San Clemente-based hotel owner Sunstone Hotel Investors Inc. topped Wall Street expectations with a key profit measure and a gain in revenue as life appears to be returning to the industry.
The company, which owns all or part of 30 hotels, reported adjusted funds from operations—a measure of profitability for hotel and other real estate owners—of $17.8 million, up 30% from a year earlier.
That topped the $16.8 million analysts were looking for.
Sunstone reported a net loss of $4.9 million for the quarter, narrowed from $135.3 million a year earlier.
Revenue came in at $181 million, up 3% from a year earlier and topping expectations of $162.3 million.
Revenue per available room, or sales from rooms available to guests during the quarter, was $112, up 7% from a year earlier.
“We continue to see increasing signs of a cyclical recovery,” Chief Executive Art Buser said. “Occupancies increased to levels that enabled our hotels to increase rates.”
Sunstone and others were hard hit during the downturn as tumbling occupancy and room rates hurt bottom lines. The company turned over a handful of hotels to lenders in the past year or so.
Earlier this week, Sunstone made a bid to acquire on the 1,625-room Manchester Grand Hyatt in downtown San Diego.
Sunstone is in talks with hotel developer Doug Manchester, who owns the Grand Hyatt and has been looking to sell his shares in the hotel.
Manchester is expected to get a minority stake in Sunstone if the company ends up buying the hotel.
The San Diego Unified Port District, which serves as the Grand Hyatt’s landlord, is expected to take up the request in September.