Beating forecasts... but not turning a profit 

Wyndham International Inc. exceeded its financial projections in the first quarter, and gained market share during a time when business travel is lagging. 

But beating projections is one thing, and turning a profit is another. 

Wyndham still posted a $107.4 million first-quarter loss � less than the same period a year ago, but a loss nonetheless. 

Wyndham did inch closer to its goal of selling as much as $900 million worth of non-strategic assets by netting deals totaling $97 million. Those sales are critical to the company as it tries to pay down the $3.7 billion in debt it inherited by its predecessor company nearly four years ago. 

Four years into the plan, that debt has been reduced to $2.75 billion. 

Like many hotel companies, Wyndham's business slowed during January and February, as corporate travel tapered off in advance of the war with Iraq. Room reservations ground to a halt when the war began. 

But the conflict was short-lived, and by mid-April, call volume returned to pre-war levels, Wyndham officials say. By the first week of May, volume had returned to the levels seen before pre-war jitters pushed travelers into a wait-and-see mode. 

If travel has picked up again, though, prices haven't. 

Forecasters are trimming their projections for improvements in room revenue and bookings across the lodging industry. 

Room prices may end up flat over 2002 levels, according to Robert Mandelbaum, director of research for PKF Consulting. 

Wyndham shares closed Wednesday at 25 cents. 

Wyndham chairman and chief executive Fred Kleisner points to various technical measures as proof of how the company is coping with a difficult business environment. 

Even though call volume is down 5 percent over last year, for example, Wyndham is able to convert more of those calls into room reservations � 42 percent, compared with 25 percent a year ago. 

Other benchmarks are of the glass-half-full-or-empty variety. 

Wyndham did better than its peers in terms of growth in room revenue, but it was a negative number. Wyndham's room revenue shrank only 0.8 percent, compared with a 2.6 percent decline for the upper upscale hotels, according to Smith Travel Research. 

Wyndham took drastic measures to get out from under leases that it said were losing money: It let 27 properties go into default beginning in April when it stopped paying rent. 

Executives from the two Wyndham subsidiaries that held the leases are negotiating with Hospitality Properties Trust to keep the hotels in Wyndham's system through franchise contracts. 
 

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