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ARA H-Trust launches cost-cutting measures amid virus outbreak
ARA US Hospitality Trust (ARA H-Trust) has initiated cost controls by cutting labour cost hours and staffing, closing certain facilities and amenities and reviewing all operating contracts under its "cost mitigation and capital preservation measures", its managers announced on Wednesday.
This comes as its portfolio faces increasing booking cancellations and fewer new reservations, which have led to declines in room occupancies since mid-March, said the managers in a regulatory update.
ARA H-Trust managers may also implement additional measures such as temporary closure of hotels with low occupancy and consolidation of business and operations of hotels in the same geographic vicinity.
In addition, further steps are being taken to conserve cash flow by postponing non-essential capital expenditures and actively managing working capital. It has also recently drawn down on a revolving credit facility, which was extended by a syndicate of local Singapore banks which provided financing for its initial public offering.
The stapled group has no scheduled debt maturities in 2020, with the earliest loan maturity in January 2023.
ARA H-Trust units were trading down US$0.03 or 8.5 per cent to US$0.33 on Wednesday.