Hersha Hospitality Trust Announces Full Year and Fourth Quarter 2020 Results
Hersha Hospitality Trust, owner of high-quality hotels in urban gateway markets and regional resort destinations, announced results for the full year and fourth quarter ended December 31, 2020.
Net loss applicable to common shareholders was approximately ($190.5 million), or ($4.93) per diluted common share, in 2020, compared to net loss applicable to common shareholders of approximately ($27.8 million), or ($0.74) per diluted common share, in 2019. Net loss applicable to common shareholders was ($44.8 million), or ($1.16) per diluted common share, in the fourth quarter 2020, compared to net loss applicable to common shareholders of approximately ($9.3 million), or ($0.24) per diluted common share, in fourth quarter 2019. The decrease in full year and fourth quarter 2020 net income and net income per diluted common share was due to the ongoing COVID-19 pandemic and its impact on the hospitality industry.
Mr. Jay H. Shah, Hersha’s Chief Executive Officer, stated:
“As we move forward from the extraordinary challenges our industry encountered last year, we remain confident that our purpose-built portfolio of high-quality, recently renovated, transient hotels, gives us the ability to outperform through the recovery. One of the silver linings of 2020 was our franchise model and close collaborative relationship with our operating partners, which gave us ample autonomy and control to make material changes to our operating model to preserve cash. In addition to creating sustainable cost savings in our expense structure, our operating model enabled us to reopen every one of our wholly owned hotels by the end of last year. Our operating results in January provide credible signs that the resumption in travel demand has begun as leisure bookings accelerated across the portfolio and property-level cash flow turned positive for the first time since March of last year.”
“Last week, we announced several strategic steps to provide us with near and medium-term financial flexibility. Our announced asset sales and our unsecured notes facility with affiliates of the Merchant Banking business of The Goldman Sachs Group, Inc. (“GS Purchasers”) allows us to simultaneously pay down our 2021 term loan, amend the Revolving Credit Facility agreement, and extend the covenant waiver holiday through March 31, 2022. Our bespoke solution with the GS Purchasers in conjunction with our selling certain older, more mature assets from our various clusters, addresses our financing and liquidity needs with no equity dilution. Our successful sales of these hotels at attractive pricing completes our asset sales strategy and highlights the liquidity and inherent real estate value of our portfolio.”
“During the disruption from these historic times, we took the opportunity to zero-base budget our assets, dispose of lower growth, higher cost hotels to reduce leverage, equitize the portfolio with non-dilutive, highly flexible near-term financing, and successfully amend our revolving credit facility. We begin 2021 on stronger footing with a keen focus on operational performance as demand returns, and accretive opportunities that will emerge in the recovery.”
The Company had 36 comparable hotels fully open and operational throughout the fourth-quarter, which generated 33.0% occupancy and an average daily rate of $157.06. Year to-date 2021, the Company has completed the sale of or entered into binding sales contracts on four consolidated hotels for a total sale price of $178.5 million:
- The 245-room Courtyard Downtown San Diego, CA
- The 140-room Residence Inn in Coconut Grove, FL
- The 153-room Capitol Hill Hotel in Washington, DC
- The 112-room Holiday Inn Express in Cambridge, MA
The Company completed the full year and fourth quarter 2020 with approximately $23.6 million of cash & cash equivalents and deposits. As of February 1, 2021, the Company had drawn $138 million of its $250 million Senior Revolving Line of Credit. The Company’s pro forma consolidated debt has a weighted average interest rate of approximately 4.54% and a weighted average life-to-maturity of approximately 3.6 years.
Hersha Hospitality Trust (HT) is a self-advised real estate investment trust in the hospitality sector, which owns and operates high-quality hotels in urban gateway markets and regional resort destinations. The Company's 40 hotels totaling 6,250 rooms are located in New York, Washington, DC, Boston, Philadelphia, South Florida and select markets on the West Coast. The Company's common shares are traded on The New York Stock Exchange under the ticker “HT.”