Braemar Hotels & Resorts Inc. · NYSE:BHR
Braemar Hotels & Resorts — Q2 2022 Earnings Presentation
41 slides from Braemar Hotels & Resorts's earnings presentation, Aug 4, 2022
Slide 1: Braemar Hotels & Resorts August 2022
Nil’ Ni BL | LI) Lin) BRAEMAR August 2022 HOTELS & RESORTS
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 Senior Vice President & Head President of Asset Management ▪ 24 years of hospitality ▪ 21 years of hospitality ▪ 12 years of hospitality experience experience
Slide 4: BHR Positioned Ideally for Outperformance
BHR Positioned Ideally for Outperformance Market Outlook: Recovery Favors Luxury Resorts Attractive Portfolio Composition Recent Results & Developments Balance Sheet Strategy The Notary Hotel Company Presentation | August 2022 4
Slide 5: Market Outlook
Market Outlook Recovery Favors Luxury Resort Assets
Slide 6: Industry RevPAR Expected to Exceed 2019 in 2022
Industry RevPAR Expected to Exceed 2019 in 2022 U.S. KPIs, Indexed to 2019 Occupancy Index ADR Index RevPAR Index 140 140 140 122.9 123.4 119.7 119.5 120 120 116.1 120 112.8 113.8 107.7 99.8 100.5 98.0 100 95.5 100 95.3 100 87.3 83.2 80 80 80 60 60 60 40 40 40 20 20 20 0 0 0 2021 2022 2023 2024 2025
Slide 7: Lodging REITs and Luxury Hotels are Favored in the Current Economic Environment
Lodging REITs and Luxury Hotels are Favored in the Current Economic Environment REIT Index Performance During Rate Increases Key Takeaways 10-Year Rate Change (bps) 112 112 121 128 100 127 99 35.0% 27.3% 28.0% 24.0% 21.9% 21.0% 14.0% 8.1% Short-Term REITs(1) 7.0% -5.0% 0.3% -0.9% Consistently Outper
Slide 8: Demand and ADR Continue to Recover
Demand and ADR Continue to Recover Group and Transient Room Night Demand Seeing Strong Luxury and Upper Upscale Pricing Power is Strong for Both Recovery for Luxury and Upper Upscale Hotels(1) Transient and Group(1) Indexed to 2019 Indexed to 2019 20% 30% 23.50% -5.20% 20% 0% 10% -20% 9.00% 0% -40%
Slide 9: Attractive Portfolio Composition
Attractive Portfolio Composition Taking Advantage of Strategic Asset Class
Slide 10: High Quality Assets with High Barriers to Entry
High Quality Assets with High Barriers to Entry The Ritz-Carlton Lake Tahoe Park Hyatt Beaver Creek Pier House Resort & Spa Truckee, CA Beaver Creek, CO Key West, FL Bardessono Hilton La Jolla Torrey Pines The Ritz-Carlton Reserve Dorado Beach Yountville, CA La Jolla, CA Dorado, PR Hotel Yountville
Slide 11: Portfolio Resort Exposure Lifts Performance
Portfolio Resort Exposure Lifts Performance ADR Ramping Up(1) – 03/1/20 to 07/30/22 Occupancy Ramping Up(1) – 03/1/20 to 07/30/22 100% $1,200 90% 80% $1,000 77% 73% 70% 71% $800 60% $677 50% $600 40% $446 $400 30% $271 20% $200 10% $0 0% Key: Resort Urban Average (1) 30-Day Average Resort: Bardesson
Slide 12: Portfolio Resort Exposure Lifts Performance
Portfolio Resort Exposure Lifts Performance RevPAR(1) Ramping Up – 03/1/20 to 07/30/22 $800 Key Observations $700 Urban properties have $600 closed the occupancy gap caused by COVID $523 $500 $400 Resort properties continue to show high resiliency, recovering quickly $327 $300 and pushing RevPAR to
Slide 13: Hotel EBITDA Rebounding Through Resorts
Hotel EBITDA Rebounding Through Resorts Pier House Resort & Spa (1) In thousands Company Presentation | August 2022 13
Slide 14: High Exposure to Luxury Hotels and Resorts
High Exposure to Luxury Hotels and Resorts Ritz-Carlton Drives Q2 TTM Hotel EBITDA(1) Luxury Hotels Drive Q2 TTM Hotel EBITDA(1) $105,000 Ritz-Carlton $180,000 $93,227 Luxury $90,000 $151,975 $150,000 $75,000 $120,000 $60,000 Independent $90,000 $42,204 $45,000 Upper Marriott/ $60,000 $30,000 Upscal
Slide 15: Quarterly Hotel EBITDA and RevPAR Now Exceed 2019 Levels
Quarterly Hotel EBITDA and RevPAR Now Exceed 2019 Levels Quarterly Hotel EBITDA (In Thousands) $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- $(10,000) $(20,000) 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 2022 2022 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Quarterly RevP
Slide 16: Highest EBITDA Per Room & RevPAR
Highest EBITDA Per Room & RevPAR 2019 EBITDA Per Room(1) Q2 2022 YTD EBITDA Per Room(1) $40 $38 $35 $37 $29 $30 $35 $30 $30 $25 $30 $28 $27 $27 $20 $20 $16 $16 $16 $25 $23 $15 $15 $12 $20 $11 $19 $20 $9 $17 $10 $8 $8 $15 $15 $5 $10 $- BHR PEB SHO XHR DRH HST PK HT RLJ INN CLDT APLE BHR HST XHR SHO D
Slide 17: Recent Results & Developments
Recent Results & Developments Solid Q2 Results Signal Potential For Sharp Recovery
Slide 18: RevPAR Recovers Significantly in Q2
RevPAR Recovers Significantly in Q2 Comparable Hotel Operating 2022 Q2 2021 Q2 % Variance 2019 Q2 % Variance Results(1)(4) 2021 2019 ADR $ 441 $ 441 0% $ 312 41% Occupancy 71% 50% 43% 79% (10)% RevPAR $ 314 $ 220 43% $ 246 28% Total Hotel Revenue(2) $ 176,082 $ 120,124 47% $ 136,258 29% Hotel EBITDA
Slide 19: Sharp Recovery Trends Continue in Q2 2022
Sharp Recovery Trends Continue in Q2 2022 Quarter Highlights • Comparable RevPAR for all hotels increased 43% over the prior year quarter to $313.96. Comparable ADR was flat compared to the prior year quarter at $441.25 and Comparable Occupancy increased 42.8% over the prior year quarter to 71.2%. C
Slide 20: July 2022 RevPAR Exceeds 2019
July 2022 RevPAR Exceeds 2019 July 2022 RevPAR Growth OCCUPANCY 73% VS. 2019 +29% ADR $441 REVPAR $320 VS. 2021 +7% Highlights • July RevPAR above 2019 levels • Resort properties continue to capitalize on strong leisure demand • Urban properties continue to recover Company Presentation | August 2022
Slide 21: Balance Sheet Strategy
Balance Sheet Strategy Maintain Liquidity, Monitor Leverage, Navigate Recovery
Slide 22: Current Liquidity Fuels Growth
Current Liquidity Fuels Growth(1) CASH POSITION CASH & CASH EQUIVALENTS $251.0M RESTRICTED CASH $48.1M DUE FROM 3RD PARTY MANAGERS $19.1M TOTAL CASH $318.2M POSITIVE OPERATING CASH FLOW(2) ADJ. EBITDARE $50.1M PREFERRED DIVIDENDS ($4.1M) CAPEX ($9.1M) DEBT SERVICE(3) ($9.7M) CASH FLOW ~$27.2M Ritz-C
Slide 23: Conservative Leverage Strategy
Conservative Leverage Strategy With No Significant Near-Term Debt Maturities Overview • Delever to 35% Net Debt to Gross Assets (vs. 43% today) • Hold 10% of Gross Debt Balance as cash on the balance sheet • Floating-rate debt provides a natural hedge to hotel cash flows NEXT HARD DEBT MATURITY 2023
Slide 24: Highly Aligned Management Team
Highly Aligned Management Team 8.4% Management has significant personal wealth invested in the Company 1.9x Insider ownership 1.9x higher than public lodging REIT industry average $35.8M Total dollar value of insider ownership (as of 8/5/2022) 24% 20.8% Highly-aligned management team is among highes
Slide 25: Key Takeaways
Key Takeaways Market Outlook: Recovery Favors Luxury Resorts Attractive Portfolio Composition Focus on Growth Solid Balance Sheet and Liquidity The Notary Hotel Company Presentation | August 2022 25
Slide 26: Appendix
Appendix
Slide 27: Indebtedness
Indebtedness Company Presentation | August 2022 27
Slide 28: Indebtedness
Indebtedness Company Presentation | August 2022 28
Slide 29: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | August 2022 29
Slide 30: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA 2019 2019 2019 2019 December 31, 2019 4th Q uarter 3rd Q uarter 2nd Q uarter 1st Q uarter TTM Net income (loss) $ 31,806 $ 9,410 $ 12,828 $ 16,800 $ 70,844 Non-property adjustments (26,320) 1,441 (9) — (24,888) Interest income (69) (79)
Slide 31: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | August 2022 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 | August 2022 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 | August 2022 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 | August 2022 34
Slide 35: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | August 2022 35
Slide 36: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre
Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre Company Presentation | August 2022 36
Slide 37: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre
Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre Company Presentation | August 2022 37
Slide 38: Reconciliation of Net Income (Loss) to Adjusted FFO Q2
Reconciliation of Net Income (Loss) to Adjusted FFO Q2 In thousands except per share amounts Company Presentation | August 2022 38
Slide 39: Reconciliation of Net Income (Loss) to Adjusted FFO Q1
Reconciliation of Net Income (Loss) to Adjusted FFO Q1 In thousands except per share amounts Company Presentation | August 2022 39
Slide 40: Reconciliation of Net Income (Loss) to Adjusted FFO Q4
Reconciliation of Net Income (Loss) to Adjusted FFO Q4 In thousands except per share amounts Company Presentation | August 2022 40
Slide 41: Reconciliation of Net Income (Loss) to Adjusted FFO Q3
Reconciliation of Net Income (Loss) to Adjusted FFO Q3 Company Presentation | August 2022 41
Braemar Hotels & Resorts — Q2 2022 Earnings Presentation on 6ix