RLJ Lodging Trust has interests in 104 hotels with more than 22,700 rooms across 23 states. It primarily owns focused-service and compact full-service hotels that generate most of their revenue from room rentals, have limited food and beverage outlets and meeting space, and require fewer employees than larger facilities.
During the height of the first wave of the COVID-19 outbreak, the hotel REIT suspended operations at 57 of its properties because the expenses of operating at a low occupancy rate were more than if it had closed its doors. Despite those cost-containment efforts, the company estimates that its portfolio will burn between $25 million to $35 million in cash per month.
On a positive note, RLJ Lodging Trust has since reopened 31 properties because of a recovery in demand. Most are either in resort/beach locations or drive-to/leisure markets and are select-service or extended-stay hotels. Meanwhile, it will reopen others as demand improves. These recent openings should help reduce the company's cash burn rate in the near-term, while eventually returning it to profitability as occupancy recovers.
One noteworthy aspect of RLJ's hotel portfolio is that demand has been recovering much quicker for select-service and extended-stay hotels in drive-to and leisure markets than for other hotel types and markets. That suggests it could return to profitability faster than some of its peers.