Extended Stay America plans to introduce this year an
automated revenue management system in an effort to push up rates and revenue
across its portfolio, executives said during the company's fourth-quarter
earnings conference call on Wednesday.
Chief marketing officer Thomas Seddon said the company
currently is running revenue management off Excel spreadsheets, which is "better
than nothing but not like what other hotel companies have been doing." The
company is looking at off-the-shelf revenue management systems with plans to
pilot one by the second half of 2014 and have it fully deployed by year-end or
in early 2015. After that, it will take 12 to 18 months for Extended Stay
America to see the full benefits, he said.
"The systems will give us the immediate benefit of
getting better at forecasting price and inventory changes, and it will get smarter
as we use this system," Seddon said.
During the fourth quarter of 2013, the first to be publicly
reported since Extended Stay America's initial public offering last year, the
company's overall average daily rate increased 4.5 percent year over year to
$53.65. Occupancy increased by 0.9 percentage points to 70.5 percent.
CFO Peter Crage noted a few factors hurt revenue growth
during the quarter. The company was facing comparisons to the period following
Hurricane Sandy in 2012, which spurred extended-stay demand, and a significant
portion of the Extended Stay America portfolio is undergoing renovation. CEO
Jim Donald said that by the end of March, more than 50 percent of the 684
hotels in the portfolio will have been renovated, and the company is
considering "expanding and accelerating" renovation plans for the
rest.
The company reported a loss of $15.4 million during the
quarter compared with a loss of $33 million in the fourth quarter of 2012. For
the full year, net income was $82.7 million, up from $22.3 million in 2012.