Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — Investor Presentation (January 2016)
32 slides from Ashford Hospitality Trust's investor presentation, Jan 26, 2016
Slide 1: Company Presentation – January 2016
Company Presentation – January 2016
Slide 2: Safe Harbor
Safe Harbor 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
Slide 3: Ashford Hospitality Trust Vision
Ashford Hospitality Trust Vision Opportunistic platform focused on full-service hotels 3 Management team more highly-aligned with shareholders than our peers Appropriate use of financial leverage Best in class hotel managers Superior long-term total shareholder return performance Announc
Slide 4: Recent Developments
Recent Developments 4 Sale of select-service assets Simplify strategy Marketing 24-hotel portfolio in smaller groups and individually Pursuing the opportunistic sale of remaining 39 select-service hotels over time Amendments to Advisory Agreement with Ashford, Inc. Receive key money ($4
Slide 5: Strategy to Improve Shareholder Value
Strategy to Improve Shareholder Value 5 Current Market Valuation Increase in transparency No more spin-offs Improve portfolio quality through sale of select- service assets Private Market Valuation Simplify strategy and structure Opportunistic stock buybacks
Slide 6: Best In Class Hotel Managers
Best In Class Hotel Managers 89 properties managed by Remington representing 60% of portfolio hotel EBITDA 32 properties managed by Marriott representing 30% of portfolio hotel EBITDA Remaining 11 properties managed by Hilton, Starwood, Hyatt, and Interstate Best in class hotel property mana
Slide 7: Remington Outperformance - Revenue
100 110 120 130 140 150 160 2009 2010 2011 2012 2013 2014 TTM 2015 Remington Outperformance - Revenue Affiliation with Remington is a competitive advantage 7 NOTE: Remington managed hotels owned by Ashford Trust and Ashford Prime as compared to Non-Remington managed hotels Superior revenue optimiz
Slide 8: Remington Outperformance - Profitability
52% 58% 59% 43% 41% 44% 22% 53% 60% 59% 68% 70% 47% 55% -200% -175% -150% -125% -100% -75% -50% -25% 0% 25% 50% 75% 100% 2008 2009 2010 2011 2012 2013 2014 TTM 2015 Non-Remington Remington Remington Outperformance - Profitability Remington has outperformed in EBITDA flow-through 7 out of the last
Slide 9: Demonstrated Long-Term Track Record
67% -15% -35% -8% 185% 49% 14% 48% 22% -2% -31% 97% 42% 22% 128% 829% 105% 22% 44% -2% -16% -39% -100% 0% 100% 200% 300% 400% 500% 600% 700% 800% 900% Inception 10-Yr 9-Yr 8-Yr 7-Yr 6-Yr 5-Yr 4-Yr 3-Yr 2-Yr 1-Yr Peer Avg AHT Demonstrated Long-Term Track Record 9 (1) Since IPO on August 26, 2003 Peer
Slide 10: Asset Performance
Asset Performance 10 Source: Company filings YTD Q3 2015 RevPAR Growth 9.0% 7.9% 6.6% 6.3% 6.3% 6.3% 5.9% 5.2% 4.3% 3.9% 2.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% FCH INN AHT HT CHSP CLDT SHO DRH RLJ HST LHO
Slide 11: Highest Insider Ownership
Highest Insider Ownership 11 Public Lodging REITs include: CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHO Source: Company filings. * Insider ownership for Ashford Trust includes direct & indirect interests & interests of related parties Insider Ownership 16.0%* 5.0% 4.0% 3.0% 3.0% 2.2% 2.0%
Slide 12: Shareholder Alignment
12 Shareholder Alignment Peers Ashford Trust Incentivized to grow No sizeable share repurchases Low insider ownership Reluctance to monetize Internal Incentivized to outperform Significant share repurchases High insider ownership Willingness to monetize External or internal His
Slide 13: Attractive Dividend Yield
Attractive Dividend Yield 13 Source: Company filings. Highest dividend yield in the industry and with coverage ratio of 2.7x Dividend Yield (as of 1/11/16) 8.8% 7.0% 6.4% 6.3% 6.2% 5.9% 5.8% 5.7% 5.4% 5.3% 5.2% 4.4% 4.2% 3.2% 2.4% 1.7% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% AHT LH
Slide 14: Ashford Trust Hotels High Quality, Geographically Diverse Portfolio
14 Ashford Trust Hotels High Quality, Geographically Diverse Portfolio Le Pavillon Hotel New Orleans, LA Lakeway Resort & Spa Austin, TX Hilton Costa Mesa Costa Mesa, CA Marriott Fremont Fremont, CA Le Meridien Minneapolis Minneapolis, MN Chicago Silversmith Chicago, IL Hilton Back Bay Boston, MA Th
Slide 15: Portfolio Overview
Top 25 70.8% Top 50 20.6% Other 8.6% Portfolio Overview 15 Hotel EBITDA as of September 30, 2015 for 132 owned hotels as of January 25, 2016 Hotel EBITDA in thousands Hotel EBITDA by Brand Hotel EBITDA by Manager Hotel EBITDA by MSA Hotel EBITDA by Chainscale Top Ten Markets Marriott 50.3% Hilton 28
Slide 16: Pro Forma Portfolio Figures
16 (1) Pro forma for sale of all select-service hotels excluding Hilton Garden Inn Austin, Courtyard Boston Downtown, Hampton Inn Parsippany, Courtyard Crystal City, Courtyard Basking Ridge, Courtyard Newark, and Residence Inn Newark (2) As of September 30, 2015 Pro Forma Portfolio Figures $112 RevP
Slide 17: Investment Strategy
Investment Strategy 17 Full-service hotels Upper-upscale hotels Focus on all markets Appropriate use of leverage Focus on franchised properties where we can add significant value Investment Strategy Competitive Advantage Increased deal flow Less competition Improves selectivity Mor
Slide 18: Recent Acquisitions
Recent Acquisitions 18 Strategic Rationale Total Value Forward Cap Rate(1) Forward Leveraged Cash Flow Yield (2) JV Share of Highland Portfolio 100% ownership in high quality portfolio $490.3 mn 7.4% 15% Le Pavillon, New Orleans Significant value-add opportunity; excellent location in a strong marke
Slide 19: Case Study – Conversion to Remington Managed
Case Study – Conversion to Remington Managed 19 Implemented Strategies: Increased club room premium pricing from $30 to $45 Increased corporate group room nights to 25% mid-week to ensure sell- outs and push rate Improved pattern management and business mix to increase higher rated retail cont
Slide 20: Case Study – Marriott Beverly Hills Conversion
Case Study – Marriott Beverly Hills Conversion 20
Slide 21: Case Study – Marriott Beverly Hills Conversion (cont.)
21 Case Study – Marriott Beverly Hills Conversion (cont.) Ashford identified underrepresentation of full-service Marriott product in the Beverly Hills market Closest Marriott full-service hotel is 6.6 miles away Full-service
Slide 22: Case Study – Marriott Beverly Hills Conversion (cont.)
22 Case Study – Marriott Beverly Hills Conversion (cont.) Renovation Management Terms $21mm (net of Marriott key money) Remington 25 year agreement with fee ramp, area of protection and key money Conversion (258 Rooms) Premium Pricing Average incremental increase in BAR of $42 since conversi
Slide 23: Case Study – Marriott Beverly Hills Conversion (cont.)
23 Case Study – Marriott Beverly Hills Conversion (cont.) Lobby Bar Restaurant Front Desk Lobby
Slide 24: Case Study – Marriott Beverly Hills Conversion (cont.)
24 Case Study – Marriott Beverly Hills Conversion (cont.) Guestroom Boardroom Guestroom Club Lounge
Slide 25: Case Study – Marriott Beverly Hills Conversion (cont.)
25 Case Study – Marriott Beverly Hills Conversion (cont.) Entrance Pool Fitness Center Outdoor Dining
Slide 26: Opportunity – W Atlanta Downtown
Opportunity – W Atlanta Downtown 26 Acquired in July 2015 237 keys, 9,000 sq. ft. of meeting space Located in the heart of Downtown Atlanta Close proximity to the downtown and midtown demand generators: Centennial Olympic Park, the Atlanta Aquarium, and Georgia Dome Potential to reconcept
Slide 27: Opportunity – Le Pavillon
Opportunity – Le Pavillon 27 Le Pavillon – New Orleans, LA Le Pavillon – New Orleans, LA Acquired in June 2015 226 keys, 11,235 sq. ft. of meeting space Located in the heart of New Orleans Surrounded by corporate, group, and leisure demand generators Close proximity to The Mercedes-Benz Su
Slide 28: Capital Structure and Net Working Capital
Capital Structure and Net Working Capital Appropriate use of leverage to more cost effectively invest in the hotel cycle Current net working capital of approximately $3.44 per share All debt is non-recourse, property level mortgage debt Targeted cash balance of 25% to 30% of market capitaliz
Slide 29: Debt Maturities and Leverage
$498.7 $206.2 $98.8 $284.3 $606.9 $731.9 $1,495.6 $167.4 $191.8 $91.2 $123.2 $172.0 $0.0 $500.0 $1,000.0 $1,500.0 $2,000.0 $2,500.0 2016 2017 2018 2019 2020 Thereafter Fixed-Rate Floating-Rate Hypothetical Excess Proceeds Debt Maturities and Leverage Target Net Debt/Gross Assets of 50-60% Mainta
Slide 30: PKF RevPAR Growth Forecasts
PKF RevPAR Growth Forecasts 30 PKF RevPAR Growth* *Source: PKF 5.4% 8.2% 6.8% 5.4% 8.3% 6.7% 6.1% 5.8% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 2010 2011 2012 2013 2014 2015F 2016F 2017F Historical RevPAR Growth Forecased RevPAR Growth COMPOUNDED 2-YEAR REVPAR GROWTH RATE 24.5% 5.0% 5.5% 6.
Slide 31: Key Takeaways
Key Takeaways 31 Focused on increasing shareholder value through: Improving portfolio quality No more spin-offs Increase in transparency Simplify strategy and structure Attractive industry fundamentals Strong management team with a long track record of creating shareholder value High
Slide 32: Company Presentation – January 2016
Company Presentation – January 2016
Ashford Hospitality Trust — Investor Presentation (January 2016) on 6ix