Ashford Selling More Hotels to Pay Off Debt
As Ashford Hospitality Trust remains buried in a mountain of debt, the company is looking to offload a number of hotels.
Dallas-based Ashford, led by CEO Monty Bennett, will go on a selling spree to remedy its financial troubles, as it’s surrendering more than a dozen of its hotels to lenders, the Dallas Morning News reported.
The firm, which owns 100 hotels nationwide and seven in Dallas-Fort Worth, revealed in July that it had missed loan payments on 19 hotels, with plans to give them back to lenders. It has extended mortgages for 17 other hotels. Earlier this year, the combination of paydowns and give-backs was expected to lower the company’s debt by approximately $700 million.
Of Ashford’s hotels in default, two are in the Dallas area — Courtyard Plano Legacy Park and Residence Inn Plano. The rest of the portfolio includes properties in Las Vegas and Atlanta.
“We continue to work with the servicer on a consensual transfer of these assets to the lender and expect that to be completed sometime in the fourth quarter,” Ashford CFO Deric S. Eubanks told investors this week.
As of September, the company holds about $3.6 billion in loans with an average interest rate of 7.9 percent. The ongoing struggle for hotel operators stems from increased costs and decreased business traffic due to the lasting impacts of the pandemic.
Ashford reported over $343 million in revenue last quarter, an improvement from the same period in 2022. But it recorded a net loss of $68.6 million, reflecting the ongoing financial strain. However, the company expressed optimism about its geographically diverse portfolio and noted a 4 percent increase in revenue per available room during the third quarter, the outlet reported.
To generate funds, Ashford sold ownership in the WorldQuest Resort in Orlando for $14.8 million and aims to secure $100 million or more from the sale of six additional properties on the market. The company has plans for upgrades and brand changes for hotels in New Orleans and Key West, with the proceeds intended to pay down debt and bolster working capital.
—Quinn Donoghue
