AHT - Earnings call 3 2023 | Ashford Hospitality Trust, Inc.

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Operator

Hello, and welcome to the Ashford Hospitality Trust Third Quarter 2023 Results Conference Call. [Operator Instructions]

I will now turn the conference over to Jordan Jennings, Director of Investor Relations. Please go ahead.

Jordan Jennings

Good day, everyone, and welcome to today's conference call to review results for Ashford Hospitality Trust for the third quarter of 2023 and to update you on recent developments.

of will Eubanks, Hays, Chris Chief Vice and today Executive and Nixon, call President Deric Officer; Financial Head the be President Rob Chief Executive On Management. Asset Officer; and on in well as me Internet accessibility conference over notice The release. At a yesterday this results basis afternoon as listen-only distributed remind press of of this call a were let the time, pursuant and or and statements certain regulations. assumptions the made are are upon that conference securities contain in provisions you call harbor information based forward-looking being federal of to safe this the subject Such forward-looking anticipated. to statements and numerous are actual materially which differ to risks, or could results cause known unknown those uncertainties from assumptions, discussed the the more filings are fully factors These in Exchange company's Commission. with Securities and

offer this not the found conference made call constitute any during the and in to only do a update to and call, will made sell which securities. included registration date this or an of is offer www.sec.gov. revise are of offered be not by can company obligated a means this to prospectus, or publicly Securities statement of buy at call statements forward-looking Statements be only an of solicitation them. The

the the discussed September third call unless stated, and ended ended Each the XX, in call provided In X-K with with reconciliations XX, XXXX. accompanying other the of company's addition, earnings the quarter also been on at Form Also, terms provided is tables accessed have quarter XXXX earnings may filed otherwise XXXX, review are in together be company's to results used website all release compare in or September provided with SEC in those reported non-GAAP the November www.ahtreit.com. certain financial release third Reconciliations and are through measures. in which information the schedules, all the this X, listener which encouraged release. on

go Hays. turn sir. over to ahead, now call the Rob will Please I

J. Hays

an on After call. quarter our portfolio. welcome update operational then review and my Good provide morning, will our third and introductory our results, will financial Deric to comments, Chris

our are The achieved and we first, for third RevPAR pleased main the themes operating call with are: performance growth quarter. we in strong today the very

for seeing balanced high-quality leisure, preferred of and our broadly corporate million proceeds potential capital we may along now offering on diversified several are listed third, assets with We corporate completely and across to nicely; $XXX preferred strong. during have a corporate financing clearly the offering position pay up sources; working be our off is are sale. from quarter focused believe liquidity second, non-trade from our financing XXXX. nontraded approximately and that group portfolio with benefit capital, and the continues ramp off demand We We continued sufficient to these raise to of net the paying ended our be cash sales, stock our asset

the in additional our quarter. by quarter some on led for rates, hotels we strong prior-year over growth RevPAR over prior-year increased which RevPAR to X% X these increased occupancy, compared themes. all the quarter. quarter, the details was daily saw the third portfolio X.X% This and which also average Now prior-year increased X.X% growth in for in

to respective the performance, are vast company our cash flexibility of structure, an majority to out as capital step now This the our hotel our or debt in optimize addition growth it of to for opportunities. their pay is us down our use In solid hotels traps. invest important cash allows

with of consisting our high-quality and Looking companies well ahead, portfolio geographically we assets diverse is management brands positioned. best-in-class believe

consistently have manage us our optimize been apart to We as also manager, believe Remington, with able revenues sets that our property and affiliated costs they aggressively. relationship really

some I'll Regarding detail in cover shortly. Chris will provide more that highlights management, asset

value. long-term in beneficial engage to continue We that will create strategies believe we

With will we we quarter, anticipate to that as property will West, as autograph style a collection in distinctive a the Plaza in XXXX. of Duval historic high conversion A+ prime the branding Marriott Autograph RevPAR West, up Florida and to hotel West, It create Street Concha for an Concha track Collection to re-branded Crowne attractive, its into theme the announced location on in convert in Hotel is La be our very high a property of on elevate Key market. La entry, During hotel. should Key Key heart desirable right this hotel landmark barrier the the niche the a

and Orleans, property. Pavillon Fe, a recently looking major to the Tribute is Le are to La realize agreement had close bar Portfolio upgrading post-conversion, up-branding announced as a also with Spa RevPAR upside close XX% Portfolio in Portfolio a New Mexico This as -- to to The transforming success New XX% exterior similar to Tribute bathrooms lobby New and corridors. Louisiana Tribute proximity extensive and to compared guest believe Santa capture our in demand the downtown as Orleans. our great restaurant at And convert should Posada hotel is property well work Hotel a we rooms, We've location new Le We and new pre-conversion. in and prime includes generators franchise International the Resort guest with Pavillon. premium Marriott with

embedded Pavillon examples portfolio. about unlocking and Le of value of our are La excellent conversions Concha how we both in go planned The

Turning markets. to capital

the significant This and order by assets, meet our extension sales. asset in made we these which debt tests. assessed quarter, for extensions reflected on and decision economic prudent paydowns yield progress options multiple pools refinancing, make on and management to process the F potential company, including decision that capital our explored KEYS a was a A, required loan to the extensions During comprehensive strategic not loan B and made

this a a long-term We over a have capital company sustainable goal been more structure. towards the committed to deleveraging time, and of step significant creating is

component Additionally, capital pursue important sell and of our continue recycling to remains an assets. strategy, to opportunities we

being Orlando in other small conditions marketed additional assets for sale. asset several sale to sold warrant. and we that for for market nearly identified During We've also currently a $XX that the have may if bring X are million quarter, we market assets

debt will sales be these paydowns. from used for proceeds net primarily any expect We

subject We also continue preferred REITs of to portfolio to not source believe conditions. We at this non-traded discounts but asset market our attractive offering time, given future and significant allow net growth believe about accretively access currently to our this fact capital, grow an a be particularly to lodging values. to us over only stock provide will material will trading advantage, competitive excited offering is that capital the are

use but or capital would be preference uses that needed. may Our some we to corporate the capital for as future down growth, debt of to other use pay

selling signed XX the representing agreements X,XXX to build syndicate and We security. over have currently continue dealer selling reps

million liquidity our the includes at We raising early today, grow in place and through deleveraging operating balance to sales of value move of are continuing capital have to maximize approximately attractively during performance company, sheet and plan believe invest improving gross This raised over and across our proceeds, million quarter. process as $XX that including time possible, and opportunities that we grow for the portfolio. optimizing assets, priced to right capital We the asset forward in $XX Ashford looking the still have and plan raising the Trust.

offering, amount I'll with see on sheet. in Deric opportunities We our review performance. balance we with call excited of of substantial a us. our the now ended we third of the over And launch to quarter the are quarter front the preferred our cash turn third about stock to financial non-traded

Deric Eubanks

Thanks, Rob.

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

money of taking share diluted per AFFO reported had average $X.XX. X.X%, rate caps. Considering $XX.X we caps the of third interest XX% as loans of current interest the was corresponding a $X.X into account quarter our interest are the now quarter, all SOFR and of the the caps, the is of end EBITDAre level the At now in billion our in almost of rate of with effectively rate rate For the debt we money. for quarter, fixed Adjusted interest blended million.

secured KEYS with secured and we a of hotels E by quarter, paydown the X KEYS hotels million, pool loan pool extended D $XX with a million. approximately loan paydown X our approximately by of $XX During our

increase million. required which and A, discussed, Rob hotels. to to the secured by KEYS needed the approximately XX paydowns approximately also required paydowns extend by extend not KEYS As number in XX% not pre-pandemic $XXX loans, to extending are that until and totaled paydowns make are markets significant in nonextended from are but $XX topline B headwinds nonextended pools KEYS the RevPAR these loan XXXX and By EBITDA hotels these total Pool the required to or hotel these will approximately $XXX capital the Further, and we our of through in a F post-pandemic pools, these our million The hotels their removing also reach these in elected portfolio forecasted of million save only RevPAR not the generated recoveries, hotels XXXX. markets our loans X% properties approximately at portfolio. throughout have of only levels XXXX. Many experienced we not expenditures lower

transfer work to completed servicer expect fourth these lender continue on sometime We assets quarter. with the the of the and consensual that in a be to to

significant we loan for KEYS pool Stanley XX year extension with our no loan by extensions X test pool secured paydown. which us, our behind the extended next was With recently hotels, Morgan

of cash of end million. million. cash managers, million available $XXX The majority the the which primarily hotel reserve hotel quarter restricted cash that operating $XXX lenders. At of $XX ended we restricted trapped one by fund lender working the and held also We vast $XXX net to is is This comprised million by cash related with quarter, approximately of managers. ended property We and equivalents $X costs. due of with third-party our had also of capital quarter manager-held and accounts cash million of and represents held to the cash from

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

stock Our at diluted is comprised share shares of and shares million count which currently million XX.X common fully million outstanding, approximately units. of OP XX.X X.X stands

to the January included per financing approximately share XXXX. that common third the strategic quarter, calculate our share exit on fee with used shares X.X completed fully million In the average AFFO diluted in we weighted count associated

we anticipate preferred or currently some monthly, not reinstating paying for dividend we quarterly While do are time. common our a dividends

our we made extensions we've Our the our is and preferred with position progress capital pleased that and are on of solid, liquidity raising. the pace nontraded loan

the a and be for challenging financing portfolio to is spreads both performing continues well. it base rates, with hotel in our market debt increase While credit

perspective, to our it management asset Chris activities balance like From through I to corporate for turn a to capital financing. concludes financial we paying down structure focus our This on our raising to now the potential will asset sheet over would quarter. our capital nontraded stock, and preferred continue and discuss review, and sales

Christopher Nixon

Thank you, Deric.

hotel growth for RevPAR For urban favorably properties maximizing team, increased compared some the were some national approximately This for both the portfolio initiatives over upper due spend we to through able the demand, our scales. grow production would quarter, growth prior-year from like performance comparable the optimizing to hotel and and the for at costs, rising challenges averages upscale upscale RevPAR to comparable X% chain quarter. of I to the propelling our group Despite time the throughout increased quarter. wages portfolio. EBITDA highlighting and ancillary including industry

in is exceeding books We to Group on X%. for revenue also resurgence by a pace XXXX, of revenue the year group is the group by revenue continue XXXX year prior ahead segment. the prior for Portfolio year ahead full pacing the experience XX%.

the we to ADR to the year quarter, compared we and a in compared pacing lift quarter, X% last year During in saw the for prior ADR are full year. X% ahead group

the our quarter Crystal quarter. in group million and combined Gateway addition, with a X% year Renaissance revenue, the to finished prior largest a increase $XX.X Marriott In hotels, X Nashville

that the the quarter, the quarters first history. through up the more banquet room fact, group revenue Nashville X revenue other year compared year ancillary revenue than year-to-date added with Nashville In additional benefit is business. Banquet third year. Renaissance in this XX% group in An last any the generated hotel's through is comes to

We quarter. as by XX%. well nights urban evidenced a quarter occupancy increase peak This the any the demand as returns. are travel than in is greater Our performing peak define over XX% with during individual night nights prior-year assets

rate For these ADR at the XX%, drive urban hotels Nashville, relative the hotels to prior-year where ADR major transient This for night and in for respectively, quarter, such allowed business demand quarter increased in hubs increased transient Atlanta to our peak urban grew the and X%. as transient XX% during performance quarter. us

the a also has XXXX on effort that aligned strategy XX% pricing team partnered corporate to revenue to year XX over XXXX. Our increase by the drive our brands ensure on are optimization to we XX. rates with target, is by strategy corporate This an

As valet X% a which the portfolio, nearly XXX major a success. point the minor quarter as in our in been by prior-year quarter. Parking parking to outsourced the contributor other the within ancillary our revenue streams, during contract department, as departments has over basis well revenue negotiated a which revenue includes every resulted We increase portfolio share. grew

charges out XX at properties. We also new parking rolled

we all streams Additionally, across audits other completed benchmarking ancillary price of we and were to capture ensure market. top revenue

was this downtown asset a in One the Hilton Back of XXX-key our properties full-service Bay, quarter best-performing Boston. Boston

the For increased XX% quarter. hotel RevPAR quarter, over prior-year comparable the

quarter. For comparison, comparable was relative to quarter the growth prior the Boston entire RevPAR year hotel markets for X% the

EBITDA increased over XX% quarter. the Additionally, the quarter hotel comparable during prior-year

helped compared margin and initiative the higher identify the hours We EBITDA processes, in than per prior-year XX.X%, housekeeping with Remington propel basis other quarter, room by to These the X% partnered the labor XXX schedule occupied to which quarter. for hotel risks prior-year inefficiencies. resulted to quarter. This changes create comparable new improving points

capital to on expenditures. Moving

We strategic repositioning noted have we taken to calls renovating previous approach hotels. our have how in a and

relocated So concierge the the Nashville. completed at City Suites meeting we XXXX, lobby space Ritz-Carlton and lounge Crystal the Embassy far the Renaissance renovation at bar in and Atlanta, at have the of

transformative West Key the grow We the an market. Autograph to Plaza have enable Crowne a started will Collection barrier-to-entry hotel, conversion the in of property high which to

Orleans In benefit which addition, from will portfolio the in hotel converting booking hotel, system. Pavillon allow to Le we Marriott's New are the to attribute

Nashville. Renaissance room we into suite located the spacious lounge downtown currently old floor renovating concierge overlooking Lastly, in a on premium a are guest Nashville

anticipate million and we million $XXX spending $XXX expenditures. between capital XXXX, on For

Looking including key considering at several hotels, portfolio, brand our are high-margin across forward, additional executing accretive initiatives various ROI projects. we and new conversions additions

are this portfolio. I about would like to future finish the by of we emphasizing optimistic how

As businesses continued group mentioned growth. show earlier, to

to concludes We our helped The team's rebound, and streams. are seeing prepared to maximize industry's have additional remarks. continued diversified concentrated the well more us capitalize revenue geographically, is and This on continue efforts more our portfolio markets allowing recovery.

open now up Q&A. We will the for call

Operator

Your [Operator Bryan line comes Securities. the Riley question of Instructions] with from first B. Maher

Bryan Maher

upon the in over face that? how you of of you capital couple have Key projects allocating maturities Maybe continuing a not of to years? the those couple amounts upgrades the New Just discussion Rob, how questions and us next Orleans. still you're West are say, through walk Can debt thinking insignificant morning. this to, about the that of you about let's thinking of

J. Hays

that time. is think the investment. we we push to look being that there's think holds ways want to or needs opportunities great steps taken this And X the some think towards I keep Bryan, Yes. time, are underserving we that things of in to over the kind X trying we RevPAR to that to years' trying assets of that have that, all have years same to like a are delever, which portfolio underserved of in quarters few long-term do kind or what do handful we've eye simultaneously, combination of yet at we're which an obviously the do big some past trying pretty market

mean, asset given least Key that action potential reason in Pav, a see XX we're and and we it's a balancing that that we opportunities just needs why properties. it's a our the and at some of like a great do on not a of West, a these doing in that's of and has only handful And market anyway. this Le significant so other of property renovation amount other that them, upside of think there's kind But I because

it it's made so thought incremental ability put that bit one to capital to of it, sense. little reposition And in the a we

it's time, be And we'll to there. assets And capital. here a at a a that's raise same couple and it's selling act. the couple But why balancing

balancing would say it's I just So a act.

Bryan Maher

XQ? not what sometime gears you it's rough them for and comments prepared said KEYS from that do in And for much sit assets Deric. that, in about Okay. hotels extend, in so think that in, you XQ, the shouldn't out be shifting When maybe there as did say, is keep happened I'm hasn't your those I think but for pools on that November, we pulling modeling RevPAR. already we here assuming And impact XQ the XX we in in early later still the suspect you XQ,

I X, can RevPAR. you in higher think that nearest a quantify hotels uplift round what have we dollars modeling But kept our maybe the commented the you terms, should to? assumption RevPAR

Deric Eubanks

in transaction-wise. our Bryan, to terms be all are Everything Yes, of hotels seems longer those timing, these days in just still taking portfolio.

it's perspective, from I look, say, good is fourth would estimate. a halfway think probably modeling I in -- a the quarter

the happen the between XXX% between quarter and end I will because sometime expect year. during of and Somewhere now XX% the it

end the of been XX all those to over hotels by hopefully, year, So -- those transferred lender. the of have the

some might might Some that November, December. in in of of happen that happen

that basis impact gross we net anticipate terms debt the on points. In decrease portfolio, will assets remaining to of XXX our about

So overall we'll go from about of we standpoint, by remaining a portfolio. our X%. anticipate to in RevPAR RevPAR decrease up the have a pretty portfolio the leverage And the decent of

in that's of these So the kind of XX I think round terms we in land of portfolio post-transfer hotels. numbers, where

Bryan Maher

owning to you interest any do this economic or still hotels, lender get point? hotels? do Or at these from to any you're While keep these go the down up profits

Deric Eubanks

We're properties. the continue to Yes. management other operate our doing anything than companies not

all our really properties there's from at the And at basically purposes, oversight very So intents they're perspective for lender-owned. these little and moment.

Bryan Maher

me. Okay. And then just last for

asset waning to Chris kind bifurcating not or thinking night to tend of put those slightly leisure go and I charges talked management Are to opt costs a on $XX as it on like weekend to charges park. The about else Chris somewhere relates that that, how certain parking, about people like are of demand side. off opposed want may those costs of you leisure who off charges the layering versus to to kind think this paying $XX as maybe traveler ancillary fees? weekday put who don't to pay Rob or you

Christopher Nixon

Bryan. great a question, that's Yes,

So there regarding of in the I is charging. kind terms customer think charges, you're what of critical that those it's value appropriate ancillary for

then our charges and X share really makes And ancillary that revenue. so streams the of parking major resort are up kind lion's of

those of additive and the resort make of propositions at the gone to we the and revenue truly we're those more value those we adding value our kind when of back it also on to customer display we've customer. we is How because running to lower And charges than is at more look all inclusions sure it's charges, to what experience. streams, historically the that we're margin important. have For looked becoming

we're So brands, that. working with we're the very and of mindful

dynamic on In offer flex parking, events. periods based terms many of providers based on based of the day year, do week, rates. of our They on in

And so also parking added security, out where presence. we've gates, rolled we've often out parking charges, There's added rolled cameras.

as So just security there's but not well. parking it's guests for charge, additional an the added

Operator

next the Tyler question Batory comes Your from of with line Oppenheimer.

Jonathan Jenkins

This is Tyler. on for Jonathan

operating on other from now? besides provide labor? like side, the are on costs that potentially areas First labor color worth look one are out the right me the any there? And what can of situation any hiring inflation on you're cost What's out seeing that you calling cost

Christopher Nixon

Yes. I'll that. this Jonathan, take is Chris.

the really improvements meaningful quarter So the this signs in where we within QX, saw was first labor market. of

something improvements were this the of optimistic think signs I first we was real we last saw earlier quarter. we'd see this year. that And really that

were of in quarter where -- we the we year. labor signs. contract historically what the last That's first we've reduced running kind of and where been our versus kind So

standpoint, on expensive XXX we much there. contract for a that labor reliant about we shifted So contract the hire across movement to able portfolio, we're on We in-house. From associates labor. were we haven't additional brought the -- of seen quarter, and more wage some less

we're to still aggressive that that. Again, reduction to X% hoping then of a wages start And to come see those internal year. that's expected. are think wages folks hire hourly sequentially see about kind as now fairly step down. first Our to we've in we'll service roles. X% we to year-over-year. kind of see down steady. kind been we're contract We the And is starting still And this to finally of labor earlier up were kind very come thereafter, of what signs of being It's

Jonathan Jenkins

Very there avenue? how to asset about switching Okay. early of more bringing updated of Any updates thoughts using there's and I terms or process kind possibility the helpful. indication in thinking And that assets believe to its of on market. And that sales. a you're timing? gears Any then

J. Hays

Sure.

I well, hopefully got think I'd kind of a will say, we're -- we've here done be smaller got we've that shortly. -- asset

bigger depending dates with bit taking those first assets in contemplating be extent move just probably we of think quarter a longer. the until next not those, a we've coming process, weeks. call to it's we're that got Some I probably the been that forward And up little are close. Those for the have some few in offer won't upon

or I of sense we'll available think in. the look niches the upon kind impact market how how interested and to people probably finding that of add to is capital on are depending of types are looks, whether not, decision we portfolio, those both assets the additional one assets certain

On the is that what pay does that -- other -- be proceeds of going that deleverage try as that's there time. financing of and our to all cash And we're from at financing? And really those off two-fold. to sales? to portfolio look how we're to this kind the off Purpose trying of and asset pay improve are strategic getting same both time, are over side this the the

few pieces there. a there's So moving

in weeks. to here month the next So more we'll probably know X

Operator

[Operator Baird. from of Instructions] Michael with the question Your comes Bellisario next line

Michael Bellisario

question. Rob, just last a follow-up to that

to need paid You able for to at happen point in hotels kind that sold XXXX? year. point off number order to And what Oaktree at that is pay guess, some happen, I think to that happen? to there dollar in needs that a mentioned off of for get of for amount be some you to or being first next

J. Hays

on at that to we it's to enough sales needing be got the comfortable. But the pay able we've some proceeds that a Well, we've million combination end up capital day, of $XXX-something on to are left feel enough generate here. asset both of think of coming working kind that and I it. have got Again,

we and So where working net we've had today. we to quite cash in -- of it probably depends that reported that capital asset to the off in of we those feel paid numbers got it comfortable and Again, we're combination kind do sales, it also paying a preferred the on point because off but continuing working of But well. nontrade quarter. the the kind it's today, as comes not again,

lot moving again, just pieces. So it's a of

So I don't have we've a be get. $XXX those to probably specific number because it's do or kind in of proceeds to dynamic. we like think feel to everything million But the more I mean, needed need I that order got we --

Michael Bellisario

XXXX just Understood. on it. to to Got spending, spend just least you New at then the thoughts provide any more then spend you're directionally any And cost West on details what Key of versus you could CapEx, plan in on Orleans? and 'XX? maybe what in And initial going

J. Hays

Sure.

of we'll will in less. or some CapEx I the even little that brands negotiating a I it year. don't where will than -- still of will higher the so we of like. be with first On be have we're put what better a likely -- on kind midst look comparable mean bit out. when maybe question, the that's But number, it exactly this the think

also million, it million somewhere $XX the is done goal that's in of Pav similar the Concha, have La is In it has and next $XX to right started, of in is we put and think now release, which opening. about million be between the terms all-in kind Le third press I of $XX already will and its year. in terms starting of a frame project, and time -- quarter

Operator

call for This question-and-answer remarks. session. concludes will the closing the management to turn I back

J. Hays

everybody, to you, for We us for next Thank third forward look quarter call. with joining you our speaking quarter.

Operator

conference for today's joining. call. you Thank concludes This

You may lines. disconnect your now

Ashford Hospitality Trust (AHT) 8 Nov 232023 Q3 Earnings call transcript