Ashford Trust Reports First Quarter 2020 Results

May 21, 2020

DALLAS—Ashford Hospitality Trust, Inc. (NYSE: AHT) (“Ashford Trust” or the “Company”) today reported financial results and performance measures for the first quarter ended March 31, 2020. The comparable performance measurements for Occupancy, Average Daily Rate (ADR), Revenue Per Available Room (RevPAR), and Hotel EBITDA assume each of the hotel properties in the Company’s hotel portfolio as of March 31, 2020 were owned as of the beginning of each of the periods presented. Unless otherwise stated, all reported results compare the first quarter ended March 31, 2020 with the first quarter ended March 31, 2019 (see discussion below). The reconciliation of non-GAAP financial measures is included in the financial tables accompanying this press release.

Subsequent to the end of the quarter, J. Robison Hays, III was appointed President and Chief Executive Officer of the Company, effective May 14, 2020. Mr. Hays previously served as the Company’s Chief Strategy Officer, a position he held since May 2015. Mr. Hays has been with the Company since 2005.


On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. In the United States, federal and local government agencies implemented emergency declarations and issued restrictions on travel, implementation of social distancing protocols, stay at home orders, limitations on gatherings and mandates to close all non-essential businesses.

In response to the impact of COVID-19 on the hospitality industry, the Company is deploying numerous strategies and protocols to protect the health and safety of its employees, guests, partners, and communities where it operates. Additionally, the Company has taken steps to ensure that it has additional financial flexibility going forward to navigate this crisis, including:

Currently, the Company has temporarily suspended operations at 23 properties. The Company’s remaining 93 properties are operating at reduced levels.
The Company worked proactively with its property managers to aggressively cut operating costs at its hotels ultimately resulting in an approximate 90% reduction in property-level staffing.
The Company has significantly reduced its planned spend for capital expenditures for the year from a range of $125-$145 million to a range of $30-$50 million.
The Company has suspended its common dividend conserving approximately $7 million per calendar quarter.
The Company has taken proactive and aggressive actions to protect liquidity and reduce corporate expenses through compensation reductions and the curtailment of expenses resulting in an approximate 25% reduction in corporate G&A and reimbursable expenses and will continue to take all necessary additional actions to preserve capital and liquidity.
The Company estimates that its current monthly cash burn at its hotels given their current state of either having suspended operations or operating in a limited capacity is approximately $20 million per month. The Company’s debt is all property-level, non-recourse debt and the monthly interest is currently approximately $13 million per month. The Company’s run rate for corporate G&A and Advisory Fees is approximately $4 million per month.
The Company ended the quarter with cash and cash equivalents of $240 million and restricted cash of $127 million. The vast majority of the restricted cash is comprised of lender and manager held reserves. The Company is currently working with its property managers and lenders in order to utilize lender and manager held reserves to fund operating shortfalls. At the end of the quarter, there was also $19 million in due from third-party hotel managers, which is the Company’s cash held by one of its property managers which is also available to fund hotel operating costs.
Beginning on April 1, 2020, the Company did not make principal or interest payments under nearly all of its loan agreements, which constituted an “Event of Default” as such term is defined under the applicable loan agreement. The Company is actively working with its lenders to arrange mutually agreeable forbearance agreements to reduce its near-term cash burn rate and improve liquidity.
Additionally, the Company has partnered with local government agencies, medical staffing organizations, and hotel brands to support COVID-19 response efforts. To date, through various initiatives, 48 Ashford Trust hotels have provided temporary lodging for first responders, healthcare professionals, and other community residents impacted by the pandemic.
The anticipated negative impact of the COVID-19 crisis on economic activity and the hospitality industry continues to evolve. The crisis is expected to continue to impact the Company’s financial results during the second quarter of 2020 and beyond. Given the severity of the COVID-19 crisis and the appointment of a new President and Chief Executive Officer, the Company anticipates doing a review of its long-term strategy after the crisis has passed, which may include material changes to its future leverage, capital structure, liquidity, and investment focus.


Net loss attributable to common stockholders was $94.8 million or $0.94 per diluted share for the quarter.
Comparable RevPAR for all hotels decreased 22.9% to $95.16 during the quarter.
Adjusted EBITDAre was $47.4 million for the quarter.
Adjusted funds from operations (AFFO) was $(0.12) per diluted share for the quarter.
During the quarter, the Company refinanced its mortgage loan for the 226-room Le Pavillon Hotel in New Orleans, Louisiana.
During the quarter, the Company sold the Crowne Plaza Annapolis for $5.1 million in cash proceeds.
Capex invested during the quarter was $20.4 million.

At March 31, 2020, the Company had total mortgage loans of $4.1 billion with a blended average interest rate of 4.4%.

As of March 31, 2020, Ashford had cash and cash equivalents of $240.3 million.

In light of the economic uncertainty arising from the COVID-19 pandemic and to protect liquidity, the Company and its Board of Directors announced a suspension of its previously announced 2020 common stock dividend policy. Accordingly, the Company did not pay a dividend on its common stock and common units for the first quarter ending March 31, 2020. The Board of Directors will continue to monitor the situation and assess future quarterly common dividend declarations.

During the quarter, the Company refinanced its mortgage loan for the 226-room Le Pavillon Hotel in New Orleans, Louisiana, which had an existing outstanding balance of approximately $43.8 million, a floating interest rate of LIBOR + 5.10%, and a final maturity date in June 2020. The new, non-recourse loan totals $37 million and has a three-year initial term with two one-year extension options, subject to the satisfaction of certain conditions. The loan provides for a floating interest rate of LIBOR + 3.40%.

During the quarter, the Company sold the Crowne Plaza Annapolis for approximately $5.1 million in cash.


As of March 31, 2020, the portfolio consisted of 116 hotels.

Comparable RevPAR decreased 22.9% to $95.16 for all hotels on a 3.8% decrease in ADR and a 19.8% decrease in occupancy.

The Company believes year-over-year Comparable Hotel EBITDA and Comparable Hotel EBITDA Margin comparisons are more meaningful to gauge the performance of the Company’s hotels than sequential quarter-over-quarter comparisons. To help investors better understand the seasonality in the Company’s portfolio, the Company provides quarterly detail on its Comparable Hotel EBITDA and Comparable Hotel EBITDA Margin for the current and certain prior-year periods based upon the number of hotels in the Company’s portfolio as of the end of the current period. As the Company’s portfolio mix changes from time to time, so will the seasonality for Comparable Hotel EBITDA and Comparable Hotel EBITDA Margin.

“To address the unprecedented challenge of the COVID-19 pandemic, the Company has taken immediate actions to enhance its operational and financial flexibility,” commented J. Robison Hays, Ashford Trust’s President and Chief Executive Officer. “We have worked very closely with our property managers to minimize our operating costs. We remain steadfast in our approach to protect our hotels, safeguard the health of our associates and guests and establish a path to return our hotels to profitability.”

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