MIAMI - LuxUrban Hotels Inc. (NASDAQ: LUXH, LUXHP), a company specializing in leasing and renting hotel rooms, has announced preliminary unaudited financial results for the fourth quarter and the full year ending December 31, 2023.
The company reported a substantial increase in net rental revenue, rising 160% to approximately $114.0 million from $43.8 million the previous year. EBITDA also saw a significant rise, reaching approximately $30.6 million compared to $14.3 million in the prior year, with adjusted EBITDA climbing to roughly $35.0 million from $14.3 million.
These increases are attributed to the expansion of the company's portfolio, with an average of 1,249 units available for rent, up from 487, and improvements in Total Revenue Per Available Room (TRevPAR).
Despite these gains, the company experienced a net loss of approximately $65.2 million, widening from a $9.4 million loss. Adjusting for the one-time negative impact of about $5 million due to the transition to the Wyndham Hotels & Resorts platform, the net loss would be around $60.8 million.
LuxUrban's strategic partnership with Wyndham has been highlighted as a significant contributor to the company's growth, providing financial, branding, and operational support. The company's focus on elevating its industry profile and expanding its operating model has been reinforced by the addition of experienced industry professionals to its management team and board of directors.
The company has also entered into a master collateral trust agreement to secure up to $10 million in surety bonds to fund deposit requirements under long-term hotel leases. This move is intended to support future lease acquisitions and reflects a shift towards a more strategic approach to growth in 2024, with an emphasis on improving working capital, receivables, and free cash flow.
LuxUrban has decided to surrender certain underperforming leases, which is expected to enhance TRevPAR and operating margins moving forward. As of the end of 2023, the company leased 18 properties with 1,599 units available for rent. After surrendering four properties in March 2024, the company now leases 14 properties with 1,406 units available.
The company has also delayed the filing of its Annual Report on Form 10-K due to expanded audit procedures, but does not anticipate material changes to its operating financial results for 2023. An investor call previously scheduled for March 27, 2024, has been canceled in light of the ongoing audit.
This article is based on a press release statement from LuxUrban Hotels Inc.
InvestingPro Insights
LuxUrban Hotels Inc. (NASDAQ: LUXH) has demonstrated a remarkable revenue growth trajectory, with the company's revenue surging by 159.26% in the last twelve months as of Q1 2023. This substantial increase aligns with the company's reported rise in net rental revenue and EBITDA for the year ending December 31, 2023. The InvestingPro data highlights the company's aggressive expansion and operational scaling, reflected in the revenue growth figures.
Despite experiencing a widened net loss, analysts are optimistic about LuxUrban's future profitability. One of the key InvestingPro Tips suggests that net income is expected to grow this year, which may reassure investors about the company's potential to overcome its current loss-making status.
Moreover, with a significant return over the last week, LuxUrban's stock shows signs of investor confidence bouncing back, which could be an indicator of market belief in the company's strategic moves and partnership with Wyndham Hotels & Resorts.
Furthermore, LuxUrban's stock is currently trading at a low revenue valuation multiple, as indicated by the InvestingPro Data. This could present an attractive entry point for investors who are confident in the company's growth prospects and are looking for potentially undervalued opportunities.
The company's proactive approach to surrendering underperforming leases also suggests a strategic focus on improving operational efficiency and margins.
For a deeper analysis and more InvestingPro Tips on LuxUrban Hotels Inc., interested readers can explore https://www.investing.com/pro/LUXH. There are 11 additional tips available that can provide further insights into the company's financial health and market position. To access these tips and more, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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