Ashford Hospitality Trust Inc · NYSE:AHT

Ashford Hospitality Trust — Investor Day (October 2021)

36 slides from Ashford Hospitality Trust's investor day presentation, Oct 12, 2021

  1. Slide 1: Investor Day | October 2021

    Investor Day | October 2021

  2. Slide 2: Safe Harbor forward-looking statements

    In keeping with the SEC's "Safe Harbor" guidelines, certain statements made during this presentation could be considered forward-looking and subject to certain risks and uncertainties that could cause results to differ materially from those projected. When we use the words "will likely result," "may

  3. Slide 3: Investor Day Agenda

    Attractive Portfolio Well Positioned for the Recovery Best-in-class Asset Management Growth & Acquisition Strategy Balance Sheet & Capital Structure Leverage Strategy Reasons to Own AHT Appendix Investor Day Agenda AHT | Page 3

  4. Slide 4: Attractive High Quality Portfolio

    Attractive High Quality Portfolio O w n e r o f I n s t i t u t i o n a l Q u a l i t y , G e o g r a p h i c a l l y D i v e r s e L o d g i n g A s s e t s w i t h E x p o s u r e t o L e i s u r e a n d T r a n s i e n t S e g m e n t s Crowne Plaza La Concha Key West, FL W Atlanta Downtown Atlan

  5. Slide 5: Portfolio Positioned for the Recovery

    Portfolio Positioned for the Recovery F u l l - S e r v i c e , U p p e r U p s c a l e , B e s t - i n - C l a s s B r a n d s a n d M a n a g e r s Portfolio by Hotel EBITDA(2) (1) As of June 30, 2021 excludes WorldQuest (2) Pro forma TTM Hotel EBITDA as of December 31, 2019 excluding assets dispo

  6. Slide 6: Geographically Diverse

    Geographically Diverse P o s i t i o n e d t o B e n e f i t F r o m D e m o g r a p h i c S h i f t AHT Top Markets (by 2019 Hotel EBITDA)(2) % Total Washington, D.C. / Northern Virginia 11.1% San Francisco/Oakland, CA 8.5% Los Angeles, CA 7.3% Nashville, TN 7.1% New York/New Jersey 6.7% Atlanta, G

  7. Slide 7: Exposure to Transient Leisure in Top-25 Markets

    Portfolio Positioned for the Recovery E x p o s u r e t o T r a n s i e n t L e i s u r e i n T o p - 2 5 M a r k e t s AHT 2019 Hotel EBITDA by MSA TOP-25 76% TOP 26-50 10% OTHER 14% F o c u s e d O n T o p - 2 5 M a r k e t s 73% 24% 3% AHT 2019 Pro Forma Hotel Room Revenue TRANSIENT OTHER GROUP 7

  8. Slide 8: CapEx Outlook

    CapEx Outlook R e c e n t R e n o v a t i o n s P r o v i d e C o m p e t i t i v e A d v a n t a g e 13.1% 13.7% 15.4% 14.5% 10.6% 9.1% 0.0% 2.5% 5.0% 7.5% 10.0% 12.5% 15.0% 17.5% 20.0% 22.5% 25.0% $- $50 $100 $150 $200 $250 2015 2016 2017 2018 2019 2020 2021 2022 2023 ($ I n m ill io n s) Hotel Ca

  9. Slide 9: Investor Day Agenda

    Attractive Portfolio Well Positioned for the Recovery Best-in-class Asset Management Growth & Acquisition Strategy Balance Sheet & Capital Structure Leverage Strategy Reasons to Own AHT Appendix AHT | Page 9 Investor Day Agenda

  10. Slide 10: Best-In-Class Asset Management Team

    Best-In-Class Asset Management Team Overview Asset Managers Legal Risk/Property Tax Revenue Optimization Analytics ExecutiveAdministration Capital Management Team Breakdown AHT | Page 10 2 4 3 4 12 5 9

  11. Slide 11: Historical Portfolio Results

    2014 8.0% 9.8% 2015 5.4% 6.5% 2016 1.7% 3.2% 2017 1.8% 1.8% 2018 1.4% 0.1% 2019 0.8% 1.4% 2020 -68.3% -64.3% YTD Q2 2021 9.6% 10.7% Peer Group: DRH, INN, RLJ, SHO, HST, HT; shown as simple average Historical Portfolio Results On Pace To Outperform RevPAR Growth in last 7 of 8 years Year Peers AHT AH

  12. Slide 12: La Posada Santa Fe Post-Acquisition Outperformance

    (1) Acquired hotel in Oct 2018 (2) Incremental NOI TTM October 2019 vs. TTTM October 2018; assumes 7.0% exit cap rate La Posada Santa Fe Post-Acquisition Outperformance  Optimized pricing across channels to maximize retail contribution  Enforced capture of rental and resort fees for groups  Solic

  13. Slide 13: Marriott DFW Airport Brand To Franchise Conversion

    Marriott DFW Airport Brand To Franchise Conversion  Transitioned to Remington management May 2017  Hired new General Manager  Renovated 15,522 SF of meeting space to capture additional group demand  Completed rooms and lobby renovation July 2017 – September 2019 S t r a t e g y Reno. Hotel EBITD

  14. Slide 14: Renaissance Nashville Repositioning of Convention Center

    Renaissance Nashville Repositioning of Convention Center $5 $10 $15 $20 $25 $30 $35 2011 2012 2013 2014 2015 2016 2017 2018 2019 H o te l E B IT D A ( $ M ) Reno. Total Revenue $41.5M $76.3M+84.1% FY 2011 FY 2019 AHT | Page 14  Negotiated with the city to fund new self-contained meeting space and s

  15. Slide 15: Lakeway Resort And Spa Optimized Sales Strategy

    Lakeway Resort And Spa Optimized Sales Strategy  Increased emphasis on direct bookings while pushing away from OTAs  Implemented new revenue management systems and direct marketing campaigns, reducing reliance on commissionable business S t r a t e g y $100 $109 $113 $120 $125 $102 $129 10% 15% 20

  16. Slide 16: The Ritz-Carlton Atlanta Downtown Renovation Impact

    (1) Negative YOY growth TTM 2/2020 vs 2019 attributable to Super Bowl (2) FY 2013 to TTM 2/2020, excludes Super Bowl lift in 2019 The Ritz-Carlton Atlanta Downtown Renovation Impact $4 $6 $8 $10 $12 $14 $16 2013 2014 2015 2016 2017 2018 2019 TTM 2/2020 H o te l E B IT D A ( $ M ) Super Bowl  Renova

  17. Slide 17: Dallas Marriott Market Suites Parking Capture

    Dallas Marriott Market Suites Strategic Initiative To Maximize Parking Capture  Identified parking partner with newly developed license plate reading technology  First hotel in the nation to install and beta test product o July 2021 was second highest revenue month on record despite being lowest o

  18. Slide 18: Portfolio Tax Savings

    Portfolio Tax Savings Implemented Focused Strategy To Minimize Property Tax Burden 2020 Appeals 2021 Appeals Marriott Sugarland $488K Property Tax Savings Hilton Fort Worth $286K W Atlanta $281K All Others $2.7M FY 2020 Total $3.7M Marriott Gateway $578K Property Tax Savings Marriott Sugarland $373K

  19. Slide 19: Recovery By Class Poised to Outperform Market

    (1) July 2021 vs. July 2019 (2) Source: STR Recovery By Class Poised to Outperform Market High-End Classes’ Occupancy Has Yet To Fully Recover Owners Of Midscale And Economy Properties Have Realized Their Recovery Luxury Upper Upscale Upscale Upper Midscale Midscale Economy -14.3% -19.7% -9.1% -3.2%

  20. Slide 20: Reduced Pressure From New Supply

    Percentage Of Keys In Pipeline Unlikely To Actualize February 2020 July 2021 (1) Source: STR Reduced Pressure From New Supply New Builds Sitting In Planning Phases Forecast New Supply In AHT Markets(1) February 2020 Next 12-Months 2.9% 1.8% July 2021 13-34 Months 2.8% 2.1% Abandoned 7% 6% Unconfirme

  21. Slide 21: Top-25 Markets To Outperform

    Top-25 Markets To Outperform STR Forecast Indicates AHT Growth To Outpace Market AHT | Page 21 YOY RevPAR Growth Peers(1) AHT v 2022 All Other Markets RevPAR Growth(2) 13% 2022 Top-25 Markets RevPAR Growth(2) 32% (1) Peer Group: DRH, INN, RLJ, SHO, HST, HT; shown as simple average (2) Source: STR; T

  22. Slide 22: Investor Day Agenda

    Attractive Portfolio Well Positioned for the Recovery Best-in-class Asset Management Growth & Acquisition Strategy Balance Sheet & Capital Structure Leverage Strategy Reasons to Own AHT Appendix AHT | Page 22 Investor Day Agenda

  23. Slide 23: Industry's Path to Recovery

    Industry’s Path to Recovery E x p e c t e d t o R e c o v e r b y 2 0 2 4 0% 10% 20% 30% 40% 50% 60% 70% 80% $0 $20 $40 $60 $80 $100 $120 $140 $160 2019 2020 2021 2022 2023 2024 Occupancy/ADR/RevPAR Forecasts ADR RevPAR Occupancy 100 50 74 88 98 104 0 20 40 60 80 100 120 2019 2020 2021 2022 2023 202

  24. Slide 24: Acquisition Outlook

    Acquisition Outlook G r o w t h O p p o r t u n i t i e s  Full-service assets  Top-25 and leisure markets  Major brands + independents  Preference for franchised properties  High exposure to transient  Target Cap Rate: 6.0% - 8.0%  10% unlevered IRRs  Targeted sellers – small owner/operator

  25. Slide 25: Investor Day Agenda

    Attractive Portfolio Well Positioned for the Recovery Best-in-class Asset Management Growth & Acquisition Strategy Balance Sheet & Capital Structure Leverage Strategy Reasons to Own AHT Appendix AHT | Page 25 Investor Day Agenda

  26. Slide 26: Net Working Capital

    Net Working Capital A C l o s e r L o o k a t C a s h & L i q u i d i t y P o s i t i o n June 30, 2021 Cash and cash equivalents $ 520,340 Restricted cash 69,895 Accounts receivable, net 37,225 Prepaid expenses 15,742 Due from third-party hotel managers, net 15,032 Due from affiliates, net 1,725 To

  27. Slide 27: Well-Laddered Maturity Schedule

    Well-Laddered Maturity Schedule M o s t M a t u r i t i e s a r e A f t e r E x p e c t e d I n d u s t r y R e c o v e r y $78 $0 $132 $495 $2,619 $553 $0 $1,000 $2,000 $3,000 2021 2022 2023 2024 2025 2026 Debt Final Maturity Schedule(1)(2) (in $ millions) Marriott Crystal Gateway Arlington, VA (1)

  28. Slide 28: Investor Day Agenda

    Attractive Portfolio Well Positioned for the Recovery Best-in-class Asset Management Growth & Acquisition Strategy Balance Sheet & Capital Structure Leverage Strategy Reasons to Own AHT Appendix AHT | Page 28 Investor Day Agenda

  29. Slide 29: Leverage Strategy

    Leverage Strategy O n g o i n g I n i t i a t i v e t o D e l e v e r $3,730 $3,295 $565 $189 $3,000 $3,200 $3,400 $3,600 $3,800 $4,000 $4,200 $4,400 3/31/2020 6/30/2021 Net Debt + Preferred Equity (in $ Millions) Net Debt Perpetual Preferred Face Value $4,294  Build up cash  Buy assets without le

  30. Slide 30: Floating Rate Rationale

    Floating Rate Rationale H e d g i n g O u r C a s h F l o w s 5.75% 5.08% 3.47% 4.13% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% 5.50% 6.00% 2018 2019 2020 2021 Q2 Weighted Avg. Interest Rate  Floating rate debt provides a natural hedge  160 bps drop provides $55M of interest expense savings Highli

  31. Slide 31: Investor Day Agenda

    Attractive Portfolio Well Positioned for the Recovery Best-in-class Asset Management Growth & Acquisition Strategy Balance Sheet & Capital Structure Leverage Strategy Reasons to Own AHT Appendix AHT | Page 31 Investor Day Agenda

  32. Slide 32: Reasons to Own AHT

    Reasons to Own AHT K e y T a k e a w a y s  Industry positioned for strong recovery  High quality  Geographically diverse  High exposure to transient leisure  Excellent physical shape  Net Working Capital Per Share is 109% of stock price  Much improved balance sheet  Well-laddered debt matur

  33. Slide 33: Appendix

    Appendix

  34. Slide 34: Debt Yield and Cash Trap Summary

    Appendix D e b t Y i e l d a n d C a s h T r a p S u m m a r y Hotel / Pool Principal Amount Interest Rate Final Maturity Date Debt Yield Tests & Extension Options Cash Trap Tests Highland Portfolio $914,280,958 L + 3.20% 9-Apr-25 Five 1-year extension options DY Cash Trap Trigger 7.5% 9.54% DY for

  35. Slide 35: Debt Yield and Cash Trap Summary

    Appendix D e b t Y i e l d a n d C a s h T r a p S u m m a r y Hotel / Pool Principal Amount Interest Rate Final Maturity Date Debt Yield Tests & Extension Options Cash Trap Tests Marriott Crystal Gateway $81,261,564 6.26% fixed 1-Nov-21 None DSCR Cash Trap Trigger 1.20x Cash trapped released after

  36. Slide 36: Reconciliation of Net Income to Hotel EBITDA

    Reconciliation of Net Income to Hotel EBITDA AHT | Page 36 December 31, 2019 TTM Net income (loss) 168,758$ Non-property adjustments 7,341 Interest income (306) Interest expense 19,208 Amortization of loan costs 1,763 Depreciation and amortization 268,896 Income tax expense (benefit) 324 Non-hotel E

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