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Welcome to InnSuitesTrust.com
investor and shareholder information:
Fiscal year 2007
(February 1st, 2006 – January 31st, 2007) and
fiscal 2008 are experiencing improved operating profit and operating
efficiency. For fiscal year 2007, operating profit jumped 334% to $1.5
million after all operating expenses, including $2.0 million in non-cash
depreciation expense.
Supply and demand
dynamics in the hotel industry have steadily improved during the last five
years with supply relatively steady and demand increasing. The entire
hospitality industry, including InnSuites, has
been able to maintain and increase rates for hotel studios and suites due
to a number of factors:
A.
The hotel
industry is favorably positioned for supply and demand balance currently
and in the year ahead.
B.
InnSuites Hotels (and
many of our competitors) have significantly upgraded the quality of our
product with system-wide initiatives including InnSuites
Cloud 9 pillow top beds, rich granite vanities, hard wired and WiFi free high speed internet, flat screen TVs and much
more. InnSuites (and many of our competitors)
have been able to pass on the cost of these quality improvements with
higher room rates.
C.
InnSuites has
traditionally provided “Your Suites Choice Value” with extra
value including free amenities not found in many mid-priced hotel systems.
With the assistance of InnSuites rate management
system and intensified revenue management, InnSuites
has been able to more accurately price our value services often with
significant price increases.
D.
Continued
emphasis has been placed on cost control and sales, particularly at more
favorable group rates.
The improved operating
profits are something the shareholders can see. The untold story however is
the significant real estate appreciation that has and continues to occur
annually. InnSuite properties are located
throughout the fast growing Southwestern states of New
Mexico, Texas, Southern California and with a heavy concentration in
prosperous Arizona,
one of the fastest-growing states in the nation for the past several years.
During the past fiscal year, real estate prices in many growing Southwest
cities jumped significantly. Even though the rate of increase has slowed,
substantial increased values are locked into the Trust assets from a
combination of area wide real estate appreciation, increased operating
profits and the continuation of fast track mortgage reduction through short
amortizations typical of Trust hotels.
In the prior years, the
Trust liquidated select under-performing real estate assets with favorable
gain. As a result, we are now seeing improving operating profits. In fiscal
2007 and fiscal 2008 the Trust is looking at unlocking value in its most
successful hotels. There is no assurance the Trust will be able to sell one
or more assets at strong market prices but there is a potential opportunity
to tap a previously hidden asset of the Trust in the form of significantly
appreciating real estate equity. The Trust may consider sales of one or
more of its hotels to unlock shareholder value as the company places
greater emphasis on income from trademark licensing and hotel management.
Management estimates
that the difference between the market value of Trust assets and underlying
debt significantly exceeds the current market capitalization of the Trust.
Management also believes that select asset sales may enhance shareholder
value by increasingly tapping into the hidden equity of appreciated real
estate assets. Asset sales could be particularly beneficial to the Trust
if, as oftentimes has been the case in the past, the Trust maintains the
management and/or trademark licensing of the hotel after sale.
Favorable trends include
improved room revenue, increased suite rates and improved profitability
seen in fiscal year 2007 and continuing into the current fiscal year 2008.
The Trust is strong. The economy is strong. The hotel industry is strong.
Operating results are strong.
We look forward to
rewarding our loyal guests with continually improved product and service,
rewarding our hard working staff with increased profitability based bonuses
and rewarding our patient long term shareholders as we unlock hidden real
estate value.
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