Playa Hotels & Resorts, operator of all-inclusive resort hotels in the region, booked the equivalent of a near $4-billion loss on the sale of two properties in Jamaica.
The outlook remains sombre for the hotel management company, which is wary of potential upsurges in the spread of the coronavirus a month into the reopening of properties in its portfolio.
“We cannot predict when our business will return to normalised levels because we cannot predict when all effects of the pandemic will subside. The longer and more severe the pandemic, the greater the material adverse effect the pandemic will have on our business, results of operations, cash flows, financial condition, access to credit markets and ability to service our debt,” said Playa Chairman and CEO Bruce Wardinski in the company’s second-quarter financial report.
Playa recorded a US$87.5-million net loss for the June quarter after earning less than one million dollars in revenue. Comparatively, it made a profit of US$1 million on revenue of US$164 million a year earlier.
Pay down debt
The company sold Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark in May. The properties were sold for US$60 million ($9 billion), below their fair value of US$85 million ($12.6 billion). Playa stated that it needed the funds for cash flow but also to pay down on a portion of its debt.
Playa said its impairment loss for the April-June quarter increased 100 per cent year-on-year to US$25.3 million, which translates to $3.8 billion in Jamaican currency.
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