COVID-19 Will Cause A Significant Decline In Global RevPAR, Cash Flow, For Rated Lodging Companies

On Jan. 29, 2020, S&P Global Ratings published "The Wuhan Coronavirus Outbreak Will Negatively Affect The Cash Flow Of Gaming And Lodging Companies Exposed To The Asia-Pacific Region," and at that time we said the outbreak will adversely impact lodging companies that operate a material percentage of their rooms in China and the greater Asia-Pacific region. Over the past few weeks, efforts at containment failed, and travel bans and reports of voluntary travel restrictions are sweeping the globe. We believe this will result in a global travel downturn until the virus is contained, and that revenue per available room (RevPAR) will decline in nearly all major travel markets as long as consumers and businesses postpone or cancel travel due to

...- RevPAR in the U.S., Europe, and Asia will decline for as long as leisure and business travel is postponed or cancelled due to fear of COVID-19. - Most rated lodging companies have substantial flexibility in leverage measures compared to downgrade thresholds, and in cash flow generation, and can reduce spending on shareholder returns and other investments. - We plan to conduct a review of lodging ratings as frequently as needed and update the marketplace on the ratings impact of the virus on the sector until it is contained. On Jan. 29, 2020, S&P Global Ratings published "The Wuhan Coronavirus Outbreak Will Negatively Affect The Cash Flow Of Gaming And Lodging Companies Exposed To The Asia-Pacific Region," and at that time we said the outbreak will adversely impact lodging companies that operate a material percentage of their rooms in China and the greater Asia-Pacific region. Over the past few weeks, efforts at containment failed, and travel bans and reports of voluntary travel restrictions...

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