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

Royal Host Real Estate Investment Trust

November 07, 2007 02:50 ET

Royal Host REIT Continues to Deliver Strong Results

CALGARY, ALBERTA--(Marketwire - Nov. 7, 2007) - Royal Host Real Estate Investment Trust (TSX:RYL.UN)(TSX:RYL.DB.A)(TSX:RYL.DB.B)(TSX:RYL.DB.C)(TSX:RYL.DB.D) ("Royal Host" or the "Trust") today announced strong financial results for the three and nine months ended September 30, 2007.

Revenue Per Available Room ("RevPAR") from continuing operations increased by 2.9% to $78.91 during the quarter, reflecting effective yield strategies and the strength of the Trust's uniquely diversified portfolio. During the nine months, RevPAR from continuing operations grew by 2.0% to $67.83.

The following table summarizes room statistics for the Trust's portfolio.


Three months ended Nine months ended
36 hotels / September 30 September 30
4,423 rooms 2007 2006 Change (%) 2007 2006 Change (%)
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RevPAR $ 78.91 $ 76.69 2.9 $ 67.83 $ 66.53 2.0
Occupancy 72.8% 73.5% (1.0) 66.0% 67.5% (2.2)
ADR $ 108.39 $ 104.27 4.0 $ 102.54 $ 98.52 4.1


Revenue growth and a reduction in hospitality expenses produced a 6.6% increase in gross margin from hospitality operations to $16.0 million for the third quarter. For the nine months then ended, gross margin from hospitality operations increased 6.0% to $35.9 million.

The following table highlights the Trust's financial results for the three and nine months ended September 30, 2007.



($000's, except as otherwise noted)

---------------------------------------------------------------------------
Three months ended Nine months ended
September 30 September 30
2007 2006 Change (%) 2007 2006 Change (%)
---------------------------------------------------------------------------
Hospitality
Revenue 42,223 41,408 2.0 112,188 110,235 1.8
Hospitality
Expenses 26,178 26,360 (0.7) 76,284 76,366 (0.1)
-------------- ---------------
Hospitality
Gross Margin 16,045 15,048 6.6 35,904 33,869 6.0
-------------- ---------------
Hospitality
Gross Margin % 38.0% 36.3% 32.0% 30.7%
-------------- ---------------
Royal Private
Residence Club - 8,727 (100.0) - 8,727 (100.0)
-------------- ---------------
Other Expenses 9,511 10,479 (9.2) 24,865 29,346 (15.3)
-------------- ---------------
Income From
Continuing
Operations 6,534 13,296 (50.9) 11,039 13,250 (16.7)
Income From
Discontinued
Operations(i) 30 643 (95.3) 4,191 1,252 (234.7)
-------------- ---------------
Net Income 6,564 13,939 (52.9) 15,230 14,502 5.0
-------------- ---------------
-------------- ---------------

Basic Per Unit
Net Earnings ($)
From Continuing
Operations 0.25 0.52 (51.9) 0.43 0.51 (15.7)
From
Discontinued
Operations 0.00 0.02 (100.0) 0.16 0.04 300.00
-------------- ---------------
0.25 0.54 (53.7) 0.59 0.55 7.3
-------------- ---------------
-------------- ---------------
Cash Available
For Distribution 10,073 17,417 (42.2) 17,585 23,186 (24.2)
-------------- ---------------
-------------- ---------------
Distributions
Declared on
Trust Units 4,378 3,083 42.0 12,880 9,004 43.0
-------------- ---------------
-------------- ---------------
Basic Per Unit
Cash Available
For
Distribution ($) 0.39 0.68 (42.6) 0.69 0.89 (22.5)
-------------- ---------------
-------------- ---------------
Per Unit
Distributions
Declared ($) 0.17 0.12 37.5 0.49 0.35 40.0
-------------- ---------------
-------------- ---------------

(i)Discontinued operations are comprised of the Trust's former timeshare
and US hotel management businesses and the Sundial Inn.


During the quarter, the Trust took advantage of market conditions and repurchased 1.0 million of its trust units with an aggregate cost of $7.2 million and $1.9 million of its convertible debentures, further maximizing the growth in Unitholder value.

"Our management team is very proud of the achievements for the quarter. We look forward to continued opportunities to improve upon and deliver value to our Unitholders," stated Mr. Brad Cann, Chief Financial Officer of Royal Host.

A conference call will be held on Thursday, November 8, 2007 at 11:00 a.m. Eastern Time. Investors and analysts are invited to access the call by dialing 1-800-952-4972 or 1-416-695-5259. You will be required to identify yourself and indicate if you represent an organization or you are a private investor. A recording of this call will be made available beginning November 8 through November 16, 2007. To access this recording please dial 1-800-408-3053 or 1-416-695-5800 and provide the playback password 3236771. Alternatively, a copy of the audio webcast will also be made available on our website after November 16, 2007.

Royal Host is a fully-integrated hotelier focused on hotel ownership, management and franchising and is Canada's second-largest hotel Real Estate Investment Trust.

Royal Host owns a diversified portfolio of 37 properties, comprising 4,500 guest rooms. The portfolio includes limited, focused and full-service hotels in the mid-market to upscale hospitality segments, and is well represented throughout Canada operating under such recognizable brands as Best Western®, Country Inns & Suites®, Hilton®, Holiday Inn®, Ramada®, Super 8®, Thriftlodge® and Travelodge®, as well as a number of unbranded properties such as the Chimo Hotel in Ottawa and the Grand Okanagan Resort and Conference Centre in Kelowna.

In addition to providing management services to its own portfolio, Royal Host's team manages a number of properties on behalf of third parties using its proven training programs, operating procedures, revenue and yield management systems and sales programs.

Royal Host also owns the master franchise rights for Travelodge® and Thriftlodge® in Canada. Through its subsidiary, Travelodge Canada, Royal Host currently franchises over 100 locations, 15 of which are owned by the Trust, and receives a stable stream of revenue through monthly royalty fees paid by licensed hotel owners and by selling franchise licenses, which enhances the overall diversity of Royal Host's portfolio.

Royal Host trust units and convertible debentures are traded on the Toronto Stock Exchange under the trading symbols "RYL.UN", "RYL.DB.A", "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 interim financial statements for the three and nine months ended September 30, 2007 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

  • Royal Host Real Estate Investment Trust
    A. Brad Cann, CA
    Vice President and Chief Financial Officer
    (403) 259-9800
    (403) 259-8580 (FAX)
    Website: www.royalhost.com