Ashford Hospitality Trust: Remington’s Cost-Cutting Measures to Boost EBITDA
DALLAS, March 20, 2025 – Ashford Hospitality Trust, Inc. (Ashford Trust), a real estate investment trust specializing in the ownership and operation of upscale, full-service hotels, announced that its largest property manager, Remington Hotels, has implemented several cost-saving measures to enhance Hotel Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA).
Strategic Moves for EBITDA Improvement
According to the press release, Remington has taken the following steps:
- Property-level headcount reductions: Remington has reduced the workforce at the property level to decrease labor costs.
- Travel expenses: The company has cut back on travel expenses to save on operational costs.
- PTO policy: The Paid Time Off (PTO) policy for field associates has been changed to limit the accrual and usage of PTO.
- Reduced contracted services: Remington has negotiated lower fees for contracted services to minimize expenses.
- Centralized expenses: The company has centralized expenses that were previously allocated to individual properties to achieve economies of scale.
Impact on Ashford Trust and Shareholders
These cost-cutting measures reflect Remington’s commitment to helping Ashford Trust execute on its transformative initiative, “GRO AHT,” which aims to deliver $50 million in annual run-rate EBITDA improvement and significantly increase shareholder value.
By reducing expenses at the property level, Ashford Trust may experience improved profitability, which could lead to increased dividends for shareholders. Moreover, the cost savings could be reinvested in the business to drive growth and create long-term value.
Personal Impact
As an individual, the cost-cutting measures may have various implications:
- Employment: The reduction in property-level headcount may result in job losses for some employees. However, it could also create opportunities for employment in other areas of the business or industry.
- Travel: With reduced travel expenses, companies might offer fewer business trips, which could impact the travel industry and related businesses.
- Services: The negotiation of lower fees for contracted services could lead to increased competition in the service industry.
Global Impact
The cost-cutting measures implemented by Ashford Trust and Remington could have ripple effects on the broader economy:
- Hotel Industry: The cost savings could lead to increased competition in the hotel industry, as companies seek to improve their profitability and offer more attractive prices to guests.
- Labor Market: The reduction in property-level headcount could put downward pressure on employment levels in the hospitality sector.
- Travel Industry: The decrease in travel expenses could impact businesses that rely on business travel, such as airlines, car rental companies, and restaurants.
Conclusion
In conclusion, Ashford Trust’s cost-cutting measures, led by its property manager Remington, are aimed at enhancing Hotel EBITDA and increasing shareholder value. These strategic moves include property-level headcount reductions, reduced travel expenses, changes to the PTO policy, and the centralization of expenses. While the cost savings may lead to improved profitability for Ashford Trust and potential benefits for shareholders, they could also have significant implications for employment, travel, and related industries. As the hospitality industry continues to evolve, companies will need to adapt to changing market conditions and competitive pressures to remain competitive and successful.
By staying informed about industry trends and developments, individuals and businesses can position themselves to capitalize on opportunities and mitigate risks in the ever-changing business landscape.
