Supertel Hospitality is a self-administered real estate
investment trust that specializes in the ownership of select-service hotels.
The company currently owns 49 hotels in 19 states that are operated by various
third-party management companies – including Hilton Hotels and Resorts® (HLT),
Choice Hotels® (CHH) and Wyndham® Hotels (WYN) – through franchise agreements.
In recent months, Supertel has initiated a new investment
strategy involving upper midscale and upscale hotels in order to maximize
shareholder returns in the future. In the first quarter of 2015, the company
announced the sale of four hotels around the country for a cumulative sum of
$7.5 million. In the second quarter, the company sold three additional
properties for $9.3 million, and seven other hotels were also listed for sale
as of March 31, 2015. With this influx of capital, Supertel has taken steps
toward improving its balance sheet by repaying underlying loans. Following
associated debt repayments, these sales are expected to generate approximately
$14.5 million in net proceeds, which should enable the company to more
effectively adhere to its updated investment strategy.
“The company is actively seeking acquisitions as we expand
the efforts to recycle capital into newer hotels with higher margins in sectors
and markets with characteristics having the potential to create higher
shareholder value,” Bill Blackham, chief executive officer of Supertel, stated
in a news release. “As this effort is underway, the underlying hotel portfolio
appears to be on track to deliver an increased contribution and that should
help to accelerate growing the company during this time of transition.”
Despite its transitional efforts, Supertel has realized
noteworthy financial growth from its portfolio of properties in recent months.
The company’s first quarter revenue from continuing operations was $12.3
million, which was a 9.3 percent year-over-year increase. Likewise, Supertel’s
revenue per available room (RevPAR) improved by 9.9 percent to $35.19 for the period,
outperforming the growth of the national hotel industry by nearly two percent.
As the global economy continues to recover moving forward,
the hotel industry is expected to experience strong growth. According to a
report by Statista, revenue generated by the global hotel industry is expected
to climb to $550 billion in 2016, representing a 20 percent improvement over
the results of 2011. For Supertel, this industry growth should provide a strong
platform to post improved financial results. For prospective investors, the
company’s recent efforts to increase shareholder value could foreshadow an
opportunity to realize strong returns in the years to come.
For more information, visit www.supertelinc.com
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MissionIR is committed to connecting the investment community with companies that have great potential and a strong dedication to building shareholder value. We know our reputation is based on the integrity of our clients and go to great lengths to ensure the companies represented adhere to sound business practices.
Sign up for “The Mission Report” at www.MissionIR.com
Please see disclaimer on the MissionIR website http://www.missionir.com/disclaimer.html
