Expects 2022 Net Revenue of $42 - $46 Million Expects 2023 Net Revenue of $100 - $110 Million
LuxUrban Hotels Inc (NASDAQ: LUXH), which utilizes a long-term lease, asset-light business model to acquire and manage a growing portfolio of short-term rental properties in major metropolitan cities, announced today net revenue and EBITDA guidance for the years ending December 31, 2022 and 2023, and the engagement of a new credit card processing company that, among other benefits, will reduce processing fees by approximately 400 bps and result in the release to the Company of approximately $5.5 million in retained funds over the next 12 months.
“We are very excited at the pace of our ongoing shift to acquiring, via long-term Master Lease Agreements, short-term rental hotel units in destination cities,” said Brian Ferdinand, Chairman and Chief Executive Officer. “We have good visibility into the anticipated performance metrics across our portfolio for the balance of 2022 and 2023. We believe that we are well-positioned to continue to execute our growth strategy in a thoughtful and impactful manner that will, over time, improve our margins, generate sustainable cash flow, and enhance overall profitability.”
Guidance: 2022-2023 Net Revenue and EBITDA
For the years ending December 31, 2022 and 2023, the Company is providing the following guidance:
- Full Year 2022 (based on its current operating portfolio of approximately 1,200 short-term rental hotel units): Net revenue of $42 - $46 million, and EBITDA of $7 - $9 million.
- Full Year 2023: Net revenue of $100 - $110 million, and EBITDA of $16 - $20 million, based on its expectation that it will operate approximately 1,500 short-term rental hotel units by or around December 31, 2022.
In addition to the existing and anticipated additional units discussed above, this guidance is based on, among other factors, the Company’s current business, economic, and public health conditions; the status of its acquisition pipeline and its ability to close on these potential acquisitions; and its current view of forward-looking unit operating metrics.
“The approximately 1,200 units that are currently in operation have been fully funded,” Mr. Ferdinand continued. “We are committed to funding our foreseeable growth in a non-dilutive manner. To that end, the additional units we expect to have in operation by year-end 2022 will be funded by a combination of anticipated operating cash flows we are beginning to see in the 2022 fourth quarter and our existing debt facility, $2.5 million of which is currently available.”
The Company’s guidance is based on current plans and expectations and is subject to a number of known and unknown uncertainties and risks, including those set forth below under “Forward-Looking Statements.”
Engages New Credit Card Processor
The Company has engaged a new credit card processing company, which it expects to be fully operational across its portfolio by or around November 30, 2022. The new relationship allows the Company to secure credit card processing across its portfolio of properties without reserves and reduces the associated processing expenses by approximately 400 bps compared to its former processor relationships. As a result of this new relationship the Company’s former credit card processors will release to the Company approximately $5.5 million in retained funds over the next 12 months.