San Clemente-based hotel owner Sunstone Hotel Investors Inc. reaffirmed its 2008 outlook but said it has seen several key indicators worsen as hotels show “cyclical weakness” along with the economy.
For October and November, Sunstone said it saw revenue per available room,a ratio that measures the financial performance of hotels,fall 9% from a year earlier to $122.76.
Much of the decline came in November, as Sunstone saw revenue per available room fall 12% to $116.32 last month.
For the year through November, Sunstone has seen less than a 1% decline in revenue per available room.
“Lodging demand is currently showing cyclical weakness consistent with the trends we are seeing in the overall U.S. economy,” Chief Executive Bob Alter said.
Even so, Sunstone said it is sticking with a Nov. 5 forecast for its 2008 results.
For the year, Sunstone said it expects a 1% increase to a 4% decrease in revenue per available room.
Earnings before interest, taxes, depreciation and amortization are projected at $275 million to $285 million, versus $310.1 million for 2007.
Funds from operations, a cash flow measurement for hotel owners, is projected to be $149.5 million to $159.5 million, down from $180.6 million in 2007.
Before the update, shares of Sunstone closed down 5.5% on a market value of $245 million in a down day on Wall Street Thursday. The shares were up about 4.5% in afterhours trading.
On Wednesday, Sunstone said it sold the Crowne Plaza Hotel in Grand Rapids, Mich., for $8 million, or nine times the hotel’s forecasted earnings before interest, taxes, depreciation and amortization.
