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Mar 31, 2022
Service Properties Trust Q1 2022 Earnings Report
Announced first quarter 2022 results with a net loss of $(0.73) per common share and adjusted EBITDAre of $90.1 million.
Key Takeaways
Service Properties Trust reported a net loss of $(0.73) per common share for Q1 2022. The company's Adjusted EBITDAre increased to $90.1 million. SVC amended its revolving credit facility and extended the maturity to January 2023. The company also made progress on its hotel disposition plan.
Hotel operating trends began to improve in mid-February as the impact of the Omicron variant subsided and bookings increased at urban and select service hotels.
Comparable RevPAR improved as the first quarter progressed from 37.3% below 2019 levels in January 2022 to 25.7% below 2019 levels in March 2022.
Net lease portfolio continues to provide steady cash flow driven by a diverse mix of tenants and industries.
Since December 2021, SVC has either closed or are under purchase and sale agreements for 64 hotels for an aggregate sales price of $539.3 million.
Revenue by Segment
Forward Guidance
SVC expects to benefit further from a rebound in business travel in the coming quarters, particularly at its full service hotels as urban centers continue to reopen.
Positive Outlook
- Bookings at urban and select service hotels are expected to continue to increase.
- Business travel is expected to continue to improve.
- SVC will benefit from improvements in business travel.
- SVC has modified certain covenants under its credit agreement through December 31, 2022.
- SVC expects to complete sales of properties by the end of the second quarter of 2022.
Challenges Ahead
- The hotel industry and SVC’s business are subject to various risks, including risks beyond its control, such as the continued impact of the COVID-19 pandemic and economic conditions.
- Bookings at SVC’s urban and select service may not improve at SVC’s hotels and may decline in the future.
- SVC may not realize any benefits from improvements in business travel, if any.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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