Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — Investor Presentation (November 2018)
32 slides from Ashford Hospitality Trust's investor presentation, Nov 27, 2018
Slide 1: Ashford Hospitality Trust November 2018
Af ASHFORD HOSPITALITY TRUST November 2018
Slide 2: Forward Looking Statements and Non-GAAP Measures
Forward Looking St atements 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: Goals and Strategy
Goals OUTPERFORM Deliver strong shareholder returns vs. peers Strategy PROTECT Protect shareholder investment through disciplined capital Opportunistically own, management strategies finance, and asset manage predominately full–service, upper upscale hotels GROW Increase the quality and performance
Slide 4: Experienced Management Team
E x p e r i e n c e d M a n a g e m e n t T e a m J e r e m y W e l t e r D e r i c E u b a n k s D o u g l a s K e s s l e r J . R o b i s o n H a y s R o b e r t H a i m a n C h i e f O p e r a t i n g C h i e f F i n a n c i a l C h i e f E x e c u t i v e C h i e f S t r a t e g y E V P , G e n
Slide 5: Reasons to Own Ashford Hospitality Trust
Reasons to Own Ashford Hospitality Trust PORTFOLIO QUALITY STRATEGIC FOCUS ERFP PROGRAM HIGH DIVIDEND YIELD High quality portfolio presents an Strategy maximizes investment Innovative program provides a One of the highest dividend yields in attractive investment opportunity opportunity and value-add
Slide 6: Key Metrics Portfolio Overview
Key Metrics Portfolio Overview 118 24,930 31 $125 $5.9B H O T E L S (1) H O T E L R O O M S (1) S T A T E S R e v P A R (1)(2) G R O S S A S S E T S Portfolio by Hotel EBITDA(1)(2) IHG INTERSTATE 2% HYATT LUXURY MARRIOTT <1% 4% UPPER HYATT 4% 56% REMINGTON MIDSCALE 5% SELECT-SERVICE 3% 59% 29% INDEP
Slide 7: Portfolio Position: Geographically Diverse
Portfolio Position Geographically Diverse Portfolio by Hotel EBITDA(1)(2) INTERSTATE <1% OTHER RESORT 8% 8% 3% TOP 50 19% AIRPORT SMALL TOWN/ METRO 16% Location MSA’s TTM Q3 2018 Type Top 10 Markets EBITDA(3) % of Total Washington DC $50,313 10.8% San Fran/Oakland, CA $36,170 7.7% TOP 25 Los Angeles
Slide 8: Strategic Rationale: Full-Service & Upper Upscale
Strategic Rationale Full-Service & Upper Upscale 2017 DEAL FLOW(1) Full-Service VALUE-ADD (Luxury) $ 2.5B 10% 39% OF TOTAL UPPER UPSCALE ROOMS ARE FRANCHISED(2) YIELD 6.5% - 8.5% ESTIMATED CAP RATES Full-Service (Non-Luxury) Limited-Service $ 11.6B $ 10.5B 43% 47% (1) Estimate based upon MAR, HLT, H
Slide 9: Maximize Value: Enhanced Return Funding Program
Maximize Value Enhanced Return Funding Program • $50M ERFP commitment from Ashford Inc. • 2 year term • Up to 10% of purchase price • Funding comes in form of purchased FF&E • Potential to upsize to $100M by mutual agreement $50M ERFP GOALS Allocation(1) • Enhance overall shareholder returns $100M A
Slide 10: Attractive Dividend Yield
Attractive Dividend Yield (1) 9.5% 9.3% 8.5% 7.4% 7.5% 6.9% 6.8% 6.5% 6.4% 6.5% 6.2% 5.8% 5.6% 5.5% 5.4% 5.5% 5.2% 4.9% 4.6% 4.6% 4.5% 3.5% 2.5% 1.5% AHT APLE RLJ CLDT PK HT BHR Peer CHSP XHR INN SHO DRH PEB HST(2) Avg. Source: Bloomberg (1) As of October 26, 2018, annualized based on most recent di
Slide 11: Relative to Peers: Hotel EBITDA Performance
Relative to Peers Hotel EBITDA Performance H o t e l E B I T D A % C h a n g e C u m u l a t i v e H o t e l E B I T D A G r o w t h 2014 2015 2016 2017 30% AHT 13.3% 9.0% 4.5% 1.0% bps 1060 AHT Peer Avg. 11.7% 6.1% 1.6% -0.4% 25% Peer Avg. 20% 4 Straight Years of 15% Outperformance 10% 2014 2015 20
Slide 12: Track Record: Disciplined Capital Management
Track Record Disciplined Capital Management COMMON SHARE BUYBACKS Track record of enhancing shareholder returns by capitalizing upon cyclical changes and 73.6M ~50% $3.28 advantageous pricing situations SHARES SHARES AVERAGE OUTSTANDING BUYBACK $1,400 PRICE Financial Crisis $1,200 $200 PREFERRED EQU
Slide 13: Affiliate Competitive Advantages
Affiliate Competitive Advantages AFFILIATED COMPANIES PLATFORM To drive performance, guest satisfaction, and revenue To maximize outperformance vs. peers Mobile interface for guest check-in and room access Scale with major hotel brands Audio visual services for banquets, meetings, and events Long te
Slide 14: Highest Insider Ownership Among Peers
Highest INSIDER OWNERSHIP AMONG PEERS 20% 18% 17.3% 16% 14.4% 14% 12% 10% 9.4% 8% 6.3% 6% 3.4% 3.4% 4% 2.6% 2.2% 2.1% 1.9% 1.6% 2% 1.2% 0.9% 0.9% 0.4% 0.4% 0% AHT(1) BHR(1) HT APLE Peer CLDT CHSP PEB INN HST RLJ DRH SHO XHR LHO PK Avg. #1 5.1x $109M Aligned Management Team More insider ownership vs.
Slide 15: Transactions
QAO? ASHFORD HOSPITALITY TRUST Transac tions
Slide 16: Making Good Deals Great: Acquisitions Using ERFP
Making Good Deals Great Acquisitions Using ERFP H i l t o n A l e x a n d r i a H i l t o n S a n t a C r u z L a P o s a d a S a n t a F e • Attractive RevPAR/yield combination • Favorable RevPAR/yield combination • Supply constrained market able to with high margins with operational upside generat
Slide 17: Asset Sales: Financially Calibrated
A s s e t S a l e s Financially Calibrated ASSETS SOLD SINCE 2015 SALE OF MAINLY SELECT-SERVICE HOTELS HAMPTON INN TERRE HAUTE $375M COURTYARD MARRIOTT VILLAGE LAKE BUENA VISTA SALES PROCEEDS SPRINGHILL SUITES LAKE BUENA VISTA FAIRFIELLD INN LAKE BUENA VISTA DISPOSING OF LOWER REVPAR HOTELS RESIDENN
Slide 18: Balance Sheet
UN ASHFORD HOSPITALITY TRUST Balance Sheet
Slide 19: Strategic Rationale: Non-Recourse Debt
Strategic Rationale Non-Recourse Debt B e n e f i t s o f N o n - R e c o u r s e D e b t T o t a l E n t e r p r i s e V a l u e • Non-recourse debt lowers risk profile of Stock Price(1) $5.18 platform Fully Diluted Shares Outstanding(2) 121.7 • Maximizes flexibility in all economic Equity Value $6
Slide 20: Value Enhancement Through Recent Refinancings
V a l u e E n h a n c e m e n t T h r o u g h Recent Refinancings S t r a t e g i c R a t i o n a l e L+5.52% L+3.00% L+4.95% L+2.92% Extend Maturity 17- P a c k – O c t 2 0 1 7 8 - P a c k – J a n 2 0 1 8 Greater Flexibility ~$9.8M in annual debt ~$6.8M in annual debt service savings over prior
Slide 21: Well-Laddered Debt Maturity Schedule
Well- Laddered Debt Maturity Schedule (1) Q4 2017 weighted average maturity was 3.7 years Q3 2018 weighted average maturity is now 5.8 years $3,500 $3,000 Less than 16% of debt due through 2022 $2,500 $2,000 $3,071.9 $1,500 $ in $ Millions $1,000 $500 $5.3 $230.7 $287.3 $250.0 $0 $93.9 2018 2019 202
Slide 22: Strategic Cash Target
Strategic Cash Target F i n a n c i a l C r i s i s C u r r e n t C y c l e Positioned to buy back approximately 50% of Flexibility to execute opportunistic outstanding common shares for about $240M growth and maintain hedge against an leading to outsized total shareholder returns economic downturn
Slide 23: Asset Management Initiatives
Asset Management Initiatives
Slide 24: Capital Improvements Contribute to Growth
Capital Improvements Contribute to Growth Hotel CapEx Invested 250,000 15.4% 16.0% 221,960 15.2% 15.1% 13.7% 225,000 15.0% 204,040 200,000 13.1% 14.0% 175,159 175,000 164,726 13.0% 150,000 120,105 12.0% 125,000 10.2% 96,285 100,000 11.0% 75,000 10.0% 2013 2014 2015 2016 2017 2018 Q3 YTD Capex As % o
Slide 25: Case Study: Hyatt Regency Savannah Capital Improvements
C a s e S t u d y Hyatt Regency Savannah Capital Improvements $ 1 0 . 7 M $ 8 . 4 M Invested in lobby, meeting space, and Invested in guestrooms and corridors restaurant $10 Renovation Period Performance Comparison Hotel EBITDA $9 RevPAR Index(3) $8 109.2 130.2 (3) (In Millions (In $) $7 Value Added
Slide 26: Case Study: Marriott Beverly Hills Rebranding
C a s e S t u d y Marriott Beverly Hills Rebranding (1) O n l y f u l l - Incremental Value Added $ 1 1 . 0 M s e r v i c e M a r r i o t t Revenue: 5,950bps Occ: 950bps i n c r e m e n t a l w i t h i n 6 - m i l e ADR: 4,640bps RevPAR: $90.14 C a p E x r a d i u s Value Creation(2): $68.8M 130 $13
Slide 27: Case Study: Marriott DFW Franchise Conversion
C a s e S t u d y Marriott DFW Franchise Conversion 491 18,522 s q . f t . Keys Meeting Space • Realigned and retrained sales staff to effectively target under-performing market segments • Shifted business mix by prioritizing transient and enforcing group ceilings over high demand periods • Implemen
Slide 28: Opportunity: Revenue Initiatives
Opportunity Revenue Initiatives Implementing aggressive strategy to increase ancillary revenue $2.2M $3.7M $400K $4.6M Resort Fee Parking Early Arrival/ Other Charge Late Departure Total Added Revenue(1): $10.9M (1) Estimated annual revenue 28
Slide 29: Valuation
UN ASHFORD HOSPITALITY TRUST Valuation
Slide 30: Valuation: TTM Cap Rate and TEV/EBITDA Multiple
Valuation (1),(2) 9.0% TTM CAP RATE 8.6% 8.6% 8.4% 8.5% 8.1% 8.0% 8.0% 7.8% 7.5% 7.5% 7.1% 7.0% 6.8% 6.5% 6.4% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% RLJ CLDT AHT DRH SHO INN Peer Avg CHSP HST HT LHO TEV / 2018E EBITDA MULTIPLE(1),(2) 15.0x 14.7x 14.5x 14.0x 13.6x 13.4x 13.5x 13.0x 12.5x 12.1x 11.9x 12.0x 11
Slide 31: Reasons to Own Ashford Hospitality Trust
STRATEGIC FOCUS PORTFOLIO QUALITY ERFP PROGRAM DIVIDEND YIELD Reasons to Own Ashford Hospitality Trust ASSET MANAGEMENT TRACK RECORD AFFILIATE ADVANTAGES INSIDER OWNERSHIP
Slide 32: Ashford Hospitality Trust November 2018
Af ASHFORD HOSPITALITY TRUST November 2018
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