REVPAR dip for ESA

George Sell George Sell Uploaded 07 November 2019

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US: Extended Stay America has announced its results for the three and nine months to September 30 2019.

Q3 2019 highlights include:
• Net income of $53.2 million
• Total revenues of $332.7 million
• Comparable system-wide RevPAR declined 1.3 per cent
• Adjusted EBITDA of $156.3 million
• $186 million in capital returns to shareholders for the first nine months of 2019

Extended Stay America president and CEO Jonathan Halkyard, said: “Our focus on core extended stay guests enabled us to outperform our competitive set yet again this quarter, a quarter which was characterised by slowing growth in the economy and mid-priced chain scales. We have increased the pace of capital returns to shareholders in recent months and are on track to return more than 10 per cent of our recent market capitalisation to shareholders in 2019 through dividends and Paired Share repurchases. Capital returns remain a top priority for the Company with a strong balance sheet, a dividend yield in excess of six per cent and more than $200 million remaining in repurchase authorisation at the end of the third quarter.”

Total revenues for the three months ended September 30, 2019 were $332.7 million, a decrease of 5.2 per cent 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 0.6 per cent during the third quarter. For the nine months ended September 30, 2019, total revenues declined 5.2 per cent to $934.0 million, driven by asset dispositions. Adjusting for asset dispositions in 2018, total revenues were approximately flat for the nine months ended September 30, 2019.

Operating margin for the three months ended September 30, 2019 was 53.8 per cent compared to 55.5 per cent in the same period in 2018. The company invested $65.1 million in capital expenditures during the third quarter of 2019. This includes $10.2 million in renovation capital, $10.9 million in IT capital and $20.2 million in capital for ESA 2.0 hotel development and land acquisitions. The company invested $178.0 million in capital expenditures during the first nine months of 2019.

As of September 30, 2019, the company had a pipeline of 77 hotels representing approximately 9,400 rooms.

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