IRVINE, Calif., March 5, 2020 /PRNewswire/ -- Sunstone Hotel
Investors, Inc. (the "Company" or "Sunstone") (NYSE: SHO), the
owner of Long-Term Relevant Real Estate® in the hospitality sector,
today announced that due to uncertainty related to the ultimate
impact on travel demand resulting from the COVID-19 virus outbreak,
the Company is withdrawing its first quarter and full-year 2020
guidance.
On February 18, 2020, as part of
the Company's full-year 2019 earnings report, Sunstone provided
first quarter and full-year 2020 guidance for certain operational
and earnings metrics. Included in this guidance was approximately
$1 million of lost revenue resulting
primarily from known group customer cancelations related to
COVID-19. Since the time this guidance was provided, the
Company has experienced a material increase in expected lost
revenue from group customer cancelations, which, as of today's
date, have increased to approximately $11
million. The majority of the lost revenue is related
to business that was scheduled to occur in March 2020. The Company believes that the
impact from these trends will most likely result in the Company
failing to achieve the previously provided first quarter guidance
for net income, comparable portfolio RevPAR growth, Adjusted
EBITDAre, Adjusted FFO, and Adjusted FFO per diluted share.
The impact of COVID-19 on travel demand continues to evolve
and the Company is currently not able to accurately assess the
financial impact on its full-year operations. As such, the
full-year guidance previously provided on February 18, 2020 should no longer be relied
upon.
John Arabia, President and Chief
Executive Officer, stated, "Since the time of our earnings call, we
have witnessed a sizeable increase in both group cancelations and
corporate travel policy restrictions related to COVID-19, both of
which are expected to reduce our near-term occupancy and hotel
revenues. As a result, we are unlikely to achieve our first
quarter 2020 guidance. Furthermore, as we are currently unable to
quantify the full-year impact of COVID-19 on hotel operating
fundamentals, we believe it is prudent to withdraw our previously
provided full-year guidance. As the situation evolves, we
will continue to assess the expected impact of COVID-19 on our
operations and earnings, while working to protect the hotel
employees and guests."
The Company cannot provide any assurances regarding future
business cancelations or their effect on its results. The
Company intends to provide an update on its first quarter 2020
earnings call based on the information available at that time.
About Sunstone Hotel Investors, Inc.
Sunstone Hotel Investors, Inc. is a real estate investment trust
("REIT") that invests in Long-Term Relevant Real Estate® within the
hospitality sector. Sunstone's hotels are primarily in the
urban and resort upper upscale segment and are predominantly
operated under nationally recognized brands such as Marriott,
Hilton and Hyatt. For further information, please visit Sunstone's
website at www.sunstonehotels.com.
Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of federal securities laws and regulations. These
forward-looking statements are identified by their use of terms and
phrases such as "anticipate," "believe," "continue," "could,"
"estimate," "expect," "intend," "may," "plan," "predict,"
"project," "should," "will" and other similar terms and phrases,
including opinions, references to assumptions and forecasts of
future results. Forward-looking statements are not guarantees of
future performance and involve known and unknown risks,
uncertainties and other factors that may cause the actual results
to differ materially from those anticipated at the time the
forward-looking statements are made. These risks include, but are
not limited to: volatility in the debt or equity markets affecting
our ability to acquire or sell hotel assets; international,
national and local economic and business conditions, including the
likelihood of a U.S. recession, government shutdown, changes in the
European Union or global economic slowdown, as well as any type of
flu, disease-related pandemic or the adverse effects of climate
change, affecting the lodging and travel industry; the ability to
maintain sufficient liquidity and our access to capital markets;
terrorist attacks or civil unrest, which would affect occupancy
rates at our hotels and the demand for hotel products and services;
operating risks associated with the hotel business; risks
associated with the level of our indebtedness and our ability to
meet covenants in our debt and equity agreements; relationships
with property managers and franchisors; our ability to maintain our
properties in a first-class manner, including meeting capital
expenditure requirements; our ability to compete effectively in
areas such as access, location, quality of accommodations and room
rate structures; changes in travel patterns, taxes and government
regulations, which influence or determine wages, prices,
construction procedures and costs; our ability to identify,
successfully compete for and complete acquisitions; the performance
of hotels after they are acquired; necessary capital expenditures
and our ability to fund them and complete them with minimum
disruption; our ability to continue to satisfy complex rules in
order for us to qualify as a REIT for federal income tax purposes;
severe weather events or other natural disasters; risks impacting
our ability to pay anticipated future dividends; and other risks
and uncertainties associated with our business described in the
Company's filings with the Securities and Exchange Commission.
Although the Company believes the expectations reflected in such
forward-looking statements are based upon reasonable assumptions,
it can give no assurance that the expectations will be attained or
that any deviation will not be material. All forward-looking
information provided herein is as of the date of this release, and
the Company undertakes no obligation to update any forward-looking
statement to conform the statement to actual results or changes in
the Company's expectations.
This release should be read together with the consolidated
financial statements and notes thereto included in our most recent
reports on Form 10-K and Form 10-Q. Copies of these reports are
available on our website at www.sunstonehotels.com and through the
SEC's Electronic Data Gathering Analysis and Retrieval System
("EDGAR") at www.sec.gov.
For Additional Information:
Bryan Giglia
Sunstone Hotel Investors, Inc.
(949) 382-3036
Aaron Reyes
Sunstone Hotel Investors, Inc.
(949) 382-3018
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SOURCE Sunstone Hotel Investors, Inc.