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ARTHUR ANDERSEN'S 'THE HOST REPORT' FINDS HOTELS TURNED THE CORNER, POSTED PROFITS IN 1992

 LOS ANGELES, June 24 /PRNewswire/ -- The U.S. hotel industry rebounded and posted a modest operating profit in 1992, according to "The HOST Report," a semi-annual publication by the Arthur Andersen Real Estate Services Group (RESG) and Smith Travel Research.
 Larry Krause, Arthur Andersen worldwide director of hospitality industry services, said, "Continued cost-cutting by hotel operators during 1992 magnified the benefits of modest gains in occupancy and average rates."
 The improvement in operating profits, combined with continued restructuring of debt and lower interest rates, allowed the industry to post an average pre-tax operating income of $159 per room in 1992. This compared to an average operating loss of $719 per hotel room in 1991.
 While industry occupancy in 1992 increased to 61.8 percent in 1992 from 60.3 percent in 1991, average daily rates were up only 1.4 percent, lagging the rate of inflation, according to the report.
 "Achieving an increase in room rates is now the biggest challenge facing hotel owners and operators," Krause said. "For the sixth straight year they have not kept pace with inflation. The outlook for room rate increases in this country depends on a number of factors, such as a healthier economy. Many industry watchers are now counting on changes in supply and demand to bring about some real improvement in room rates."
 Limited-Service, All-Suite Profitable.
 Full-Service Still Posts Losses
 Limited-service hotels posted strong gains in both revenues and operating profits in 1992. Revenues per room were up 7.2 percent to $13,114, and pre-tax income rose to $1,375 per room.
 All-suite hotels without food and beverage service posted the highest pre-tax income, $1,462 per room, of any segment in the industry. All-suite hotels with food and beverage posted the highest revenue per room in 1992 of $29,753, but showed only a modest profit of $170 per room.
 Not all categories of hotels were profitable, according to "The HOST Report." Full-service hotels (those with restaurants, meeting space and other services) posted a pre-tax loss of $395 per room for the year. This, however, was a 46-percent improvement on the figures from 1991.
 Data on revenues and expenses in the 1992 "HOST Report" are a compilation of operating statistics from 2,584 U.S. hotels, the largest sampling of operating data ever published on the United States hotel industry. The sample is comprised of 1,442 full-service hotels, 913 limited-service hotels, 121 all-suite hotels with food and beverage revenue, and 108 all-suite hotels without food and beverage revenue. The publication also includes data on full-service and limited-service hotels in 21 major market areas.
 -0- 6/24/93
 /NOTE TO EDITORS: Complimentary copies for members of the media of "The HOST Report" can be obtained by calling the contacts below./
 /CONTACT: Marjorie Blackwell, 415-546-8644, or Gregg Nicholson, 415-546-8474, both of Arthur Andersen/


CO: Arthur Andersen ST: California IN: FIN LEI SU:

GT-TM -- SF003 -- 5234 06/24/93 10:30 EDT
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Date:Jun 24, 1993
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