AHT - Earnings call transcript Q2 2024 | Ashford Hospitality Trust, Inc.

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Operator

Hello, and welcome to the Ashford Hospitality Trust Second Quarter 2024 Results Conference Call. [Operator Instructions]

I would now like to turn the conference over to Deric Eubanks, Chief Financial Officer.

You may begin.

Deric Eubanks

Good day, everyone, and welcome to today's conference call to review results for Ashford Hospitality Trust for the Second Quarter of 2024 and to update you on recent developments.

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

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

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

Stephen Zsigray

conference in you process. of also than out Trust's CEO, continue the providing to of date, defined to path step those combination Ashford second to an while a announced plan valuations, this preferred coming refinancings Ashford Today deleveraging our and have efforts. the over months. And marks in to X many with several progress meeting in XXXX, our as set largest determine principal. We in made areas well payments quarter the the since with I with to made while non-traded goal more impact $XX quarter. March, these tangible remaining forward the our our sales, million stages the the during most the closing million assets of principal is speaking our To positioning ambitious made work sales X positioned are and $XXX our strategic all in with mortgage We financing capital are currently solid capturing with Earlier and sell attractive raise. sales to various to to to this all sold we we achieve second growth. We executing in in are assets in through at nearly accomplish also for pay assets assets, and a to significant I'm have which my we million unlikely now diligently we approximately $XX first that debt on look and back pleased year progress crucial strategy. believe asset off a year, we corporate which Trust start we've Hospitality call of we X

Hilton in Boston room April, In Boston, million $XXX,XXX the key. for $XXX Massachusetts, we on Back closed or of Bay XXX the per sale

million pay company's price the $XX Hampton All including reduction, from closed Inn $X.X approximately trailing for The of Georgia sale the net proceeds a the sale for million. used rate in strategic down were income Lawrenceville, represented on X% financing. In through March sale XX-room operating the debt capitalization to of XX-month the April, we on XXXX.

applied million. In May, had in a encumbered XX-room X.X% Atlantic $X capitalization SpringHill mortgage sale loan in were the loan. Courtyard sale sale through Suites rate closed balance associated outstanding million. sale encumbered an we The Additionally, property mortgage $XX.X Connecticut $XX.X Fairfield of million. mid-June, we to loan $XX.X the that mortgage located hotels of Georgia closed for late approximately outstanding the approximately on million The of an One the was in XXXX. XX-room in represented Beach, April on price had Kennesaw, closed in a the of income trailing on XX-month approximately on located balance Inn with that a for net The XXX-room And million of Manchester, for with June, Ocean operating $XX located the Resort $X.X the with and XX-room the we million. Florida

We coming all financing. expect available our generate additional proceeds of months, for the asset which sales would excess strategic to close of repayment in the

totaled X previous is and satisfaction with secured during the loan final term of loan SOFR subject had Jersey. X.XX%. conditions. Princeton, In Hotel for Nashville, options XXX-room $XXX interest has and refinanced included In certain quarter. the we on March to extension Westin and in sales, The initial New a a nonrecourse $XXX.X to of The Nashville key X-year asset million in we second of addition a date closed by and the provides million loan floating rate the totaled Renaissance interest-only The XXXX. which new X-year loan May, a maturity Tennessee, our refinancing plus

part Westin have is listed sale. As and of the we property this Princeton now this refinancing, for unencumbered,

also non-traded stock We excited preferred about our remain offering.

including This repayment expensive more To is build dealer raised date, the syndicate the security. proceeds, to million X,XXX selling raised strategic attractive this XX% capital to we $XX approximately financing. nearly the have very continue of we committed XX selling company, currently our quarter. towards signed $XXX capital and representing applying We of for have of gross all agreements have million second during and the reps

With the across we are refinancings that our asset to focused with preferred drivers of XXXX. the right sales, path financing are outperform believe and making These offering, the quarter pay on second the we results progress to XXXX a operating demand continue in with mortgage remainder non-traded deleveraging and company multiple strategic diversified beyond. high-quality we to efforts, for position along portfolio the solid broadly will and off

performance. second to call turn will the review I now financial over our Deric to quarter

Deric Eubanks

Stephen. Thanks,

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

lender level end For the now X.X%, the billion of vast we quarter $XX.X second also majority and the comprised the held related caps. Considering lenders. the current cash of the that $X.X $XX.X effectively restricted EBITDAre for corresponding is At by cash rate The restricted loans had to of million $XXX.X we had of SOFR $X.XX. quarter, of quarter, a $X.X accounts manager trapped ended and rate cash debt end million. the fixed. quarter, interest money We we XXX% property reported which operating account the into held represents reserve with cash primarily also fund to We and working AFFO of third-party managers. taking million cash managers, $XXX.X This capital of rate hotel per quarter by held was from is one ended million. available cash interest with costs. and the in At with approximately blended of interest equivalents diluted the of caps, our approximately and due the is $XXX.X quarter net of our million. of share of million hotel average of Adjusted

shares At of of XX,XXX quarter, XX.X which share the XX, June hotels our OP end count approximately of of units. XXXX, XX X.X fully the portfolio million million As is shares comprised of common consisted consisted and XX.X consolidated of stock diluted our outstanding, with million rooms.

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

to quarter. would activities it like to financial discuss review, to and our now our concludes I management turn the This for asset over Chris

Christopher Nixon

Deric. you, Thank

our hotel prior quarter. X.X% RevPAR quarter, over increased For the portfolio comparable for year the

XX% well. the year Our is the prior half This quarter. compared occupied Corporate was actively second of the positioned year but over revenue, experienced revenue prior transient that year-over-year been in the for quarter accelerate, pace to out recovery team the ancillary double XX% gains several growth in the corporate Group of to the room initiatives the back has quarter. per continues with first grow rolling quarter. also year we portfolio to which nearly revenue accelerating up is

of the pacing across year over performed will Group was The business year a last business into was for X% the by Group by ahead revenue third with Our ADR secured completed Total year full booked of XX%. quarter. increased is to X% pace the these go of throughout through urban the the margin well. portfolio. revenue the future to basis balance I compared days accelerate at ahead prior in assets quarter for booked on the XXX group EBITDA pacing the more the detail some hotel all for quarter X% and year premium the during room continues now also that the prior quarter year points hotels. quarter. achievements increased

presidential has We association, election. more business approach than we offsetting in which softened group and is are that increases corporate group the government seeing as

group XXXX pace The continues ahead window revenue by extend our is as overall group XX%. booking to

lead year-over-year size While and remained average increase. to normalize, rates group the started continues booking has to volume group conversion strong

headwinds in group year hotels X% the Hotel which Our team during us the has increased quarter. from second macro well transient EBITDA us allow to year. strategically yield prior increased heading the compared XXXX, aggressively will to into Urban business base quarter. performed our protect and

to compared the resulted successful the the compared quarter. compared the optimizing aggressive XXX% year labor driving the revenue year quarter. business considering The increased in hotel rates in a during hotel the nimble hotel demand to also during by slower in quarter. only our grew costs. of The high strategy Nashville to quarter. was EBITDA impressive hotel Renaissance by lowered This to total and X% which mix prior is sending other XX% prior the This EBITDA prior periods managers periods, temporarily, several hotels was for quarter flow-through year

increased count performance pleased to of total X% assets our Dallas/Fort with the in market, of the the for Worth portfolio. revenue X% compared been have quarter. accounts strong prior key by the assets which These our hotel in year We

the the compared the margin One prior hotel by to Worth, like hotel year which basis points year quarter. prior quarter. by Additionally, compared hotel the XX% Fort Hilton EBITDA is year to XX% by would highlight revenue I XXX to relative impressively, grew approximately EBITDA expanded More to total quarter. that prior grew

eliminate associates, the internal allowed to Our us for which program referral team restructured labor. nearly contract

These changes basis productivity. scheduling in profit In hotel their in departmental margin. process, hours, a improvement overtime the XXX while resulted increasing enhanced reduced addition, which also point

competitive tax million tax in-house year during to appeals, XX% for approximately in we us This data-driven in approach increase the quarter. to a quarter. our compared a savings advantage the overall property represents second A is property team. savings $X.X prior Utilizing realized

review reduced the appraisal pursuit property compared by tax for points tax data appeal Sugar at could our decided Marriott where Land. level, An to our was further more market assessment. which strategically After we The led other in total to trends the this process. reductions. year of million to with litigation, analyzed identify appeals taxable team successful assessment is hotels in through value to Our board $X.X conjunction aggressive prior we example continue be the a

Moving on capital to expenditures.

we XXXX, room During guest improved at Sugar a modern Marriott enhanced the the touches of and experience. for quarter introducing comprehensive an amenities second completed Land, renovation guest

We renovation completion both the also at later expected spaces public Suites made of guestrooms year. extensive substantial progress Embassy towards Dallas the with this an and

million XXXX, to third the as in the Bloomington. Evansville start the the room comprehensive quarter XXXX, restaurant between Courtyard at to In $XXX $XX quarter Inn capital start in and as renovations upgrading Garden of on and well and spending the at fourth Embassy Hilton we Suites Palm meeting plan to ahead the the anticipate Beach. across several Looking million plan guest renovation portfolio, we at a including both on Inn West XXXX, Residence spaces expenditures. the of renovations Austin guest And room we

our urban As is business, various strong markets. performance to our and we mentioned continue solid group earlier, building portfolio a in are hotels improve, of foundation experiencing

at Collection soon-to-be Tribute Le are Autograph an Concha be Key We Hotel. which about conversions the will Pavillon, completed excited will be Hotel which a and West, Portfolio La

initiatives new several and brand concludes evaluate to continue as strategic also such We prepared our renovations. That our partnerships portfolio, high-yield remarks. across conversions,

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

Operator

Your first line Instructions] comes [Operator with Jenkins question the Oppenheimer. of from Jonathan

Jonathan Jenkins

congratulations Stephen. to Welcome and

group that seeing believe I Chris. for prepared is maybe business provide on the maybe you're that in and additional me, of you comment what for out there? one mentioned kind some normalizing. First remarks you Can color

Christopher Nixon

question, Yes. Thanks for Jon. your

is lead normalizing. volume group So

to starting very high. group the that seeing remain rates we're So segment within normalize conversion

have. are normalize, So seeing group increasing. -- sales And more more we're got still booking We've of teams we our right? historically but than working lead efficiently, bookings we're kind volume are

very with we're of the kind is positioned so happy from a standpoint. group And portfolio how

look you a remarks, of balance up of from the QX, stated traditionally majority in revenue, as we're that an If at in group year, standpoint. occupancy in my the this growth this portfolio soft I quarter XX% which is is

that's And which XX%. ahead so is XXXX, we're then group we're to QX, up XX% as up great. revenue we in looking at And look

is. And is lead so but group the segment not volume normalizing,

Jonathan Jenkins

other give outside year of seems guidance in seeing I'm peers, PT then if Understood. And be don't leisure indicate whether I'm to outside volume that Perfect. slowing? curious lead lead gets softening that [ anything but the that's what -- of lowering full maybe understanding demand. elsewhere, broad their guidance, pause full of And that group or year the ] we've volumes, group maybe there's industry, you of industry you're the or RevPAR others that Okay. seen

Christopher Nixon

to happy to I'm Yes, that. talk Yes.

still from 'XX XX% But and the the from growth between not corporate When kind we're X So XX% We're the rest sides at anywhere of seeing it's to urban standpoint, resort. is a I encouraging. at sitting We're of to of levels. portfolio, levels. acceleration. accelerating, XXXX tale continued at is which really look year-over-year back the

at year-over-year. our are up X% up RevPAR. in performance, we we're hotels XXXX, hotels grew look X% But Urban portfolio QX when those to

the And growth so of levels, resort the they're and pre-COVID a in is up to kind of opposite that bit hotels. accelerating. It's

So some is there in normalizing heavy resorts.

resort single but year. to up last Our digits high they're hotels are down to XXXX, still

the see our certainly residing I resorts. so [indiscernible] And in softness

so we of put think power pace. the and mitigated of will a transient. grouping some position ourselves we in us with as And mitigate that when have to I can where that things look from we're kind pricing of end up, we is back group kind our at some in even on where speak, soften,

Jonathan Jenkins

helpful. And on the switching out more color for other what -- just Any in you remains opportunities the additional provide for can opportunity size wondering and now maybe you've Okay. national completed that then are terms the there gears. Very refis? I'm that there for refinancing out refi. of scale

Deric Eubanks

stayed have take Yes, bit to this in some been has that. spreads This there. especially some year. better. half market has Short-term do. the we've come we seen is We debt refinancings that little. pretty Thankfully, pretty need CMBS definitely I'll Deric. but market down have The the of seen little gotten high, active first attractive a rates We've executions a

maturity and of on just doing hasn't of refinancings left So runway look, we're we off some market a runway. held run on that because been attractive, lot the out to that schedules, had we've starting but

looking better actively And a our performance loans property loans. as on has get thankfully, the of refinance continued be well. a we will these so to to of lot And lot

cash when we've yields, lenders So flow at look and there. seen in-place some debt improvements

continue the year. we in market, some especially to the think I the optimistic you'll will be of on see But half to debt that here continue side us do second the improve. refinancings execute So

Jonathan Jenkins

transaction in [ you late. the in I been the any Great. ]? on demand or environment, if larger or smaller thoughts calling your versus Any of could. And differences curious maybe some then can one, broadly any I'm last noticeable assets provide worth pickup changes of color there's if out as

Stephen Zsigray

John. Yes, that, I'll take

few our obviously portfolio. we've been across active in a assets So quite

our helped transaction we've is assets not seen there improved, financing X, gotten X, cases, fingers it's multiple of process. wide or early Unfortunately, seeing, XX, markets. But maybe -- haven't buyers to right still think think now. a we've as the run little I flavor seen of better but we to consistently here enough we have an seen certainly pretty they've we've a of we'll while see And as a what's and on the all many today, bid-ask you're start year, X, markets, start get in a crossed, out bit rate to bit September forward think So cuts those deals certainly pick as for markets as through buyers. to the we if some continue to transaction I rest especially start I more pencil a later maybe move up of bit little which effective

Operator

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

Michael Bellisario

Chris, want to back side of I the go to group things.

that basis? rate up mentioned quarter future that end year-over-year the for nights X% you did where in for on booked periods, Just for bookings all increase a

Christopher Nixon

Yes. up room nights. group is healthy increases room but volume our don't the I both well. we're but have periods to as seeing prior ADR booked I and were the ADR percentage, and growth know exact nights that nights relative in pretty booking outpacing in

Michael Bellisario

it. pace, because versus Got change did for points? those the the then And up And pick you how think much X just that is rate? quarter up demand I points. any you picked then pace X last 'XX saw Where versus similarly

Christopher Nixon

The driving room needed. our the rate. up has XX% where again, XXXX on is are heavy Really, nights Yes. for about it's remainder business focus been and

needs traditionally, quarter the We the that's business. so lowest by QX year. percentages, large group occupancy is not a And where every margin, run softest but this our portfolio

rate in our And portfolio double-digit then With room look growth are And XXXX largest XX%. in we're night QX that's QX, spreads as XXXX. night that up we so increases. in highest look said, of even historically, where is increase this quarters has ahead and seeing throughout kind you stronger quarter when our QX, XXXX, every the room at where

and setting great our funneling really so team a the done optimal job business. targets has mix And

is you and hey, can we night quarters it where when night room the we up one volume the get the month-over-month you quarter-over-quarter But the aggressive and dissect room it's nights highest where at in ADR thing We're really see seeing the that's with need as think that's pace where coming I to XX%. most So the quarters cited. pace where growth, it rate, say, highest point. and We're is a But is room is spread evenly this improvements seeing you great of in it that's improvements throughout year. sign. more fairly

Michael Bellisario

think then a and I helpful. just And in multiple. you on That's EBITDA for did to provide Manchester X Maybe gears, not Understood. want an Ocean, were cap rate or just zero One the switching transactions. those

take hoping give And just also expectations can you can. you terms in what in on a if a dollar process What's there terms So are value buyer there Ocean bifurcation for difference and lower any unencumbered as metrics buyer versus look fully you and hotel process, then pricing interest? the an like beach interest seeing just example, of resort. One select-serve the of

Stephen Zsigray

Yes, I'll that. take

And X. don't can what metrics I So those available offhand certainly see we'll have we for find.

far it's hotel. don't As interest, the that so size know as I buyer much the of

that different because I very as are said, markets. we've really in consistently getting them really that specific is. consistently, X markets and think X hot the assets. There value a you've that cases, several soft markets. It's I through that selling, are we've really But have always we players somewhere the we a run these we're us wide sure seen so is and pretty we're, all set, some think what on process that buyer are obviously, of identify to we cap of I process surprising finding good think seen try assets there where bit to now, were right certain between in a I value we've highest like have disclosed rates found And in our markets right portfolio are to we've the make gone now.

we've XX get an So value. feel eventually it an of people we we had get process asset, something to, has where all not but to solid effective assets we been is have interest fighting for and run in which had these what to love sufficient

Michael Bellisario

X of you terms line, And look part thoughts, are same then I Rob those me, remember related portfolio now? to thinking of lines? more wanted talking maybe plans? Do Stephen, the lower you months? of look in looks along like to about what along just same question lower the call X of out XX, the years quality accelerate like, the I guess strategy. last if portfolio Are for the XX sort your you What RevPAR, from to the but portfolio. what

Stephen Zsigray

I Yes, right. think that's

our certainly consider end. the preference noncore we think have of we maybe would what I to a at of turnover some pursue assets some lower

right process a to run timing, are think bit markets, markets process. better, financing outlined a as the look a very buyers. until play. rather we and little that can is go But I inclined longer sales bit XX still I X especially do far as wait think X As we now, X get with or years, we more effective I'd to a much into in Rob forward goal

Operator

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

Stephen Zsigray

Thank all and you of call, forward speaking we next for again you to with today's joining quarter. look

Operator

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

now disconnect. may You

Ashford Hospitality Trust (AHT) 31 Jul 242024 Q2 Earnings call transcript