CHARLOTTE, NC—Extended Stay America Inc. and ESH Hospitality Inc. have consolidated results for the three and 12 months ended Dec. 31, 2018.
Extended Stay America’s President/CEO Jonathan Halkyard said, “We are pleased with the strong progress we made in 2018, including achieving solid financial results, growing our pipeline to nearly 60 hotels, growing RevPAR primarily from our core extended-stay guest, refranchising more than 70 hotels and further de-levering the balance sheet.”
The company completed the sale of one portfolio totaling 14 hotels during the fourth quarter for gross proceeds of $37.7 million, including prepaid franchise application and development fees. The portfolio sale comes with franchise agreements on all of the hotels sold and with agreements to develop or convert an additional seven Extended Stay America hotels.
For the full year 2018, the company completed the sale of 72 hotels for gross proceeds of approximately $322.0 million, of which 71 are expected to remain in the system under long-term franchise or management agreements. As of Dec. 31, 2018, the company had a pipeline of 57 hotels representing approximately 7,000 rooms.
“Looking to 2019, on the backdrop of an expected stable macro environment, we plan to make significant progress on our growth strategy while evaluating options to enhance shareholder value,” Halkyard said.
Fourth quarter 2018 highlights:
- Net Income of $39.4 million, compared to prior year period $40.2 million
- Total revenues of $289.7 million, a decrease of 4.2% over the same prior year period due to asset dispositions
- Comparable system-wide RevPAR grew 0.9% to $47.38
- Adjusted EBITDA of $126.6 million
- Adjusted Funds From Operations of $0.41 per diluted Paired Share, an increase of 3.0%
- Adjusted Paired Share Income of $0.21 per diluted Paired Share, an increase of 9.2%
Full year 2018 highlights:
- Net Income of $211.8 million, compared to $172.2 million in 2017, an increase of 23.0%
- Total revenues of $1,275.1 million, a decrease of 0.6% compared to 2017 due to asset dispositions
- Comparable system-wide RevPAR grew 2.0% to $51.09
- Adjusted EBITDA of $599.7 million
- Adjusted FFO of $2.02 per diluted Paired Share, an increase of 9.4%
- Adjusted Paired Share Income of $1.14 per diluted Paired Share, an increase of 14.4%