Revenue during the quarter dropped 3.77 percent to $289.58 million from $300.93 million in the previous year period. Gross margin for the quarter expanded 59 basis points over the previous year period to 53.83 percent. Total expenses were 87.20 percent of quarterly revenues, up from 86.33 percent for the same period last year. That has resulted in a contraction of 87 basis points in operating margin to 12.80 percent.

Operating income for the quarter was $37.07 million, compared with $41.14 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $79.12 million compared with $81.06 million in the prior year period. At the same time, adjusted EBITDA margin improved 39 basis points in the quarter to 27.32 percent from 26.94 percent in the last year period.

John Arabia, president and chief executive officer, stated, "During the quarter, transient demand and rates increased relative to the prior year, group attendance was healthy relative to its historic norms, and group spend on banquets and audio visual demonstrated strength. These better-than-anticipated top line results, coupled with energy, overhead and property tax savings, resulted in portfolio and company profits well ahead of our expectations."

For the first-quarter 2017, Sunstone Hotel Investors forecasts net income to be in the range of $54 million to $57 million.

For fiscal year 2017, Sunstone Hotel Investors forecasts net income to be in the range of $150 million to $174 million.

Debt comes down
Sunstone Hotel Investors has recorded a decline in total debt over the last one year. It stood at $946.88 million as on Dec. 31, 2016, down 14.86 percent or $165.29 million from $1,112.17 million on Dec. 31, 2015. Total debt was 25.32 percent of total assets as on Dec. 31, 2016, compared with 28.79 percent on Dec. 31, 2015. Debt to equity ratio was at 0.37 as on Dec. 31, 2016, down from 0.47 as on Dec. 31, 2015. Interest coverage ratio improved to 11.35 for the quarter from 2.65 for the same period last year.