Royal Host Real Estate Investment Trust
TSX : RYL.UN
TSX : RYL.DB.B
TSX : RYL.DB.C
TSX : RYL.DB.D

Royal Host Real Estate Investment Trust

August 11, 2009 09:42 ET

Royal Host REIT Announces Second Quarter Results and Amends Monthly Per Unit Distribution to Unitholders to $0.025

CALGARY, ALBERTA--(Marketwire - Aug. 11, 2009) - Royal Host Real Estate Investment Trust (TSX:RYL.UN) (TSX:RYL.DB.B) (TSX:RYL.DB.C) (TSX:RYL.DB.D) ("Royal Host" or the "Trust") today announced results for the three and six months ended June 30, 2009.

Hospitality revenue for the second quarter declined 13%, compared to 2008, to $24.0 million, primarily as a result of lower occupancy; hospitality gross margin declined 30% to $5.8 million. Investment income increased 35% to $3.0 million. The Trust generated income from continuing operations of $1.1 million (2008 - $2.9 million), or $0.06 (2008 - $0.14) per unit, and Distributable Income for the second quarter of 2009 declined to $2.6 million (2008 - $7.7 million) or $0.13 (2008 - $0.36) per unit.

"The continued contraction in business and leisure travel due to the current recession has resulted in lower demand. The resulting decline in occupancy, combined with a growing frequency in rate discounting, has produced a challenging operating climate," commented Brad Cann, Executive Vice President and Chief Financial Officer of Royal Host. "Amid these challenges, Royal Host has maintained a disciplined approach to balancing occupancy and rate while remaining competitive, and we continue to operate our hotels as efficiently as possible, having advanced cost savings initiatives and reduced unnecessary costs wherever possible. Our results, nevertheless, reflect the strong headwinds hoteliers face during this cyclical downturn", he added.



Three months Six months
ended June 30 ended June 30
----------------------------------------------------------------------------
Change Change
2009 2008 (%) 2009 2008 (%)
----------------------------------------------------------------------------
RevPAR $ 55.69 $ 62.27 (10.6%) $ 52.44 $ 58.25 (10.0%)
Occupancy 55.9% 62.8% (11.1%) 52.4% 59.4% (11.8%)
ADR $ 99.70 $ 99.11 0.6% $ 100.05 $ 98.04 2.0%


To date in 2009, Royal Host declared monthly distributions of $0.055 per unit, representing $3.2 million in monthly distributions during the second quarter of 2009. Today, Royal Host declared a monthly distribution of $0.025 per unit, payable on September 18, 2009, to Unitholders of record on August 31, 2009. After careful consideration of the Canadian lodging industry outlook and its impact on near term cash flows from the Trust's hospitality and investment portfolios, the Board of Trustees determined that it was in Royal Host's best interests to reduce distributions at this time and continue its periodic review.

The following table highlights the Trust's financial results for the three and six months ended June 30, 2009.

SELECTED FINANCIAL INFORMATION



Three months ended Six months ended
June 30 June 30
----------------------------------------------------------------------------
($000's, except as otherwise Change Change
noted) 2009 2008 (%) 2009 2008 (%)
----------------------------------------------------------------------------
Hospitality Revenue
(Continuing Operations) 23,971 27,638 (13.3) 45,655 51,789 (11.8)
Hospitality Expenses 18,126 19,250 (5.8) 36,748 38,531 (4.6)
---------------- ----------------
Hospitality Gross Margin 5,845 8,388 (30.3) 8,907 13,258 (32.8)
---------------- ----------------
Hospitality Gross Margin % 24.4% 30.4% 19.5% 25.6%
---------------- ----------------
Investment Income 3,031 2,249 34.8 6,219 4,317 44.1
---------------- ----------------
Other Expenses 7,748 7,697 0.7 15,480 14,665 5.6
---------------- ----------------
Income (Loss) From
Continuing Operations 1,128 2,940 (61.6) (354) 2,910
Income (Loss) From
Discontinued Operations (92) 15,087 (161) 27,175
---------------- ----------------
Net Income (Loss) 1,036 18,027 (94.3) (515) 30,085
---------------- ----------------
---------------- ----------------

Basic Per Unit Net Earnings($)
From Continuing Operations 0.06 0.14 (57.1) (0.02) 0.12
From Discontinued Operations - 0.70 (100.0) (0.01) 1.12
---------------- ----------------
0.06 0.84 (92.9) (0.03) 1.24
---------------- ----------------
---------------- ----------------

Distributable Income 2,611 7,664 (65.9) 2,519 9,039 (72.1)
---------------- ----------------
---------------- ----------------
Distributions Declared on
Trust Units 3,245 3,533 (8.2) 8,615 7,686 12.1
---------------- ----------------
---------------- ----------------
Basic Per Unit Distributable
Income ($) 0.13 0.36 (63.9) 0.13 0.37 (64.9)
---------------- ----------------
---------------- ----------------
Per Unit Distributions
Declared ($) 0.165 0.165 - 0.33 0.33 -
---------------- ----------------
---------------- ----------------


Management of Royal Host will host an investor conference call on Wednesday, August 12, 2009 at 11:00 a.m. Eastern Time. The call may be accessed by dialing 1-416-642-5213 or 1-866-321-8231 and providing confirmation code 7904417. A recording of this call will be available shortly after the call until August 20, 2009. To access this recording please dial 1-647-436-0148 or 1-888-203-1112 and provide the playback passcode 7904417. Alternatively, a recording of the audio webcast will also be available on the Trust's website after August 15, 2009.

Royal Host is a uniquely diversified hospitality trust that delivers Unitholder value through hotel ownership, investment, management and franchising. Royal Host's portfolio of Canadian hotels operates under a variety of recognizable brands as well as a number of unbranded properties. The Trust's hotel portfolio is further enhanced by a stable franchising business, a successful hotel management operation, and a sizable portfolio of publicly-traded securities from within the hospitality and service sectors.

Royal Host trust units and convertible debentures are traded on the Toronto Stock Exchange under the trading symbols "RYL.UN", "RYL.DB.B", "RYL.DB.C" and "RYL.DB.D", respectively.

The above statements in regard to the financial results should be read in conjunction with Royal Host's unaudited consolidated financial statements for the three and six months ended June 30, 2009 and its management's discussion and analysis, which are available on Royal Host's website at www.royalhost.com as well as the SEDAR website at www.sedar.com.

This press release contains certain forward-looking statements relating, but not limited to, Royal Host's operations, anticipated financial performance, business prospects, and strategies. Forward-looking information typically contains statements with words such as "anticipate", "believe", "expect", "plan", or similar words suggesting future outcomes. Such forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected, or implied by such forward-looking statements. Such factors include, but are not limited to economic, competitive, and lodging industry conditions. Royal Host disclaims any responsibility to update any such forward-looking statements except as required by law.

Contact Information