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Hersha Closes 2007 With 75% Rise in Income

PHILADELPHIA-Following two years of acquisitions, the hospitality REIT turned to internal growth in fourth quarter and all performance arrows tilted up.

By Marita Thomas | Updated on February 28, 2008

PHILADELPHIA-Hersha Hospitality Trust’s operating income rose 75% in the fourth quarter of 2007, reaching $11.9 million, compared with $6.8 million for the same quarter of 2006. Operating revenues rose 52.9% to $57.5 million, up from $37.6 million in the parallel quarter of the previous year.

Calling the company’s 2007 growth “very strong” during a conference call, Jay Shah, CEO, said “significant internal growth from both our stabilized and newer hotels contributed to our 16.1% revenue increase per available room.” He also said RevPAR growth in the Hersha properties in the metro areas of New York City, Boston and Washington, DC rose 28.4%, 20.6% and 18.6%, respectively. That compared with overall industry estimates of 13.5%, 18.6%, and 7.4%, respectively for those same markets, he noted.

Just seven hotels were added to the Hersha portfolio in 2007, compared with 44 additions during the previous two years. “We purposely shifted our primary focus to internal growth and asset management in order to drive our portfolio RevPAR and hotel profitability,” he said, adding that would be a “continuing priority in the years ahead.”

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