Morgans Hotel Group Reports Third Quarter 2008 Results
- Revenue per available room (“RevPAR”) for Owned Comparable Hotels1 increased by 9.5% over the comparable period in 2007, compared to the domestic industry average decrease of 1.1%.
- RevPAR for System-Wide Comparable Hotels2 increased by 1.9% (3.5% in constant dollars) over the comparable period in 2007.
- EBITDA margins at System-Wide Comparable Hotels increased by 90 basis points over the comparable period in 2007. MHG achieved a 1% reduction in operating expenses due to the implementation of plans put into effect in the first quarter of 2008 in anticipation of an economic slowdown.
- Adjusted EBITDA3 excluding hotels under renovation increased by 7.8% over the comparable period in 2007, a growth rate of 4.0 times the related RevPAR growth rate.
- A restructuring plan was implemented in October 2008 which is projected to result in approximately $10 million in annual cost savings including approximately $6 million in corporate expenses.
- In September 2008, MHG received a return of its $30 million deposit on the Echelon project in Las Vegas and eliminated approximately $41 million of future funding obligations for the project.