Parsippany, N.J., May 6, 1998 – Super 8 Motels, Inc. reported a strong first quarter and predicts a healthy year for franchisees. North America’s fastest growing economy lodging chain opened 37 new motels in the first quarter of 1998 in the U.S. and Canada. Demand for economy motels in Canada has been particularly strong with four new motels, bringing the total to 54 properties. Royop Properties Corporation (TSE:RYP), which signed the first Super 8 Canadian master franchise license in 1992, also announced plans to build 23 motels over the next 18 months.
Super 8 also reported a "RevPAR" increase of 4.1 percent over first quarter 1997. RevPAR, or revenue per available room, is a common indicator of return on investment in the lodging industry.
"Super 8 franchises are doing well because customers are enjoying their stays at Super 8 motels and returning and referring their friends. That drives the development for more franchises," said Robert N. Weller, president and ceo of Super 8 Motels, Inc.
"Our growth is particularly strong in the Southeast and we are certainly seeing more demand in Canada," said Weller. Continuing with this growth, Super 8 should reach 1,800 motels by 1999.
Super 8 Motels, Inc., a subsidiary of Cendant
Corporation (NYSE: CD), was founded in America's heartland in 1974
and has more than 1,600 motels and 100,000 rooms throughout the United
States and Canada. It is the fastest-growing economy lodging chain in North
America. Motel locations and on-line reservations are available on the
Super 8 Internet home page at http://www.Super8.com.
Super 8's toll-free reservations number in North America is 1-800-800-8000.
The new motels, which were opened in March and April,
are located in Drayton Valley, Alberta, Sicamous, British Columbia, and
Kenora and London, Ontario. Royop has an ownership interest in the Drayton
Valley and Kenora
Royop also announced that its wholly-owned subsidiary Royop Hospitality Corporation, has sold four new Super 8 Motel franchises, and plans to develop a further two properties itself.
The new franchises are in Canmore, Alberta (93 rooms), Stettler, Alberta (46 rooms), Kingston, Ontario (52 rooms) and Kirkland Lake, Ontario (61 rooms). In addition to these, Royop announced it will develop, and have an ownership interest in, two new Super 8 Motels in Alberta - one in Nisku (60 rooms), the other in Calgary (85 rooms) which will be located next to Shawnessy Towne Centre, Royop's new 560,000 square foot retail centre now under construction in south Calgary.
Royop vice-chairman and chief executive officer, Gary M. Samuel, said, ``With these new sales we now have 23 Super 8 Motel properties under development comprising 1,439 rooms. When these are completed, there will be 77 Super 8 Motels open in Canada with a total of 4,671 rooms.''
Royop receives an upfront fee for each new franchise sold, and an ongoing royalty from each franchise based on a percentage of gross revenue. Franchise agreements are generally for a term of 20 years.
Mr. Samuel said expansion of the franchise further strengthens the ongoing revenue stream generated by the company's hotel operations. ``Demand for quality economy lodging continues to be high, and we expect to have no trouble reaching our target of 100 Super 8 Motels in Canada by the year 2000.''
Royop Properties Corporation is a real estate company founded in June 1997. Royop develops, owns and manages commercial real estate, primarily in western Canada, and develops, owns and franchises hotel real estate, including ownership of the Canadian development rights of Super 8 Motels and Wingate Inn. Royop is traded on The Toronto Stock Exchange under the symbol RYP.