Ashford Hospitality Trust (NYSE: AHT) stock went up 25% yesterday after this hotel REIT announced that it has issued 7.54 million shares of its 849.4K shares belonging to preferred stock. The rate of interest in preferred stock ranged from 7.375% to 8.45%. The company had earlier suspended dividends on preferred stock in the wake of the pandemic in June 2020.
The company has announced strong earnings in Q1-2021, exceeding past internal budgets and Wall Street estimates. Positive hotel EBITDA is a breath of fresh air for the investors and all stakeholders involved.
In Q1-2021, the company secured strategic financing of $200 million with $250 million additional future commitments to ensure that AHT remains in a liquidity position.
Using capital expenditure prudently
Ashford Hospitality Trust has a de-levered balance sheet in the last year by over $500 million. The company is looking to spend as much as $40 million to $50 million as its capital expenditure. Additionally, the company is starting to plan strategically with restarting those projects on hold until now. Renovation of the ballroom at Ritz-Carlton Atlanta, guest rooms and public spaces at Hilton Santa Cruz, and the guest rooms at Marriott Fremont shall begin now.
Foraying further with clear insight
There may not be a very pleasant picture in hindsight, but there are new operational efficiencies and driving revenue factors foraying further. The company is looking to have clearer visibility and insight into hotel operations as the relationship with brand partners becomes stronger.
Pent-up leisure demand in relaxed states: A positive aspect
Ashford Hospitality Trust witnessed particularly evident pent-up demand in those states where relaxation has been given after COVID-19 plateaued. La Concha Key West Hotel in Q1-2021 witnessed 89% occupancy, while the same occupancy in March was 96% due to spring break.
The company is now capitalizing on rising demand by increasing seasonal premiums on certain room types.