AHT - Earnings call transcript Q3 2021 | Ashford Hospitality Trust, Inc.

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Operator

Greetings. Welcome to Ashford Hospitality Trust Third Quarter 2021 Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. the to turn of Jennings, now Relations. Investor will conference Jordan over Manager I you. Thank

begin. may You

Jordan Jennings

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

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

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

Rob Hays

will by update main themes Good welcome overview results. of start will morning financial like how on call. accomplishments current operational recovery. call. Trust Deric Jeremy, some our that, will the portfolio. the environment our providing an and I I highlight our been and has review our provide to our Ashford navigating first recent the and After then, And an of for to

earnings First, internal and solid we strong third street the had forecast. and in both our hotel estimates exceeded that quarter performance

ended continues our cash to liquidity and our We Second, building. cash quarter improve equivalents. with balances million the over $XXX and cash of

leverage gross continued Third, over we to our ratio, preferred financial net over have preferred and defined to its lowered lower plus XX have improve assets $X.X we our debt equity our a decrease in plus XXXX, position. our by equating by debt percentage net peak billion, as points. Since equity in leverage

management. proactive already balance remain maturity and Finally, we loan capital markets with in our activities attractive even schedule, sheet an

financing in XXXX. significant final in maturity the and which had During quarter, refinanced final this Back Hilton a we XXXX for addresses Bay, November successfully of only Boston the mortgage date loan a the maturity debt

-- Gateway on City, Crystal our Gate We soon debt Marriott the hope have more have upcoming it. for at made Marriot significant you progress to City Crystal and refinance Gateway information maturity on

seen an in actions our recovery capitalize decisive feel are company by we well-positioned long-term taking the on balance sheet, balance. announced needed about and to amendment the optimistic are we some current to the which Subsequent We after already off capital flexibility even undrawn strategic to if paid for we us end, financing, to to we’ve our shrink the outlook hospitality industry. with access provides quarter

must the variants some of acknowledge recovery risks the we our the While ongoing of to pace to due remains, COVID-XX. optimism also

and our to In continue our and next cash addition, structure we to in on to to Board months as believe the does stock In stock the the stock and suspension on not XX majority previously announced loans of The or months in the on for dividend XX its we over units a its will Directors third more, therefore continue and dividend the dividend capital quarter. of its quarter. our company for improving dividends, not pay of third focus traps its a pay liquidity come. could company be common regards to the result, also months common common building preferred and does a company

assess However, and situation the continue Board will dividend monitor future the to declarations.

We for have significantly expenditures our reduced planned this capital year. spend

made believe past we we over our years, the sizable and the hotels in condition However, fantastic well-positioned the are our given rebound. are properties several capital expenditures in for strategic industry

having leisure hotels. to building Let in is the of versus increased approximately by the only hotel RevPAR portfolio with in operating are all continued the the The the the seven our me October EBITDA XXXX. remain clearly This now RevPAR strong We with third we likely to showing in third hotels numbers industry our quarter at the September decrease numbers. turn quarter, upon for signs fourth lodging encouraged XX.X% our a quarter quarter. of properties. our performance negative momentum to of as XXX% result equates improvement. hotels demand outperform weekend strength of of In in

We that capitalize our and U.S. transient confident consisting the assets rely industry high believe the continuing demand. diverse trends approximately the portfolio a are of be across in pent-up demand hold. in recovery position the XX% well acceleration quality will corporate is located take to to geographically on that we leisure are we of on So

liquidity same minimize including property control able with with or our This to relationship really apart. closely working to affiliated property hotels. new us aggressive sets our throughout We responsive is on the cost the environment. creep where maximize to way down, adjust In expect continue mitigating initiatives to hyper managers the be manager rapidly and this Remington we them Remington focused and as way operating structures on as on much responsive recovery. were costs possible our up, was cut hyper the way cost they be to cost quickly

industry important has and in operation We believe are past more proud Jeremy an outperform relationship detail. standpoint the will from and discuss of our us year efforts over enabled the to this this

Investor very Turning to we attended well Day York. New investor recently a held in relations,

you able website our If you’re I to and the not webcast. watch to to join go encourage us,

looking explain This in now we portfolio, to operating optimizing focused the of XXXX, efforts will and believe turn and to on maximize our into meet financial as be unfolds. remainder and includes communicate year going time performance deleveraging opportunity have sheet company, the We strategy of expand invest what laser performance. attractive liquidity upcoming road plan continuing the forward across will of an on be will the the I For third balance review these. the the our Ashford all that and investors, right on Trust. believe opportunities to our investment we to to to we over with of recoveries quarter plan We Deric assets they forward for the look grow events. to at our and we to get with speaking capitalize call over during our the you recover, place any

Deric Eubanks

Thanks Rob.

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

For the quarter, of reported we per diluted share AFFO $X.XX.

average EBITDA over ROE the of $XX.X quarter of We At was with are million, XXXX. second strongest quarter adjusted rate interest pleased a of quarter, the numbers for increase XX% the our since XXXX a the end that is the loans of of X.X%. to $X.X we billion the which had and third report quarter first blended

loans fixed rate. rate and flows. hedge a our rate operating we debt, We as Our cash approximately of is XX% utilize better floating XX% believe were floating

utilize caps rate those However, on loans interest company the floating we rate increases. against do significant protect

Rob level all for are them purposes. nearly currently mentioned, and meaning utilize are hotel are cash we of currently all Our that unable to cash in property loans as traps, corporate-related non-recourse,

the third-party is property costs. managers, we in reserve one able at of cash corporate. properties to $XX ended that that the which freely cash held the and cash accounts. hotel recover This vast held $XX.X restricted due various of need managers. be million coverage with fund cash to yield lender primarily million million. is hotel We of or As utilize we majority thresholds, manager At cash comprised represents of also quarter equivalents and and our debt $XXX will and from The also available operating the of end by of the had quarter restricted cash

working also with million in working million, to position. We compared capital our ended $X.X improvement which quarter of continued XXXX, at end the of the capital of financial highlights net $XXX the net

think also I discount point price stock a out share. to important yesterday working that $XX.XX, equates capital per of which million is it share. our capital amount $XXX closing $XX net compares is to almost per from approximately this working to This to of our XX% net

a over high hotels, EBITDA value standpoint, From of reflect cash value the hotel portfolio utilization does quarter. as quality stock current working value portfolio. generated of net Our our above $XX hotel we that the in million our price our and intrinsic reflects such, capital of not a believe our

run million. advisory million corporate Our and current is $XX monthly interest G&A rate is for run approximately and expense our monthly rate approximately expense for current $X

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

approximately financing weighted diluted January. AFFO Our share of the units. million the share fully shares our we and is exit average used shares to common comprised common count that X.X per share fee stock XX.X the which million currently OP on XX.X calculate strategic million count X.X quarter, third at million included outstanding, In with associated approximately stands completed of diluted fully in shares

$XX.XX, stock is price market cap Assuming yesterday’s million. our $XXX equity at approximately closing

Massachusetts, term we quarter, company XXXX. XXX balance maturity sheet a the room in only refinanced date one-year X.X%. Furthermore, a with final maturity non-recourse option, addresses Hilton for interest + financing of the in subject mortgage extension had four-year with November loan best-in-class provides $XX rate million for only initial the Bay Back lender. successfully in addresses and this During initial The loan which payments the to able a certain extension with the final our significant The financing to floating was quarterly of conditions. XXXX. Boston, term a institutional for during our Boston complete totals term These the amortization new at LIBOR satisfaction loan

have Crystal to we progress Gateway an on significant debt made City you refinancing maturity, the Marriott provide and soon. that hope update the Additionally, upcoming on

the maturity in of Gateway Marriott debt after hard is June next Our XXXX.

stock. corporate preferred equity debt These to new million way amount stock, also quarter, remove As we After have over by and a at lowered $X.X is our exchanging our dividend $XXX we billion selectively balance equity the have original balance exchanged that accrued taking been these our in since January stock end a sheet, we for discussed, our of of into which account liability we’ve significant our approximately common peak its our of approximately we and common $XXX.X of improve net exchanges cash accrued into eliminated preferred flow. as the deliver value preferred preferred in face the Through plus million of previously XXXX. exchanges, dividends. stock XX.X% closed the debt

pay be balance prepared capital to been tests achieve We liquidity extension or refinancing needed raising for also downs our our meet shore to requirements. up have sheet, opportunistically bond and equity potential improve to

third issued for we million approximately common gross million shares of approximately proceeds. stock X.X quarter, in During the $XXX.X

improve are numerous we past and liquidity, taken Over have progress the to position made. we pleased and steps our that our we’ve months, strengthen with several the financial

the improve structure, and While well-positioned we we to schedule And to to management we to balance financial is are do This work is our benefit seeing believe I quarter. for asset trends the turn Jeremy discuss activities have it now an our still to company improving our cash attractive the lodging to would concludes have industry. our maturity from in building, the capital over review. we like

Jeremy Welter

portfolio Thank RevPAR flowed increased Deric. XXX% the during with through for of you, solid our while house XX%. a quarter XXXX, Comparable profit third

at our the We’re second extremely encouraged third respectively. occupancy with with quarter outperforming XX% XX%, acceleration the of quarter hotels, to the continued

upscale third in the in basis upper quarter outperforming scale we’re points. occupancy chain XXX Additionally, the by U.S.

early than that airline was increase. propelled spend Hyatt base the seeing we’re The stabilized additional at some hotel that to hotels more our that continues, of in and number proactive recovery Coral produced able some XXXX. during with a in the over of EBITDA XXXX. secure metrics XXX% success revenue more driven like team While being The Gables is to a to is has hotel business third performance exceed This comparable by highlighting increase $XXX,XXX. That quarter, an shift the RevPAR a our exceeding the of being increase performance resulting the phenomenal time I’d XXXX results rate, stories. is pushing allowed pandemic. by strategies third occupancy during by XX% contract quarter in premium

has to which job quarter. A an occupancy success Our to hotel the La in an to additional to third property EBITDA is the growth, increasing the business, excellent hotel’s period results, RevPAR capture the increasing that a identified West training added revenue third booking program, of comparable lot with relative done quarter to XX% in also X% the XXX% The attributable additional an relative the with third during XXXX. Key Concha of topline resulting XXXX opportunity during team quarter the the exceeding XXXX. hotel government

it million hotel one the of That of own. the could significant period Our Renaissance houses which EBITDA selling in the room a nearly back largest during comparable is seen its group hotel third the demand. Nashville levels group on XX,XXX be produced are $X.X in on of and This quarter, headline These the nights. results exceeded XXXX. has

our advantages industry-specific competitive is structure asset team how the broken of by of down One experts. management our is

have believe proactive unlock items XX% successful build should and the we out this with our savings issue third potential through saved the found this some and savings, a $X.X a from they Our property assessors rate we both this year. XXXX, these quarter our property considered. appeals. on tax local local start that and year. that approach proactively has be in tax the reached Notably, relationships in To to results success to states assessors. using before strong been had appeals million team achieve Year-to-date discuss We we’ve values have we additional dialogue maximize extraordinarily the

we throughout renovation potential that renew Moving years, in is but can on the in are prudently the prior resulted at attractive Ritz-Carlton our to a we proactive portfolio. commitment more properties in deploy to competitive Thus recovery. major only renovating are strategic advantage That our market capital and we project XXXX, only travelers, ballroom also the capital we as far completed to rebounds. more Atlanta. have management, were Not hotels now -- has in our

less include Looking capital renovation space guest a Hilton of at spaces we $XX renovation and million of projects $XX we spending in previous the service is of ahead, Fremont major at Marriott public of in guest public significantly capital estimate at XXXX, the in horizon the renovation on the rooms spent and expenditures million to and years. our select Santa the than Cruz which have six hotels. rooms Seriously,

of to the reiterate portfolio we recovery a moving whole. Q&A, our about Before the to like I’d how and industry as are optimistic

positive from outperforming in momentum the period markets a U.S. GOP our to concludes are fantastic This have remarks. other news that these expected keys for within is XX% compared all growth of our portfolio at prepared were continue. last top Research this Sprint the hotels number and that quarter, anticipate That suggests XXXX. our XX% will We comparable fully markets. XX markets fall in of XXXX, hotel that given Data all During this our Travel nearly were RevPAR to XX%.

open We Q&A. call will now the for

Operator

first question Bryan is Please Riley Thank proceed. you. [Operator Our Instructions] B. with Maher Securities.

Bryan Maher

on which are to to you cash, to is in that maybe being it portfolio with But bigger what you how it cash. an in some that And I know assets opposed preferred making guys. Oaktree to but the accrued at portfolio want keep, large a can that Thanks new six maybe cash the peel cash? there about maybe, take months you Oaktree? here, you of in accumulated that obstacles or that the which know as A, want the of Starting able to keep. you maybe the you come million, think away relates I whole that making hoard with the have and there’s to financings don’t those that hold the and don’t such $XX nine agreement your reasons lenders have away can financings dividends, such to I the fresh picture, really are care How advantage of debt cash sell deploying know, you taking holding over as ones pitting you of taking is assets marketplace with in then morning, really think buyers question. then I for Good out months, you all and do about on you to want peeling my of really basically past, the X% thinking

Rob Hays

a question, Bryan. That’s good Yeah.

I obstacles various that is, sell these, the now, look which think as are And said, the debt normally to think, extract -- with kind include this offense at you’re I hinting going we’re do you to period, meet are which it’s that we which ending overall thing those incent now. coverage where from are cash we holes, also see pools are required, the is capital, bringing well. to the that you ratios, strategic through So current, to we do from whether -- make to to preferred of had discussions defense. to guess, strategic initial also now? on XX that ways the right on obviously which we all which as there them, yields at current as financing, closer if sell thinking something us possible do opposed bring to needs looking exact strategic have is being paying tests our guess, order those currently have, got of alternatives conversations though have underway. to on to and those around also to I we’ve financing do make-hole do the structural that or of But don’t lead the come But them, we need months off the assets just lenders to have would by even be, if it those did certain with to several the we in I financing go our our for currently of that

payment preferred $XX we another is million. that’s So up $XX if up, the, then catch the next need we’re we’ve make ramp to XX something on going deferred up to some that million over that, payments obviously people XX it, call to months. And CapEx months to catch got the starting also to

the to extent we have of don’t have things that are the the and exactly the do some variants cash recovery know new looks to this that minds, in like and cautious of what office be our what does we to be after look like So year. there return or needs thoughtful also pacing back and other other we

So thoughtful different we’re obviously base financing, terms. to One were attractive see did starting which to we is is trying back the those the was encouraging thing healing our -- it be pretty I and markets debt items. around of think all a we thought

and end But CMBS our higher see hopefully Gateway side hospitality, deals, but the will starting to few bit on have bigger talk there the soon that on that. a something working to we as will spread. We’re have start about on to a deals little been particularly quotes, in deal we’re that

but refinancings be are we maybe chipping thing some one at that what so, those particularly got But maybe and of start think and at up pairing very asset strategic handful is pull, looking new said, of And as year ways at, the assets. levers we’ve on looking very, sales to I gets we away long-term there’s, we’re think, like, with those into these focused there alternatives. it to that don’t will some of our I a

Bryan Maher

you thought mentioned, ballroom left there the already in think XX to that Great. CapEx higher million $XX you to the do XXXX might And million to what fourth done months in for deferred And that the much be that had Atlanta. million year? maybe is of How just this $XX as me. in renovation might might that’s Jeremy past CapEx XXXX and a $XX of previously do in follow-up, think, for the and to that $XX I all have there from that you and months XX make is quarter than million

Jeremy Welter

that. take Yeah. I will

the We’re in we $XX million close do quarter. to that to hope probably fourth

of and So it’s just timing on our -- always depends in of because kind actually it tough, a lot is we’ve just typically when all we renovations pay quarter it’s out got fourth vendors. the

which not top if $XX going of end to And we’re so am hit I was the million, range. sure

probably that’s unlikely. think I

So -- it’s million $XX to we going close be to-date think closer about $XX million. spent I probably to to and

a haven’t of in capital would there’s say we see not renovations next detail portfolio Now CapEx. that ton good year. for through there’s our we We’ve but year put plans, pretty lot together gone and our a deferred I not that of next

Bryan Maher

you. Thank

Rob Hays

Thanks, Bryan.

Operator

question next proceed. from Batory with is Scott. Janney Please Our Montgomery Tyler

Jonathan Jenkins

Jonathan This taking Hi. on questions. Good for Thanks our morning. is Tyler. for

becoming presumably additional in thinking in the corporate bigger you First And if all pickup from then contributor with meaningful rates continued positively? the one picture, that’s been be business or in you’re to strong and transit travel any color for leisure long-term, future? more about rates on a that how I provide maybe some curious am that’s particularly if quarter can impacting there’s me,

Jeremy Welter

Yeah.

interesting it’s amount. But right It’s weekend higher having on weekend premium -- but me or to as kind higher Let much the leisure. by similar $XX versus to in of a historically now, a travel also you’re side and I popping at out corporate rates because then having versus speaking, $XX quarter the as weekday it’s the on seeing inverse. we’re on opposite higher you’re guess, the rate really corporate are where stats in typically looking some that occupancies, weekends and occupancies obviously, disparity, decent both the regards there’s the leisure occupancies,

our industry. don’t ever scenario before unique a in seen I So that, we’ve it’s think

probably, of corporate So is X% transient. that X% right we our occupancy, of to out now think

percent of our still occupancy. a So overall very small it’s

of I’d specifics. I’d leisure, little a the still majority now, actually corporate. gains the it’s you say, is rate So, driven not give right by bit more

for So third pretty X%. in quarter, was ADR up is travel weekend impressive and the RevPAR XX%, up our which was the

traditionally, and portfolio. from about as butter but XX%. is transient transient down weekday our comparison compares And was this travel. So the and over down been where to then seeing But looking declines, ahead mentioned, segment. always which Tuesday, in bit Rob increase month. Thursday to we’re that’s come pacing But of business the Wednesday, a ADR, the actually that was each customer XXXX. to we’re business we’re in XX% bread in in XXXX seeing a compared group, X%. in the That’s little XXXX we’re XXXX, slower about back, That X% And accelerate specifically, ADR our has XXXX,

to a were pandemic. certain out there’s been coming segments the big pretty push do able So rate kind of that able delta in we of haven’t to we

sign. positive think really a I that’s So

Rob Hays

XXXX with significant situation not Well, still competitive before takes, close a into it’s rates so occupancy the as collapsed. I And level. and were losses rate if in to are cases would of until than they rate at this in in opportunities our investors your the some ditch had sort industry have occupancy in typically of of is you’re the look maybe think what existing. underappreciated that that’s digging already they typically, this are or this losses, one Yeah. years yourself out several it is, of we you’re for at cycle rates And higher the recovery comparable

that able that pricing gives makes us to is obviously, bullish, also So power and is highly push us being very profitable. rate

investors, So that rate. on push able being opportunities lost I to think be shouldn’t -- there’s of a the

Jonathan Jenkins

then, into Labor guys should ramp? continues to cost how any the you back on I going trended and and labor you provide future labor as business Day? other the Great. there the And I seem difference say, noticeable easing, thinking headwinds detail. the pressures about can that any impacting be balancing has then, or are the to forward post appreciate that the all And that update industry, been

Jeremy Welter

Yeah.

the of But I think on seeing the that, cost was the we pressures. pressures, the we’re where in so the majority still increases saw really quarter. pressures wage cost second

So at the pressures quarter, in when we expect third we’re percentage some significantly look the wage pretty seeing coming quarter, down it’s in the some still but you increases. fourth still

In impacting mean that what to put positions, of hasn’t them a or out haven’t service it our had that, terms and And by take of been we out problem is yet the open revenue. rooms in of terms anything But I we positions. them part that see. is would that like the what to like because and have a clean because we than just still can’t lower is of bit occupancy little we a open do

previous I think that properties it’s the but down about terms it’s at is about down months, -- our positions XX.X% open or in from so of we’re running not at and dramatically.

those Labor actually hopefully, terms And so, we saw acceleration we Day filling will in see positions. an than of more of after

Jonathan Jenkins

and any Thank one, the if can future turning XXXX to group curious you that’s that in or how progressing, Jeremy, I been provide Very any am the -- additional last side, if provided some helpful what in color you’ve the a demand ADR XXXX. bookings But on then, you. on I And color have helpful. could, stats you there?

Jeremy Welter

Yeah.

group very down we yes, increase revenue compared sit which now, ADR, room for So as by in is, spite will there. ADR, of the to XX%, increase we a the healthy right design. think don’t actualize XXXX XXXX in the an but I in is that’s, slight

seeing lot. and we’re getting We’re pickup a

very the the was that seeing before it be times compressed versus lead what to pandemic. continue bookings for We’re

XX% yeah, than hopefully I would that. much that will quarter, that come somewhere so less actualize continue anticipate and down to And each will so we

Rob Hays

XXXX. still goes XX% on that ADR is down same that now if should Again, again right But the Yeah. X% compress. up over

So, which a positive is plays again, story, rate for into us. it that broader

Jonathan Jenkins

That’s Thank Okay. the Very for you for me. all helpful. all color.

Operator

is question with from next Woronka proceed. Bank. Our Please Chris Deutsche

Chris Woronka

obviously morning. maybe is, a or And taking about are for Jeremy. one’s the is versus historically? third a negotiated it’s leisure versus I what Thanks can rate, Jeremy, quarter to additive, I gap when little rates because Good you the between going guys more either be I But guys. you corporate occupancy. remix have this bit and mean, year, a rates? going widening talk you’re guess guess to now for see in there Hey, next Yeah. question corporate questions. very bit net where little you leisure

Operator

have and see speaker line the you check muted. Please if

Jeremy Welter

Okay. Hey, Chris.

Chris Woronka

Okay.

Jeremy Welter

technical minute. little a difficulty a for Sorry,

Chris Woronka

Yeah.

Jeremy Welter

this for at apologize with we I at When look now probably -- the especially to just increase. weekend our that. at leisure rate right and look is to look

these weekend is Weekday in our So XX%. All numbers we’re down up compared XXXX. ADR XX% rates travel from XXXX. the in quarter are to

-- definitely the spread up more as business is transient that continues But more but we ADR somewhat segment, than leisure picking to of was it are actually gains leisure down than it’s occur. know. you So is definitely is seeing what

even continuing gains it’s to are off a from traveler, still larger And so XXXX. business quite bit our have we in though

Chris Woronka

then property tax a to refunds? the Okay. or That’s you event expenses going mentioned of lot And you’re guys how more appeals. of help or going helpful. that to on question -- I Jeremy. in Thanks, any progress book the in that -- a XXXX more is of XXXX terms is

Jeremy Welter

Yeah.

think help going in to it’s I both years.

see both to going we’re XXXX that and in think savings XXXX. I

Chris Woronka

a of hotels, of also, a more you then operationally, of some them sense suburban service service to ton some full have markets, full in helpful. ton of may city for because earlier, versus trying but don’t not Very are get center. service And select your mentioned Okay. and the a you resorts it

those you versus service in select of sense your give service kind any markets? for full there is can performing outer us is how So

Jeremy Welter

underperforming limited less Yeah. because service full service select MSAs certain more have dependent select properties mean, say, we markets. service in market-by-market. even are in Really, it’s I’d ways upon and other really service assets it’s in the the that some versus I

now where the right and mandate industry performing to think way New at is the your it. having of hurt Minneapolis a it the I it’s harder what look York. in in markets seen And help stronger, or be mechanisms markets safer a and they’re markets tended that their COVID other to So people less travel is cause been better certain continue markets there’s I markets it be hindrance? and Do feel the and restrictions. because our in Bay performance had been so COVID a performed time, prevention go those think think, to are to is as the seeing of they’re are we to I now markets actually debate, or are Chicago, that willing weak Area, going around And to it various or -- particularly Philadelphia, because just right

of for example, leisure really an seemed and once removed where were perform particularly, asset to kind unleash restrictions mandates market was hotels and So an that be the and COVID attractive asset. national well. to it the started That

service don’t I is as service as So if much limited full it it’s know versus market-by-market.

Chris Woronka

Yeah. Very helpful.

Jeremy Welter

Boston little one pleased did quarter. on I that that, the had with I and in was our how assets well comment surprised is

So to bit otherwise it’s some would I good have slower anticipated be to see recover that urban a markets pretty significantly. little markets, to

bounce to think in And so other these I and that of of in of you’re that locations pretty it’s that the have urban a see the massive you underperformed markets underperformed, have significantly. see a some some will going other Area time Bay just matter in that

Chris Woronka

sneak more a last a talked that of could Got you any the this Is southern it’s are? differences I and northern open labor, the in could about, Any guys the geographically? And it. if positions us one where or problem you one in on seeing question about half? are but Very helpful. -- urban half or shortages or in of you color kind give the

Jeremy Welter

that that that is to lower interesting be it’s where Yeah. also markets it to having in tell, are occupancies. we’re those that some the It’s hard ways, is, in urban because tends

of other still D.C. at York issue, because really would MSA little we again, or operating some in opened get to in have And bit then, a hasn’t or Area, it markets, of like. a some we’re where these been than the occupancies markets lower little New in significant the like been a the people. more, so it’s the bit Bay economies the in up And easier

-- D.C. be I little York start is and the guess happens what that and then? it’s going what So will trying just pavement and Minneapolis bit out be think New not these, at -- to difficult. occupancy that situation But probably difficult right push now and and but the it be somewhat is than when the think new a now. to you seen overly to still it don’t to We employees to a hard round know until associates it’s pounding of starting is better know a outset. more, you’re when that really and Bay up and I Area is left sometimes our really some

Rob Hays

of use to the country but given stop across and this between as up Nashville in staff three-week is we snapback those of I the before across states fill other add are example just concerned a enhanced service that, the were concerned lag opened when it we were have acceleration Chris, occupancy bit Board, run with positions. difference about that a in ability positions so labor that pervasive so benefits But relative out, property. June open did very is shortages, ramp we to terms the and being pleased massive to the even amount the a benefits ramped able of We of about the of in an there little able up to demand, up. up. to that is the was market very time When states the good that I’d that, about hotels year, higher very running what can -- it were the issue still maybe and a

the kept markets helps. you’re in but that if on place, time that issue, benefits lag pervasive a a seeing enhanced it’s the So

Chris Woronka

Thanks, helpful. it. Very Yeah. guys. Appreciate Yeah.

Operator

Bellisario W. from [Operator Instructions] Robert Baird. Our Michael next with Please question proceed. is

Michael Bellisario

Thanks. Good morning, everyone.

Rob Hays

Good morning.

Jeremy Welter

morning. Good

Michael Bellisario

then, number you guys of the that a hand, is, you I think Rob, question I part guess, have the on as when issuing rather get to cash? occurring? preferred the accrual Oaktree about later incentives the the And and think raising than question second obvious paid you shares any back accrual pick from timing and back one, enough cash is, is first balance that’s sooner you’re you you do mind want in aside that have targeting there part go the will sheet. to for to of

Rob Hays

Good Yeah. question. All right.

the capital first in that, at the than point we it for So did some while least, let substantially second the was out third me, raise one, quarter. in quarter, we less did one

obviously there to we on a, and is where what are and where very be very raising so that. at around cautious price price is that given our is And capital thoughtful share share we’re

beginning at. goals these accomplish there obviously are need is, a we number, So trends that to as, as strategic are the goals there’s pay we’re you could to there hard here. look is we’re And as that pay do it’s payment. -- But some million to one, but much that that we it, order In with million -- bring the the trying off point accomplish. is financing, there strategic trying off can that financing as some to exact to to come are up be $XXX the time our preferreds there call do We at that current. That’s that, $XX preference. to long we need have and will in be

of these then the will CapEx also have We and we another, current well needs. it, need kind to call strategic and other as bring that’s million $XX-ish financing

that we So have. we have some do capital needs

storms, of so risks and is reason whatever think capital that winds a will the has here quickly recovery of still business been the that other pivot time, goal other and that very that weather ready like. assets pivot there’s very same cash what on this to I next our going the to capital as terms and amount we this we’re we certain offense maintain variants, is those for soon many towards feel direction of in recovery, ample now, going that we what with blow few the as happens sit acquisitions as to in underwriting here return if months to a time. uncertain in and to the see extent because the And have the many transient our our be it over we comfortable upon depend have. At looks really to

an give capital eye can’t we on you down and you number, obviously I trajectory. slowed of raising but have I exact the tell is So a the are keeping close what our can

to soon. terms pay of the our we In off preferred, have also preferences

year. order current would It’s the to and that’s And we that Eligibility. Shelf back probably complete that, that in we we end Board. February which Eligibility, important The in been intention. to XX-K need would eligibility. by TBD. And by next our need happen, that to -- for preferreds that to we’re our have again, S-X still the called to those was filed, of then factor this of is not That’s do get is once year, trying to finalized order that But, then our That’s to yet getting do what’s have preference.

Michael Bellisario

then Got reserve? the paying it. that right, are the current preferred would if dividend then, And presumably those then quarterly year two also

Rob Hays

be basis Yeah. would be That financing the would then strategic paying a and paying we would those current basis -- we basically on be as go-forward well. on

Michael Bellisario

you to that at do times, on today, markets in what and said Got months like acquisitions more grow that is or of you but would months look XX touched or do you six months fast what it. And then like? it then it think the when target position on again be the assets XX least is you forward couple and a portfolio

Rob Hays

year. mean, to the a something Good similar on it’s last comes be our because of need I assets world that’s deal few seeing done question. a with Okay. five levers. I assets every a sitting hold spending Marriott, opportunities lot that think ideal and three pull will will into affiliated our pivot getting and just with be historically of other with in we opportunities our most comparable week mean, assets. over are a as to the things I which are years we’ve branded value that Hyatt full-service years add we to and the that We will offense, I Remington first. recovery assets. there, predominantly franchised Hilton, likely accomplish lot But affiliated lot really to it be what where be They They exciting. can mostly think will is that looking and there’s are and to take at we I we’re can meetings and continues the go and out hope nearly next what new year,

that and will flourished And And I’d say, been out we well great think by box they There’s a urban lot institutional will exist. sure those what we think a be, well. markets just It’s and predominantly of diversified big continue will we we’ve demand, am underappreciated that do that well continue investors top will across we mix have and to never invested XX, are we XX markets. Street now huge were a I there of be So probably we’ve at. in markets to That’s independents. that’s buying they what assets. performing top be XX, unlikely been transient-based top Wall

the Posada that will done be to Old performing similar few acquisitions years Cruz the Fe we’ve think, assets feel great. Santa last like Town La Hilton Santa Hilton it or I in that the that and in in in in assets So, Alexandria Virginia are or Alexandria

types that of will So assets the are doing. those be we

Michael Bellisario

it. Thank you. Got

Operator

We follow a question Riley now have proceed. Securities. Bryan up Please with B. from Maher

Bryan Maher

Yes. Thank you.

pay current S-X you’re the Oaktree be that on Eligibility… to off you’re I preferred, pay, Eligibility, to to $XX million be required current for think clear Just S-X was not required that back $XX you make you which getting brings said Oaktree, on million. to the about to

Rob Hays

Correct.

Bryan Maher

correct? that Is

Rob Hays

a correct. our That’s loan out typically obviously typically to strategic was a that in that financing a provision like not junior is leaking liability. There flow super about agreement lender in a thrilled cash

So, of being is importance but strategic obviously, us. important to eligible S-X the

were and one, cash them them -- a long that as meet we certain with picking pay deal to and of a the that effectively opposed them to or sheet, which as, liquidity obviously maintain as accrue. pay amount preferreds them negotiate our we pay balance current, bring today on current, them and having current current that was able continue the we So keep them we to as well

starting do and stipulation it that of the to -- year. that’s allowed December that So this in we’re

Bryan Maher

say, the And Got material to Ashford But of today look, in to interest has on XX couple on a that some years, the as within months rate debt? know there picture push years fixed we rates floating versus next, world let’s in XX to is rate inflation I higher debt live more preferred fixed next rate. any then layer refinance concerns with past and question. of more process the start do the the mean, we to to for potential that you thought over it. big all for over Ashford XX financing months,

Rob Hays

a to rate experience we being guess that considering analysis open a are structure. that floating hotel I be always almost It’s always over things our off you’re and time, owner. just might better in question. Good better

floating or debt fact Now that there’s perspective. of rate is, at and we caps there and extent assets whether look other will and different that other a Bryan, We debt that exists be that from them It’s portfolio. floating the is rates, something pairing rate the on hyperinflation protected there the inflationary just the we’re question obviously, there’s we today a benefit but given typically looking benefits something than to you’re so your within it And typically at, risk have move before? buy the to the the liabilities risks been negative. that where the anyway, would flexibility to is find significant in

the think right to So, being still I I say, but I to on some about and it predominantly we look table really floating if had think, money spend put to would anticipate it, time through now, we’re debt. willing rate

Bryan Maher

rate better you your at it’s a of be versus I respectable And debate of I do to interest that you’ve it of know hyperinflation and component a valuation like rate down higher community some just it huge and just higher interest hugely rates else I we to multiple environment. out think guys me least seems there’s Right. were in feel a for some but and scenario. the that, everyone could spike, assign floating. institutional might that amount mean, to and with road studies I over that even it you the all investor seems over done, a have I that, a that the didn’t get multiple continue leverage a debt understand it overhang to also -- a maybe than extent but ran of work pandemic uncertain kind fixed the

seeing in kind there that interested out we what be of So but do? will just throwing you

Rob Hays

if factor is, that well, consider. premiums, significant seen I a And higher the an multiple to component fixed rate companies that is hey, also think, have important haven’t get No. answer case, for a a hospitality we’re within indeed but if to it. that possibly factor important as the support very contemplating that’s consider data or to the side, us analysis I is that,

Bryan Maher

Thank you. Okay.

Rob Hays

Thanks, Bryan.

Operator

closing to the turn We like end remarks. our over question-and-answer have session. to management the of would back reached conference I for

Rob Hays

call. we with and us joining next you forward to our for look all earnings you Thank on talking

Operator

Thank conference. you. This does conclude today’s

participation. your lines disconnect at this and your time may thank you You for

Ashford Hospitality Trust (AHT) 27 Oct 212021 Q3 Earnings call transcript