US: Extended Stay America has released its full year results for 2019.
During he year it recorded net income of $23.8 million on turnover of $535 million, and returned more than $300 million to paired shareholders.
President and CEO Bruce Haase said: “We were pleased to finish the year on a strong December performance, where we gained more than 400 basis points of RevPAR index on our competitive set and 210 basis points for the full fourth quarter of 2019.”
“In 2020, we will focus on a return to the basics and fully exploiting the value inherent in our high margin extended stay business model. We believe there is opportunity to improve the guest experience and property performance, more aggressively curate our asset portfolio, and grow the Extended Stay America brand through an asset-light franchising strategy. We will also continue to focus on returning significant capital to our shareholders while maintaining strong financial discipline,” he added.
Total revenues for the three months ended December 31, 2019 were $284.2 million, a decrease of 1.9% over the same period in the prior year due to asset dispositions in 2018 and a decline in Comparable Company-owned RevPAR. Adjusting for asset dispositions in 2018, total revenues declined 1.1% during the fourth quarter. For the full year 2019, total revenues declined 4.5% to $1,218.2 million, driven by asset dispositions and a decrease in Comparable system-wide RevPAR. Adjusting for asset dispositions in 2018, total revenues decreased 0.3%.
Comparable system-wide RevPAR for the full year 2019 declined 0.9 per cent over 2018 driven by a 2.9 per cent decline in ADR, partially offset by a 150 basis point increase in occupancy. Excluding renovation disruption and cycling hurricane market benefits in 2018, Comparable system-wide RevPAR for the full year 2019 would have increased one per cent. The Company’s RevPAR outperformed its competitive set by 0.6 per cent during the full year on a comparable system-wide basis.
Operating Margin for the full year 2019 was 51.8 per cent compared to 54 per cent in 2018. The company invested $261.3 million in capital expenditures for the full year 2019. As of December 31, 2019, the company had a pipeline of 75 hotels representing approximately 9,100 rooms after opening four hotels in 2019.</p
