Hersha Hospitality Trust (NYSE:HT) Q2 2020 Earnings Conference Call - Final Transcript
Aug 06, 2020 • 09:00 am ET
Good morning, and welcome to the Hersha Hospitality Trust Second Quarter 2020 Conference Call and Webcast. [Operator Instructions] [Operator Instructions]
I would now like to turn the conference over to Greg Costa, Investor Relations. Please go ahead.
Thank you, Danielle, and good morning to everyone joining us today. Welcome to the Hersha Hospitality Trust Second Quarter 2020 Conference Call. Today's call will be based on the second quarter 2020 earnings release, which was distributed yesterday afternoon. Prior to proceeding, I'd like to remind everyone that today's conference call may contain forward-looking statements.
These forward-looking statements involve known and unknown risks and uncertainties, and other factors that may cause the company's actual results, performance or financial positions to be considerably different from any future results, performance or financial positions. These factors are detailed within the company's press release as well as with the company's filings with the SEC.
]With that, it is now my pleasure to turn the call over to Mr. Neil Shah, Hersha Hospitality Trust's President and Chief Operating Officer. Neil, you may begin.
Neil H. Shah
Good morning. Good morning, everyone, and thank you for joining us on today's call. Joining me this morning are Jay Shah, our Chief Executive Officer; and Ashish Parikh, our Chief Financial Officer. We understand it's a busy last few days of the earnings season, and everyone is quite familiar with the environment, so we will jump right in. During the first weeks of this pandemic, we took decisive action and focused on capital pricing through several critical steps. We suspended dividend distributions on both our common and preferred securities, preserving approximately $72.5 million, and we deferred all planned capital expenditures for the balance of the year, saving approximately $20 million.
Additionally, at the corporate level, we reduced our SG&A run rate by 25% for 2020. While at our properties, we suspended operations at 21 of our 48 hotels, which led to a reduction in operating expenses, approximating 80% on a go-forward basis. These were difficult but necessary moves, and we undertook these actions to ensure we had sufficient flexibility through this pandemic. Early in the quarter, we amended our credit facility to access our senior revolving credit facility and received a full financial covenant holiday for five quarters with the next covenant test on June 30, 2021. We've had a decade-long relationship with the lead banks in our bank group, and we appreciate their partnership during this unique time.
We have spent most of the most of the second quarter reopening hotels. A word of thanks before I go any further for the courage and commitment of our frontline team members at each of our hotels. Each of them adapted to a highly-efficient operating model, provided anticipatory service from behind plexiglass and engaged a completely new guest profile. And they did so safely, graciously and effectively. The lion's share of the 27 hotels that were opened in April and May consisted of our limited service drive-to resort offerings that were able to drive rate and occupancy,