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Chatham Lodging Trust Implements Plan to Mitigate COVID-19 Impact
“The hotel industry is in the midst of unprecedented disruption due to the extreme severity of the COVID-19 pandemic, and occupancy across the hotel industry has plummeted to levels never before experienced,” commented
“As we have previously stated, our best-in-class operating platform with Island Hospitality gives us the tools to act more expeditiously than others which has a meaningful impact on the top- and bottom-line. This also enables us to generate the highest operating margins of all lodging REITs and to remain open at historically low occupancy levels,” Fisher concluded.
Chatham has taken aggressive actions to mitigate the operating and financial impact of the COVID-19 (coronavirus) pandemic. Some of the major steps include:
Suspended its monthly dividend, preserving approximately
$5.3 millionper month and approximately $64 millionon an annual basis.
Reduced its 2020 capital expenditures budget by approximately
$10 millionor 45 percent.
Drew down cash on its unsecured credit facility, increasing its cash liquidity position to approximately
- Chatham also owns twelve unencumbered hotels available as collateral to source additional liquidity
Temporarily reduced compensation for its executive officers. Fisher and
Dennis Craven, executive vice president and chief operating officer, have both volunteered to reduce their salaries by 50 percent. Jeremy Wegner, chief financial officer, has volunteered to reduce his salary by 25 percent.
Lessened compensation for its
Board of Trustees, who voluntarily agreed to temporarily reduce their proposed 2020 base compensation by approximately 25 percent.
Forward-Looking Statement Safe Harbor
Note: This press release contains forward-looking statements within the meaning of federal securities regulations. These forward-looking statements are identified by their use of terms and phrases such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "should," "plan," "predict," "project," "will," "continue" and other similar terms and phrases, including references to assumption and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to: national and local economic and business conditions, including the effect on travel of potential terrorist attacks or global pandemics, that will affect occupancy rates at the company’s hotels and the demand for hotel products and services; operating risks associated with the hotel business; risks associated with the level of the company’s indebtedness and its ability to meet covenants in its debt agreements; relationships with property managers; the company’s ability to maintain its properties in a first-class manner, including meeting capital expenditure requirements; the company’s ability to compete effectively in areas such as access, location, quality of accommodations and room rate structures; changes in travel patterns, taxes and government regulations which influence or determine wages, prices, construction procedures and costs; the company’s ability to complete acquisitions and dispositions; and the company’s ability to continue to satisfy complex rules in order for the company to remain a REIT for federal income tax purposes and other risks and uncertainties associated with the company’s business described in the company's filings with the