Braemar Hotels & Resorts Inc. · NYSE:BHR
Braemar Hotels & Resorts — Ashford Hospitality Prime — Investor Presentation (March 2016)
30 slides from Braemar Hotels & Resorts's investor presentation, Mar 31, 2016
Slide 1: Management Track Record March 2016
Management Track RecordMarch 2016
Slide 2: Safe Harbor and Important Information
2 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 result," "m
Slide 3: Summary
Substantial depth of hospitality experienceHighly aligned with the interests of all shareholdersCommitment to long term value creation for stakeholdersBest-in-class asset management teamAffiliate property manager Remington adds significant valueIn-depth hospitality operations experience and knowledg
Slide 4: Management Expertise & Alignment
Management Expertise & Alignment 4 Renaissance TampaTampa, FL Chicago Sofitel WaterTowerChicago, IL Ritz-Carlton St. ThomasSt. Thomas, BVI
Slide 5: Management Team with Deep Experience
Management Team with Deep Experience 5 Aggregate 140+ Years of Relevant Industry Experience 27 years of hospitality experience13 years with Ashford (14 years with Ashford predecessor)Cornell School of Hotel Administration BSCornell S.C. Johnson MBA Montgomery J. BennettChief Executive Officer & Chai
Slide 6: Highly Aligned With the Interests of All Shareholders
Highly Aligned With the Interests of All Shareholders 6 Public Lodging REITs include: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHOSource: Company filings* Insider ownership for Ashford Prime includes direct & indirect interests & interests of related parties Ashford Prime’s management
Slide 7: Award-Winning Management Team
Monty J. Bennett was named the hotel industry’s “Top-Performing CEO of the Year” for 2011 by HVS Executive Search, as he offered the best value to AHT shareholders based on HVS’s pay-for-performance model2013 finalist for ALIS Single Asset Transaction of the Year for AHT’s purchase of the 142-room P
Slide 8: Operational Expertise
Operational Expertise 8 Renaissance TampaTampa, FL Chicago Sofitel WaterTowerChicago, IL Marriott SeattleSeattle, WA
Slide 9: Best-in-class asset management team
Hospitality REITs require very hands-on asset management and it’s crucial that management has a very thorough understanding of operations in order to oversee property managersThe depth of management’s 140+ years of hospitality experience provides shareholders with exceptional operational expertiseBe
Slide 10: AHT highest average hotel EBITDA flows among peers
Asset Management Expertise 10 Peers include: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RHP, RLJ, SHO, and APLESource: Company filings AHT has the highest average hotel EBITDA flows among its peers over the past 9 years
Slide 11: AHT highest average EBITDA margin change among peers
Asset Management Expertise 11 Renaissance TampaTampa, FL Peers include: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RHP, RLJ, SHO, and APLESource: Company filings AHT has the highest average EBITDA margin change among its peers over the past 9 years
Slide 12: Remington Outperformance - Profitability
Remington Outperformance - Profitability 12 Renaissance TampaTampa, FL Marriott SeattleSeattle, WA Superior management of downside risk and cash flow loss Remington has outperformed in EBITDA flow-through 7 out of the last 8 years NOTE: Remington managed hotels owned by Ashford Trust and Ashford Pri
Slide 13: Extraordinary Ashford asset management results – Highland Takeover
Ordinary asset management results Extraordinary Ashford asset management results Asset Management Expertise – Highland Takeover 13 The takeover of the Highland portfolio demonstrates how a superior asset management team can drive performanceAHT took over the Highland portfolio in March 2011 (see sli
Slide 14: Marriott Seattle Revenue Strategies
Asset Management Expertise – Marriott Seattle 14 Seattle Marriott Waterfront – Seattle, WA Segment Jul-Aug 2012 Jul-Aug 2013 Jul-Aug 2014 Jul-Aug 2015 ADR Premium Retail $ 327.49 $ 354.85 $ 411.14 $ 449.95 Regular Retail $ 281.73 $ 309.96 $ 348.03 $ 371.66 Difference $ 45.76 $ 44.90 $ 63.10 $ 78.29
Slide 15: Capital Hilton Revenue Strategies
Asset Management Expertise – Capital Hilton 15 The Capital Hilton – Washington, DC Installed Upsell program, driving $250,000 of incremental revenueDaily focus on pricing in order to drive retail transient penetration to historical high; retail RPI up 19% TTMWeekly reviews of group position, leading
Slide 16: Marriott Plano Legacy Revenue Strategies
Asset Management Expertise – Marriott Plano Legacy 16 Strong RPI growth despite opening of Hilton Granite Park in Sep. 2014Installed Sr. RM in Q1 20142014 & 2015 Business Transient Pricing Strategy led to premium increases with key accountsRenovated meeting space in 2014Monthly review with Area & Gr
Slide 17: Room Additions
Asset Management Expertise – Room Additions 17 Fourth highest occupancy hotel in Prime portfolioIconic hotel located in downtown Washington DC and 3 blocks north of the White HouseConverted 1 Ambassador Suite and relocated concierge lounge to 1st floor, gained 6 additional keys Project Overview: Fou
Slide 18: Pier House
Asset Management Expertise – Pier House 18 Asset management performance significantly exceeded underwritingEliminated $1.5mm in expenses through cost cutting initiatives: Right-sized staffing levelImplemented improved housekeeping practicesIdentified additional F&B efficienciesRealized synergies wit
Slide 19: Courtyard San Francisco
Asset Management Expertise – Courtyard San Francisco 19 Courtyard San Francisco has historically underperformed compared to the rest of AHP’s select portfolio in ADR indexA one point increase in RevPAR index equals $171,000 in EBITDARepositioning hotel with $14.5mm extensive guestrooms and lobby ren
Slide 20: Bardessono
Asset Management Expertise – Bardessono 20 Bardessono – Yountville, CA Acquired by AHP in July 20152015 RevPAR of $56462 keys, 1,350 sq. ft. of meeting spaceLocated in Yountville, CA the “Culinary Capital of Napa Valley”High barrier to entry marketEasily accessible to the major markets in Northern C
Slide 21: Ritz St. Thomas
Asset Management Expertise – Ritz St. Thomas 21 The Ritz-Carlton St. Thomas Acquired by AHP in December 2015180 keys, 10,000 sq. ft. of meeting spaceAcquisition completed at favorable metrics of 7.2x TTM EBITDA and 10% TTM NOI cap rateLocated in St. Thomas in the stunning U.S. Virgin Islands with hi
Slide 22: Capital Markets Expertise
Capital Markets Expertise 22 Renaissance TampaTampa, FL Chicago Sofitel WaterTowerChicago, IL Pier House ResortKey West, FL
Slide 23: Deep Capital Markets Expertise
In addition to its operational expertise, management also has an extensive track record of successful capital markets executionManagement’s unique understanding of the long-term cost of equity has allowed it to successfully navigate through several lodging cycles while minimizing riskManagement has
Slide 24: Extensive Capital Markets & Deal Expertise
Extensive Capital Markets & Deal Expertise 24 Management’s deal and capital markets activity in the hospitality industry has totaled $19.4 billion since 2003 Source: AHT, AHP and AINC Company filings
Slide 25: Significant Value Creation – Share Buybacks
The Ashford management team took advantage of the opportunity to buy back AHT stock at trough prices, while other public hospitality REIT management teams issued stock at these low prices, substantially diluting their shareholders Significant Value Creation – Share Buybacks 25 Source: SNL
Slide 26: Significant Value Creation – Hedges
Ashford management implemented a hedging strategy at AHT to protect cash flow prior to the Great Recession in 2008Management discovered a high correlation between RevPAR growth and changes in LIBORBased on this strong correlation, management swapped $1.8b of fixed-rate debt to floating-rate debt in
Slide 27: Highland Portfolio Mezzanine Investment
Demonstrated understanding of debt capital market conditions and formed subordinated JV with institutional partnerIn January 2008, AHT formed a joint venture with Prudential Real Estate Investors ("PREI") in which contributions would be split 25% from AHT and 75% from PREIAHT acquired junior mezz po
Slide 28: Significant Value Creation – Highland Portfolio
28 Significant Value Creation – Highland Portfolio The Ritz-Carlton – Atlanta, GA 29% IRR over 7 years3.0x equity multiple $554.3 $371.8Gain * Based on the total transaction value at the time of the buyout of PREI in March 2015 Highland Hospitality Portfolio:AHT converted a fully-subordinated minori
Slide 29: Summary
Substantial depth of hospitality experienceHighly aligned with the interests of all shareholdersCommitment to long term value creation for stakeholdersBest-in-class asset management teamAffiliate property manager Remington adds significant valueIn-depth hospitality operations experience and knowledg
Slide 30: Management Track Record March 2016
Management Track RecordMarch 2016
Ashford Hospitality Prime — Investor Presentation (March 2016) on 6ix