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RLJ Lodging Suspends 50% of Ops Due to COVID-19

Print Article Contributed by BSM Staff

BETHESDA, MD -- RLJ Lodging Trust, a REIT that primarily owns hotels, has announced that, in addition to the significant efforts underway to protect the health and safety of guests and employees, it has temporarily suspended operations at over 50 percent of its hotels and will continue to evaluate the suspension of operations at its remaining hotels over the next several weeks.

“Over the past several weeks, the impact of the COVID-19 pandemic on the global economy, the United States and the local communities where our hotels are located, has accelerated. Our hearts are with those employees and people who have been directly impacted by this unprecedented event,” said Leslie D. Hale, president and CEO. “We are taking necessary and proactive measures on multiple fronts to address the disruption from this crisis. These measures include temporarily suspending operations in many of our markets and further strengthening our balance sheet and liquidity to position us to navigate through these uncertain times.”

Some of the operational measures that the company has taken to date include:
- Suspension of Hotel Operations: The decision to suspend operations was made in response to the elimination of hotel demand, resulting from COVID-19 and the related government and health official mandates in many markets, which are in the best interest of the communities served by RLJ’s properties and employees.

- Cost Containment Initiatives: The Company’s asset managers are working closely with its hotel management partners to materially reduce operating expenses and preserve liquidity by putting stringent operational cost containment measures in place. These measures include significantly reduced staffing, elimination of non-essential amenities & services and the closure of several floors and all food & beverage outlets at properties that remain open.

- Capital Investment Reduction: The Company expects to reduce its 2020 capital expenditure program by over 80 percent by deferring all capital investments, other than completing projects that are substantially underway and are nearing completion. Near-term, the Company will take appropriate steps to protect and preserve its properties and re-evaluate its 2020 capital plan at a time when there is improved economic clarity.

- ROI Project Suspensions: The Company reviewed all 2020 ROI initiatives and is suspending 90% of these projects.

At the corporate level, the Company is also taking aggressive actions to increase liquidity and preserve cash, including:
- Common Stock Dividend Reduction: The Company’s Board of Trustees recently authorized the reduction in the first quarter common cash dividend to $0.01 per common share.

- Increased Liquidity to $1.2 Billion in Corporate Cash: Out of an abundance of caution the Company took the proactive step to further enhance its liquidity position by drawing $400 million under its $600 million corporate line of credit, adding to its existing cash balance of approximately $800 million. By preemptively drawing this capital, the Company has ensured that it maintains significant liquidity to meet its obligations over an extended period of time. The Company has no scheduled debt maturities until 2022.

The Company, in conjunction with its third party management partners will continue to evaluate additional measures that may be necessary to address the effects of the ongoing disruption in the broader economy and the lodging industry from COVID-19.

RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company's portfolio consists of 103 hotels with approximately 22,570 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.

 

 

 

 


 

 

 

 

 

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