Local lodging owners posted solid gains in the second quarter, benefiting from a sustained rebound in room rates and occupancy. Revenue was up at all Washington-area hotel real estate investment trusts that have reported earnings, as were funds from operations — a key financial metric for REITs.
At Bethesda-based Host Hotels & Resorts, the nation’s largest hotel owner with 123 properties, revenue per available room climbed 6.7 percent to $780 million, driven by a 5 percent increase in average daily rates. The company beat market expectations with FFO climbing to $210 million, or 30 cents per share. All told, revenue rose 17 percent to $1.3 billion from $1.1 billion, thanks to healthy food and beverage sales.
Total revenue at LaSalle Hotel Properties also climbed in the three months ending June, to $202.6 million, compared to $165.7 million for the same period a year earlier. Like Host, the Bethesda company saw room revenue climb around 6 percent to $169 million. Some analysts said the high occupancy rates across LaSalle’s 35-asset portfolio should allow it to hike rates in the second half of the year.
For its part, DiamondRock Hospitality also reported a 6.4 percent increase to $111 million in room revenue, fueled by a 4.2 percent increase in daily room prices. The Bethesda company continued to narrow its losses from $839,000 in the second quarter of 2010 to $600,000 this time around. Weak group bookings in Chicago and Boston, however, tempered management’s earnings expectations.