Hersha Hospitality Trust Provides Portfolio Update Related to COVID-19 Outbreak

PHILADELPHIA, March 19, 2020 (GLOBE NEWSWIRE) -- Hersha Hospitality Trust (NYSE: HT) (“Hersha” or the “Company”), owner of high-quality upscale and lifestyle hotels in urban gateway markets and resort destinations, today announced that due to the recent lodging demand shocks stemming from the COVID-19 outbreak, the Company’s first quarter and full year 2020 guidance presented in its fourth-quarter 2019 earnings release should not be relied upon. 

“Since our fourth-quarter earnings call just over three weeks ago, we have experienced an unprecedented pace of transient and group cancellations across our portfolio along with a rapid and pervasive deterioration of forward booking pace related to the outbreak and spread of COVID-19. The demand shock has materially impacted the industry and our portfolio. Although the full impact of the national emergency will become more apparent in the coming weeks, we are working side-by-side with our operators to stem the economic effects of declining revenues. Since this situation is evolving rapidly across all markets, we are unable to provide a clear roadmap regarding the potential impact the COVID-19 outbreak will have on our first-quarter and full-year results,” stated Mr. Jay H. Shah, Hersha’s Chief Executive Officer.

Hersha Hospitality Trust has taken measures to enhance the liquidity profile of the Company and its properties during this unprecedented operating environment. These initiatives include:

• Comprehensive containment of operating expenses through deep cost cuts, restructuring, and select closing of hotels
• Reducing floor operations and closing restaurants and bars to “shrink” hotels to more efficiently serve our limited guest count and curb expenses
• Suspending planned capital expenditures for the balance of the year, resulting in $10 million to $15 million of estimated savings
• CEO & COO reducing salary by 50% and the Board of Trustees electing to take all payments in stock for the remainder of 2020, resulting in cash preservation and additional liquidity

The Company’s top priority during this uncertain time is maintaining adequate liquidity as we manage the Company under the press and uncertainty of the COVID-19 virus and its effect on the travel and hospitality industries. In addition to the previously announced asset dispositions, the Company continues to explore various asset sales and is in active dialogue with our lending partners and bank group to shore up capital available on our $250 million unsecured credit facility. Furthermore, as a part of the Company’s plan to preserve cash, the Company is revoking the previously declared dividends from March 5, 2020 on its common shares, 6.875% Series C Cumulative Redeemable Preferred Shares, 6.50% Series D Cumulative Redeemable Preferred Shares and 6.50% Series E Cumulative Redeemable Preferred Shares.