Host Marriott's 3rd-quarter loss increased to 18 cents a share

Dip in business travel tied to recession, attacks noted

October 17, 2002|By BLOOMBERG NEWS

Host Marriott Corp., the largest hotel real estate investment trust, said yesterday that its third-quarter loss grew as business travel spending fell.

The net loss for the owner of Four Seasons, Marriott and Hyatt hotels widened to $38 million, or 18 cents a share, from $7 million, or 6 cents a share, a year ago. Per-share results reflect the payment of preferred dividends.

Revenue in the quarter that ended Sept. 6 fell 7 percent to $789 million, Christopher Nassetta, chief executive officer, said during a conference call.

Business travel spending is in a slump because of last year's recession and terrorist attacks, prompting hotel owners to market rooms to lower-paying tourists and convention-goers.

"Things didn't improve during the third quarter, and so far in October business travel isn't picking up," said Robert Crosby, who helps manage about $120 million in real estate investments for Munder Capital Management, including shares of Host Marriott.

Bethesda-based Host Marriott said funds from operations fell to $55 million, or 15 cents a share, from $90 million or 28 cents a share a year ago. On that basis, which isn't in accordance with generally accepted accounting principles, the results exceeded Wall Street's expectation of 11 cents a share.

The funds from operations included 3 cents a share from business-interruption insurance related to the Sept. 11 attacks. The attacks destroyed the company's Marriott World Trade Center hotel and damaged the Marriott Financial Center.

Host Marriott's shares fell 3 cents yesterday to close at $7.97 on the New York Stock Exchange and are down 11 percent this year.

Host Marriott owns 123 hotels, including the Marriott Marquis in New York. The company was created by the split of the former Marriott Corp. in 1992. Marriott International Inc. manages and franchises hotels, and Host Marriott owns properties.

For the year, the company said, funds from operations will be $1.05 a share to $1.10 a share.

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