DiamondRock Hospitality Company, a self-advised real estate investment trust (REIT), owns a portfolio of 31 premium hotels and resorts containing over 10,000 rooms in the aggregate, concentrated in key gateway cities and destination resorts throughout North America and the U.S. Virgin Islands. With a net loss of $37.2 Million announced on their Earnings Call, the future is looking grim. DiamondRock also fully drew down its $400 million senior unsecured credit facility to enhance its liquidity. As of March 31, 2020, the company had unrestricted cash of approximately $387.8 million. And like many REITs, DiamondRock is having to assess the real damage brought forth under the COVID crisis. To that point, Mark W. Brugger, president/CEO of DiamondRock had this to say to HotelBusiness.com,
We expect new construction not already out of the ground will essentially evaporate in the U.S. due to a dearth of financing and uncertain profit outlook.
Fact of the matter is that Brugger is merely vocalizing what Foreclosurepedia has been saying since late December. Moreover, though, the reality is extremely grim when it comes to the hotel and entertainment sector, a large scale provider of both employment and large scale commercial projects. Fox Business News announced yesterday morning, on Varney & Company, that Caesar’s Entertainment is hemorrhaging $94 Million dollars per day with cash reserves of roughly $2 Billion. If do the math, that means in 20 days they go broke.
