The second quarter of 2011 showcased how the worldwide economic recovery has boosted the revenue of hospitality heavyweights MGM and IHG, while REITs’ results were a mixed bag.
Of results released on Monday and Tuesday, MGM Resorts International, Paradise, Nevada, had the most dramatic turnaround in performance with US$3.4 billion in net income in the second quarter 2011 after posting a US$883 million loss in 2010.
The improvement was fueled by the company’s successful operations in China and a recovery in Las Vegas despite the sputtering U.S. economy
“We have shown growth in year over year cash flows throughout the first half and expect those trends will continue. We believe the foundation of the Las Vegas recovery is solid and our business is building,” said Jim Murren, MGM Resorts international chairman and CEO.
A full report can be read here.
IHG, Denham, U.K., reported that net profits for the first six months of 2011 were climbed up 11% to US$156 million. The results were boosted by demand from emerging markets.
“Whilst we continue to monitor the uncertain economic outlook, we look forward with confidence in the currently favorable hotel trading environment of record demand and low supply growth in many markets,” said Richard Solomons, IHG CEO. “In the first half we delivered a strong performance across each of our regions, driven both by increased occupancy from business and leisure travellers as well as progressive rate improvement. Global RevPAR grew 6.7% with China up 12.7% and the U.S. up 8.2%, where the Holiday Inn relaunch is delivering sustained outperformance.”
A full report can be read here.
The REIT Hospitality Properties Trust second-quarter earnings more than doubled from US$15.7 million in 2010 to US$44.2 million in 2011 due to increased business travel demand and an 8.2% yearly increase in RevPAR.
A full report can be read here.
The news was different for the REIT Chatham Lodging Trust, Palm Beach, Florida, where despite a year-on-year boost in RevPAR on their properties the company’s US$0.6 loss in the second quarter of 2010 deepened to US$1.9 million during the same period in 2012.
A full report can be read here.
Likewise the REIT Holloway Lodging, Halifax, Canada, sank deeper into the red with from US$2.5 million in 2Q 2010 to US$2.9 million in 2011 even though hotel revenue increased year-on-year.
A full report can be read here.
MHI Hospitality, Williamsburg, Virginia, also reported second quarter results that went from a slim US$256,000 profit in 2Q 2010 to a US$183,000 loss during the same period this year.
A full report can be read here.