LuxUrban Hotels Inc. (Nasdaq: LUXH), a hospitality company that
leases entire hotels on a long-term basis, manages these hotels,
and rents out rooms to guests in the properties it leases, today
announced its financial results for the second quarter ended June
30, 2024 (“Q2 2024”). The Company has also submitted its quarterly
report on Form 10-Q to the U.S. Securities and Exchange Commission.
Q2 2024 Financial Overview:
- Net Rental Revenue:
$18.2 million, compared to $31.9 million in Q2 2023.
- Gross (Loss)
Profit: $(22.2) million, compared to a profit of $10.2
million in Q2 2023, impacted by increased rent expenses, surrender
of deposits from exiting properties, and other increased
operational costs. We have streamlined our hotel portfolio to
exclude underperforming properties and now manage 9 hotels with a
total of 1,056 rooms.
- Total Operating
Expenses: $4.2 million, compared to $5.4 million in Q2
2023, reflecting efforts to realign cost structures.
- Net Loss: $(26.8)
million, compared to a net loss of $(26.8) million in Q2 2023.
Rob Arigo, Lux Urban Hotels CEO, commented: “In 2024, we
launched a comprehensive initiative to enhance our company’s
management and operations, which we refer to as LuxUrban 2.0. Our
strategy was focused on the strategic elimination of non-performing
hotel properties, and targeted efforts to reduce operating
overhead. As part of our recent Lux 2.0 transition, we strengthened
our management and operations teams through recruiting talented
directors and officers with significant experience in the
hospitality and financial sectors. While significant work remains
as we navigate the end of 2023, and legacy operations will continue
to present exposure and challenges, we are implementing
transformative changes within LuxUrban that will enhance our
financial stability and provide a solid foundation for future
growth.”
Operational Highlights:
Key initiatives include revenue optimization, expense reduction,
re-branding, and a focus on long-term Master Lease Agreements,
eliminating traditional fees.
Refinement of Hotel Portfolio:
LuxUrban Hotels has refined its portfolio and focused its
geographic operations around New York City. The company is now
operating 9 properties with a total of 1,025 units available.
Cost Management Initiatives:
In Q2 2024, the Company took actions to reduce its operational
expenses, including renegotiating certain lease agreements and
surrendering non-core properties, resulting in non-cash
charges.
Strengthening the Company with Industry
Expertise:
The Company added over 100 years of relevant industry and public
company experience at both executive and Board levels. This
includes the appointment of Non-Executive Chairman Elan Blutinger,
independent board members Kim Schaefer and Alex Lombardo, and Mike
James as Chief Financial Officer. Additionally, LuxUrban has hired
experienced professionals in revenue management and property
operations.
Outlook for the 2H 2024
Looking ahead, LuxUrban Hotels plans to focus on optimizing
revenue management, improving its cash flow profile, and enhancing
its balance sheet through strategic initiatives aimed at
strengthening liquidity. The Company is optimistic about growth
prospects in the second half of 2024 as it moves into peak travel
seasons and continues to benefit from the recovery in the
hospitality sector and the modified portfolio intended to eliminate
nonperforming hotels.
Conference Call & Webcast Information:
- Time &
Date: September 25, 2024, at 5:00PM ET
- PARTICIPANT DIAL IN (TOLL
FREE): 1-877-317-6789
- PARTICIPANT INTERNATIONAL
DIAL IN: 1-412-317-6789
- Webcast
Link: HERE
The simultaneous webcast will be available in the Investor
Relations section of the Company’s website at
www.luxurbanhotels.com.
For access to all applicable financial statements, please see
the company’s quarterly report on 10Q at the following link:
ttps://www.sec.gov/ix?doc=/Archives/edgar/data/0001893311/000182912624006460/luxurbanhotels_10q.htm
LuxUrban Hotels Inc.LuxUrban Hotels Inc.
secures long-term operating rights for entire hotels through Master
Lease Agreements (MLA) and rents out, on a short-term basis, hotel
rooms to business and vacation travelers. The Company is
strategically building a portfolio of hotel properties in
destination cities by capitalizing on the dislocation in commercial
real estate markets and the large amount of debt maturity
obligations on those assets coming due with a lack of available
options for owners of those assets. LuxUrban’s MLA allows owners to
hold onto their assets and retain their equity value while LuxUrban
operates and owns the cash flows of the operating business for the
life of the MLA.
Forward Looking StatementsThis press
release contains certain “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995
(set forth in Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended). The statements contained in this release that are not
purely historical are forward-looking statements. Forward-looking
statements include, but are not limited to, statements regarding
expectations, hopes, beliefs, intentions or strategies regarding
the future. In addition, any statements that refer to projections,
forecasts or other characterizations of future events or
circumstances, including any underlying assumptions, are
forward-looking statements. Generally, the words “anticipates,”
“believes,” “continues,” “could,” “estimates,” “expects,”
“intends,” “may,” “might,” “plans,” “possible,” “potential,”
“predicts,” “projects,” “should,” “would” and similar expressions
may identify forward-looking statements, but the absence of these
words does not mean that a statement is not forward-looking.
Forward-looking statements in this release may include, for
example, statements with respect to the Company’s ability to
successfully de-platform its properties from its former franchise
partner and operate independently, its ability to improve its
working capital and cash flow profiles, enhance its balance sheet
and deliver organic revenue growth, scheduled property openings,
expected closing of noted lease transactions, the Company’s ability
to continue closing on additional leases for properties in the
Company’s pipeline, as well the Company’s anticipated ability to
commercialize efficiently and profitably the properties it leases
and will lease in the future. The forward-looking statements
contained in this release are based on current expectations and
belief concerning future developments and their potential effect on
the Company. There can be no assurance that future developments
will be those that have been anticipated. These forward-looking
statements are subject to a number of risks, uncertainties (some of
which are beyond our control) or other assumptions that may cause
actual results of performance to be materially different from those
expressed or implied by these forward-looking statements, including
those set forth under the caption “Risk Factors” in our public
filings with the SEC, including in Item 1A of our Annual Report on
Form 10-K for the year ended December 31, 2023 filed with the SEC
on April 15, 2024, and any updates to those factors as set forth in
subsequent Quarterly Reports on Form 10-Q or other public filings
with the SEC, the base prospectus comprising part of the
Registration Statement and when filed, the prospectus supplement
filed with respect thereto. The forward-looking information and
forward-looking statements contained in this press
release are made as of the date of this press release,
and the Company does not undertake to update any forward-looking
information and/or forward-looking statements that are contained or
referenced herein, except in accordance with applicable securities
laws.
For more information, contact:Investor
Relations:Jeff Ramson, PCG Advisory
Email: Jramson@pcgadvisory.com
Corporate: Robert Arigo,
CEOEmail: rob@luxurbanhotels.com
LuxUrban Hotels (NASDAQ:LUXH)
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