Contact Information: Contact: Donavon A. Heimes Supertel Hospitality Chief financial officer 402.371.2520 Jerry Daly, Carol McCune Daly Gray (Media Contact) 703.435.6293
Supertel to Outline Strategic Initiatives at Annual Meeting
Announces Sale of Holiday Inn Express Gettysburg
| Source: Supertel Hospitality, Inc.
NORFOLK, NE--(Marketwire - May 28, 2009) - Supertel Hospitality, Inc. (NASDAQ : SPPR ), a
real estate investment trust (REIT) which owns 121 hotels in 24 states,
today will outline four key areas of its strategic initiatives at its
annual meeting.
"We are still finalizing the details of our new strategic plan, but intend
to focus on four key areas," said Kelly A. Walters, Supertel president and
chief executive officer. His comments at the meeting will outline four
initiatives:
-- Improving operations and returns -- "We will continue to work closely
with our hotel operators to refine our hotel operations and incentives,
clearly focused on optimizing profitability," Walters noted. "We believe
we are making appropriate progress, especially in the current economic
environment. We intend to put plans into place with a goal of retaining as
much as possible of the operational savings we have created in order to
enhance margins when the economy begins to recover."
-- Reinstate and maintain a dividend competitive with the market -- "A key
advantage to a REIT is its ability to avoid the double taxation on
dividends. We continue to monitor the requirements to maintain our REIT
status. Our goal is to attain a level of profitability which will permit
us to reinstate the dividend as soon as prudently practical and then to
maintain it at a rate competitive with our peer group."
-- Constantly improve portfolio -- "We will regularly review our portfolio
to seek ways we believe will allow us to achieve a greater return on our
capital by identifying and monetizing certain assets and reinvesting the
proceeds to enhance returns on our more profitable assets," Walters
commented. "Reflecting this initiative, we recently sold the 50-room
Holiday Inn Express Gettysburg for approximately $2.6 million as part of
our previously announced plan to divest eight hotels. We will continue to
consider risk-appropriate hotel acquisitions in segments in which we have
expertise and where we see long-time opportunities. In addition, we will
investigate investment opportunities in real estate classes that are
counter-cyclical to hotels with the goal of providing us a more stable
income stream. However, hotels will remain our primary investment
strategy."
-- Strengthen balance sheet -- "The company has taken significant steps to
strengthen its balance sheet by paying down $19.4 million of debt since
March 31, 2008. Our goal is to further reduce and then maintain risk-
appropriate leverage going forward. Supertel's remaining outstanding near-
term debt due this year is a $9.5 million note payable to Wells Fargo Bank
in September 2009. We expect to either refinance the loan or retire the
debt with funds from operations and sale of properties. At the end of the
first quarter, approximately 74 percent of our debt was fixed at a 6.5
percent weighted average rate with an average of 6.1 years to maturity. We
want to improve our access to capital and intend to step up our visibility
with the investment community. As we finalize our growth strategy, we
believe we will have a positive story that will resonate well with
investors."
About Supertel Hospitality, Inc.
As of May 28, 2009, Supertel Hospitality, Inc. (NASDAQ : SPPR ) owns 121
hotels comprised of 10,608 rooms in 24 states. The company's hotel
portfolio includes Super 8, Comfort Inn/Comfort Suites, Hampton Inn,
Holiday Inn Express, Supertel Inn, Days Inn, Ramada Limited, Guest House
Inn, Sleep Inn, Savannah Suites, Masters Inn, Key West Inns and Baymont
Inn. This diversity enables the company to participate in the best
practices of each of these respected hospitality partners. The company
specializes in limited service hotels, which do not normally offer food and
beverage service. For more information or to make a hotel reservation,
visit www.supertelinc.com.
Certain matters within this press release are discussed using
forward-looking language as specified in the Private Securities Litigation
Reform Act of 1995, and, as such, may involve known and unknown risks,
uncertainties and other factors that may cause the actual results or
performance to differ from those projected in the
forward-looking statement. These risks are discussed in the Company's
filings with the Securities and Exchange Commission.