Braemar Hotels & Resorts Inc. · NYSE:BHR
Braemar Hotels & Resorts — Q3 2024 Earnings Presentation
48 slides from Braemar Hotels & Resorts's earnings presentation, Nov 7, 2024
Slide 1: 3rd Quarter 2024 Earnings Update
3rd Quarter 2024 Earnings Update
Slide 2: Forward Looking Statements and Non-GAAP Measures
Forward Looking Statements and Non-GAAP Measures 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.
Slide 3: Experienced Management Team
Experienced Management Team RICHARD J. STOCKTON DERIC S. EUBANKS, CFA CHRISTOPHER C. NIXON Chief Executive Officer & Chief Financial Officer Executive Vice President & President Head of Asset Management 28 years of hospitality 23 years of hospitality 14 years of hospitality experience experien
Slide 4: Company Fact Sheet
Company Fact Sheet Since inception in 2013, we have significantly increased Gross Asset Value and EBITDA for our iconic and irreplaceable portfolio $228.3MM NYSE: $1.8B EQUITY MARKET CAP(1) BHR ENTERPRISE VALUE(1) HIGHEST RevPAR LODGING REIT Total Assets (2)(3) Number of Hotels(2)(5) % of Total Hote
Slide 5: Positioned for Consistent Performance
Positioned for Consistent Performance Stable Industry Performance Continuing Balanced Portfolio Composition Recent Results & Developments Refinancing to Lower Interest Cost The Notary Hotel Company Presentation | November 2024 5
Slide 6: Stable Industry Performance Continuing
Ritz-Carlton Reserve Dorado Beach Stable Industry Performance Continuing
Slide 7: Industry RevPAR Continues to Exceed 2019
Industry RevPAR Continues to Exceed 2019 U.S. KPIs, Indexed to 2019 Occupancy Index ADR Index RevPAR Index 140 140 140 124 119 121 120 120 120 118 114 113 115 108 100 95 96 95 95 100 95 100 87 83 80 80 80 60 60 60 40 40 40 20 20 20 0 0 0 2021 2022 2023 2024F 2025F 2021 2022 2023 2024F 2025F 2021 202
Slide 8: Industry Real RevPAR Stabilizing at a New Level
Industry Real RevPAR Stabilizing at a New Level Real ADR Stabilizing Occupancy Stabilizing $200 70% 66% 63% $160 60% $131 $129 50% $120 40% $80 30% $40 20% $0 10% Q3'19 Q3'20 Q3'21 Q3'22 Q3'23 Q3'24 0% Real ADR Nominal ADR Q3'19 Q3'20 Q3'21 Q3'22 Q3'23 Q3'24 Real RevPAR Stabilizing $100 $87 $81 $80
Slide 9: Luxury RevPAR Growth Forecasted
Luxury RevPAR Growth Forecasted 2024 Forecasted Growth YoY 4.0% 3.0% 2.2% 2.0% 1.8% 1.5% 1.1% 1.1% 1.0% 1.0% 0.8% 0.4% 0.4% 0.3% 0.0% -0.1% -0.3% -0.4% -0.3% -1.0% -0.9% -1.3% -2.0% -2.3% -2.4% -3.0% Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Source: Lodging Analytics Research & Co
Slide 10: Balanced Portfolio Composition
Ritz-Carlton St. Thomas Balanced Portfolio Composition Exposure to Both Resorts and Urban Properties
Slide 11: High Quality Assets with High Barriers to Entry
High Quality Assets with High Barriers to Entry Properties Resort Hotel Q3 2024 TTM EBITDA(2) Four Seasons Scottsdale $23,196 Ritz-Carlton Sarasota $22,917 Ritz-Carlton St. Thomas $21,278 Ritz-Carlton Reserve Dorado Beach $18,911 Pier House $13,388 Park Hyatt Beaver Creek $12,361 Bardessono $4,464 H
Slide 12: Improving Occupancies Offset by ADR Softness
Improving Occupancies Offset by ADR Softness ADR(1) Softening – Q3 2019 to Q3 2024 Occupancy(1) Stabilizing – Q3 2019 to Q3 2024 800 100% Pandemic 90% 700 80% +40.2% -11.9% 600 70% -14.2% 500 60% -17.1% 400 50% +25.3% 40% 300 +12.1% 30% 200 20% 100 10% - 0% Q3'19 Q3'20 Q3'21 Q3'22 Q3'23 Q3'24 Q3'19
Slide 13: Portfolio RevPAR at Higher Stabilized Level
Portfolio RevPAR at Higher Stabilized Level RevPAR(1) Stabilizing – Q3 2019 to Q3 2024 500 Key Observations 450 Urban properties 400 flat to 2019 levels 350 +16.2% 300 +7.5% Resort RevPARs Impacted by 250 Normalizing ADRs -1.3% 200 150 100 Average RevPAR well above 2019 levels 50 - Q3'19 Q3'20 Q3'21
Slide 14: High Exposure to Luxury Hotels and Resorts
High Exposure to Luxury Hotels and Resorts Ritz-Carlton Drives Q3 TTM Hotel EBITDA(1)(2) Luxury Hotels Drive Q3 TTM Hotel EBITDA(1)(2) Luxury $75,000 Ritz-Carlton $140,000 $128,566 $65,614 $120,000 $60,000 $100,000 $45,000 Marriott/ $80,000 Autograph Independent $32,277 $21,774 Upper Upscale Four Se
Slide 15: Recent Results & Developments
The Notary Hotel Recent Results & Developments Urban Property Performance Offset by Resort Property Results
Slide 16: Q3 RevPAR Results Diverge By Property Type
Q3 RevPAR Results Diverge By Property Type Quarter Highlights • ADR softness YoY at rate leading resorts continues • Urban properties continue both occupancy and ADR led recovery, especially Capital Hilton, The Notary, and Sofitel • Cameo continues to underperform due to higher labor expenses during
Slide 17: Lower ADRs Contributed to Margin Compression
Lower ADRs Contributed to Margin Compression Comparable Hotel Operating Results(1) 2024 Q3 2023 Q3(2) % Variance 2023(2) ADR $383 $398 (3.8%) Occupancy 68.2% 66.7% 2.3% RevPAR $261 $266 (1.6%) Total Hotel Revenue(3) $147,206 $147,009 0.1% Hotel EBITDA(3) $24,653 $29,884 (17.5%) Hotel EBITDA Margin 1
Slide 18: Occupancy Holding Steady; ADR on the Rise
Occupancy Holding Steady; ADR on the Rise HOTEL OCCUPANCY(1) 100% 78.9% 80% 64.7% 66.9% 66.8% 60% 51.9% 40% 30.3% 20% 0% 2019 2020 2021 2022 2023 TTM Q3'24 HOTEL ADR(1) $500 $482 $472 $458 $458 $400 $333 $296 $300 Hotel Yountville $200 $100 $- 2019 2020 2021 2022 2023 TTM Q3'24 (1) As reported in Ea
Slide 19: Total Revenue Flat, But Higher Expenses
Total Revenue Flat, But Higher Expenses Quarter Highlights • Adjusted funds from operations (AFFO) was $(0.24) per diluted share for the quarter. • Net loss attributable to common stockholders for the quarter was $(1.4) million or $(0.02) per diluted share. • Net debt to gross assets was 41.0% at th
Slide 20: Sale of Hilton Torrey Pines Completed
Sale of Hilton Torrey Pines Completed • Sale Date: 7/17/24 • Price: $165MM • Distribution: $69MM • This includes amounts previously due to BHR and after the repayment of debt, transaction expenses, and a share to the joint venture partner • TTM EBITDA Multiple:(1)(2) 11.9x • All-In Cap Rate:(1)(2) 7
Slide 21: Major 2024 Planned Capital Expenditures
Major 2024 Planned Capital Expenditures $70M - $90M Range in Capital Expenditures Underway in 2024 Ritz-Carlton St. Thomas Ritz-Carlton Lake Tahoe Ritz-Carlton Sarasota • Restaurant renovation • Public space renovation • Spa renovation (95% complete) Capital Hilton Bardessono Hotel Cameo Beverly Hil
Slide 22: BHR Adds New Director Industry Veteran Jay Shah
BHR Adds New Director Industry Veteran Jay Shah • Prior to his current role as a Senior Advisor to Hersha Hotels & Resorts, Mr. Shah served as CEO and Executive Chairman of Hersha Hospitality Trust. • Before joining Hersha, Mr. Shah formed Shah & Byler, LLP, a Philadelphia- based law firm specializi
Slide 23: Refinancing to Lower Interest Cost
Bardessono Hotel and Spa Refinancing to Lower Interest Cost Strong CMBS Market Enabling Refinancing at Lower Interest Cost
Slide 24: Closed Major Refinancing to Extend Maturities and Reduce Interest Cost
Closed Major Refinancing to Extend Maturities and Reduce Interest Cost Corporate Term Loan Amount $200MM CMBS Refinancing(1) Maturity July 2027 Amount $364.8MM Interest Rate SOFR + 310 Maturity 2 + 3 One Year Extensions Collateral Bardessono, Hotel Yountville, & RC Sarasota Interest Rate SOFR + 301
Slide 25: Positioned for Consistent Performance
Positioned for Consistent Performance Stable Industry Performance Continuing Balanced Portfolio Composition Recent Results & Developments Refinancing to Lower Interest Cost The Notary Hotel Company Presentation | November 2024 25
Slide 26: Appendix
Ritz-Carlton Lake Tahoe Appendix
Slide 27: Indebtedness
Indebtedness Company Presentation | November 2024 27
Slide 28: Indebtedness
Indebtedness Company Presentation | November 2024 28
Slide 29: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | November 2024 29
Slide 30: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | November 2024 30
Slide 31: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | November 2024 31
Slide 32: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | November 2024 32
Slide 33: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | November 2024 33
Slide 34: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | November 2024 34
Slide 35: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | November 2024 35
Slide 36: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | November 2024 36
Slide 37: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | November 2024 37
Slide 38: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | November 2024 38
Slide 39: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Note: As reported, used in Comparable Hotel EBITDA Slide 17 Company Presentation | November 2024 39
Slide 40: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | November 2024 40
Slide 41: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre
Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre Company Presentation | November 2024 41
Slide 42: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre
Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre Company Presentation | November 2024 42
Slide 43: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre
Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre Company Presentation | November 2024 43
Slide 44: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre
Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre Company Presentation | November 2024 44
Slide 45: Reconciliation of Net Income (Loss) to Adjusted FFO Q3
Reconciliation of Net Income (Loss) to Adjusted FFO Q3 In thousands except per share amounts Effective beginning with the third quarter of 2022 we no longer included the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For compar
Slide 46: Reconciliation of Net Income (Loss) to Adjusted FFO Q1
Reconciliation of Net Income (Loss) to Adjusted FFO Q1 In thousands except per share amounts Effective beginning with the third quarter of 2022 we no longer included the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For compar
Slide 47: Reconciliation of Net Income (Loss) to Adjusted FFO Q1
Reconciliation of Net Income (Loss) to Adjusted FFO Q1 In thousands except per share amounts Effective beginning with the third quarter of 2022 we no longer included the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For compar
Slide 48: Reconciliation of Net Income (Loss) to Adjusted FFO Q4
Reconciliation of Net Income (Loss) to Adjusted FFO Q4 In thousands except per share amounts Effective beginning with the third quarter of 2022 we no longer included the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For compar
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