Braemar Hotels & Resorts Inc. · NYSE:BHR
Braemar Hotels & Resorts — Q2 2024 Earnings Presentation
48 slides from Braemar Hotels & Resorts's earnings presentation, Aug 1, 2024
Slide 1: 2nd Quarter 2024 Earnings Update
2nd Quarter 2024 Earnings Update
Slide 2: Forward Looking Statements and Non-GAAP Measures
Forward Looking Statements 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: Experienced Management Team
Experienced Management Team RICHARD J. STOCKTON DERIC S. EUBANKS, CFA CHRISTOPHER C. NIXON Chief Executive Officer & Chief Financial Officer Executive Vice President & President Head of Asset Management 28 years of hospitality 23 years of hospitality 14 years of hospitality experience experien
Slide 4: Company Fact Sheet
Company Fact Sheet Since inception in 2013, we have significantly increased Gross Asset Value and EBITDA for our iconic and irreplaceable portfolio $285.9MM NYSE: $1.9B EQUITY MARKET CAP(1) BHR ENTERPRISE VALUE(1) HIGHEST RevPAR LODGING REIT Total Assets (2)(3) Number of Hotels(2)(5) % of Total Hote
Slide 5: Positioned for Consistent Performance
Positioned for Consistent Performance Stable Industry Performance Continuing Balanced Portfolio Composition Recent Results & Developments Refinancing to Lower Interest Cost The Notary Hotel Company Presentation | August 2024 5
Slide 6: Stable Industry Performance Continuing
Park Hyatt Beaver Creek Stable Industry Performance Continuing
Slide 7: Industry RevPAR Continues to Exceed 2019
Industry RevPAR Continues to Exceed 2019 U.S. KPIs, Indexed to 2019 Occupancy Index ADR Index RevPAR Index 140 140 140 122 119 120 120 120 115 114 113 108 100 95 96 95 100 95 100 87 83 80 80 80 60 60 60 40 40 40 20 20 20 0 0 0 2021 2022 2023 2024 F 2021 2022 2023 2024 F 2021 2022 2023 2024 F Source:
Slide 8: Industry Real RevPAR Stabilizing at a New Level
Industry Real RevPAR Stabilizing at a New Level Real ADR Holding Steady Occupancy Plateauing $200 70% 66% 63% $160 60% $131 $128 50% $120 40% $80 30% $40 20% $0 10% Q2'19 Q2'20 Q2'21 Q2'22 Q2'23 Q2'24 0% Real ADR Nominal ADR Q2'19 Q2'20 Q2'21 Q2'22 Q2'23 Q2'24 Real RevPAR Leveling $105 $86 $90 $81 $
Slide 9: Luxury RevPAR Growth Forecasted
Luxury RevPAR Growth Forecasted 2024 Forecasted Growth YoY 4.0% 3.1% 3.1% 3.0% 3.0% 3.0% 2.3% 2.0% 1.7% 1.2% 1.0% 1.1% 1.0% 0.1% 0.1% 0.0% 0.0% -0.2% -0.7% -1.0% -0.8% -1.0% -1.0% -1.1% -2.0% Luxury Upper Upscale Upscale Upper Midscale Midscale Economy Source: Lodging Analytics Research & Consulting
Slide 10: Balanced Portfolio Composition
Bardessono Hotel and Spa Balanced Portfolio Composition Exposure to Both Resorts and Urban Properties
Slide 11: High Quality Assets with High Barriers to Entry
High Quality Assets with High Barriers to Entry Properties Resort Hotel Q2 2024 TTM EBITDA(2) Four Seasons Scottsdale $23,564 Ritz-Carlton St. Thomas $22,857 Ritz-Carlton Sarasota $22,690 Ritz-Carlton Reserve Dorado Beach $20,004 Hilton Torrey Pines (sold) $18,045 Pier House $14,192 Park Hyatt Beave
Slide 12: Improving Occupancies Offset by ADR Softness
Improving Occupancies Offset by ADR Softness ADR(1) Softening – Q2 2019 to Q2 2024 Occupancy(1) Stabilizing – Q2 2019 to Q2 2024 1,000 100% Pandemic 900 90% 800 80% -8.3% +55.1% -8.0% 700 70% 600 60% -4.6% 500 50% +32.9% 400 40% 300 +8.7% 30% 200 20% 100 10% - 0% Q2'19 Q2'20 Q2'21 Q2'22 Q2'23 Q2'24
Slide 13: Portfolio RevPAR at Higher Stabilized Level
Portfolio RevPAR at Higher Stabilized Level RevPAR(1) Stabilizing – Q2 2019 to Q2 2024 600 Key Observations Urban properties 500 flat to 2019 levels +47.9% 400 Resort RevPARs Impacted by +22.3% Normalizing ADRs 300 -0.3% 200 Average RevPAR well above 2019 levels 100 4.1% 5-Year CAGR - Q2'19 Q2'20 Q2
Slide 14: High Exposure to Luxury Hotels and Resorts
High Exposure to Luxury Hotels and Resorts Ritz-Carlton Drives Q2 TTM Hotel EBITDA(1)(2) Luxury Hotels Drive Q2 TTM Hotel EBITDA(1)(2) Ritz-Carlton $160,000 $75,000 Luxury $68,619 $140,000 $134,420 $60,000 $120,000 Marriott/ $100,000 $45,000 Hilton Autograph Upper Upscale Four Seasons $34,327 $32,40
Slide 15: Recent Results & Developments
Ritz-Carlton Sarasota Recent Results & Developments Urban Property Performance Offset by Resort Property Results
Slide 16: Q2 RevPAR Results Diverge By Property Type
Q2 RevPAR Results Diverge By Property Type Quarter Highlights • ADR softness YoY at rate leading resorts (Dorado Beach, Bardessono, & Ritz- Carlton St. Thomas), except Four Seasons Scottsdale • Urban properties continue both occupancy and ADR led recovery, especially Capital Hilton and The Notary •
Slide 17: Somewhat Lower ADRs Contributed to Margin Compression
Somewhat Lower ADRs Contributed to Margin Compression Comparable Hotel Operating Results(1) 2024 Q2 2023 Q2 % Variance 2023 ADR $418 $436 (4.1%) Occupancy 72.8% 70.9% 2.7% RevPAR $305 $309 (1.5%) Total Hotel Revenue(2) $188,307 $187,905 0.2% Hotel EBITDA(2) $51,078 $53,660 (4.8%) Hotel EBITDA Margin
Slide 18: Occupancies On The Rise; ADRs Normalizing
Occupancies On The Rise; ADRs Normalizing HOTEL OCCUPANCY(1) 100% 78.9% 80% 64.7% 66.9% 67.5% 60% 51.9% 40% 30.3% 20% 0% 2019 2020 2021 2022 2023 TTM Q2'24 HOTEL ADR(1) $500 $482 $458 $458 $452 $400 $333 $296 $300 $200 Cameo Beverly Hills $100 $- 2019 2020 2021 2022 2023 TTM Q2'24 (1) As reported in
Slide 19: Total Revenue Up, Offset by Higher Expenses
Total Revenue Up, Offset by Higher Expenses Quarter Highlights • Adjusted funds from operations (AFFO) was $0.10 per diluted share for the quarter. • Net loss attributable to common stockholders for the quarter was $(21.9) million or $(0.33) per diluted share. • Net debt to gross assets was 40.4% at
Slide 20: Sale of Hilton Torrey Pines Completed
Sale of Hilton Torrey Pines Completed Sell Date: 7/17/24 • BHR has completed the sale of the Hilton La Jolla Torrey Pines for a price of $165MM, resulting in a distribution of $69MM, including amounts previously due to BHR and after the repayment of debt, transaction expenses, and a share to the joi
Slide 21: Shareholder Value Creation Plan
Shareholder Value Creation Plan Announced 5/6/24 • Select Non-Core Asset Sales – Sale of Hilton Torrey Pines Completed • Repayment of 2024 debt maturities – Completed • Preferred Share Redemption Program: $50MM – ~$40MM of Redemptions to Date • Common share buyback authorization: $50MM Company Prese
Slide 22: Major 2024 Planned Capital Expenditures
Major 2024 Planned Capital Expenditures $80M - $100M Range in Capital Expenditures Underway in 2024 Ritz-Carlton St. Thomas Ritz-Carlton Lake Tahoe Ritz-Carlton Sarasota • Restaurant renovation • Public space renovation • Spa renovation (95% complete) Capital Hilton Bardessono Hotel Cameo Beverly Hi
Slide 23: Refinancing to Lower Interest Cost
Hotel Yountville Refinancing to Lower Interest Cost Strong CMBS Market Enabling Refinancing at Lower Interest Cost
Slide 24: Closed Major Refinancing to Extend Maturities and Reduce Interest Cost
Closed Major Refinancing to Extend Maturities and Reduce Interest Cost Corporate Term Loan Amount $200MM CMBS Refinancing(1) Maturity July 2027 Amount $364.8MM Interest Rate SOFR + 310 Maturity 2 + 3 One Year Extensions Bardessono, Hotel Yountville, & Ritz-Carlton Collateral Interest Rate SOFR + 301
Slide 25: Positioned for Consistent Performance
Positioned for Consistent Performance Stable Industry Performance Continuing Balanced Portfolio Composition Recent Results & Developments Refinancing to Lower Interest Cost The Notary Hotel Company Presentation | August 2024 25
Slide 26: Appendix
Ritz-Carlton Lake Tahoe Appendix
Slide 27: Indebtedness
Indebtedness Company Presentation | August 2024 27
Slide 28: Indebtedness
Indebtedness Company Presentation | August 2024 28
Slide 29: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | August 2024 29
Slide 30: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | August 2024 30
Slide 31: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | August 2024 31
Slide 32: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | August 2024 32
Slide 33: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | August 2024 33
Slide 34: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA by Hotel Company Presentation | August 2024 34
Slide 35: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | August 2024 35
Slide 36: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | August 2024 36
Slide 37: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | August 2024 37
Slide 38: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | August 2024 38
Slide 39: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Note: As reported, used in Comparable Hotel EBITDA Slide 17 Company Presentation | August 2024 39
Slide 40: Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA
Reconciliation of Net Income (Loss) to Comparable Hotel EBITDA Company Presentation | August 2024 40
Slide 41: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre
Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre (1) Incentive fee adjustment represents the true-up for the actual 2022 incentive fee Company Presentation | August 2024 41
Slide 42: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre
Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre (1) Incentive fee adjustment represents the true-up for the actual 2022 incentive fee Company Presentation | August 2024 42
Slide 43: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre
Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre Company Presentation | August 2024 43
Slide 44: Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre
Reconciliation of Net Income (Loss) to EBITDAre and Adjusted EBITDAre Company Presentation | August 2024 44
Slide 45: Reconciliation of Net Income (Loss) to Adjusted FFO Q1
Reconciliation of Net Income (Loss) to Adjusted FFO Q1 In thousands except per share amounts Effective beginning with the third quarter of 2022 we no longer included the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For compar
Slide 46: Reconciliation of Net Income (Loss) to Adjusted FFO Q1
Reconciliation of Net Income (Loss) to Adjusted FFO Q1 In thousands except per share amounts Effective beginning with the third quarter of 2022 we no longer included the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For compar
Slide 47: Reconciliation of Net Income (Loss) to Adjusted FFO Q4
Reconciliation of Net Income (Loss) to Adjusted FFO Q4 In thousands except per share amounts Effective beginning with the third quarter of 2022 we no longer included the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For compar
Slide 48: Reconciliation of Net Income (Loss) to Adjusted FFO Q3
Reconciliation of Net Income (Loss) to Adjusted FFO Q3 In thousands except per share amounts Effective beginning with the third quarter of 2022 we no longer included the effect of the Series B Cumulative Convertible Preferred Stock and convertible notes on an “as-converted” basis in AFFO. For compar
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