Cavanaughs Expects Better Year In 2000

Cavanaughs Hospitality Corp. turned in a choppy year-end performance as events in Seattle added to woes the Spokane-based company has experienced with its Salt Lake City property.

But Chairman Don Barbieri said Friday the recent purchase of WestCoast Hotels Inc. sets the stage for aggressive expansion in 2000.

“It’s really a turning point, a transformation of the company,” he said during a briefing on 1999 earnings. “We expect growth to be dramatic. We expect the growth to be profitable.”

For 1999, Cavanaughs reported net income of $8 million, up from $7.5 million in 1998. But per-share results dropped to 64 cents from 71 cents the prior year.

Total revenues increased to $110.1 million from $86.3 million.

Fourth quarter net income fell by almost half, from $1.4 million, or 11 cents per share, in 1998 to $740,000, or 6 cents per share, in 1999.

Revenues increased to $26.2 million from $23 million.

In Salt Lake City, the Cavanaughs property has been hobbled by access problems created by highway construction associated with the 2002 Winter Olympics.

Although that work is completed, poor skiing conditions have the whole Salt Lake City hospitality market down about 10 percent.

But Vice President for Hotel Operations Tom Taffin said longterm prospects are improving with the construction, kitty-corner to the Salt Lake property, of a new fivestar hotel with large meeting spaces.

Barbieri said the company’s Seattle property was surrounded during the World Trade Organization demonstrations in December.

Then concerns raised by the arrest of suspected terrorists caused Seattle to cancel its New Year’s Eve celebration, which led to cancellation of some reservations, he said.

Barbieri said unification of the Cavanaughs and WestCoast chains under the WestCoast banner - 46 properties in total - will put the franchise in some of the best hospitality markets in the West.

He said those beachheads will be supplemented by the new alliance with Coast Hotels & Resorts of Vancouver, British Columbia.

Barbieri also was upbeat about the potential of the company’s electronic ticketing operations.

Overall, revenues under management by the company for 2000 are expected to reach $210 million, he said.