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RevPAR for Fairmont Owned Hotels Down 17.0% 
In Fourth Quarter, Occupancy Down 7.9 points
From Same Quarter Last Year
Hotel Operating Statistics

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TORONTO, Jan. 23, 2002 - Fairmont Hotels & Resorts Inc. (TSE and NYSE: FHR) today announced its unaudited financial results for the three months and the year ended December 31, 2001. FHR expects to release its 2001 annual report in early March. All amounts are expressed in U.S.  dollars.
    
FHR's financial results for the year contain substantial non-recurring items related to the reorganization of Canadian Pacific Limited ("CPL"), including the operating results of CPL's four discontinued businesses, reorganization expenses and CPL corporate expenses. The accompanying financial statements reflect CPL's reorganization effective September 30, 2001. Given the inclusion of these non-recurring charges, net income and earnings per share are not considered reflective of FHR's continuing operations for the periods presented.
    
"We are pleased to report EBITDA of $165.2 million in 2001 which is at the high end of the range of previous guidance," said William R. Fatt, Chief Executive Officer of FHR. "2001 was a very significant and challenging year for FHR. In our early days as an independent public hotel company, FHR was tested by the profound impact of the events of September 11th in an already difficult economic environment. We are encouraged that FHR's business has held up remarkably well due to our geographically balanced portfolio of world-class properties and excellent operating management. In particular, our ability to maintain year-over-year average daily rates for the Fairmont brand and reduce property level operating expenses throughout this challenging period will facilitate near-term earnings improvement."
    
Fourth Quarter Consolidated Results

Typically, the fourth quarter is FHR's weakest quarter. Revenues of $100.8 million in the fourth quarter of 2001 were down 12.7% from $115.4 million in the same quarter of 2000. EBITDA(1) of $14.6 million decreased 54.1% from $31.8 million in the fourth quarter of 2000. Declines were experienced in both FHR's hotel ownership and hotel management operations resulting from lower occupancies and the difficulty of managed operations in meeting incentive fee targets due to the extraordinary events in late 2001.  Additions to the portfolio included The Fairmont Kea Lani Maui and the remaining 51% interests in The Fairmont Glitter Bay and The Fairmont Royal Pavilion in Barbados in early 2001, and the remaining 80% interest in The Fairmont Chateau Whistler late in 2000. In February 2001, FHR sold The Fairmont Empress in Victoria and Fairmont Le Chateau Frontenac in Quebec City to Legacy Hotels Real Estate Investment Trust ("Legacy"). These changes to FHR's owned portfolio mix make quarterly and yearly comparisons difficult.

Income from continuing operations was $49.6 million compared to a loss from continuing operations of $12.1 million in the same quarter of 2000.  Included in income from continuing operations for the current quarter is an income tax recovery of $51.4 million that relates primarily to various favorable tax reassessments. The loss in the prior year's quarter is largely due to the inclusion of CPL corporate expenses as well as interest expense incurred on CPL debt, which was considerably higher than FHR's current level of debt.
    
Fourth Quarter Hotel Ownership Operations

Revenue per available room ("RevPAR") for owned comparable hotels was $78.75, down 17.0% from $94.92 in the same quarter of 2000. The decline resulted from a combination of a 7.9 point decrease in occupancy and a 3.5% decrease in average daily rates ("ADR"). This ADR decline relates primarily to currency fluctuations between the U.S. and Canadian dollars. In the absence of these fluctuations, ADR would have remained flat compared to the prior quarter. FHR's non-Canadian properties were most significantly impacted by the events of September 11th.

Fourth Quarter Hotel Management Operations
    
Fairmont
    
Fairmont's RevPAR was $86.08 in the fourth quarter of 2001, down 18.1% from the same quarter in 2000. The decline resulted from a combination of a 5.2 point decrease in occupancy and a 10.5% decrease in ADR. Of the 10.5% decline in ADR, approximately 4.1% was caused by currency fluctuations.
    
Delta
    
Comparable hotels' RevPAR of $44.31 was down 12.1% from the same quarter in 2000 resulting from a 5.2 point decrease in occupancy and a 4.4% decrease in ADR. This ADR decline relates almost exclusively to currency fluctuations.
    
Year-End 2001 Consolidated Results

Revenues increased 2.2% to $542.6 million in 2001 from $530.8 million in 2000. EBITDA of $165.2 million was down 15.5% from $195.4 million in 2000. The impact of September 11th and the general economic downturn were the primary factors for the annual decrease in EBITDA. Due to the changes in the portfolio mix in late 2000 and throughout 2001, yearly comparisons are difficult.

FHR incurred a loss from continuing operations of $28.2 million compared to income from continuing operations of $52.4 million in 2000. The loss in 2001 is primarily attributable to non-recurring items related to the CPL reorganization. FHR's financial results for the years presented also include substantial non-recurring expenses relating to CPL.

Year-End 2001 Hotel Ownership Operations

RevPAR for owned comparable hotels was $114.14 in 2001, down 3.2% from $117.91 in 2000. The decline resulted from a combination of a 3.0 point decrease in occupancy and a 1.6% increase in ADR. The decrease in annual occupancy relates almost exclusively to the period following the terrorist attacks.

Year-End 2001 Hotel Management Operations
    
Fairmont
    
RevPAR for the year was $107.48 in 2001, down 6.8% from 2000. The decline resulted from a combination of a 4.5 point decrease in occupancy and stable ADR. In the absence of currency fluctuations, ADR would have increased approximately 1.3% compared to the prior year. The events of September 11th most significantly impacted our non-Canadian properties.
    
Delta
    
Comparable hotels' RevPAR of $55.88 was down 3.3% from 2000 resulting from a 1.5 point decrease in occupancy and a 1.1% decrease in ADR. This ADR decline relates exclusively to currency fluctuations.
    
Outlook

"The reorganization of CPL in October resulted in a unique opportunity for long-term growth and value creation for FHR shareholders. As CPL's surviving entity, we benefited by inheriting a low level of debt and significant tax losses. FHR's balance sheet will allow us to manage through current market conditions and expand our luxury brand in key U.S. markets by capitalizing on potential acquisition opportunities. Depending on the opportunities that arise, FHR could also use its available capital to repurchase up to 10% of its common shares for which we received regulatory approval in October 2001," said Fatt. "With our significant financial flexibility and unique affiliation with Legacy, FHR is well positioned to take advantage of growth opportunities in 2002 and beyond."

Assuming a gradual improvement in the economy and a return to more normal travel patterns over the course of the year, FHR estimates that EBITDA in 2002 will be in the range of $180 to $190 million, net income to be between $62 and $68 million and EPS to be in the range of $0.79 to $0.87. For the first quarter of 2002, FHR anticipates EBITDA of approximately $25 million, or EPS of about $0.03, however quarterly earnings are difficult to estimate in the current environment. 
 

Three months    Three months      Year            Year
                         ended  Dec.   ended Dec.    ended Dec.    ended Dec.
                          31, 2001         31, 2000         31, 2001       31, 2000
                        ------------               ------------            ----------       ----------
 FAIRMONT MANAGED COMPARABLE HOTELS AND RESORTS

    Worldwide
      RevPAR             $   86.08     $  105.05     $  107.48     $  115.29
      ADR                   153.58        171.61        167.55        168.02
      Occupancy               56.0%         61.2%         64.1%         68.6%

    Canada
      RevPAR             $   59.33     $   65.81     $   84.15     $   86.75
      ADR                   106.02        110.94        128.43        126.57
      Occupancy               56.0%         59.3%         65.5%         68.5%

    United States and
     Other
      RevPAR             $  122.97     $  159.27     $  139.78     $  154.81
      ADR                   218.92        249.55        224.57        225.26
      Occupancy               56.2%         63.8%         62.2%         68.7%
 

 DELTA MANAGED COMPARABLE HOTELS AND RESORTS

    Canada
      RevPAR             $   44.31     $   50.43     $   55.88     $   57.77
      ADR                    75.60         79.10         83.40         84.33
      Occupancy               58.6%         63.8%         67.0%         68.5%
 

 OWNED COMPARABLE HOTELS AND RESORTS
    Worldwide
      RevPAR             $   78.75     $   94.92     $  114.14     $  117.91
      ADR                   161.70        167.63        185.11        182.25
      Occupancy               48.7%         56.6%         61.7%         64.7%

    Canada
      RevPAR             $   52.66     $   60.98     $   94.15     $   97.32
      ADR                   107.72        111.32        145.77        144.15
      Occupancy               48.9%         54.8%         64.6%         67.5%

    United States and
     Other
      RevPAR             $  116.54     $  144.13     $  143.07     $  147.74
      ADR                   240.57        243.03        249.17        243.77
      Occupancy               48.4%         59.3%         57.4%         60.6%

                        
Comparable hotels and resorts are considered to be properties that were fully open under FHR management for at least the entire current and prior period. Given the strategic importance of the acquisition of The Fairmont Kea Lani Maui, it has been included in FHR's operating statistics in the preceding chart on a pro forma basis as if owned since the beginning of the prior period. Comparable hotels and resorts statistics exclude properties under significant renovation that would have a significant adverse effect on the properties' primary operations. For both the three-month periods and years ending December 31, 2001 and December 31, 2000, The Fairmont Southampton Princess, The Fairmont Hamilton Princess and The Fairmont Pierre Marques have been excluded from the comparable data.

FHR is one of North America's leading owner/operators of luxury hotels
and resorts. FHR's portfolio consists of 77 luxury and first class properties with more than 30,000 guestrooms in Canada, the United States, Mexico, Bermuda and Barbados. It holds a 67 percent controlling interest in Fairmont, North America's largest luxury hotel management company. Fairmont manages 37 distinctive city center and resort hotels such as The Fairmont San Francisco, The Fairmont Banff Springs, Fairmont Le Chateau Frontenac, The Fairmont Scottsdale Princess and The Plaza in New York City. FHR also holds a 100 percent interest in Delta, Canada's largest first class hotel management company, which manages and franchises a portfolio of 40 city center and resort properties in Canada. In addition to hotel management, FHR holds real estate interests in 20 hotel properties and a 34 percent investment interest in Legacy, which owns 21 properties.
    
This press release contains certain forward-looking statements relating, but not limited to, FHR'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.  FHR disclaims any responsibility to update any such forward-looking statements.

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Contact
Fairmont Hotels & Resorts
http://www.fairmonthotels.com

Also See Fairmont Hotels & Resorts Inc. Reports Market Weakness Evident In the 2nd Qtr, Negatively Impacting Revenues and EBITDA; Operating Statistics for Fairmont and Delta Hotels / July 2001 


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