Published on : Friday, March 27, 2020
Lodging real estate investment trust (REIT), Chatham Lodging Trust, that invests in upscale, extended-stay hotels and premium-branded, select-service hotels recently announced few measures in response to the coronavirus pandemic. Chatham Lodging owns 134 hotels wholly or through joint ventures. It announced the new set of actions to address the operating and financial impact caused by the deadly virus outbreak.
Jeffrey H. Fisher, President, and Chief Executive Officer, Chatham Lodging Trust said in a recent press statement that the hotel industry is currently in the middle of unprecedented disruption. The extreme severity of the pandemic has diminished the occupancy rate of hotels like never seen before. The coronavirus has adversely affected the hospitality industry. However, he informed that though Chatham hotels are not any different, its properties are faring a bit better as compared to other hotels.
He said in a time when hotel companies are closing the majority of their hotels, Chatham’s hotels have shown an occupancy of 19% across their portfolio over the past week. He mentioned that he is thankful that the hotel could provide accommodations to the nation’s military, infrastructure-related workers, first responders, and critical medical workers. He expressed joy that the company could contribute to help individuals who are dedicated and tirelessly working to end the pandemic.
Although, he also mentioned that Chatham hotels have to undergo lay-off or furlough as well. Thousands of team members had to work on significantly reduced working hours over the last few weeks. He also said though all their hotels remain open at present, some property may face temporary closures if conditions worsen any further.
Fisher concluded by saying the company’s best-in-class operating platform with Island Hospitality gives them the tools to act more expeditiously. It also enables them to generate the highest operating margins of all lodging REITs and to remain open at historically low occupancy levels.
Chatham has also taken some strict actions to mitigate the operating and financial impact of the coronavirus pandemic. It has suspended its monthly dividend, preserving approximately $5.3 million per month and approximately $64 million on an annual basis. In addition, it has reduced its 2020 capital expenditures budget by approximately $10 million or 45%.
Chatham brought down cash on its unsecured credit facility. That increased its cash liquidity position to approximately $55 million. It also owns twelve unencumbered hotels. Those properties are available as collateral to source additional liquidity.
Additionally, has reduced compensation for its executive officers temporarily. Even the Board of Trustees has volunteered to temporarily reduce their proposed 2020 base compensation by approximately 25%.
Tags: Chatham Lodging Trust