La Quinta Holdings this week filed with the U.S. Securities
and Exchange Commission for an initial public offering. The midprice hotel
chain—which as of September had a portfolio of 819 owned, franchised and
managed hotels—is the latest Blackstone-owned entity to begin the process,
following public offerings completed last year by Extended Stay America and Hilton Worldwide. La Quinta had been public prior to its January 2006 acquisition by
Blackstone.
Since that acquisition, La Quinta has invested about $728
million in the brand, including $145 million in improvements at owned hotels, and
nearly tripled to 466 the number of franchised properties, according to the filing.
La Quinta's average daily rate also has grown in recent
years, according to the filing. ADR during the first nine months of 2013 was
$79.71, up 4.8 percent from the prior-year period. From full-year 2010 to
full-year 2012, ADR increased by 8.4 percent.
The filing noted a "meaningful ADR differential between
us and the hotels in our main [Smith Travel Research] competitive sets, which
we believe we can continue to decrease over time."
Corporate, government and military accounts make up about a
quarter of La Quinta's revenue at owned and franchised hotels, according to the
company. La Quinta aims to "increase room revenues from corporate
accounts, as we believe such accounts are associated with more consistent
demand and longer stays," the filing stated.
La Quinta's net income for the first nine months of 2013 was
$8.6 million, compared with $46.2 million in the same period of 2012. The
company, however, had a loss of about $31 million for full-year 2012, with both
2013 and 2012 hit by an impairment loss related to assets being held for sale.
It had been profitable both in 2011 ($63.6 million) and 2010 ($68.8 million).
The amount and price range of shares in the IPO were not
specified, but La Quinta set a placeholder figure of $100 million to be raised.
Blackstone will continue to own a majority of the company after the IPO.