Extended Stay America reported year-over-year gains in both average
daily rate and occupancy for the fourth quarter and for the full year 2016. For
the quarter, comparable ADR increased 1.7 percent to $64.34 and occupancy grew 160
basis points to 70.7 percent. For the full-year, comparable ADR rose 3.4
percent to $66.43 and occupancy increased 40 basis points to 74.1 percent.
At year-end, only 45 of ESA's 629 hotels remained
unrenovated, marking a light at the end of the tunnel for the company's
years-long renovation
effort. The company made some progress during the fourth quarter in shifting
its revenue mix toward shorter stays; one- to six-night stays grew from 32
percent of revenue in 2015 to 36 percent in 2016. As the company goes after
more corporate clients, CEO Gerry Lopez said he sees the largest sales opportunities
in the healthcare, construction and technology industries.
The company projects revenue per available room
growth of 1 percent to 3 percent for 2017, which is on par with Hilton's
guidance. Fourth-quarter net income declined from $132.1 million in 2015 to
$30.1 million, and full-year net income fell from $283 million to $163.4
million. The drops reflect asset
sale gains made during the fourth quarter of 2015.