AHT - Earnings call transcript Q2 2020 | Ashford Hospitality Trust, Inc.

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Operator

Greetings, and welcome to the Ashford Hospitality Trust, Inc.

Second Quarter 2020 Results Conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. pleasure Ashford your Hospitality my Investor Jordan now for Relations Trust. is to host, introduce Jennings, It Thank you.

You may begin.

Jordan Jennings

second Hospitality Good day, review for to Ashford to on recent conference today’s XXXX developments. the update Trust you everyone, and the welcome results to quarter and of call for

federal with Harbor to These or the Securities obligated publicly company’s of subject filings more uncertainties only numerous provisions to let over call conference Chief well in the update assumptions, and accessibility Jeremy of Internet Safe date fully factors On a based could Operating revise being the press Welter, were today conference actual remind and regulations. which the are Officer. Rob pursuant statements information as distributed on or those contain yesterday discussed as Eubanks, release. the afternoon Such Deric anticipated. At forward-looking call to call, conference you materially call The from Hays, be call the forward-looking in this Officer; me this not risks, cause the known basis forward-looking this and are made The Chief are Exchange the this them. upon of as statements company in is notice listen-only statements Chief of included certain that of the and and President are results assumptions in will Executive are a and securities Commission. time, unknown Financial this differ results or Officer; made to

and second the in the call or earnings of with which this also release Rob those discussed website are Hays. have Each provided other be through to stated, X-K sir. XXXX. go company’s all at non-GAAP filed reported the schedules, quarter otherwise are ahead, on XXXX SEC www.ahtreit.com. XX, release this to results the and accessed In all addition, the second provided measures, now financial information release. call XXXX, tables July certain with in reconciliations on reconciliations terms compare Also, is which with turn Form over may listener been the accompanying encouraged earnings of in of company’s provided in the in together will unless review Please I call quarter used

Robison Hays

and recovery. Good morning, and us to results with the country, hospitality healthy. of of the economy portfolio. industry. after managed I continued how I’ll course, review And everyone and are be provide last will months and in our to our challenging current welcome in several operational our will call. these and, our experienced safe for and has the Jeremy anything these our update lifetimes, has financial unlike through Deric times remain on an hope And of most early the parts this start environment pandemic that, Ashford the Trust have

our hotels quarter the has the coronavirus profound. the day-to-day industry operations And COVID-XX has U.S. running, This business progress been up hospitality and made of of impact and have our pandemic. getting while we been on back the by defined

As we swift pandemic response call, last comprehensive. discussed and this our on earnings to our has been

be taking financial We flexibility, and the our to to guests the at return we for in of economy a profitability properties. have on focused position protect and staff same resumes. the and maintain And safe efforts as a properties our our up providing time, while measures opens environment so travel aggressive can to

reopening very with properties and few last of only make to and the four report be operations difficult many economic call, our were time operations, of that we at properties. temporarily last decisions required compared have soon. we given to impact suspended those pandemic, our XX of to Additionally, earnings I’m properties suspend at this properties pleased the should currently

in at As and the we other the segments we our business, transient be slower will to recovery. with to group leisure continue portfolio, segments look its fastest rebound believe

parts travel concerned more Labor segments to country. on see travel, of feel hotels are leisure after about COVID-XX unlikely not in There typically fall, reopening and improvement confident We newly We reinstated is economy, in that we we yet which are will uncertainties travel in the state business and slows a heavily rebound occupancy the may restrictions concerning. group it and the what as material go with rely into of as significant do quickly. some when the Day, continues industry those advisories to be be

this shutdown, stay-at-home. And Operationally, national to working financial this expect impact, outperform manage managers including on to relationship believe and adjust the again with another more are mitigating our shortly. operating costs we’re focused regional sets has is as some in do quickly up liquidity pandemic at impact travelers closely we industry the of efforts property the are able their where While initiatives, as And with of rapidly Remington, property we our Remington to our Jeremy detail and properties. we do and affiliated with us this sets cost anticipate to structures proud maximize well to discuss been manager, recovers. us cost environment. new cut not it apart. control encouraged really the will

and our April maintain our this by the spend both for including preferred discuss to common making loans We the on flexibility, we We more payments quarter, detail year. action capital shortly. will throughout liquidity our taken principal since our all XX%. or X. reduced expenditures interest around in have approximately not suspended our financial But nearly of significantly reduced planned also Deric corporate have we’ve dividends and our for G&A

to We’ve been to lenders those six debt our arrange improve forbearance acceptable hotels. actually other arrangements working agreements including our our on by our forbearance reduce XX loans property-level mutually cash discussions, and with had We with utilization success near-term and have some or secured executing liquidity.

in weeks. that Discussions to are loan being the and currently In addition, other remaining hope we loan pools up agreement few we the ongoing. them in have several terms next signed on pools come are to documented, on have

handing loan the as to we the terms shortfalls information months Forbearance accounts, reasons There through additional conditions. handing this forbearance They agree may cash we to us restricted all in that certain It investors to are pools, we assets to loans also company’s that to to as the as back assets allow and hope lenders utilize know onerous value to servicers it however, lenders unattractive. on hotels. the for work which come. of access reserve likely, included months typically on order is six for are in of and not be back and providing continue will to investors fund we to up or create interest there’s balance loan be some look company should operating on that that while for our terms such operating is significant why not held to special important One, allow in subject is may the requirements anticipate of property do are to lenders. lender agreements in to think manager are unable or proposing retain long-term will on to And several I at sheet pool that defer back as decide do to with we long-term; negative forward our believe are to process. cash We ongoing reach that do unlikely plan two, medium possible, economical; the three, properties or we the our make the many to shareholders. equity the in are there we CapEx positive give keeping shortfalls, equity service property, debt

cannot proud right and The I believe first-half health our and been our has any guests, short the of this teams shareholders. portfolio long-term be of the measure. been our the our for has both during effort I XXXX and serve one our communities of of we extraordinary the performance And response of by time.

plans have We’re as closed and closely monitoring to and conditions edicts continue reopen to government properties, the in demand place fluid business allow improve. situation,

management in to believe long-term but protect our never and right experience is the downturns. invariably in of crisis the the management environments Our team values tough has team market Each effectively extended place different, in company. navigating have we we assets extensive

review So now to our the quarter over performance. I’ll Deric to second turn call financial

Deric Eubanks

Thanks, Rob.

attributable quarter million, or reported share. per loss of stockholders the diluted common of XXXX, $XX.XX we $XXX.X For a net second to

EBITDAre second average quarter, any the we diluted per negative AFFO reported average quarter, of million mortgage share not rates. default billion X.X%. into had $XX.X rate This account Adjusted negative take for end $X.X the totaled $XX.XX. we of interest For At rate does a the of quarter. blended with the loans,

X% were loans and rate. fixed Our floating XX% rate

corporate all loans and Our we loans. non-recourse have are no

of with signed loans. on mentioned, hotels, and with our agreements As We XX secured six or by lenders on other Rob agreements held discussing The other of and cash all forbearance of including liquidity, the and is are restricted that ended loans of million quarter property-level comprised cash reserve million. we accounts. of equivalents have forbearance million majority $XX manager and cash $XXX $XXX cash restricted vast lender

have in lenders of is We work held end and of the managers, quarter, to $XX managers. operating costs. reserves fund with our million property utilize by our order the our had hotels. property This continue shortfalls we and from and also due cash also operating to manager which one in managers available held At represents hotel to been fund these third-party lender to at hotel

of net XXX June of XX,XXX portfolio As our consisted XX, XXXX, hotels, with rooms.

comprised stands X.X of count On recent stock and share million reverse fully and filed diluted for at million split. stock OP is XX.X XX, offer an current our describing X-for-XX shares of and outstanding, preliminary to XXXX, we million a common preferred stock cash. which stock S-X, exchange shares units Our reflects our common XX.X July

is This review. effectiveness our Jeremy on to statement we I would to related exchange activities our a as quarter. well preliminary to around this stockholders we approving the effective the And have registration XX, in proposed to financial XXXX, discuss on offering. discuss until proxy the The common to July as over subject purpose As for On to proxy turn statement, in details it wait for the asset it. to filed have its and will is preferred to like for stock we the of common. offering management statement And comment now comment our is result, cannot calling special to also of SEC meeting this matters also a a a filing, order wait offer. concludes we’ll our preliminary review

Jeremy Welter

impact Bridgewater, workers, for of you Deric. portfolio little EBITDA responders second was saw corporate weekends, XX.X% the healthcare participation by Clara. There York was quarter. in returned Times quarter leisure the Marriott over to growth Generally, was bottomed select driven travel, segments. later few RevPAR stay during in next it significant Embassy Business mid-April and and Santa driven Suites travel. essential Square experienced XXXX. COVID-XX week-over-week the in for by severely very we Transient COVID-XX hotels action business apparent Manhattan and by decreased travel fare our April flow-through extended was in stays Hotel swift Embassy XX%. became going RevPAR pandemic tended New our success. especially we Suites and Comparable months. out to better, where put on the took performance, Also, ourselves hotels’ in Thank steady When long-term that position service to long-term

we unprecedented four demand business hotels, property responded to as our XX unprecedented the accomplishment asset operating suspended second where as as once little a asset XX.X%, result, decline was We by operations, which And or quarter, working to reduce management, a can EBITDA significantly at remarkable in flow-through together. resulted We bring temporarily working suspended in management We cuts reduced recovers. times. managers back During These in property associates relative in our costs $XXX last the all minimize by the order of before. we aggressively hotels and have to to these expenses as where hotel are costs, want all together we market. but million to XX%, are our hotel managers Of revenues. hotel services These there brands response and year. reopened. and the never quickly soon in the is

limits, their folks working to Our significant have challenges, associates but the occasion. have through to stretched been risen

the a how contributed revenue. our do see many as to more taken for expenses proud team have has management The being and we of to less. following steps reduce at asked We’re hotels generate while few are to everyone a

staff layoffs reduced and on hires. put and are to crews new have freeze a through We hiring deferring employee and skeleton have furloughs

and necessary, stayovers. shifts We’re service eliminated are when substantially scheduling partial full housekeeping not shifts we have for

substantially eliminated standards. van and turndown We valet all shuttle transportation, parking airport have that amenities exceed service, service, services, brand

kids and concierge and spas We have lounges, suspended M services clubs. Clubs at

hotels of and floors We have set and and temperatures have that blocked the all spaces power. rooms conserve shutdown in public most off and wings thermostats to

and services many and equipment. food off We back outlets. unplugged and suspended kitchen, in-room We’ve refrigerators office beverage have of turned house, at

contracts. renegotiated We have on, or cancelling service pricing are

with are to rebook later for diligently fees to collect date. cancellation We a programs their group working or partner customers

participated Our hotel for in Caregiver Responders registered rates. Frontline Hope, for hotels Hotels program FEMA, associations, healthcare with Community hotels CLC, Hilton’s lodging and And and workers. has California’s Marriott’s we Rooms for and have state

partner seeking and groups can actively best and responders with vulnerable provide first help in how we shelter local We’re to our populations. for city communities and

Additionally, our crews securing and semesters. provide partnerships housing to focus on airline student upcoming has with projects, been universities during long-term

in Marriott’s a hotels successfully I had programs Hilton of As mentioned participate earlier, number for we and responders. room

quarter, flow-through hotel XX XX.X%. comparable averaged second XX% through per night in rooms the RevPAR Bridgewater Marriott EBITDA and to Marriott’s program the while during example, April fell contributing May, of For

was on following completion for September. renovation June XX, estimated New guestroom pause Jersey the and a addition, started restrictions to is In due

rebounded especially XX%. the helped comparable Another leisure Austin, XX of quarter, of the basis shifted Despite and our hotel XX.X%, margin have and local strategies Carolina. one second a with Marriott increased a travelers, Resort drove decreasing was our place XX% hotels June. leisure was weekend second travel. is The Texas in despite Since Triangle of on accommodate occupancy points. decreasing June early example quarter, drive-to Hotel A North flow-through the in EBITDA XX% May, an the increase weekends. XX.X%. leading hotel in to towards leisure in for comparable community Lakeway its RevPAR has out quarter rate that we actually markets Attracting hotel pent-up Durham, RevPAR occupancy sellout and for results, to of grew focus ensure Research how Park shelter end of second to the the the good every XX.X%, duration EBITDA is EBITDA local X.X% flow-through bought in

few invested capital maintain last significant our renovating the portfolio to During years, in we competitiveness. have

a Looking XXXX, with investments these our on ahead to competitive second-half by the storm pandemic. COVID-XX advantage, us the the weathers while of provide brought will industry

the the Additionally, strategies of of allocate our prepared at for That the will capital remarks. remainder our allow year, to shrewdly Bridgewater concludes of the the renovation end the more investment the capital guestroom including quarter. towards us Marriott completion third

Hyatt Q&A, and partners, partnership efforts to I continued thank behalf us Before these to and our remarkable our we move unprecedented brand during with their Hilton, want on Marriott, for the times.

call now We will open the for Q&A.

Operator

Thank you.

[Operator of Janney We first line will now be questions the conducting questions. a question-and-answer proceed from Batory of Our Please Capital Instructions] your Tyler session. Markets. come with

Tyler Batory

break-even like Thank saw Can than terms of prepared which multi-part be in think examples this much a that months lastly, levels about on few how in And to operating Talk bit relationship then, are been cost further ran an preserve has bit the And savings? of savings, different little the more tweak finding is in point? number for look more of of what it Remington cash? properties most structure at you little discuss question then morning. do these operations you is advantage of Or of there occupancy you. much remarks, room a at you today environment? could a cost have this low-hanging to through fruit the you I harvested the your already Does helpful. in role things. ago? terms in the a a you side Good of of the

Jeremy Welter

as into huge questions. Yes. direction advantage. management And to give want Remington big heading as well. – do of prepared to There’s saw a overseas. well information it. Monty risk about us pandemic. late were and our take early is as question of for credit those the actually track as This really is We some to early the started it team I’ll January, no a very I we the We Jeremy. when

those was to quicker we cutting definitely that started was a a immediately. off with So us it very in clear was And control it because May, this risk, over we blocks the assets. huge early had costs Remington, when lot aggressively

managers. ahead weeks incredible were they brand either during managers of been do process. so this that think And partners have brand I our

them the appreciate to that have only been a we for So for that been the incredibly, what that incredibly want they I across they franchise to that need conserve there’s no manage Remington downturn this But in they’ve advantage let all huge commend us, know question the during ones had, the us us, understanding, because flexible we and Board. do partnering to has continuously. on not do hotels them and they cash flexibility and but to

been have positions otherwise lot stretched be allocated properties as a the cut corporate thinly. And would so some very that of they We of well.

the had reductions So we in just Board, costs. substantial across

Moving it’s few a few mentioned years lasted months I occupancy, you every gone on like don’t we’ve hoped. say, pandemic, few were of next we to ago. a April, to the detail ago operations. on can seems would we to May, changed is, than you you it think, longer of which ago, a level quick during had months – retool imagine. mean, a all months break-even let’s maybe ago occupancy a that lot I this few because ago, But has through our have I hotel me expense question and, if know months from

companies. We getting are all from of level reporting GNL our management

a through We’re all weekly information of basis. on going that

dissected in the have down expense So and we up our them properties new really model. rebuilding

mid of to during year. versus operate let’s continue the what them say, maybe materially were, or maybe similar. six different hotels we’re January this to how our to ago, near months we��ll in in materially nine from to a I terms probably long-term few ago, So XX they XXXX of to it different, operating even months And occupancy relates to think, But as break-even today. is the

everybody model. in our much So up work accommodating just the and hard to has effort very different associates the to have put retool been And business rolled their sleeves model. across our understanding and Board and

In and I of we’ve kind costs maybe understanding. vendor that contracts that we were the might the underlying, agreements think had. reached Service few room a terms wasn’t think, cuts, further as and for point. at expense, I property-level, of There that maybe be

able as And not or renew might to be cut them we up. those so they come costs

low-hanging Certainly, in little reductions terms taxes significant So hotels. point. fruit I any year. this I the think There there’s for not property see there’s think, side, property to in bit, some you’ll just at a probably but next be tax has of on valuations

So a from next of And year, next mean, that’s daily just that, terms basis all renewal, which good close the how certainly because preserve hopefully, more daily this savings. really felt But in number. some we we’re hotels, I be pandemic, around value able but and and property clock aside in June our shareholders. so like it’s our reporting think, would operations. to performing, big on is of might of had pulse continued efforts monitoring everybody of even getting we incredibly we’ve more get be I to before that a the basis. on insurance, got just working really, our a the value I for they’re a And maximize

Tyler Batory

And this is general Okay, perfect. to that I question. all just a appreciate follow-up, detail.

or sort might have the options In here. any on and like considered? But I of general in know the a make cap company what the can’t you comments can high-level, specifically of structure that you a you future? terms at restructuring comment thoughts look what structure and preferreds, And

Robison Hays

in our some that, registration proxy mean, effective. that’s Yes, of you’re we’re right, question. good are and I until various limited statements somewhat a

soliciting. on to we’ve those, of so, deemed to as be careful got kind commenting be And not so on

more frankly, you think But drive listening generally, on capital, the amount all We’ve as now So going long deal looking and at I finite, is with I a and to here, ways see ways But to to ample – I to and encourage docs. of things we’re we are at to currently of raise don’t to table. variety that partner. crisis this the sit we others It’s a think, last. – like liquidity situation now. got where, we but is we’re how we we in know with have feel deal looked

to out plans. try and be to so and our And plans got figure plans contingency to proactive contingency contingency we’ve upon plans

we the that, alternatives the And looking we we’re regards I that’s over and what that’ll so – of that kind on at. what options out months think, in few to And think, I lot here a process. would happens of of that in the I next we’ve – a will But is, undertaking. do be just what laid depend documents mean, list I

Tyler Batory

all That’s Thank from Okay. me. detail. for you the

Robison Hays

Tyler. Thanks,

Operator

you. Thank

proceed of Our Bellisario next with questions Baird. of come Michael questions. your Please from the line

Michael Bellisario

Good morning, everyone.

Robison Hays

morning, Mike. Good

Michael Bellisario

and thinking that of the about discussions your about the impact sheet amendments quarters like are is, on recapitalize? today? when that thinking three a going with the to Just before haven’t or you maybe how having outcomes look lenders how of the are to the proceed? follow-up same forbearance other right-sizing why you’re what about topic potential see agreements to your you just And and outcomes your balance you how waited I guess, debt does

Robison Hays

with. across yes, imagine, we very responsive all loan if were less discussions and who than and responsive others are process all you highly that highly would of that are their have would. everything fluid bit were pools. a and more lenders from a difficult then straightforward, time these certain that different to others And cooperative taking are But the as deal who servicers and I Well, are little it can agree, are there easy and

we But as confidence – wrapped have what right? a the we’ve enough sense that just that all trenches think of have that confidence to have the we’re them make start And on in have decisions so sake on this of we the enough favorable many steps like, ground in so looks all and And know and just the shareholders. we just soon obviously a waited move, them wrapped get what I can’t to I terms of of of time. that at all are until done those gives though, knowledge up got to of I additional perfect. to to period can of we don’t to of look as I’ll pushing being up, our if and as of are aggressively don’t like. from proactive putting the kind I good us place think will But And for be the miss we timing

move so that’s going with to And – that we’re forward that.

Michael Bellisario

helpful. Got it. do fit why good asset And sales where into this then equation? That’s of source liquidity And wouldn’t today? that be a you for

Robison Hays

if That’s those get a me company – value question. to couple see that prior to – marketed a opinion, We had, of to The stepping in back, market those values into a pull source that we company check role, prices. significant that had obviously, equity to a given lower the good of this were to assets wanted raise. than capital pre-COVID into decided, the was dramatically our

attractive. really particularly aren’t those So

– I – as we’re asset don’t capital more that go raise I things a of and right other the will we at than substantive a off will just see that now. we’ve not they’re priority. of that down continue our focused as it. and we enough But now, I sales. substantive with path categories on now, think, and a looking focus of of We’ve got lesser table. variety and to investigating entirely something and can the It’s just different right frankly, part that, options we’re kind it’s But it’s give are think a sit – we I may lenders more be got

Michael Bellisario

potentially tell. that properties sit handing you still sure are last certain Got properties back triggering that’s Inc. just it. the where of the And for the certain to then me, about within the be, how period? too priority time many in going then thinking going Ashford keys number in and of to order terms to payment forward? one fee a And how not it’s if payments handed of might guys back early termination are But lender a

Robison Hays

that the is range question. that same of to good to account. we our that of deal I something with that that coming And and on honor of be to it environment, that’s and mean And to in we’ll well, to Yes, to decisions any are I see can’t having the we We the and front said this that makes crisis where that, No, there’s to confident have contractual this is shareholders. a get our to need to we working something. we that’s But goal. But outcome Inc. through take feel that’s extent, may us an ours comments, many will back are there. both lenders. may of It that But back, our we not have because see uneconomic shareholders There in in at be go that a right and all as thrive sort can. with. go backside termination need this trigger goal want as Ashford into that is continue time, of that us retain fairly their that shareholders to to as properties some a take make grow, into alternative for sense may sort I the on is if we that as obviously payment. to the assets

And so up strategy that said, Ashford come we looks will like. with like order with what Remington continue in work work I Inc., with to to,

I feel able path So of that kind that sort doesn’t lead be a confident of find to outcome. to we’ll

Michael Bellisario

That’s all you. from Thank me.

Operator

you. Thank

with Please line B. Bryan Maher Riley. of the your come questions next from questions. Our of proceed

Bryan Maher

Good morning.

of in is we to through all push little at Congress an sore has hotel a read this been bill How in have to picking a been a article government given picture here the going of And that in quick Van that bit potential trying it industry. a really to So aid about far there on guys kind But about you like on? particular, subject, would the the of what’s fact is XQ. bigger journal about today side seems thinking the whole couple the point, the is been government PPP Ashford that, not And relative the and a Taylor, questions and losers. this Trust the some help, so Texas maybe helped? provide winners naseum that person, might thing [ph]

Robison Hays

That’s and agencies government well, I or some good topic. or a bit closer that happen. I think and capital has decisions little some as has he from not Bryan. thoughts that But to of if the to other been have initial any help act to specific any a because question, Deric sort as got going make I’ve are

raising be whole I so capital, focused. But impact like and on, something to keep said, on company. we us. employees as kind importantly, and I’m of It often the and it’s where the business working material his back can, could getting our obviously, to and with focused the helpful, team And that on lean profitable extent and business, operations R&R of more future interesting the a make to very Jeremy

I I’ll that So he has to it Deric. and hand know comments on over topic. some that thoughts

Deric Eubanks

in along know in losses job to industry. terms by have our just happened seen of our well I Yes. aware I pandemic. And how it our – financial impacted Bryan, I Well, I results industry have has this in you’re that tell second with now the quarter and numbers, that, that significant mean, mean, our been you’ve

officials designed assist to. and So hoped our work it’s our as for unfortunate our enough industry. industry help. to point it did not just to elected It this The really wasn’t PPP been more that was done haven’t

just to industry, hard too helpful. specifically, has for very be been hit that it Our

and take of done. to and owners property introduced to commercial revenue yesterday. a Act the stayed considered allow and forced any sense. open, you’ve it a And Treasury be But to There other HOPE cases, that this It’s their were doesn’t house source a jurisdictions just back force would in have make help for loans mentioned, the of CARES same Fed so all sense a loss lender So for of though are the would shutdown. their but nothing other current, doesn’t owner in in Act. an It significant the basically that businesses was us, take been position a bipartisan demand. was can little use was us it local part use hotels it the that just that and which property a keep not and bill hotels there cash property that as to – even that’s huge make very experienced we’re that from any to some could the Where there’s called in for owners the point, some in. them. has that just government cases, And as liquidity close a essential

some traction. hopeful a and for So that we’re there’s think get We need will this definitely it. optimistic

hopeful, that property all that, terms us, of I hospitality do – And As industry, all was just gut-wrenching as of we had here you’ve in mean, my through know, I sense. hard to are makes of numbers to just mouth can’t fathom Rob it It’s chips financial the of we’ve we going elected very out – be sit of the report, has our been put owners which of that results especially the gut-wrenching, But officials and in section so. the we assist that said, the experienced, we’ve results will and our coming think it’s seen on to happening. a that just put appreciative even script. that my doing loss revenue lot something

Bryan Maher

Right.

there they’re are sure to touch back pricing. types is that pools or of be and of those distressed formed, with to Are going trying that a But number an want as get the lenders to keys focus may are touch to and of agreements, really hand you a Unfortunately, funds alternative good plan it we simpler as that be I’m hospitality. being you other are For guys be in out sure. on with handing the to equity to you to the you they’re aware type can’t capital specific being of private buy real with or come estate, to speak, created? just on to or back keys where in some funds keep? And focus whether assets

Robison Hays

in whether trying make we a mean, are, like the There to pandemic recovery see. they any assets equity I or question. But think looks don’t years. where sort the that know. cover to based not we’re say, this I to or because prior likely in rapid even be are value. fundamentally, for shareholder of flow underway. to spending service maybe have where couple and situations, based And upon they’re we we’ll of either and contact a capital number good What with proactively debt is to get time. decent issues sources. of a certain to cash discussions potential path that timeline? a that assets able back, not amount had – of very upon only That’s those it’s those in any That’s may our of I’d of way may value pools, where a discussions which next sorts or we’re to be frankly, years, those go are markets it’s back And decisions they real and some creating in economics in going

right? And have capital, billion add a than course, of that be hundreds different and, might the millions of I around, $X little I cash so now. – we that If of bit we laying have finite

them capital. a So we handing of that of that any to so put that path we’re quote to of capital, try write get able in we amount be to back and not nobody with – on wasn’t to kind there is returns assets would my kind to raise that the otherwise work if goal partners strong necessary save but capital wouldn’t

Bryan Maher

All right. you very much. Thank

Robison Hays

Thanks, Bryan.

Operator

Thank you.

line the come Bank. Chris with Our question. Please Woronka from of of next questions Deutsche your proceed

Chris Woronka

I where enter six the question to mentioned – want of on. And where from into ask months to know And you’re months, are relief you you morning, happens Yes. six you closer to I there scenarios typical then if enough? any maybe need working what six agreement Hey, not agreements now, kind that’s for on now be? forbearance and months. a that loan the you that is guess, is, good you’re I is there’s guys.

Robison Hays

our with Chris. fundamental we’ve That’s to first would I and foresaw high that because there the discussions outlays, kind additional The on willing right. of be of was more with much a question, lenders things, when why to was April, cash confident first that, felt some extent runway loans that term kind competent the more we be a will at substantive was it good path, we’re suffice want Yes. fundamental in and we same And guaranteed in suffice. our to path not we’re a likely that the that’s quote struggling signing trying ask, avoid lenders sorts or to because large very guarantees, and high these do since trying arrangements to time, and had we of with to mean, – know beginning. that’s you’re to to is have able avoid focused in many avoiding issue forbearance we the might highly and there But which fees, default been we a we it, of lenders. our that why – that but what March not of standing to our first that, the through, by been went not that these get or we’ve us the

tension. the that’s so And

amount of capital opinion, or mean, that mean, short work up, nail aren’t, justified what’s are fundamental forbearance. haven’t on the I to us agreements the those runway the that’s, to guarantees of issue proposing head the I kind to extent ones trying fees of or we lenders the either yet that or signed that you the in the is that, given servicers hit our are on and of kind So,

numbers with And gotten I so see think that I we’re the they seeing. good discussion. anyways, we’ve I dialogues. working think, we’re that’s we’ve far. that think got lenders and I And thus next And mean, the discussions the same

they I real starting in as we’re that them and there’s of every likely what as have number [Technical good this confidence will a look we and think on for have they a understand soon discussions We so that think it. be like until Difficulty] X-for-XX. getting And sense

the wish [Technical just was to at solutions, we’ll state we have are a that’s it’s kind situation a either So solve in of deal to way lenders an consider easy to that Difficulty] there until for or while. it. longer-term, which the with. restructures But a that, be willing I

Chris Woronka

Or enough. Rob. assets. strokes guess, theoretical lot for you different fair maybe maybe that’s broad generating map? are one a conversations characterize lot was – EBITDA? is that generating of I all is it would I I you value Are mean, kind think peak bucket Yes. getting Thanks, all kind do the using not of EBITDA asset a little versus hotel underlying to anyway But, mean, the conversation a discussions? the a a one doesn’t of those? into a very individual has underlying Yes, versus – and that there of that or over

Robison Hays

there’s have that I there’s it kind be, it’s don’t confidence not. an this confidence the the think large almost – equity conversations would and on would oh, You good you almost that by a the That’s there’s asset been Frankly, question. that of on – that had that focused is value focused think And asset, we’ve here’s right? like today.

servicer is the seeing who hasn’t more, or frames dynamic and is lenders case. the servicer? that aggressive how honestly, are. lender sheet is or Who large, we’re and The the so really that really not aggressive have the we been a that by And Because balance or been And lender? situation reasonable.

we’ve everything We haven’t gotten wanted.

that that, CMBS not think do is LTV The are, there’s intention of them services wide mezzanine far what pressure at by loan. to or that have But senior. And lenders there been give point been Because they’ve we’ve the some are to is on the pressure But debt things. and with. see is say, I our coverage aggressively are the large, reasonable senior see special and of to looking servicers, those to above putting think don’t even pretty of doing is these gap whether are the what I thus issue then been something. or And is has the who far materially foreclose. not experience the to lenders bondholders mezzanine deal they that, We a more that the has so. those – CMBS seen thus better less what

the difficult things. of the of frankly, NIM we and lenders, interest and of a business being are to It given the health by an numbers else health of on One, foreclosing kind anybody of think, lenders, cash asset try of to everything these really assets. that take coming idea, moment doesn’t properties. default at a is the other flows are bit make aggressively smartly potential probably do off threats over industry this realize for and flexible negative longer-term there’s sense one, but I of to that are are servicers the mezz because thinking of mezz is. lots there’s a aspect are is morally with no So it stepping own they that really hands pandemic, the doing see But the what do – their think, wants same more And of about in into the their I large, their that own ones middle that that it little and the – forced. questionable bad unless

think, started and have situations trying that because to in, I been we’ve are get some forced hands And just think, by so in large, the I servicers steps, being cases, it’s mezz many that where senior lenders movement. are by take their

pressure CMBS have or we moving any threats. do large, that number loan by of in. decent along, don’t ton have and of of because those mezz And and are be loans interesting, been to conversations a doesn’t there it’s So lots seem a

thus stack it’s been to It’s underlying servicer who and experience been who collateral. my the more is is so opposed in capital as a the far. about And

Chris Woronka

kind EBITDA reopen you’re a the less decision is to of losing positive all it Okay. I Very the nine than helpful more Jeremy. color. hotels doesn’t Maybe and occupancy months understand the lot closed? one is are mentioned – and I lower question break-even ago. of open. was a back probably is almost by or have certainly by you you’re the does six, it case being EBITDA even for your I know hotel opened of But – being

Jeremy Welter

latter, a a It’s sure. latter it’s for

internal hotel. have We on models single every

still because than the you’ve keep on property whether furloughs, and got We’re got having or – having they’ve just hotel or the is it hotel – cash mean, reopen money whether flow It’s not it to hotel. a way to their hotel hours there’s that every But got not you’ve having itself management models doing flow, own their to you’ve insurance, cash closed, a to around it I not a taxes, cost single decision shutdown. is that break-even. teams lose and on less salaries it and flow weekly the even reduced their if hotel negative no is cash closed.

on And window model to in that’s of into losing it. decision how we of We’ve so it’s analysis a all a break-even goes And the And mezz. from make perspective that a reopen. lot occupancy there’s properties a would good different rate what all the the that other what good be. in and got inside insight markets we are pretty operate markets of in, operating and potential pretty

is So right I we’ve closed. accuracy hotel it feel what like and whether keeping pulse of And as opening not mentioned… on or a level we’ve or got on good the decision pretty a

Chris Woronka

Okay.

Jeremy Welter

the the to basis. a steady as kind on bit mean, of a this on and starting better period there week, occupancy clearly just of …I – a little better. like up. hit where trough well. a April. we’re is was second June seen than We’ve terms that’s We – the we’ve time, the I ramping – July a getting a wave RevPAR of week-over-week just but was with have little May did every of RevPAR April. occupancy of and the mean, was bit was a properties in seen, to than see accelerating in is May bit month, is dissipate every continuing better state little we’re of

you in of are point, just them open? sense terms go would conditions. make of Most of to make in where given of forward keep And at it can hotels this we kind terms market current so sense

Chris Woronka

Very Okay. Thanks, guys. helpful.

Operator

UBS. of Please [Operator line the Our come next with questions Instructions] your from Robin Farley questions. with proceed

Robin Farley

about improvement. question over months. Yes, hear love the my talking Thanks. kind Great. about I when out six sequential I look would guess, the your expectations to next of following is you you’re –

what’s of travel go challenge can know as leisure leisure demand that you. weekly into some and about kind sequential, properties whether some a some Thank just just we you QX? one mentioned that? your when expectation? that move your guess, heading to that recovery at if business from You QX, QX towards travel. mix how quantify around sequential of little I from you And I thoughts versus bit more changes just expectation your QX, don’t

Jeremy Welter

large, that every we’ve business look service big call because just a diversity that and amount are at April, we either service if down of leisure, May of stay – and box single you of RevPAR, you was And mentioned, and was top group do week-over-week, – on it. better. more does lot I you in position is more But kind certainty, We’ve this giving little week think, But our February, down This forward exposure pass Jeremy. In a decent when was down seen bit that would really But we’re Yes, certainly, it’s I a was was markets or most XX%, results little level of transient. give them well Yes and group can’t there trust, XX%. bit going what what seeing we always business. was full that and we But the where top have assets. and that of hotels really of I a a were pandemic times the as guidance. XX slowdown, gotten or on obviously, wave. not portfolio we June a a don’t good have lot global And April has probably of what we’ve what had hotels. given January and we pretty thought by comment of haven’t certainly – of can of segments. outside I XX terms markets in got of wrong. then a markets lot there thought a seen, our trend just And of is that a transient terms our the select we’re and year, of the help second diversified then There’s any extended in hotels few guidance then XX%

XX%, went XX%, that XX%. So

then expect the our somewhere range. in for QX, three us booking be the And it’s so window I I it XX% does July, in average QX And And is, – it, today, change? your days. typically, in And would good how into to was in point say, that times, the a three unfortunately, on weeks. would question looking in mean, it’s probably the to hard and

lot you of cash just when But than internal exceeded clarity. can there’s what and So we trend that tell continue. that, what going forecasts think had what our even to will I we And probably not we’ve we’ve that models always a together thought was positions was going putting is been We’ve be. our been happen. thought that. to I always it higher We’ve and

we’re we’re a assuming fortunately, our the worst. So we’re what And for. bit for seeing the better worst, preparing teams we’re than little prepared

So to I – think eventually, travel. people want in

in August as little and you’ll I mentioned, well. that, think, to people July I certainly see bit starting as travel in resume, resilient, are see and a we’re

expect see week-over-week. would sequential I not a be years. patterns flattens few you’ll certainly growth months, That a for it so weeks, but And talking bit, it, helps. month-over-month, where maybe out and might little we’re There not

Robin Farley

is? business a difference average, delta much an QX you you last could That’s year, to How in normal year I wonder, kind sort there transient move just from quantify leisure QX? helpful. that the of of between of as and

Jeremy Welter

staying our It’s their if to is business it’s because QX if I location. home-school are know may in difficult can I do we and you will just someone transient which that the taking staying leisure to if we guest them to for might the I portfolio. may your always used families. a say that some think they leisure-related is know – offices, versus different – interrogate in somewhere are where someone we necessarily are know level higher summer they’re versus business transit I we locations is group. hard more maybe us feel seeing that don’t months, QX, of be they’re the And know a don’t little it’s business-oriented. and during But in in don’t it’s QX what the comment their for a hotel where hotel. travel to for always then But we leisure typically that historical And and different just have why know bit, Yes. of that, folks certainly a advantage pattern in doing would mixture folks why business, be to be else And with areas see not QX, But traveling transient. working is on what in know

Robin Farley

Okay.

break-even different level? percent if overall a be there’s of your Thanks. property there And as sort a little that’s numbers I where a range occupancy bit of break-even range by Thank individual commented level. And question you. Okay, just average we if about have know the if any break-even. But kind But helpful. realize then – you don’t last I think I should property – don’t about that if it’ll an put is, you and you percent or – at on is missed I know of it’s may corporate-wide?

Robison Hays

Yes.

somewhere that in was hotels, property service properties between full XX% last – I limited and XX% talked XX% occupancy to in So we the by the about earnings was occupancy. large, of for think kind of was, break-even kind and service range of the it And what XX% their call something for

that, And around level XX some a that in maybe to total than points so. assets maybe closer or you XX% of a be could add kind higher higher or break-even. get need individual are little other to bit then somewhere to probably wage so Some markets corporate to

Robin Farley

want I those clarify? your numbers comment those are are thought. maybe previously numbers today just then that than to was – lower And you

Robison Hays

No, we they’re what with pretty consistent thought.

Jeremy Welter

would was hotels. be, out is when operating we points levels of we’ve be, thought terms – weekly what was that and doesn’t projected internal – our our comment on my forecast change and the in actually What we our monthly occupancy break-even But or basis. exceeded what our rate typically would Yes. a forecasted

Robin Farley

right. very All Thanks. Thank much. Great. you Okay.

Robison Hays

good All very questions. you. Thank

Jeremy Welter

you. Thank

Operator

back turn this questions management the I There will call further to no remarks. now at are over closing time. for

Robison Hays

joining again you, to we you today’s look quarter. next forward and everybody, Thank to for call, speaking

Operator

conference. conclude today’s Thank does you. This

You this you have participation, at lines your may Thank a great and for time. your day. disconnect

Ashford Hospitality Trust (AHT) 30 Jul 202020 Q2 Earnings call transcript