Morgans Hotel Group swings to 2Q loss

Loss for the quarter ended June 30 totaled $730,000, or 2 cents per share, compared with earnings of $841,000, or 3 cents per share, in the prior year.

Total revenue dipped roughly 2 percent to $81.3 million, from $82.7 million in the second quarter of 2007.

Analysts surveyed by Thomson Financial forecast a quarterly loss of 5 cents per share on revenue of $85.9 million.

Morgans held operating expenses nearly flat during the quarter, but non-cash stock compensation expense, depreciation and amortization all increased.

Morgans said its concentration in international gateway cities like New York, Miami and San Francisco drove revenue per available room growth, as an increase in business from international guests offset declines in domestic travel.

Revenue per available room, or revpar, is considered a key gauge of a hospitality company's performance.

Quarterly revpar grew 2.8 percent at hotels operated by Morgans, excluding those under renovation, compared with those operated in the prior-year period. The company expects systemwide comparable hotel revpar growth of 3 percent to 5 percent in 2008.

In its earnings statement, Morgans maintained that it does not expect its joint venture with Boyd Gaming Corp. to develop two hotels on the Las Vegas Strip will obtain financing by the Sept. 15 deadline.

Morgans' Delano and Mondrian brand hotels were slated to be part of Boyd's massive Echelon resort complex, which Boyd put on hold last week until the credit markets improve.