Rlj Lodging Trust · NYSE:RLJ
Rlj Lodging Trust — Capital One Conference October 2021
34 slides from Rlj Lodging Trust's conference presentation, October 2021
Slide 1: Capital One Conference October 2021
CAPITAL ONE CONFERENCE OCTOBER 2021
Slide 2: Investment Highlights
INVESTMENT HIGHLIGHTS RLJ’s portfolio construct, embedded growth catalysts and liquidity uniquely position the Company to outperform throughout the entire lodging cycle ▪ Outperforming during early recovery with strong occupancy and positive OPERATING cash flow PERFORMANCE – Poised to benefit from t
Slide 3: Operating Performance
OPERATING PERFORMANCE MARRIOTT LOUISVILLE DOWNTOWN OCTOBER 2021 3
Slide 4: 2021 July - August Operating Performance Highlights
2021 | JULY - AUGUST OPERATING PERFORMANCE HIGHLIGHTS Accelerating operating trends from Q2 continued into July, with some moderation during the second half of August Portfolio benefitted from accelerating lodging demand in Q2(1) ▪ Open hotel occupancy of 61% and ADR of $142 increased 32% and 19%, r
Slide 5: 2021 Monthly Operating Trends
2021 | MONTHLY OPERATING TRENDS July RevPAR achieved 75% of 2019 while generating EBITDA margins above July 2019(1) Portfolio construct benefitted from pent-up demand leading to strong July performance(1) ▪ Occupancy accelerated from 59% in April to 63% in June, and 69% in July ▪ ADR improved each m
Slide 6: 2021 Weekly Occupancy Trends
2021 | WEEKLY OCCUPANCY TRENDS Q3 Occupancy peaked in July followed by seasonal and Delta moderation in late August through mid-September and ended September with positive momentum Open Hotels Weekly Occupancy vs % of 2019(1) Open Hotels % of 2019 Occupancy 80% 90% 75% 80% 70% 74% 70% 65% 61.8% 60%
Slide 7: Post-Labor Day Outlook
POST - LABOR DAY OUTLOOK Recent fundamentals showing improved momentum and our confidence in the trajectory of the lodging recovery remains unchanged RevPAR strengthened back half of September ▪ Leisure continue to drive strong weekend performance – Labor Day weekend occupancy and ADR exceeded 2019
Slide 8: High-Quality Portfolio
HIGH-QUALITY PORTFOLIO RENAISSANCE PITTSBURGH OCTOBER 2021 8
Slide 9: Portfolio Profile
PORTFOLIO PROFILE RLJ owns a geographically diversified portfolio of premium branded, high-margin, focused-service and compact full-service hotels Portfolio Overview(1) Property Types(2) Operating Metrics(3) 23 Compact Full-Service 79% States Occupancy 55% 41% Focused-Service Traditional Full-Servic
Slide 10: Diversified Portfolio
DIVERSIFIED PORTFOLIO RLJ’s footprint in top Urban markets is well-positioned to capture the recovery in all segments ▪ Sunbelt markets represent 47% of RLJ’s Hotel EBITDA(1) Portland Boston Chicago 5% New York City 4% Pittsburgh San Francisco CBD 4% Philadelphia Denver 13% Indianapolis 5% Washingto
Slide 11: High-Quality Portfolio Construct
HIGH-QUALITY PORTFOLIO CONSTRUCT RLJ’s Transient orientation, product type, favorable market exposure and lean operating model position the Company for outperformance throughout the entire cycle Transient segment, especially leisure, is expected to remain strong throughout this cycle ▪ RLJ’s portfol
Slide 12: 2021 More Resilient Portfolio
2021 | MORE RESILIENT PORTFOLIO Occupancy and Margin outperformance relative to most peers underscores RLJ’s more resilient model Occupancy Performance | Q2 2021(1) 80% 70.8% 68.2% 64.9% 57.9% 55.8% Q2 Avg.: 53.2% 60% 51.4% 48.5% 43.6% 43.0% 42.3% 38.6% 40% 20% 0% APLE CLDT INN RLJ HT XHR DRH SHO HS
Slide 13: Positioned to Drive Above-Cycle Growth
POSITIONED TO DRIVE “ABOVE-CYCLE” GROWTH RLJ is uniquely positioned with multiple channels to drive growth that is incremental to the Lodging recovery, allowing the Company to outperform throughout the entire cycle RLJ’s reshaped portfolio has an improved long-term growth profile and operating metri
Slide 14: External Growth
EXTERNAL GROWTH HAMPTON INN & SUITES ATLANTA MIDTOWN OCTOBER 2021 14
Slide 15: External Growth | Hampton Inn Atlanta Midtown
EXTERNAL GROWTH | HAMPTON INN ATLANTA MIDTOWN Recently acquired the newly-built Hampton Inn & Suites Atlanta Midtown ▪ Atlanta is ranked as a top growth market for both population and corporate relocations – Ranks 3rd in largest concentration of Fortune 500 headquarters – Home to globally ranked uni
Slide 16: External Growth | Hampton Inn Atlanta Midtown Investment Parameters
EXTERNAL GROWTH | HAMPTON INN ATLANTA MIDTOWN Acquisition is expected to be accretive to RLJ’s RevPAR, EBITDA margins and growth profile In line with RLJ’s investment parameters… Premium brand High growth market Strong RevPAR Heart of demand location Rooms-oriented Young asset High margins Off-marke
Slide 17: Internal Growth
INTERNAL GROWTH MARRIOTT LOUISVILLE DOWNTOWN OCTOBER 2021 17
Slide 18: Internal Growth | Unlocking Incremental Value
INTERNAL GROWTH | UNLOCKING INCREMENTAL VALUE $23M to $28M of Incremental EBITDA (1) $9-11M+ RLJ IS UNLOCKING SIGNIFICANT EBITDA(1) EMBEDDED VALUE across three areas of opportunity creating ~$325M REVENUE ENHANCEMENTS of value(2) $7-10M+ EBITDA(1) 2022 CONVERSIONS $7M+ EBITDA(1) MARGIN EXPANSION (1)
Slide 19: Internal Growth | Value Creation Strategy
INTERNAL GROWTH | VALUE CREATION STRATEGY Conversions, Revenue Enhancement and Margin Expansion opportunities represent a significant source of value creation Incremental Value Property Project EBITDA(2) Unlevered IRR Investment (1) Creation (3) 2022 Conversions Wyndham Conversion to $10.0M to $11.0
Slide 20: Conversion | Wyndham Santa Monica
CONVERSION | WYNDHAM SANTA MONICA KEY HIGHLIGHTS ▪ Santa Monica is a top leisure market in the U.S. ▪ Hotel located at the entrance of Santa Monica Pier ▪ Expect significant lift in ADR – Position as a “Lifestyle” hotel to capture higher ADR already in the market ▪ Expected to also unlock significan
Slide 21: Conversion | Mills House Charleston
CONVERSION | MILLS HOUSE CHARLESTON KEY HIGHLIGHTS ▪ Charleston is a top leisure, drive-to market – Over 7M annual visitors ▪ Location in Charleston Historic District ▪ Expect significant lift in ADR – Reposition as a Curio Collection to capture higher ADR – Curio will attract top Hilton Honors memb
Slide 22: Conversion | Mandalay Beach
CONVERSION | MANDALAY BEACH KEY HIGHLIGHTS ▪ Beachfront location between Los Angeles and Santa Barbara ▪ Physical configuration consistent with high-end destination resort experience ▪ Expect significant lift in ADR – Reinvented as a “curated” lifestyle resort – Curio collection will attract higher
Slide 23: Conversions | Incremental Opportunities
CONVERSIONS | INCREMENTAL OPPORTUNITIES Additional conversions to unlock significant embedded value REPRESENTS ~20%(1) OF PORTFOLIO Wyndham Portfolio (remaining 6) Conversion Opportunities Include: 8-10 additional opportunities ▪ Brand expirations ▪ Remix customer base ▪ Conversions with Boston reno
Slide 24: Revenue Enhancement | Opportunities
REVENUE ENHANCEMENT | OPPORTUNITIES Revenue ROI opportunities expected to generate incremental EBITDA PIPELINE TOTAL COMPLETED $6M $9M $3M EBITDA(1) + $8M to = $11M to EBITDA(1) EBITDA(1) RECENTLY COMPLETED PIPELINE TOTAL REVENUE ENHANCING ▪ Additional rooms in Emeryville, Buckhead, ▪ Guestroom addi
Slide 25: Margin Expansion | Management Agreement Amendments
MARGIN EXPANSION | MANAGEMENT AGREEMENT AMENDMENTS Amendments provide favorable terms with increased flexibility ▪ Harvest the embedded value at contract renewals ~50 Margins Improved (1) to reduce fees + additional incentives • Reduce base fees by 50 to 125 bps bps • Additional incentives: • Key mo
Slide 26: Margin Expansion | Completed and Pipeline
MARGIN EXPANSION | COMPLETED AND PIPELINE Represents ~50 bps of incremental margins, including ~30 bps of recently completed initiatives and ~20 bps from 2022 - 2023 renewals Portfolio Margin Lift(1) | Completed vs. Pipeline COMPLETED PIPELINE +20 bps 32.3% +30 bps 32.1% 31.8% 2019 Recent Amendments
Slide 27: Strong Liquidity and Balance Sheet
STRONG LIQUIDITY AND BALANCE SHEET RENAISSANCE PITTSBURGH OCTOBER 2021 27
Slide 28: Strong and Flexible Balance Sheet
STRONG AND FLEXIBLE BALANCE SHEET Recent financing initiatives have created significant flexibility to drive growth and further strengthened balance sheet Raised $1.0B of debt in 2021 resulting in improved laddering of debt maturities and reduced interest expense ▪ June: completed an oversubscribed,
Slide 29: Best-in-Class Balance Sheet
BEST-IN-CLASS BALANCE SHEET RLJ has solid liquidity, low leverage and a well-staggered maturity profile with no debt maturities until 2023 RLJ maintains best-in-class balance sheet ▪ Entered 2020 with Net Debt to EBITDA of 3.1x, below peer average ▪ ~$658M of cash as of June 30th ▪ Nearest debt matu
Slide 30: Investment Highlights
INVESTMENT HIGHLIGHTS RLJ’s portfolio construct, embedded growth catalysts and liquidity uniquely position the Company to outperform throughout the entire lodging cycle ▪ Outperforming during early recovery with strong occupancy and positive OPERATING cash flow PERFORMANCE – Poised to benefit from t
Slide 31: ESG Update
ESG UPDATE HILTON CABANA MIAMI BEACH OCTOBER 2021 31
Slide 32: RLJ ESG | Corporate Responsibility
RLJ ESG | CORPORATE RESPONSIBILITY Our sustainability strategy aligns our ESG objectives with our commitment to all stakeholders ▪ In recognition of the strategic importance of increasing environmental efficiency we… – Achieved cost reductions through investment in energy, carbon and water efficienc
Slide 33: RLJ ESG | Corporate Responsibility Impact
RLJ ESG | CORPORATE RESPONSIBILITY IMPACT Our longstanding commitment to ESG is evidenced by… ENVIRONMENTAL SOCIAL GOVERNANCE ▪ 77% of our properties have equipped Associate Ethnicity ▪ Maintain a highly diverse and independent Board, guestrooms with digital thermostats and committed to continuing r
Slide 34: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This information contains certain statements, other than purely historical information, including estimates, projections, statements relating to the Company’s business plans, objectives and expected operating results, measures being taken in response to the COVID-19 pandem
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