ResortQuest loses $5.5 mil
amid declining isle occupancy

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By Russ Lynch
rlynch@starbulletin.com

Declines in Hawaii in occupancy and room rates helped pull first-quarter earnings down at ResortQuest International Inc.., the Memphis, Tenn.-based parent of Aston Hotels & Resorts in Hawaii and other vacation-property businesses across North America.

The company also said a non-cash charge relating to an accounting change and other one-time charges were major contributors to its loss for the period.

ResortQuest today reported a net loss of $5.5 million, or 29 cents a share, after the charges, compared to a net profit of $4.3 million, or 30 cents a share, in the first quarter of last year. Without counting the special charges, which included $8.1 million for the cumulative effect of the accounting change, the company said would have reported a profit of $2.9 million, or 15 cents a share.

First-quarter revenues of $40.5 million were down 10.8 percent from a year-earlier $45.4 million.

The company's overall occupancy rate for the three months through March 31 was 62.7 percent, down 3.4 points from 66.1 percent in the 2001 quarter.

In Hawaii, where the company manages more than 5,000 hotel rooms and apartment units through Aston and a smaller subsidiary, first-quarter occupancy of 78.2 percent was down 4.2 points from a year-earlier level of 82.4 percent. The company's average daily room rate in Hawaii was $110.90, down 9.2 percent from $122.20. The result was gross Hawaii lodging revenues, before fees paid to some property owners, of $37.1 million, down 16 percent from a year-earlier $44.2 million.

Hawaii gross lodging revenues are about 34 percent of the company's total of $108 million.

ResortQuest's first-quarter net before the charges was better than the 11 cents to 12 cents a share it expected when it announced its fourth-quarter earnings in February and the company said today that it expects per-share earnings of 9-10 cents in the second quarter, climbing to 36-40 cents in the third quarter.

"First-quarter lodging trends significantly improved over fourth quarter 2001, which confirms our position that the leisure travel environment is improving," said David Levine, chairman and chief executive officer. He said the economy is strengthening, fears about air travel are receding and bookings for the summer are strong.