SPOKANE, WA- In an exclusive interview with HOTEL BUSINESS, Stephen Barbieri, vice president of WestCoast Hospitality, revealed some of the factors behind the companys third quarter earnings slump before the figures are officially reported on October 26, 2000.
Barbieri pointed out that the legal costs associated with WestCoasts rebranding and integration of Cavanaughs hotels were higher than expected and will be reported as a third quarter expenditure.
Secondly, a historcial tax credit that the company received last year is no longer in effect, therefore third quarter taxes were higher this year than the same period last year. Futhermore, WestCoasts interest expenses have risen because the company is experiencing a higher rate of borrowing.
Finally, the company hasnt yet realized the full synergies that should result from the Cavanaughs integration in areas like purchasing.
Barbieri believes that these obstacles are all temporary and long-run profitablility will persist despite a disappointing third quarter. Barbieri maintains that the companys revenues are rising, just not enough to cover this quarters downfalls. (10/9/00) –Kelly Wayne