LuxUrban Hotels Inc. Reports Second Quarter 2024 Financial Results
LuxUrban Hotels Inc. (Nasdaq: LUXH) reported its Q2 2024 financial results, revealing significant changes as part of its LuxUrban 2.0 initiative. The company experienced a decrease in net rental revenue to $18.2 million, down from $31.9 million in Q2 2023. A gross loss of $22.2 million was reported, compared to a profit of $10.2 million in the previous year, impacted by increased expenses and portfolio restructuring.
The company has streamlined its portfolio to 9 hotels with 1,056 rooms, focusing on New York City. Total operating expenses decreased to $4.2 million from $5.4 million in Q2 2023. The net loss remained stable at $26.8 million. LuxUrban has implemented cost management initiatives, including renegotiating lease agreements and surrendering non-core properties. The company has also strengthened its management team with industry experts and is optimistic about growth prospects in the second half of 2024.
LuxUrban Hotels Inc. (Nasdaq: LUXH) ha riportato i risultati finanziari del secondo trimestre 2024, rivelando cambiamenti significativi come parte della sua iniziativa LuxUrban 2.0. L'azienda ha registrato una riduzione del reddito da locazione netto a 18,2 milioni di dollari, rispetto ai 31,9 milioni di dollari nel secondo trimestre 2023. È stato riportato un perdita lorda di 22,2 milioni di dollari, rispetto a un profitto di 10,2 milioni di dollari dell'anno precedente, influenzato dall'aumento delle spese e dalla ristrutturazione del portafoglio.
L'azienda ha snellito il proprio portafoglio a 9 hotel con 1.056 camere, concentrandosi su New York City. Le spese operative totali sono diminuite a 4,2 milioni di dollari rispetto ai 5,4 milioni di dollari nel secondo trimestre 2023. La perdita netta è rimasta stabile a 26,8 milioni di dollari. LuxUrban ha attuato iniziative di gestione dei costi, tra cui la rinegoziazione dei contratti di locazione e la cessione di proprietà non strategiche. L'azienda ha anche rinforzato il proprio team di gestione con esperti del settore ed è ottimista riguardo alle prospettive di crescita nella seconda metà del 2024.
LuxUrban Hotels Inc. (Nasdaq: LUXH) presentó sus resultados financieros del segundo trimestre de 2024, revelando cambios significativos como parte de su iniciativa LuxUrban 2.0. La empresa experimentó una disminución en los ingresos netos de alquiler a 18,2 millones de dólares, bajando de 31,9 millones en el segundo trimestre de 2023. Se reportó una pérdida bruta de 22,2 millones de dólares, en comparación con una ganancia de 10,2 millones en el año anterior, afectada por el aumento de gastos y la reestructuración de la cartera.
La empresa ha simplificado su cartera a 9 hoteles con 1,056 habitaciones, centrándose en la ciudad de Nueva York. Los gastos operativos totales disminuyeron a 4,2 millones de dólares desde los 5,4 millones en el segundo trimestre de 2023. La pérdida neta se mantuvo estable en 26,8 millones de dólares. LuxUrban ha implementado iniciativas de gestión de costos, incluyendo la renegociación de contratos de arrendamiento y la entrega de propiedades no estratégicas. La empresa también ha fortalecido su equipo de gestión con expertos de la industria y es optimista sobre las perspectivas de crecimiento en la segunda mitad de 2024.
LuxUrban Hotels Inc. (Nasdaq: LUXH)는 2024년 2분기 재무 결과를 발표하며 LuxUrban 2.0 이니셔티브의 일환으로 주요 변화를 공개했습니다. 이 회사는 순 임대 수익이 1,820만 달러로 감소했습니다, 이는 2023년 2분기 3,190만 달러에서 감소한 수치입니다. 2,220만 달러의 총 손실이 발생했습니다, 이는 전년 대비 1,020만 달러의 이익과 비교됩니다. 증가한 비용과 포트폴리오 재구성이 영향을 미쳤습니다.
회사는 자신의 포트폴리오를 1,056개의 객실을 갖춘 9개 호텔로 축소했습니다, 뉴욕시에 집중하고 있습니다. 총 운영 비용은 2023년 2분기의 540만 달러에서 420만 달러로 감소했습니다. 순손실은 2,680만 달러로 안정세를 유지했습니다. LuxUrban은 임대 계약 재협상 및 비핵심 자산 반환을 포함한 비용 관리 이니셔티브를 시행했습니다. 회사는 또한 업계 전문가로 관리 팀을 강화했습니다고 전하며 2024년 하반기 성장 전망에 대해 긍정적인 시각을 가지고 있습니다.
LuxUrban Hotels Inc. (Nasdaq: LUXH) a annoncé ses résultats financiers du deuxième trimestre 2024, révélant des changements significatifs dans le cadre de son initiative LuxUrban 2.0. L'entreprise a connu une diminution des revenus locatifs nets à 18,2 millions de dollars, contre 31,9 millions de dollars au deuxième trimestre 2023. Un perte brute de 22,2 millions de dollars a été rapportée, par rapport à un bénéfice de 10,2 millions de dollars l'année précédente, impactée par l'augmentation des dépenses et la restructuration du portefeuille.
L'entreprise a rationalisé son portefeuille à 9 hôtels avec 1.056 chambres, en mettant l'accent sur New York. Les dépenses d'exploitation totales ont diminué à 4,2 millions de dollars contre 5,4 millions de dollars au deuxième trimestre 2023. La perte nette est restée stable à 26,8 millions de dollars. LuxUrban a mis en œuvre des initiatives de gestion des coûts, notamment la renégociation des baux et l'abandon de propriétés non stratégiques. L'entreprise a également renforcé son équipe de direction avec des experts du secteur et se montre optimiste quant aux perspectives de croissance pour la seconde moitié de 2024.
LuxUrban Hotels Inc. (Nasdaq: LUXH) hat die finanziellen Ergebnisse des zweiten Quartals 2024 veröffentlicht und dabei bedeutende Veränderungen im Rahmen ihrer LuxUrban 2.0-Initiative offengelegt. Das Unternehmen verzeichnete einen Rückgang der Netto-Mieterlöse auf 18,2 Millionen US-Dollar, gegenüber 31,9 Millionen US-Dollar im zweiten Quartal 2023. Es wurde ein Bruttoverlust von 22,2 Millionen US-Dollar gemeldet, im Vergleich zu einem Gewinn von 10,2 Millionen Dollar im Vorjahr, beeinflusst durch gestiegene Kosten und eine Umstrukturierung des Portfolios.
Das Unternehmen hat sein Portfolio auf 9 Hotels mit 1.056 Zimmern gestrafft, wobei der Schwerpunkt auf New York City liegt. Die Gesamtausgaben sanken im zweiten Quartal 2023 von 5,4 Millionen auf 4,2 Millionen US-Dollar. Der Nettoverlust blieb stabil bei 26,8 Millionen US-Dollar. LuxUrban hat Initiativen zum Kostenmanagement umgesetzt, einschließlich der Neuverhandlung von Mietverträgen und der Aufgabe nicht zum Kerngeschäft gehörender Immobilien. Zudem hat das Unternehmen sein Managementteam mit Branchenexperten verstärkt und zeigt sich optimistisch hinsichtlich der Wachstumsaussichten in der zweiten Hälfte des Jahres 2024.
- Reduction in total operating expenses from $5.4 million to $4.2 million
- Streamlined hotel portfolio to focus on 9 properties in New York City
- Addition of over 100 years of industry and public company experience to management and board
- Implementation of cost management initiatives, including lease renegotiations
- Net rental revenue decreased from $31.9 million to $18.2 million
- Gross profit of $10.2 million in Q2 2023 turned into a loss of $22.2 million in Q2 2024
- Net loss remained unchanged at $26.8 million
- Reduction in total number of rooms from previous portfolio
Insights
LuxUrban Hotels' Q2 2024 results reveal significant challenges and a major strategic shift. The 54% year-over-year decline in net rental revenue to
The "LuxUrban 2.0" initiative, while potentially beneficial long-term, has led to short-term pain. The company has drastically reduced its portfolio from 31 to 9 hotels, which explains the revenue decline. This streamlining could improve profitability if executed well, but it also increases concentration risk in the New York City market.
The addition of experienced industry professionals to the management team is a positive step, but the company's financial health remains precarious. With a market cap of just
LuxUrban's strategic pivot to a more focused portfolio is a double-edged sword. By concentrating on New York City and reducing their hotel count from 31 to 9, they're betting on quality over quantity. This could lead to better operational efficiency and higher revenue per available room (RevPAR) in the long run.
The adoption of Master Lease Agreements (MLAs) is an innovative approach that could provide more stable cash flows and eliminate traditional fees. However, it also increases fixed costs and financial risk, especially in a volatile market like New York City.
The company's focus on revenue optimization and expense reduction is important given the current financial situation. The addition of experienced professionals in revenue management is particularly important, as this could help maximize occupancy rates and average daily rates (ADR) in their remaining properties.
While the short-term outlook is challenging, the potential for recovery in the second half of 2024 during peak travel seasons could provide some relief. However, the success of this turnaround strategy remains highly uncertain and dependent on broader economic conditions and the recovery of the hospitality sector.
MIAMI, Sept. 25, 2024 (GLOBE NEWSWIRE) -- 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 Statements
This 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, CEO
Email: rob@luxurbanhotels.com
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