Apple Hospitality Q2 2020 Earnings Report
Key Takeaways
Apple Hospitality REIT reported a challenging second quarter of 2020 due to the COVID-19 pandemic. The company focused on maintaining liquidity, reducing expenses, and maximizing hotel operating results. Despite declines in rate and occupancy, they achieved positive Adjusted Hotel EBITDA for the quarter and positive Adjusted EBITDAre for June. They estimate slightly positive cash flow for July.
Hotel operating expenses were reduced by 67% during the second quarter of 2020 as compared to the same period last year.
As of June 30, 2020, all of the Company’s hotels were open and receiving reservations with enhanced health and sanitation measures in place.
The Company has postponed all non-essential capital improvement projects planned for 2020 and anticipates a reduction of approximately $50 million in originally planned capital improvements for the year.
Effective June 5, 2020, the Company entered into amendments to its unsecured credit facilities to suspend its financial covenants until June 30, 2021, and modify the calculations for the following year.
Apple Hospitality
Apple Hospitality
Forward Guidance
Given the ongoing uncertainties related to the depth and duration of the COVID-19 pandemic and its impact on the travel industry and hotel operations, the Company does not expect to issue guidance until operating fundamentals begin to stabilize.