Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — Investor Presentation (March 2019)
35 slides from Ashford Hospitality Trust's investor presentation, Mar 7, 2019
Slide 1: Ashford Hospitality Trust March 2019
JAW ASHFORD HOSPITALITY TRUST March 2019 A
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 INSIDER OWNERSHIP ERFP PROGRAM High quality portfolio presents a Strategy intended to maximize Highest insider ownership among peers Innovative program provides a potentially attractive investment investment opportunity and v
Slide 6: Key Metrics and Portfolio Overview
Key Metrics Portfolio Overview 119 25,087 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% 57% REMINGTON MIDSCALE 4% SELECT-SERVICE 3% 59% 29
Slide 7: Geographically Diverse Portfolio
Portfolio Position Geographically Diverse Portfolio by Hotel EBITDA(1)(2) INTERSTATE <1% OTHER RESORT 11% 8% 3% TOP 50 18% AIRPORT SMALL TOWN/ METRO 16% Location MSA’s (3) Type Top 10 Markets 2018 EBITDA % of Total Washington DC $47,621 10.2% San Fran/Oakland, CA $36,892 7.9% Los Angeles, CA $33,109
Slide 8: Strategic Rationale: Full-Service & Upper Upscale
Strategic Rationale Full-Service & Upper Upscale 2018 DEAL FLOW(1) VALUE-ADD Full-Service Limited-Service (Luxury) $13.8B $6.6B 28% 14% 41% OF TOTAL UPPER UPSCALE ROOMS ARE FRANCHISED(2) YIELD 6.5% - 8.5% Full-Service ESTIMATED CAP RATES (Non-Luxury) 27.9B 58% Limited-Service Full-Service (Non-Luxur
Slide 9: Highest Insider Ownership Among Peers
Highest INSIDER OWNERSHIP AMONG PEERS 20% 18% 16.8% 16% 13.6% 14% 12% 10% 9.4% 8% 6.3% 6% 3.4% 3.3% 4% 2.6% 2.2% 2.1% 1.9% 1.6% 2% 1.2% 0.9% 0.9% 0.4% 0% AHT(1) BHR(1) HT APLE CLDT Peer CHSP PEB INN HST RLJ DRH SHO XHR PK Avg. #1 5.1x $98M Aligned Management Team(3) More insider ownership vs. Total
Slide 10: Enhanced Return Funding Program
Maximize Value Enhanced Return Funding Program • $50M ERFP commitment from Ashford Inc. • 2 year term • 10% of purchase price • Funding comes in form of purchased FF&E • Potential to upsize to $100M by mutual agreement GOALS • Enhance overall shareholder returns • Apply towards $500M new acquisition
Slide 11: Hotel EBITDA Performance Relative to Peers
Relative to Peers Hotel EBITDA Performance 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 30% AHT Peer Avg. 5 years of cumulative 25% 20% EBITDA growth 15% outperformance 10% 5% 0% 2014 2015 2016 2017 2018 Peer group: CHSP, DHR, HT, HST, LHO, RLJ, PK, PEB, XHR, SHO Note: comparable results as
Slide 12: 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(2) SHARES SHARES AVERAGE OUTSTANDING BUYBACK $1,400 PRICE Financial Crisis $1,200 $200 PREFERRED
Slide 13: Affiliate Competitive Advantages
Affiliate Competitive Advantages AFFILIATED COMPANIES PLATFORM Intended to drive performance, guest satisfaction, and revenue Intended 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,
Slide 14: Attractive Dividend Yield
Attractive Dividend Yield (1) 12.0% 10.0% 10.0% 8.0% 7.3% 7.2% 6.7% 6.1% 6.0% 5.8% 6.0% 5.6% 5.6% 5.3% 4.9% 4.8% 4.7% 4.7% 4.3% 4.0% 2.0% 0.0% (2) AHT APLE RLJ CLDT INN HT PK Peer XHR CHSP SHO BHR PEB DRH HST Avg. Source: Bloomberg (1) As of March 1, 2019, annualized based on most recent dividend an
Slide 15: Transactions
WIN ASHFORD HOSPITALITY TRUST Transac tions A
Slide 16: Acquisitions Using ERFP
“Making Good Deals Great”( 1 ) Acquisitions Using ERFP Hilton Alexandria L a P o s a d a d e Embassy Suites H i l t o n S a n t a C r u z O l d T o w n Santa Fe M a n h a t t a n Scott’s Valley Acquisition Price $111M Acquisition Price $50M Acquisition Price $195M Acquisition Price $50M ERFP ERFP ER
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
WIN ASHFORD HOSPITALITY TRUST Balance Sheet A
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 seeks to lower risk profile Stock Price(1) $4.81 of platform Fully Diluted Shares Outstanding(2) 121.0 • Intended to maximize flexibility in a variety
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
W e l l - Laddered Debt Maturity Schedule (1) Q4 2017 weighted average maturity was 3.7 years Q4 2018 weighted average maturity is now 5.6 years $3,500 $3,000 $2,500 $2,000 $2,998.5 $1,500 $ in $ Millions $1,000 $500 $230.7 $98.5 $5.2 $291.2 $52.8 $195.9 $0 $93.4 2019 2020 2021 2022 2023 Thereafter
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 16.0% 15.4% 225,000 221,960 14.5% 15.1% 13.7% 15.0% 207,325 204,040 200,000 13.1% 14.0% 175,159 175,000 13.0% 150,000 12.0% 125,000 120,105 10.2% 11.0% 100,000 96,285 75,000 10.0% 2013 2014 2015 2016 2017 2018 Capex As % of Reven
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
WIN ASHFORD HOSPITALITY TRUST Valuation A
Slide 30: Valuation: Cap Rate and EBITDA Multiple
Valuation TTM CAP RATE(1),(2) 9.0% 8.6% 8.5% 8.4% 8.0% 7.7% 7.6% 7.4% 7.3% 7.5% 7.2% 7.0% 6.8% 6.7% 6.5% 6.0% 5.9% 5.5% 5.0% 4.5% 4.0% RLJ AHT INN SHO DRH CLDT Peer Avg HST CHSP HT TEV / 2019E EBITDA MULTIPLE(1),(2) 14.0x 13.7x 13.4x 13.5x 13.0x 12.5x 11.9x 12.0x 12.0x 12.0x 11.5x 11.5x 11.2x 11.0x
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(1) AFFILIATE ADVANTAGES INSIDER OWNERSHIP (1) Past performance is not indicative of future results
Slide 32: Appendix
JAW ASHFORD HOSPITALITY TRUST APPENDIX A
Slide 33: GAAP Reconciliation: Embassy Suites Manhattan
GAAP Reconciliation Ashford Hospitality Trust Embassy Suites Manhattan Reconciliation of Hotel Net Income to Hotel EBITDA and Hotel Net Operating Income (Unaudited, in millions) 12 Months Ended December 31, 2018 Hotel Net Income $ 1.0 Adjustment: Depreciation and amortization $ 2.3 Interest expense
Slide 34: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Year Ended December 31, 2018 Hotel Properties Not Hotel Properties Orlando WorldQuest Corporate / Ashford Hospitality Under Renovation Under Renovation Hotel Total Resort Allocated Trust, Inc. Net income (loss) $ 134,591 $ 28,327 $ 162,9
Slide 35: Ashford Hospitality Trust March 2019
JAW ASHFORD HOSPITALITY TRUST March 2019 A
Ashford Hospitality Trust — Investor Presentation (March 2019) on 6ix