Ashford Hospitality Trust Inc · NYSE:AHT
Ashford Hospitality Trust — Investor Presentation (November 2015)
33 slides from Ashford Hospitality Trust's investor presentation, Nov 17, 2015
Slide 1: Company Presentation – November 2015
Company Presentation – November 2015
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 Planned sale of 24-pack of select-service assets Simplify strategy 24 hotels and 4,410 rooms Encumbered by approximately $382 million of total debt TTM NOI and RevPAR of approximately $45 million and $89, respectively(1) Amendments to Advisory Agreement with Ashford
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 10 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
104% 17% -13% -13% 178% 121% 41% 95% 66% 20% -11% 144% 93% 50% 100% 620% 262% 39% 67% 61% 4% -26% -100% 0% 100% 200% 300% 400% 500% 600% 700% 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 average
Slide 10: Asset Performance
Asset Performance 10 Source: Company filings 2014 RevPAR Growth YTD Q3 2015 RevPAR Growth 11.6% 10.9% 10.5% 9.8% 8.8% 8.0% 7.2% 6.8% 6.1% 5.9% 5.3% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 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
Slide 11: Highest Insider Ownership
Highest Insider Ownership 11 16%* 5% 4% 3% 3% 2% 2% 2% 2% 1% 1% 1% 1% 1% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% AHT HT INN RLJ FCH CLDT Peer Avg CHSP HST PEB DRH BEE SHO LHO Public Lodging REITs include: BEE, CHSP, CLDT, DRH, FCH, HST, HT, INN, LHO, PEB, RLJ, SHO Source: Company fili
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 11/4/15) 6.9% 6.2% 5.5% 5.3% 5.1% 5.0% 4.9% 4.7% 4.5% 4.3% 3.9% 3.5% 3.3% 2.6% 1.9% 1.4% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% AHT APLE LHO XHR
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 70.4% Top 50 20.9% Other 8.7% Portfolio Overview 15 Hotel EBITDA as of September 30, 2015 for 131 owned hotels as of November 4, 2015 Hotel EBITDA in thousands Hotel EBITDA by Brand Hotel EBITDA by Manager Hotel EBITDA by MSA Hotel EBITDA by Chainscale Top Ten Markets Marriott 50.9% Hilton 28
Slide 16: Planned Select-Service Sale Update
Would result in excess proceeds to be utilized to maximize shareholder value Disposition of lower RevPAR hotels to boost remaining portfolio RevPAR Increases primary market concentrations Reduces concentration of brand managed hotels Planned Select-Service Sale Update Sale overview: 24 h
Slide 17: Current Portfolio Overview and Pro Forma
Current Portfolio Overview Pro Forma - Sale of Select 24 (1) Pro Forma - Sale of All Select(2) TTM % of TTM % of TTM % of Hotels Rooms RevPAR(3) EBITDA Hotels Rooms RevPAR(3) EBITDA Hotels Rooms RevPAR(3) EBITDA Atlanta, GA 11 2,070 $110 6.3% 9 1,766 $113 6.1% 3 1,176 $125 5.1% Boston, MA 3 915 $167
Slide 18: Investment Strategy
Investment Strategy 18 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 19: Recent Acquisitions
Recent Acquisitions 19 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 20: Case Study – Conversion to Remington Managed
Case Study – Conversion to Remington Managed 20 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 21: Case Study – Marriott Beverly Hills Conversion
Case Study – Marriott Beverly Hills Conversion 21
Slide 22: Case Study – Marriott Beverly Hills Conversion (cont.)
22 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 23: Case Study – Marriott Beverly Hills Conversion (cont.)
23 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 $48 since conversi
Slide 24: Case Study – Marriott Beverly Hills Conversion (cont.)
24 Case Study – Marriott Beverly Hills Conversion (cont.) Lobby Bar Restaurant Front Desk Lobby
Slide 25: Case Study – Marriott Beverly Hills Conversion (cont.)
25 Case Study – Marriott Beverly Hills Conversion (cont.) Guestroom Boardroom Guestroom Club Lounge
Slide 26: Case Study – Marriott Beverly Hills Conversion (cont.)
26 Case Study – Marriott Beverly Hills Conversion (cont.) Entrance Pool Fitness Center Outdoor Dining
Slide 27: Opportunity – W Atlanta Downtown
Opportunity – W Atlanta Downtown 27 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 28: Opportunity – Le Pavillon
Opportunity – Le Pavillon 28 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 29: 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 $3.14 per share All debt is non-recourse, property level mortgage debt Targeted cash balance of 25% to 30% of market capitaliz
Slide 30: Debt Maturities and Leverage
$91.1 $177.6 $482.7 $206.2 $328.9 $569.4 $1,839.9 $177.4 $163.4 $191.8 $58.6 $273.4 $0.0 $200.0 $400.0 $600.0 $800.0 $1,000.0 $1,200.0 2015 2016 2017 2018 2019 Thereafter Fixed-Rate Floating-Rate Expected / Hypothetical Excess Proceeds Debt Maturities and Leverage Target Net Debt/Gross Assets of 5
Slide 31: PKF RevPAR Growth Forecasts
PKF RevPAR Growth Forecasts 31 PKF RevPAR Growth* 5.4% 8.2% 6.8% 5.4% 8.3% 7.2% 6.3% 5.5% 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 *Source: PKF COMPOUNDED 2-YEAR REVPAR GROWTH RATE COMPOUNDED 2-YEAR
Slide 32: Key Takeaways
Key Takeaways 32 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 33: Company Presentation – November 2015
Company Presentation – November 2015
Ashford Hospitality Trust — Investor Presentation (November 2015) on 6ix