Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — Investor Presentation (June 2005)
25 slides from Ashford Hospitality Trust's investor presentation, Jun 21, 2005
Slide 1: Ashford Hospitality Trust
ASHFORD HOSPITALITY TRUST The premier capital provider to the hospitality industry’ June 2005
Slide 2: Safe Harbor
SAFE HARBOR 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 r
Slide 3: Discussion Topics
DISCUSSION TOPICS Asset Allocation Strategy Growth Strategy Long-Term Total Return Potential
Slide 4: Asset Allocation Strategy
ASSET ALLOCATION STRATEGY HOTEL OWNERSHIP 60-90% allocation Current yield Capital appreciation Undervalued assets Reposition Timing: Trough/Mid- Stage Recovery FIRST MORTGAGE 0-10% allocation Stable returns High volume Counter cyclical Timing: Peak/Early Decline MEZZANINE 10-40% allocation Wide inde
Slide 5: Lodging Market / Economic Recovery
Room Demand Room Supply GDP 1988 0.047 0.046 0.042 1989 0.048 0.037 0.035 1990 0.022 0.035 0.018 1991 -0.011 0.017 -0.005 1992 0.021 0.009 0.03 1993 0.019 0.006 0.027 1994 0.032 0.012 0.04 1995 0.021 0.016 0.027 1996 0.021 0.024 0.036 1997 0.025 0.035 0.044 1998 0.027 0.039 0.043 1999 0.03 0.038 0.0
Slide 6: Growth Strategy
GROWTH STRATEGY Capital Recycling: Dispose of assets where value has been maximized and redeploy capital into assets with higher total return potential Margin Growth: Align with brand leaders to drive RevPAR and work with third-party managers to control costs and expand margins Renovation/Reposition
Slide 7: Capital Recycling Strategy
CAPITAL RECYCLING STRATEGY Focus on "off-market or pre-emptive" accretive hotel acquisition and lending opportunities Pursue repositioning or re-branding opportunities that maximize total return potential Optimize portfolio balance to maximize total return
Slide 8: Management Track Record
MANAGEMENT TRACK RECORD Demonstrated expertise in creating value throughout cycles Yearly Change in U.S. Per Room Value vs. Management Purchases/Sales Source: HVS International, Ashford Hospitality Trust, AHT 2005 hotel value per room estimate Mgmt's Acquisitions / Debt Investments (1) Mgmt's Sales/
Slide 9: Achieving Targeted Yields
ACHIEVING TARGETED YIELDS 17
Slide 10: Sale of Non-Core Assets
SALE OF NON-CORE ASSETS Demonstrated ability to sell assets at an attractive multiple and reinvest the proceeds into higher yielding assets
Slide 11: CNL Portfolio Acquisition
CNL PORTFOLIO ACQUISITION 30-Hotel portfolio with 4,328 rooms acquired for $465 million Attractive TTM NOI cap rate of 8.5% Portfolio consists of select service Marriott branded and managed hotels in 27 markets across 16 states Increases brand and geographic diversification Favorable 10-yr debt fina
Slide 12: Hotel Acquisition - Case Study
HOTEL ACQUISITION - CASE STUDY FGSB Portfolio - $250 million acquisition 21-Hotel portfolio with 4,094 rooms acquired for $250 million at attractive yields Core Portfolio consists of 13 upper-upscale and upscale full-service hotels in major markets Core Portfolio TTM Cap Rate 11% TTM EBITDA Yield 13
Slide 13: Debt Investment - Case Study
DEBT INVESTMENT - CASE STUDY Hotel Teatro - $5 million mezzanine loan 111-room luxury, boutique hotel in downtown Denver Originated $10 million mortgage and $5 million mezzanine loan at a blended spread of 565 bps over LIBOR Sold first mortgage and retained mezzanine loan at a spread of 1,135 bps ov
Slide 14: Cost Saving Implementation
COST SAVING IMPLEMENTATION Sea Turtle Inn - Jacksonville, FL 193 room hotel acquired for $23.4 million Pre-Acquisition TTM Operating statistics: TTM Pre-Acquisition Current TTM Occupancy % 75.20% 85.30% ADR $101.67 $118.32 RevPAR $84.12 $86.09 Room Revenue $5.82m $6.06m NOI $1.93m $2.68m TTM room re
Slide 15: Strong Brand Representation
STRONG BRAND REPRESENTATION 79% of rooms are Hilton, Marriott, Starwood and Hyatt brands Marriott Brands Hilton Brands Starwood Brands Other Brands & Independents Hyatt Brands
Slide 16: Primary Market Portfolio
PRIMARY MARKET PORTFOLIO Majority of Ashford's EBITDA is within primary markets with high RevPAR growth
Slide 17: Portfolio Growth
PORTFOLIO GROWTH Owned hotel portfolio is well positioned for RevPAR growth
Slide 18: Asset Management Highlights
ASSET MANAGEMENT HIGHLIGHTS Maximizing the value of investments through aggressive asset management Recently hired a Sr. VP of Asset Management from Host Marriott Utilizing the best manager for any given property; currently use 7 different management companies Acquired properties at attractive trail
Slide 19: Margin Growth
MARGIN GROWTH Capital improvement drives RevPAR and EBITDA Margin growth
Slide 20: Capital Expenditures
CAPITAL EXPENDITURES Ashford has allocated significant funds in properties where there is value-added return on equity opportunity 63% of allocated capital has yet to be spent Embassy Suites Phoenix before renovation Embassy Suites Phoenix after renovation
Slide 21: Ashford Value to Peers - EBITDA Multiple
ASHFORD VALUE TO PEERS - EBITDA MULTIPLE Ashford's TTM 1Q 05 Enterprise Value / EBITDA Multiple of 11.5x is below the 12.3x forward 2005E peer group average Source: Wachovia, First Call, Bloomberg, SNL REIT Securities, Wachovia Capital Markets, LLC Estimates
Slide 22: Ashford Value to Peers - Value Per Room
ASHFORD VALUE TO PEERS - VALUE PER ROOM Ashford's value per room of $107,340 based on 6/17/05 closing price of $10.57 is below the peer group average of $132,169 Source: Wachovia, First Call, Bloomberg, SNL REIT Securities, Wachovia Capital Markets, LLC Estimates
Slide 23: Growing Dividend
GROWING DIVIDEND Ashford has increased the dividend every quarter for the past 6 quarters and current quarterly dividend of $0.17 per share is the 4th highest yield among Hotel REITs Source: Yield Calculated using 6/17/05 closing price
Slide 24: Summary Ashford Highlights
SUMMARY ASHFORD HIGHLIGHTS SIGNIFICANT INTERNAL & EXTERNAL GROWTH POTENTIAL Proven capital recycling ability Proven value-added asset management capability DIVERSIFIED INVESTMENT STRATEGY IMPROVES RISK-ADJUSTED RETURNS Diversified earnings stream reduces earnings volatility Larger investment univers
Slide 25: Ashford Hospitality Trust
ASHFORD HOSPITALITY TRUST The premier capital provider to the hospitality industry’
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