Norfolk, Neb., lodging company Supertel Corp. raised average rates at its 7,000 rooms in the first quarter of 2013 to improve financial results, but now it’s rolling the increases back.
The higher rates “unfavorably impacted” average occupancy at Supertel’s 82 properties in 21 states, so managers are acting to “price competitively as necessary to regain market share,” said Kelly Walters, president and CEO, in a report on the company’s first-quarter results.
The company lost $4.9 million, or 21 cents a share, during the three months that ended March 31, compared with a loss of $4.6 million, or 20 cents a share, for the same period a year ago.
Revenue was flat at $14.6 million. Funds from operations, a measure of profitability for real estate investment trusts like Supertel, showed a loss of $2 million, compared with about $300,000 in the same quarter of 2012.
Walters said the “frustrating quarter” and losses were due mostly to upgrading the market position of the company’s hotels, a process he said is expensive but will benefit the chain in the long run.
Supertel reduced the interest rate it pays on debt, sold two motels that don’t fit its position in the lodging industry and agreed to buy four others in the “upper-midscale” category.
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