On December 19, 1997, Promus and Doubletree Corporation merged in a
transaction accounted for as a pooling-of-interests. As such, the company's
1997 first quarter financial results have been restated to include the
results of both companies. During the first quarter of 1997, the company
experienced certain unusual items, including (1) a gain of $10.9 million
from a breakup fee received in connection with the terminated Renaissance
Hotel Group transaction, (2) gains of $10.8 million on the sale of two
joint venture hotels and an unrelated management contract, (3) a gain of
$2.1 million on the sale of securities, and (4) $5.5 million of expenses
the establishment of long-term compensation plans. These items contributed $11.2 million and 13 cents, respectively, to 1997 first quarter net income and fully-diluted earnings per share.
"We experienced another strong quarter largely due to the strength of our brands and our hotel management capabilities," said Raymond E. Schultz, chairman and chief executive officer. "By providing value-oriented and consistent lodging accommodations for our hotel guests and great returns for our owners, our hotel brands continue to grow and build even greater brand equity. This was affirmed in the 1998 American Customer Satisfaction Index published in Fortune Magazine (February 16, 1998). Promus, for the third year in a row, was listed as the highest ranked hotel company. In addition, Hampton Inn and Homewood Suites were named as the number one hotel brands in their respective segments by Business Travel News."
Richard M. Kelleher, president and chief operating officer, added, "We
are very encouraged by the RevPAR growth reported by our hotel brands during
the quarter despite the effects of unexpected weather conditions. The overall
performance for the quarter indicates these brands are in a great competitive
position for 1998. As our newer hotel brands continue to grow and the former
Red Lion properties realize the full benefit from their conversion to the
Doubletree brand, we are optimistic that our results should continue to
strengthen as 1998 progresses. In addition, we have made significant progress
in integrating the operations and systems of Promus
and Doubletree. We are ahead of our ambitious schedule and are looking forward to the successful conclusion of this effort."
Hotels managed under the Doubletree brand (excluding the Red Lion hotels converted to the Doubletree brand during 1997) generated an $80.58 RevPAR, an 8.6% increase over first quarter 1997. The Red Lion hotels which converted to the Doubletree brand during April (4 hotels) and July (36 hotels) 1997 reported RevPAR of $59.07, a 1.8% increase over first quarter 1997.
Embassy Suites' RevPAR increased 6.7% for the quarter to $89.09. Hampton Inn reported RevPAR of $43.51 for the first quarter of 1998, a 5.1% increase over the first quarter of 1997. Hampton Inn Suites achieved RevPAR of $56.58, a 13.6% increase over the first quarter 1997, and Homewood Suites' RevPAR increased 6.7% in first quarter 1998 to $72.99.
Average daily rate, occupancy and RevPAR discussed in this release and in the attachments are reported for only those comparable hotels in the system as of March 31, 1998 and managed and franchised by Promus or managed by Doubletree since January 1, 1997. Doubletree franchised hotels are not included in the statistical information.
During the first quarter of 1998, the company added 36 hotels (4,953 rooms) to its system, including two Doubletree branded hotels, three Embassy Suites hotels, 18 hotels in the Hampton Inn brand, three Hampton Inn Suites hotels, eight hotels in the Homewood Suites brand, and two other hotels. The company also terminated eight hotels during the quarter totaling 1,415 rooms.
As of March 31, 1998, the company's system included 1,227 hotels comprising 182,340 rooms. This represents a 14% increase in the number of hotels compared to March 31, 1997. In addition, the company had approximately 378 hotels with almost 50,000 rooms either in design, conversion or under construction at the end of the quarter.
Promus Hotel Corporation is one of the world's premier lodging companies, with system-wide annual revenues of over $5 billion. The company owns, operates or franchises hotels throughout the United States and in Canada, Mexico and Latin America. It is the franchisor and operator of the Doubletree Hotels and Guest Suites, Embassy Suites, Homewood Suites, Club Hotels by Doubletree, Hampton Inn, Hampton Inn Suites, Embassy Vacation Resort and Hampton Vacation Resort brands. The company also manages non-Promus branded hotels and 16 facilities in its University Hotel Conference Center division.
Certain matters discussed in this press release may constitute forward-
looking statements within the meaning of the federal securities laws. Such
statements are based on management's beliefs, assumptions and expectations,
which in turn are based on information currently available to management.
Actual performance and results could differ from those expressed in or
contemplated by the forward-looking statements due to a number of risks,
uncertainties and other factors, some of which are beyond Promus' ability
to predict or control, including changes in the general economy, customer
demand, interest rates and competition. For further information on factors
which could impact Promus and the statements contained herein, we refer
you to the filings made by Promus with the Securities and Exchange Commission,
including current reports on Form 8-K, quarterly reports on Form 10-Q and
annual reports on Form 10K.
March 31, 1998
Quarter Ended March 31, 1997
|Red Lion Hotels converted to Doubletree Hotels (b)|
|Hampton Inn Suites|
|Other Hotels (c)|
(a) Revenue statistics are for comparable hotels, and include information
only for those hotels in the system as of
March 31, 1998 and managed or franchised by Promus or managed by Doubletree since January 1, 1997.
Doubletree franchised hotels are not included in the statistical information.
(b) Includes results for the 4 Red Lion hotels converted to the Doubletree brand on April 1, 1997 and the 36 Red
Lion hotels converted to the Doubletree brand on July 1, 1997.
(c) Includes results for the 16 Red Lion hotels that have not been converted to the Doubletree brand as well as
the results for comparable hotels managed under other franchisors' brands or as independent hotels.
|Q1 1998||Change Since
December 31, 1997
|Q1 1998||Change Since
December 31, 1997
|Joint ventures (a)||3||--||812||--|
|Joint ventures (a)||19||--||4,446||--|
|Hampton Inn Suites|
|Joint venture (a)||22||--||5,758||--|
(a) For statistical purposes only, Promus classifies unconsolidated
joint ventures in which it holds less than a
20% interest as management contracts and consolidated joint ventures in which it owns more than a 50% interest
as Promus owned.