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Sunstone
🇺🇸 NYSE:SHO
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Sep 30, 2020

Sunstone Q3 2020 Earnings Report

Sunstone's third-quarter results were impacted by the global pandemic, however, the company saw several signs that the recovery that began in May and June appeared to be gaining steam.

Key Takeaways

Sunstone Hotel Investors reported a challenging third quarter due to the ongoing global pandemic. Despite the difficulties, the company saw positive signs of recovery, with sequential monthly gains in occupancy and improved transient room reservations. The company is focused on reducing cash burn and maintaining a strong liquidity position.

Comparable portfolio revenues were $24 million and RevPAR was $17.58, which represents a decline of 91% and 92% respectively, compared to the third quarter of last year.

The company has successfully resumed operations at the majority of its hotels.

Those hotels that have been open, in general, have achieved sequential monthly gains in occupancy.

Transient room reservations have gradually improved over the past few months.

Total Revenue
$28.9M
Previous year: $282M
-89.7%
EPS
-$0.26
Previous year: $0.29
-189.7%
RevPAR
17.58%

Sunstone

Sunstone

Sunstone Revenue by Geographic Location

Forward Guidance

The company expects portfolio performance to improve in the fourth quarter and beyond now that several of their larger hotels have resumed operations. The company estimates a total monthly corporate cash burn rate before capital investment of approximately $16 to $20 million a month.

Positive Outlook

  • The company has successfully resumed operations at the majority of its hotels.
  • Those hotels that have been open, in general, have achieved sequential monthly gains in occupancy.
  • Transient room reservations have gradually improved over the past few months.
  • Group production, which remains well off normal levels, increased on a sequential basis.
  • The company's monthly cash burn rate has been further reduced as well as their significant liquidity position.

Challenges Ahead

  • Nearly all of the group business cancelled in the third quarter.
  • Group cancellations in the first quarter of 2021 have increased.
  • Group business will not return in scale until there is greater comfort in traveling and congregating.
  • Group business is unlikely to return in a meaningful way until a vaccine or reliable therapeutics are developed.
  • The third quarter adjusted EBITDA was a loss of $36 million

Company Overview

Full financial data and analysis

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