A STRATEGIC PLAN TO DRIVE OUTSIZED EBITDA
GROWTH
ADVISOR ASHFORD
INC. STEPS UP TO AID EFFORTS
$50 MILLION IN
INCREMENTAL EBITDA TARGETED
OAKTREE FINANCING TARGETED FOR EARLY Q1
PAYOFF
DALLAS, Dec. 17,
2024 /PRNewswire/ -- Ashford Hospitality Trust, Inc.
(NYSE: AHT) ("Ashford Trust" or the "Company") announced today the
launch of a transformative strategic initiative designed to drive
outsized EBITDA growth and substantially improve shareholder value.
The initiative, labeled "GRO AHT,"
centers around three core pillars: G&A Reduction, Revenue
Maximization, and Operational Efficiency.
"GRO AHT represents a bold and
focused plan to enhance performance and create value for our
shareholders," said Stephen Zsigray,
President and Chief Executive Officer of Ashford Trust. "While we
expect to benefit from limited supply growth and other industry
tailwinds in the coming years, we are targeting an incremental
$50 million of EBITDA improvement to
run-rate corporate EBITDA with this initiative – an increase of
more than 20%, which we believe will have a transformative impact
on our equity value and leverage metrics."
GRO AHT: Three Core
Pillars
1. G&A Reduction
With the full support of our advisor, Ashford
Inc., the Company is committed to achieving significant reductions
in corporate overhead. Key actions include:
- Substantially cutting management and board compensation while
enhancing alignment with shareholders
- Negotiating to reduce advisory fees and reimbursable expenses
with advisor Ashford, Inc.
- Reducing professional services and other general and
administrative expenses
2. Revenue Maximization
This pillar is focused on driving outsized
top-line performance across the Ashford Trust portfolio. Components
include:
- Key revenue-focused hires recently made by the Company's
advisor, Ashford Inc., and largest property manager, Remington, to
enhance top-line performance
- Driving aggressive sales efforts to grow room revenue market
share in 2025 by more than 200 basis points across the portfolio,
as measured by RevPAR Index
- Increasing existing ancillary revenues through pricing audits
for food and beverage, gift shops, parking, and other streams
- Rolling out new ancillary revenue streams across the
portfolio
3. Operational
Efficiency
To combat ongoing pressures on property-level
margins, our property managers are implementing several
efficiency-focused measures designed to reduce costs, improve
productivity, and maintain exceptional performance. These
include:
- Reducing payroll expense through recently completed reductions
in force and upcoming changes to PTO policies
- Re-negotiating contracts and bidding out MSAs to achieve cost
savings
- Implementing LED lighting and other energy-saving initiatives
across the portfolio
- Optimizing overtime and contract labor usage to further reduce
labor costs
"GRO AHT is more than a plan,
it's a transformative initiative designed to deliver meaningful and
sustainable growth in 2025 and beyond," added Zsigray. "As we near
repayment of our corporate strategic financing – the primary focus
of our efforts in 2024, we are excited to partner with our advisor
and property managers to deliver on this next initiative. We are
turning the page on COVID and look forward to beginning the next
chapter for Ashford Trust."
Ashford Hospitality Trust will continue to share updates and
milestones as GRO AHT
progresses.
About Ashford Hospitality Trust
Ashford Hospitality Trust is a real estate investment trust
(REIT) focused on investing predominantly in upper upscale,
full-service hotels.
Forward Looking Statements
Certain statements and assumptions in this press release
contain, are based upon or could be considered "forward-looking"
and subject to certain risks and uncertainties that could cause
results to differ materially from those projected. These
forward-looking statements and assumptions are being made pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements in this press
release include, among others, statements about our business and
investment strategy, our future plans, our understanding of our
competition, current market trends and opportunities, projected
operating results and projected capital expenditures. When we
use the words "will likely result," "may," "anticipate,"
"estimate," "target," "should," "expect," "believe," "intend," or
similar expressions, we intend to identify forward-looking
statements. Such statements are subject to numerous assumptions and
uncertainties, many of which are outside Ashford Trust's
control.
These forward-looking statements are subject to known and
unknown risks and uncertainties, which could cause actual results
to differ materially from those anticipated, including, without
limitation, the Risk Factors discussed in our Annual Report on Form
10-K for the year ended December 31,
2023; our business and investment strategy; anticipated or
expected purchases, sales or dispositions of assets; our projected
operating results; completion of any pending transactions; our plan
to pay off strategic financing; our ability to restructure existing
property-level indebtedness; our ability to secure additional
financing to enable us to operate our business; our understanding
of our competition; projected capital expenditures; and the impact
of technology on our operations and business. These and other risk
factors are more fully discussed in our filings with the Securities
and Exchange Commission.
The forward-looking statements included in this press release
are only made as of the date of this press release. Such
forward-looking statements are based on our beliefs, assumptions,
and expectations of our future performance taking into account all
information currently known to us. These beliefs, assumptions, and
expectations can change as a result of many potential events or
factors, not all of which are known to us. If a change occurs, our
business, financial condition, liquidity, results of operations,
plans, and other objectives may vary materially from those
expressed in our forward-looking statements. You should carefully
consider these risks when you make an investment decision
concerning our securities. Investors should not place undue
reliance on these forward-looking statements. The Company can give
no assurance that these forward-looking statements will be attained
or that any deviation will not occur. We are not obligated to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or circumstances,
changes in expectations, or otherwise, except to the extent
required by law.
Non-GAAP Financial Measures
The Company prepares its public financial statements in
conformity with accounting principles generally accepted in
the United States of America
("GAAP"). The Company also uses certain non-GAAP measures to help
our investors evaluate our operating performance. The Company uses
EBITDA, which is defined as net income (loss) before interest
expense and amortization of discounts and loan costs, net, income
taxes, depreciation and amortization, as adjusted. EBITDA is
a non-GAAP measure and we are unable to provide a reconciliation of
forward-looking non-GAAP financial measures to their most directly
comparable GAAP financial measures because we are unable to
provide, without unreasonable effort, a meaningful or accurate
calculation or estimation of amounts that would be necessary for
the reconciliation due to the complexity and inherent difficulty in
forecasting and quantifying future amounts or when they may occur.
Such unavailable information could be significant to future
results.
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SOURCE Ashford Hospitality Trust, Inc.