,563
Depreciation and Amortization   20,114     18,495     39,576     38,555  
Total Operating Expenses   113,320     99,746     213,807     202,481  
 
Operating Income 24,684 27,977 32,195 32,095
 
Interest Income 72 78 197 124
Interest Expense (10,590 ) (11,281 ) (20,439 ) (23,502 )
Other Expense (279 ) (633 ) (678 ) (739 )
Gain on Disposition of Hotel Properties 70,852 95,276 89,583 95,276
Loss on Debt Extinguishment   -     (1,049 )   (274 )   (1,091 )

Income before Results from Unconsolidated Joint Venture Investments and Income Taxes

84,739 110,368 100,584 102,163
 
Unconsolidated Joint Ventures
Income (Loss) from Unconsolidated Joint Ventures 711 1,521 (3,175 ) 1,307

Gain from Remeasurement of Investment in Unconsolidated Joint Venture

-     -     16,239     -  
Income from Unconsolidated Joint Venture Investments   711     1,521     13,064     1,307  
 
Income before Income Taxes 85,450 111,889 113,648 103,470
 
Income Tax (Expense) Benefit (662 ) 3,070 (2,905 ) 3,070
               

Net Income

84,788 114,959 110,743 106,540
 
Income Allocated to Noncontrolling Interests (4,758 ) (4,748 ) (5,939 ) (4,061 )
Preferred Distributions (6,042 ) (4,000 ) (12,084 ) (7,589 )

Extinguishment of Issuance Costs Upon Redemption of Series B Preferred Shares

  -     (4,021 )   -     (4,021 )
 
Net Income Applicable to Common Shareholders $ 73,988   $ 102,190   $ 92,720   $ 90,869  
 

Earnings per Share:

BASIC
Net Income Applicable to Common Shareholders $ 1.77   $ 2.35   $ 2.22   $ 2.06  
 
DILUTED
Net Income Applicable to Common Shareholders $ 1.75   $ 2.33   $ 2.19   $ 2.04  
 

Weighted Average Common Shares Outstanding:

Basic 41,737,044 43,427,726 41,727,056 43,903,526
Diluted 42,207,841 43,863,577 42,201,126 44,384,969
 

Non-GAAP Measures

FFO and AFFO

The National Association of Real Estate Investment Trusts (“NAREIT”) developed Funds from Operations (“FFO”) as a non-GAAP financial measure of performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. We calculate FFO applicable to common shares and Common Units in accordance with the April 2002 National Policy Bulletin of NAREIT, which we refer to as the White Paper. The White Paper defines FFO as net income (loss) (computed in accordance with GAAP) excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated assets, plus certain non-cash items, such as loss from impairment of assets and depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Our interpretation of the NAREIT definition is that non-controlling interest in net income (loss) should be added back to (deducted from) net income (loss) as part of reconciling net income (loss) to FFO. Our FFO computation may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than we do.

The GAAP measure that we believe to be most directly comparable to FFO, net income (loss) applicable to common shareholders, includes loss from the impairment of certain depreciable assets, our investment in unconsolidated joint ventures and land, depreciation and amortization expenses, gains or losses on property sales, non-controlling interest and preferred dividends. In computing FFO, we eliminate these items because, in our view, they are not indicative of the results from our property operations. We determined that the loss from the impairment of certain depreciable assets, including investments in unconsolidated joint ventures and land, was driven by a measurable decrease in the fair value of certain hotel properties and other assets as determined by our analysis of those assets in accordance with applicable GAAP. As such, these impairments have been eliminated from net income (loss) to determine FFO.

Hersha also presents Adjusted Funds from Operations (AFFO), which reflects FFO in accordance with the NAREIT definition further adjusted by:

  • adding back non-cash share based compensation expense;
  • adding back acquisition and terminated transaction expenses;
  • adding back contingent considerations;
  • adding back amortization of deferred financing costs;
  • adding back adjustments for the amortization of discounts and premiums;
  • adding back write-offs of deferred financing costs on debt extinguishment, both for consolidated and unconsolidated properties;
  • adding back straight-line amortization of ground lease expense and prior period tax assessment expenses; and
  • adding back unconsolidated joint venture management company transaction costs and state and local tax expense related to prior period assessment.

FFO and AFFO do not represent cash flows from operating activities in accordance with GAAP and should not be considered an alternative to net income as an indication of the Company’s performance or to cash flow as a measure of liquidity or ability to make distributions. We consider FFO and AFFO to be meaningful, additional measures of our operating performance because they exclude the effects of the assumption that the value of real estate assets diminishes predictably over time, and because they are widely used by industry analysts as performance measures. We evaluate our performance by reviewing AFFO, in addition to FFO, because we believe that adjusting FFO to exclude certain recurring and non-recurring items as described above provides useful supplemental information regarding the our ongoing operating performance and that the presentation of AFFO, when combined with the primary GAAP presentation of net income (loss), more completely describes our operating performance. We show both FFO from consolidated hotel operations and FFO from unconsolidated joint ventures because we believe it is meaningful for the investor to understand the relative contributions from our consolidated and unconsolidated hotels. The display of both FFO from consolidated hotels and FFO from unconsolidated joint ventures allows for a detailed analysis of the operating performance of our hotel portfolio by management and investors. We present FFO and AFFO applicable to common shares and OP Units because our OP Units are redeemable for common shares. We believe it is meaningful for the investor to understand FFO and AFFO applicable to all common shares and OP Units. Certain amounts related to depreciation and amortization and depreciation and amortization from discontinued operations in the prior year FFO reconciliation have been recast to conform to the current year presentation. In addition, based on guidance provided by NAREIT, we have eliminated loss from the impairment of certain depreciable assets, including investments in unconsolidated joint ventures and land, from net (income) loss to arrive at FFO in each year presented.

The following table reconciles FFO and AFFO for the periods presented to the most directly comparable GAAP measure, net income (loss) applicable to common shares, for the same periods:

       
HERSHA HOSPITALITY TRUST
Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO)
(in thousands, except shares and per share data)
 
Three Months Ended Six Months Ended
June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016
 
Net income applicable to common shares $ 73,988 $ 102,190 $ 92,720 $ 90,869
Income allocated to noncontrolling interest 4,758 4,748 5,939 4,061
Income from unconsolidated joint ventures (711 ) (1,521 ) (13,064 ) (1,307 )
Gain on disposition of hotel properties (70,852 ) (95,276 ) (89,583 ) (95,276 )
Depreciation and amortization   20,114     18,495     39,576     38,555  

Funds from consolidated hotel operations applicable to common shares and Partnership units

27,297     28,636     35,588     36,902  
 
Income from unconsolidated joint venture investments 711 1,521 13,064 1,307
Income from remeasurement of investment in unconsolidated joint ventures - - (16,239 ) -

Depreciation and amortization of difference between purchase price and historical cost

(302 ) (91 ) (604 ) 29

Interest in depreciation and amortization of unconsolidated joint ventures

2,305     3,433     6,439     4,039  

Funds from unconsolidated joint venture operations applicable to common shares and Partnership units

2,714 4,863 2,660 5,375
               
Funds from Operations applicable to common shares and Partnership units 30,011 33,499 38,248 42,277
 
Non-cash extinguishment of issuance costs upon redemption of Series B Preferred Shares - 4,021 - 4,021
Non-cash share based compensation expense 2,527 1,873 3,956 4,279
Acquisition and terminated transaction costs 1,124 55 1,824 1,563

Tax expense related to gain from remeasurement of investment in unconsolidated joint venture

- - 1,853 -
Amortization of deferred financing costs 614 640 1,262 1,300
Interest in amortization of deferred financing costs of unconsolidated joint venture 368 239 735 239
Amortization of discounts and premiums (176 ) (388 ) (350 ) (775 )
Deferred financing costs and debt premium written off in debt extinguishment - 1,049 274 1,091
Straight-line amortization of ground lease expense 209   161     368   323  
 
Adjusted Funds from Operations $ 34,677   $ 41,149   $ 48,170   $ 54,318  
 

AFFO per Diluted Weighted Average Common Shares and Partnership Units Outstanding

$ 0.77   $ 0.89   $ 1.07   $ 1.17  
 
Diluted Weighted Average Common Shares and Partnership Units Outstanding 44,923,792 46,047,585 44,874,865 46,505,229
 

Adjusted EBITDA

Adjusted Earnings Before Interest, Taxes, and Depreciation and Amortization (EBITDA) is a non-GAAP financial measure within the meaning of the Securities and Exchange Commission rules. Our interpretation of Adjusted EBITDA is that EBITDA derived from our investment in unconsolidated joint ventures should be added back to net income (loss) as part of reconciling net income (loss) to Adjusted EBITDA. Our Adjusted EBITDA computation may not be comparable to EBITDA or Adjusted EBITDA reported by other companies that interpret the definition of EBITDA differently than we do. Management believes Adjusted EBITDA to be a meaningful measure of a REIT's performance because it is widely followed by industry analysts, lenders and investors and that it should be considered along with, but not as an alternative to, GAAP net income (loss) as a measure of the Company's operating performance.

       
HERSHA HOSPITALITY TRUST
Adjusted EBITDA
(in thousands)
Three Months Ended   Six Months Ended
June 30, 2017 June 30, 2016 June 30, 2017 June 30, 2016
 
Net income applicable to common shareholders $ 73,988 $ 102,190 $ 92,720 $ 90,869
Income allocated to noncontrolling interest 4,758 4,748 5,939 4,061
Income from unconsolidated joint ventures (711 ) (1,521 ) (13,064 ) (1,307 )
Gain on disposition of hotel properties (70,852 ) (95,276 ) (89,583 ) (95,276 )
Non-operating interest income (72 ) (78 ) (197 ) (124 )
Distributions to Preferred Shareholders 6,042 4,000 12,084 7,589
Interest expense 10,590 11,281 20,439 23,502
Extinguishment of issuance costs upon redemption of Series B Preferred Shares - 4,021 - 4,021
Income tax expense (benefit) 662 (3,070 ) 2,905 (3,070 )
Deferred financing costs and debt premium written off in debt extinguishment - 1,049 274 1,091
Depreciation and amortization 20,114 18,495 39,576 38,555
Acquisition and terminated transaction costs 1,124 55 1,824 1,563
Non-cash share based compensation expense 2,527 1,873 3,956 4,279
Straight-line amortization of ground lease expense   209     161     368     323  
 
Adjusted EBITDA from consolidated hotel operations   48,379     47,928     77,241     76,076  
 
Income from unconsolidated joint venture investments 711 1,521 13,064 1,307
Gain on remeasurement of investment in unconsolidated joint venture - - (16,239 ) -
Depreciation and amortization of difference between purchase price and historical cost (302 ) (91 ) (604 ) 29

Adjustment for interest in interest expense, depreciation and amortization of unconsolidated joint ventures

3,904     6,112     9,551     7,838  
 
Adjusted EBITDA from unconsolidated joint venture operations   4,313     7,542     5,772     9,174  
 
Adjusted EBITDA $ 52,692   $ 55,470   $ 83,013   $ 85,250  
 

Hotel EBITDA

Hotel EBITDA is a commonly used measure of performance in the hotel industry for a specific hotel or group of hotels. We believe Hotel EBITDA provides a more complete understanding of the operating results of the individual hotel or group of hotels. We calculate Hotel EBITDA by utilizing the total revenues generated from hotel operations less all operating expenses, property taxes, insurance and management fees, which calculation excludes Company expenses not specific to a hotel, such as corporate overhead. Because Hotel EBITDA is specific to individual hotels or groups of hotels and not to the Company as a whole, it is not directly comparable to any GAAP measure and should not be relied on as a measure of performance for our portfolio of hotels taken as a whole.



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