Ashford Hospitality Trust, Inc (NYSE: AHT) gained 6.38% on June 9, 2021, and trades at $6.67. It is a clear breakout and expects to offer decent gains if it could sustain above $5.67.
Ashford reported positive EBITDA in Q1 2021. It benefits from growing demand for its hotels because the vaccination is at its highest peak and gives more confidence for the people to do business.
With the economy opening up, the average daily expects to surge by 8.22% next year. Ashford holds investments of $3.364 billion in hotel properties.
Its loans at the end of Q1 2021 are $3.9 billion. The company tries to divest its debt holders and hotels to collect all its money.
Since the company sits on a huge debt, the stock may not offer rich dividends in the long term to its investors.
Reopening is a benefit for the debt holders
The preferred stock owners and debt holders expect to earn some profits with the reopening of the hospitality industry. Ashford’s management owes a significant amount to debt holders by 2025. As a result, the shareholders may gain in the coming years.
Ashford works with reputed brands such as Ritz-Carlton, SpringHill Suites, Hampton Inn, and Hilton. It obtained 56% of its EBITDA from hotels that offer the Marriott brand. Around 31% of its EBIDTA (Earnings Before Interest, Taxes, Depreciation, and Amortization) accounts for hotels that operate under the trade name Hilton. The company expects to maintain decent financial results in the future, considering the location of its hotel properties and its operating model.
Ashford maintains hotel properties in the best 25 markets. Since it targets different geographies, the company easily manages the COVID-19 pandemic crisis.
Though, it needs to close one hotel in one location, Ashford operates hotels in other regions. Ashford expects to recover to pre-covid levels revenues in the next two years. A lot of investors are optimistic about this stock.