Message from President & CEO Rick Smith
It was a productive and busy year for FelCor and I am very happy with the progress we made on our initiatives over the past year. We completed the disposition program, completed our debt reduction initiative, completed renovations at 61 hotels of our 83 hotels, began work on several redevelopment projects in 2007, increased our common dividend twice, and purchased two upper upscale, resort hotels, marking our first major acquisitions in almost ten years. From an operational perspective, we didn't achieve all of our financial goals, due in part to some movement in the renovation timelines and because some markets, such as Louisiana, Atlanta and Orlando were softer than expected.
We are renovating every one of our hotels in less than three years time, and the amount of renovation work during 2007 was unprecendented for one company. As of today, the majority of the renovation work is behind us, and I am very happy with the results and the quality of the finished product. I am also pleased with the RevPAR results, from the completed hotels, which have continued to beat budget, on average, all year.
We will continue to have disruption during the first part of 2008 as we complete the remaining 22 hotels renovations. During the first quarter, we will be working on 17 hotels. After that, we will be clearly over the hump. We will also continue to pursue our remaining redevelopment projects. These initiatives will translate into higher RevPAR growth than our peers and the industry. We will seek opportunities to continue improving the overall quality of our portfolio, to ensure the execution of our 2008 operating plans and return on investment of our capital spend, while improving operations through our assset management approach.
In December, we purchased two hotels; the Renaissance Esmeralda Resort & Spa located in Indian Wells, California, and the Renaissance Vinoy Resort & Golf Club located in St. Petersburg, Florida. The two hotels typify our strategy of acquiring upper upscale hotels in high barrier to entry markets. Prior to these acquisitions, we had only one Marriott-managed hotel and these are our first Renaissance-branded hotels, and I want to welcome them into the FelCor family.
I want to thank everyone for all of the hard work over the past year. This year has been extremely busy, and I appreciate everyone's efforts. Today, we face greater uncertainty regarding the health of the economy and a difficult credit market. With all the capital we have invested into the hotels and with lower debt levels, we have set oursleves up very well going forward. We are committed to preserving our capital but will continue to take advantage of opportunities that may arise.
