CorePoint Lodging Reports Third Quarter 2020 Results
IRVING, Texas , Nov. 05, 2020 (GLOBE NEWSWIRE) -- CorePoint Lodging Inc. (NYSE: CPLG) (“CorePoint” or the “Company”), a pure play select-service hotel owner strategically focused on the midscale and upper-midscale segments, today reported operational and financial results for the third quarter ended September 30, 2020.
Third Quarter 2020 and Subsequent Highlights
- Net loss of
$(8) million , or$(0.14) loss per fully diluted share - Comparable RevPAR of
$37.35 , a decrease of42.2% from the same period in 2019 with 798 basis points of RevPAR Index market share gain - Adjusted EBITDAre of
$8 million - Adjusted FFO attributable to common stockholders of
$0 million - All of the Company’s hotels are currently open and operational
- Hotel room demand was generally consistent during the quarter with comparable occupancy of
52.3% - Sold 20 non-core hotels for a combined gross sales price of approximately
$97 million during the quarter - Subsequent to quarter end, sold one non-core hotel for a gross sales price of approximately
$7 million , resulting in a total of 51 non-core hotels sold during 2020 for a combined gross sales price of approximately$233 million and a total of 95 non-core hotels sold since March 2019 for a combined gross sales price of approximately$410 million - An additional 22 hotels are under contract with qualified buyers, expected to generate approximately
$110 million of gross proceeds, and expected to close by the end of the second quarter of 2021, subject to market and other conditions
“We continue to believe that our portfolio of select-service hotels predominately focused on the midscale segments is well positioned to capture the current levels of transient room demand,” noted Keith Cline, President and Chief Executive Officer of CorePoint. “Our portfolio footprint is mostly in suburban markets, as well as drive to destination markets and interstate adjacent locations. This portfolio positioning has enabled us to benefit from leisure travel and some recovery in certain segments of corporate travel related to essential businesses. When combined with our aggressive capital preservation and cost containment efforts at both the property and corporate level, we achieved a positive hotel level Adjusted EBITDAre of approximately
“While we are encouraged by our third quarter results, we remain cautious about the uncertainty in the months ahead for the lodging industry as we continue to navigate the ongoing global pandemic. The fourth quarter and the first quarter have historically been part of our slower non-peak season. If those historical trends hold, we are cognizant of the potential for softening in operating metrics, but we are prepared to adjust our cost control initiatives as overall business conditions evolve.”
Mr. Cline added, “Throughout the quarter, we continued our successful execution of our real estate strategy. This strategy is a proven value creator for our business. Since the beginning of the year, we have closed on the sale of 51 hotels for gross proceeds of
Selected Statistical and Financial Data
(Unaudited, $ in millions, except RevPAR and ADR)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||
| 2020 | 2019 | % Change | 2020 | 2019 | % Change | ||||||||||||||||||||
| Net loss | $ | (8 | ) | $ | (12 | ) | 33.3 | % | $ | (136 | ) | $ | (58 | ) | (134.5 | %) | |||||||||
| Total revenues | $ | 107 | $ | 215 | (50.2 | %) | $ | 325 | $ | 642 | (49.4 | %) | |||||||||||||
| Adjusted EBITDAre | $ | 8 | $ | 38 | (78.9 | %) | $ | 10 | $ | 127 | (92.1 | %) | |||||||||||||
| Adjusted FFO attributable to common stockholders | $ | — | $ | 28 | (100.0 | %) | $ | (14 | ) | $ | 81 | (117.3 | %) | ||||||||||||
| Comparable Occupancy (1) | 52.3 | % | 68.8 | % | (1,650) bps | 47.9 | % | 69.0 | % | (2,110) bps | |||||||||||||||
| Comparable ADR (1) | $ | 71.42 | $ | 93.95 | (24.0 | %) | $ | 78.07 | $ | 94.52 | (17.4 | %) | |||||||||||||
| Comparable RevPAR (1) | $ | 37.35 | $ | 64.67 | (42.2 | %) | $ | 37.38 | $ | 65.25 | (42.7 | %) | |||||||||||||
| Comparable Hotel Adjusted EBITDAre margin (1) | 12.2 | % | 22.5 | % | (1,030) bps | 8.5 | % | 25.2 | % | (1,670) bps | |||||||||||||||
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| (1) | Comparable Hotels includes 213 hotels of the total 220 hotels owned as of September 30, 2020. |
Third Quarter 2020 Financial and Operating Results
The Company reported net loss of
Comparable RevPAR for the third quarter of 2020 decreased
Adjusted EBITDAre for the third quarter of 2020 was
Operations Update and Measures to Mitigate Impact of COVID-19
Due to the operational and financial impact from the COVID-19 pandemic and requirements from state and local government and public health authorities, CorePoint, along with its third-party manager, temporarily did not accept transient guests or most other reservations at 30 of the Company’s hotels, beginning in late March, 2020, in order to minimize ongoing operating expenses and conserve cash. By early August 2020, the Company had resumed operations at all of its locations.
Comparable occupancy by month during the third quarter of 2020 reflected consistent hotel room demand as the Company’s hotels benefited from leisure travel, certain segments of corporate travel related to essential businesses and being located in drive-to destinations. The following table summarizes select operating statistics for the months of July, August, and September of 2020:
| Comparable Occupancy | Comparable ADR | Comparable RevPAR | ||||||||
| July 2020 | 53.1 | % | $ | 71.27 | $ | 37.86 | ||||
| August 2020 | 52.7 | % | $ | 71.95 | $ | 37.94 | ||||
| September 2020 | 51.0 | % | $ | 71.01 | $ | 36.21 | ||||
The Company continues to implement the following measures to control costs and preserve capital to mitigate the ongoing operational and financial impact from the COVID-19 pandemic:
- Reducing staffing levels, eliminating non-essential amenity offerings, minimizing spending at all hotels, and closing sections and / or floors at some hotels to maximize efficiencies.
- Deferring all non-essential capital investments and expenditures for the balance of 2020, with the exception of life safety and critical operational needs.
- Implementing cost containment measures with respect to all other corporate spending.
- Related to Board and executive compensation, CorePoint’s Board of Directors will be paid their board fees for the remainder of 2020 in the form of deferred stock units and Mr. Cline has agreed to take a portion of his compensation for the remainder of 2020 in the form of restricted stock in lieu of cash.
Dispositions
Since CorePoint commenced its initial non-core disposition program of 78 hotels in March 2019, 66 of these hotels have been successfully sold for a combined gross sales price of approximately
Hotel Disposition Summary ($ in millions):
| Phase 1 | Phase 2 | Total | |||||||||
| Total number of non-core hotels: | 78 |
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About CPLGCorePoint Lodging Inc. (NYSE: CPLG) is the only pure-play publicly traded U.S. lodging REIT strategically focused on the ownership of midscale and upper-midscale select-service hotels. CorePoint owns a geographically diverse portfolio of La Quinta branded hotels in attractive locations primarily in or near employment centers, airports and major travel thoroughfares.
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