Summit Hotel Properties, Inc. announced that it has taken additional steps to enhance its overall liquidity position in light of the operating and financial effects on the company due to the COVID-19 (coronavirus) pandemic.
The company has implemented a wide range of corporate cost savings initiatives, including a voluntary 25 percent reduction of salaries and fees for executive officers and independent board of directors, respectively. In addition, approximately 25 percent of the corporate-level staff has been furloughed and salary reductions have been implemented for the majority of employees not subject to furlough. The company will pay 100 percent of employer and employee medical premiums during the furlough period for affected employees. Finally, a hiring freeze has been implemented for any new corporate-level positions. The company will continue to evaluate further expense reductions as appropriate.
The company previously announced liquidity enhancement measures taken, which included significant hotel-level cost reduction initiatives, postponement of all non-essential capital expenditures, the intention to suspend common stock and operating partnership unit distributions, and a revolving credit facility draw that resulted in a current unrestricted corporate cash balance of approximately $140 million. The company's balance sheet position is further enhanced by having no debt maturities until November 2022.
"As the COVID-19 pandemic continues to create unprecedented global challenges for our industry, our company and our loyal employees, the safety and wellbeing of our associates and guests continue to be our top priority," said Dan Hansen, chairman, president and CEO of Summit Hotel Properties. "The additional temporary measures taken to reduce corporate costs reflect the company's resolve during these difficult times, and we believe that when combined with the previously announced liquidity measures best position us to successfully navigate the effects of the crisis. We are already planning for and fully expect to resume our place as an industry leader coming out of this crisis."