InnSuites Hospitality Trust (IHT, Financial) filed Quarterly Report for the period ended 2009-04-30.
InnSuites Hospitality Trust is a hospitality real estate investment trust.The Trust's business plan focuses on ownership of suite hotels as well as its alliance with InnSuites Hotels. InnSuites Hospitality Trust has a market cap of $12.4 million; its shares were traded at around $1.37 with and P/S ratio of 0.6. The dividend yield of InnSuites Hospitality Trust stocks is 0.7%.
For the three months ended April 30, 2009, our total revenue was $5.5 million, a decrease of $1.3 million, or 19.0%, compared with the prior year period of $6.8 million. Revenues from hotel operations, which include Room, Food and Beverage, Telecommunications and Other revenues, decreased 19.2% to $4.8 million for the three months ended April 30, 2009, from $5.9 million for the three months ended April 30, 2008. Hotel operations, including Food and Beverage operations, experienced a significant decrease in revenues during the first quarter of fiscal 2010 due to lower occupancy and increased rate pressure. Expenses may not decline proportionately with a decline in revenues due to a high degree of operational and financial leverage in our hotel business.
Total expenses of $4.9 million for the three months ended April 30, 2009 were consistent with the prior year period total of $4.9 million. Total operating expenses of $4.5 million were also consistent with the prior year period total operating expenses. The majority of the hotel operating expenses decreased due to lower occupancy, offset by an increase of $479,000 in hotel property depreciation expense for the current quarter, due to the reclassification of the hotel properties from “held for sale” to “held and used” during the third quarter of fiscal year 2009.
General and administrative expenses was $851,000 for the three months ended April 30, 2009, consistent with the prior year period total of $836,000.
On March 3, 2008, we established a new $850,000 revolving line of credit. The new line of credit has no financial covenants, bears interest at Wall Street Journal prime (3.25% as of April 30, 2009) and matures on July 15, 2009. As of April 30, 2009, we had drawn $227,515 of the funds available under the line of credit. On April 6, 2009, the revolving line of credit was lowered to $650,000 due to the bank s lending limits. We are currently in negotiations with the bank to renew this line of credit. .
We continue to contribute to a Capital Expenditures Fund (the “Fund”) an amount equal to 4% of the InnSuites Hotels revenues from operation of the Hotels. The Fund is restricted by the mortgage lender for four of our properties. As of April 30, 2009, $163,635 was held in restricted capital expenditure funds and is included on our Balance Sheet as “Restricted Cash.” The Fund is intended to be used for capital improvements to the Hotels and for refurbishment and replacement of furniture, fixtures and equipment, in addition to other uses of amounts in the Fund considered appropriate from time to time. During the three months ended April 30, 2009, the Hotels spent $253,946 for capital expenditures. We consider the majority of these improvements to be revenue producing. Therefore, these amounts have been capitalized and are being depreciated over their estimated useful lives. The Hotels also spent $288,190 and $364,006 during the three-month periods ended April 30, 2009 and April 30, 2008, respectively, on repairs and maintenance and these amounts have been charged to expense as incurred.
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InnSuites Hospitality Trust is a hospitality real estate investment trust.The Trust's business plan focuses on ownership of suite hotels as well as its alliance with InnSuites Hotels. InnSuites Hospitality Trust has a market cap of $12.4 million; its shares were traded at around $1.37 with and P/S ratio of 0.6. The dividend yield of InnSuites Hospitality Trust stocks is 0.7%.
Highlight of Business Operations:
Our expenses consist primarily of hotel operating expenses, property taxes, insurance, corporate overhead, interest on mortgage debt, professional fees and depreciation of the Hotels. Our operating performance is principally related to the performance of the Hotels. Therefore, management believes that a review of the historical performance of the operations of the Hotels, particularly with respect to occupancy, calculated as rooms sold divided by the number of rooms available, average daily rate (“ADR”), calculated as total room revenue divided by number of rooms sold, and revenue per available room (“REVPAR”), calculated as total room revenue divided by the number of rooms available, is appropriate for understanding revenue from the Hotels. Occupancy was 70.2% for the three months ended April 30, 2009, a decrease of 8.7% from the prior year same period. ADR decreased $7.35, or 8.2%, to $82.35. The decreases in ADR and reduced occupancy resulted in a decrease of $12.98, or 18.3%, in REVPAR to $57.83 from $70.81 in the prior year period. The decrease in occupancy is due to the downward trend in our economy causing less vacation and fewer business travelers. We project that this trend will continue through late 2009.For the three months ended April 30, 2009, our total revenue was $5.5 million, a decrease of $1.3 million, or 19.0%, compared with the prior year period of $6.8 million. Revenues from hotel operations, which include Room, Food and Beverage, Telecommunications and Other revenues, decreased 19.2% to $4.8 million for the three months ended April 30, 2009, from $5.9 million for the three months ended April 30, 2008. Hotel operations, including Food and Beverage operations, experienced a significant decrease in revenues during the first quarter of fiscal 2010 due to lower occupancy and increased rate pressure. Expenses may not decline proportionately with a decline in revenues due to a high degree of operational and financial leverage in our hotel business.
Total expenses of $4.9 million for the three months ended April 30, 2009 were consistent with the prior year period total of $4.9 million. Total operating expenses of $4.5 million were also consistent with the prior year period total operating expenses. The majority of the hotel operating expenses decreased due to lower occupancy, offset by an increase of $479,000 in hotel property depreciation expense for the current quarter, due to the reclassification of the hotel properties from “held for sale” to “held and used” during the third quarter of fiscal year 2009.
General and administrative expenses was $851,000 for the three months ended April 30, 2009, consistent with the prior year period total of $836,000.
On March 3, 2008, we established a new $850,000 revolving line of credit. The new line of credit has no financial covenants, bears interest at Wall Street Journal prime (3.25% as of April 30, 2009) and matures on July 15, 2009. As of April 30, 2009, we had drawn $227,515 of the funds available under the line of credit. On April 6, 2009, the revolving line of credit was lowered to $650,000 due to the bank s lending limits. We are currently in negotiations with the bank to renew this line of credit. .
We continue to contribute to a Capital Expenditures Fund (the “Fund”) an amount equal to 4% of the InnSuites Hotels revenues from operation of the Hotels. The Fund is restricted by the mortgage lender for four of our properties. As of April 30, 2009, $163,635 was held in restricted capital expenditure funds and is included on our Balance Sheet as “Restricted Cash.” The Fund is intended to be used for capital improvements to the Hotels and for refurbishment and replacement of furniture, fixtures and equipment, in addition to other uses of amounts in the Fund considered appropriate from time to time. During the three months ended April 30, 2009, the Hotels spent $253,946 for capital expenditures. We consider the majority of these improvements to be revenue producing. Therefore, these amounts have been capitalized and are being depreciated over their estimated useful lives. The Hotels also spent $288,190 and $364,006 during the three-month periods ended April 30, 2009 and April 30, 2008, respectively, on repairs and maintenance and these amounts have been charged to expense as incurred.
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