Ashford Trust targets $4M savings in cost cuts

DALLAS - Ashford Hospitality Trust, Inc. (NYSE: AHT) announced today its latest cost reduction measures, expected to save the company over $4 million annually. These measures are part of Ashford Trust’s larger "GRO AHT" initiative, aiming to improve its EBITDA by $50 million in run-rate annually and subsequently enhance shareholder value. According to InvestingPro data, the company’s current EBITDA stands at $208.39 million, with analysts anticipating continued challenges as net income is expected to decline this year.

The cost-saving strategies include cutting legal spend, accounting and consulting fees, subscriptions and dues, general office expenses, and consolidating bank fees. These initiatives are in addition to previous efforts, which together are projected to contribute more than $18 million in incremental EBITDA. With a current gross profit margin of 19.83% and an overall WEAK financial health score according to InvestingPro, these cost-reduction efforts appear crucial for improving operational efficiency.

Ashford Trust, a real estate investment trust (REIT) specializing in upper-upscale, full-service hotels, continues to work closely with its property managers and advisor Ashford Inc. to implement the "GRO AHT" strategy. While the company’s current ratio of 2.12 indicates sufficient liquidity to meet short-term obligations, InvestingPro analysis suggests the stock is currently trading near its Fair Value. The company promises to keep stakeholders informed as they execute the plan further.

The press release also included forward-looking statements, indicative of Ashford Trust’s expectations for the future performance of its "GRO AHT" plan and its overall business strategy. However, these are subject to various risks and uncertainties that could cause actual results to differ materially.

It is important to note that the financial measures used, such as EBITDA, are non-GAAP measures. Ashford Trust has stated that due to the complexity and inherent difficulty in forecasting and quantifying certain amounts, it cannot provide a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures at this time.

This announcement is based on a press release statement from Ashford Hospitality Trust, Inc.

In other recent news, Ashford Hospitality Trust reported a net loss of $131.1 million for the fourth quarter of 2024, alongside strategic initiatives intended to improve future performance. The company has invested heavily in hotel transformations, such as converting two hotels into Marriott brands, which are expected to enhance their market positioning. Additionally, Ashford Hospitality Trust has outlined its "Grow AHT" initiative, aiming to add $50 million to corporate EBITDA through operational efficiencies. The company has also adjusted its bylaws to lower the quorum requirement for its 2025 annual stockholders’ meeting, a move driven by changes in shareholder dynamics. Recent financial maneuvers include refinancing 16 assets and fully repaying the remaining balance on corporate strategic financing, which reinforces Ashford’s financial position. The company has no plans to reinstate its common dividend in 2025, choosing instead to focus on strategic initiatives. Analysts have shown interest in Ashford’s strategic direction, particularly the implementation of the "Grow AHT" initiative and the performance of converted hotels. Ashford’s future outlook includes a capital expenditure budget of $95 to $115 million aimed at optimizing its portfolio and reducing leverage.

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