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

Royal Host Real Estate Investment Trust

March 11, 2009 02:47 ET

Royal Host REIT Announces Year End Results

CALGARY, ALBERTA--(Marketwire - March 11, 2009) - Royal Host Real Estate Investment Trust ("Royal Host" or the "Trust") (TSX:RYL.UN)(TSX:RYL.DB.A)(TSX:RYL.DB.B)(TSX:RYL.DB.C)(TSX:RYL.DB.D) today announced results for the year ended December 31, 2008.

Royal Host generated record net income of $20.4 million, or $0.90 per unit, in 2008, attributable to $101.9 million of gains realized on the sale of properties, offset by a $3.4 million decline in hospitality gross margin and the recognition of an $86.9 million unrealized loss on marketable securities.

"2008, in particular the latter half, was undeniably challenging for the Canadian hotel sector as a whole, and Royal Host was not immune," commented Brad Cann, Executive Vice President and Chief Financial Officer. "Our results were impacted by the decline in Occupancy and the associated decrease in hospitality gross margin. In retrospect, we are particularly pleased with the asset sales we completed in 2008, in light of the industry's recent performance. At the same time, we are obviously disappointed with the recent decline in the market value of the Trust's portfolio of marketable securities. We continue to be focused more than ever on preserving and growing our income and cash flows, and maintaining our balance sheet's liquidity," he added.

During the fourth quarter, Royal Host acquired an additional 3.7 million units of InnVest REIT, contributing to the recognition of the unrealized loss on marketable securities in the fourth quarter. As at December 31, 2008, Royal Host held 14.0% of the units of InnVest REIT and 19.7% of the units of Holloway Lodging REIT.

Royal Host continued to actively repurchase its trust units during the fourth quarter of 2008, bringing repurchases for the year to 7.2 million units, or approximately one-quarter of its float at the beginning of 2008. During 2008, Royal Host also retired $12.2 million of convertible debentures, recognizing $1.5 million of discounts/gains on repurchases. In addition to being immediately accretive, Management believes that repurchases of its securities at significant discounts to their underlying value are in the best interests of Unitholders. The Trust also continued to focus on the long-term value of its portfolio of hotel properties through reinvestment totaling $8.5 million during 2008.

During 2008, Royal Host declared $42.7 million of distributions to Unitholders, or $2.01 per trust unit, including a $28.0 million special distribution in December 2008. The Trust declared a further $0.10 per unit special distribution in February 2009.

The following table highlights the Trust's financial results for the year ended December 31, 2008.



($000's, except as otherwise noted) 2008 2007 Change (%)
----------------------------------------------------------------------------
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Hospitality Revenue (Continuing Operations) 104,597 108,333 (3.4)
Hospitality Expenses 78,006 78,362 (0.5)
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Hospitality Gross Margin 26,591 29,971 (11.3)
Hospitality Gross Margin % 25.4% 27.7%
Investment Income (Loss) (76,828) 6,355
Royal Private Residence Club (135) -
Other Expenses (31,743) (35,546)
-------------------
Income (Loss) from Continuing Operations (82,115) 780
Income from Discontinued Operations 102,492 13,596 653.8
-------------------
Net Income 20,377 14,376 41.7
Other Comprehensive Income (Loss) 2,210 (2,210)
-------------------
Comprehensive Income 22,587 12,166 85.7
-------------------
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Basic Per Unit Net Earnings (Loss)($)
From Continuing Operations (3.61) 0.03
From Discontinued Operations 4.51 0.52
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0.90 0.55 63.6
-------------------
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Distributable Income 16,789 21,042 (20.2)
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Distributions Declared on Trust Units
Monthly 14,667 17,414 (15.8)
Special(1) 28,000 -
-------------------
Total 42,667 17,414 145.0
-------------------
-------------------
Basic Per Unit Distributable Income ($) 0.74 0.81 (8.6)
-------------------
-------------------
Per Unit Distributions Declared ($)
Monthly 0.66 0.66 -
Special(1) 1.35 -
-------------------
Total 2.01 0.66 204.5
-------------------
-------------------

(1) Excluding the additional $2.1 million special distribution ($0.10 per
trust unit) declared in February 2009, payable to Unitholders of record
on December 29, 2008.


Management of Royal Host will host an investor conference call on Wednesday, March 11, 2009 at 11:00 a.m. Eastern Time. The call may be accessed by dialing 1-416-640-3404 or 1-866-322-1159 and providing confirmation code 4076880. A recording of this call will be available shortly after the call until March 18, 2009. To access this recording please dial 1-647-436-0148 or 1-888-203-1112 and provide the playback password 4076880. Alternatively, a recording of the audio webcast will also be available on the Trust's website after March 13, 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.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 financial statements for the year ended December 31, 2008 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.

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