BHR - Earnings call transcript Q2 2021 | Braemar Hotels & Resorts Inc.

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Operator

Greetings. Welcome to the Braemar Hotels & Resorts, Inc.

Second 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. this being note, Please Instructions] conference recorded. is [Operator conference your Braemar. host, will now Jennings, to the turn for I Jordan over Investor Relations Thank you.

You may begin.

Jordan Jennings

for to update welcome to on recent for and today’s you second Braemar results the and morning Resorts Hotels XXXX Good quarter developments. & to review call

and Officer; the Welter, and On President Chief today Deric Officer; Operating be will Executive call Jeremy Eubanks, Stockton, Officer. Richard Chief Chief Financial

securities over means during or securities. date remind registration on the any as well of the of a notice a numerous buy found are constitute Exchange an which contain offered in could revise listen-only being call obligated more and company’s Securities a press known this assumptions www.sec.gov. be which do pursuant of and publicly call with an time, made materially are basis prospectus, will made based the filings certain fully are them. in risks, to by safe or information assumptions, offer of in offer only or solicitation were upon Your Statements at not this statement At results statements to unknown and results not actual to update conference of discussed can as Securities made from sell call and a be Internet and forward-looking or are only this as accessibility subject the factors Such this statements yesterday call, you call distributed The the this this company forward-looking Commission. is These included those uncertainties of to regulation. anticipated. conference forward-looking the and to harbor differ conference statements in to release. let are federal that cause the provisions me of

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

Richard Stockton

welcome by our Deric Good an provide of our that, asset update we’ll providing begin second our on morning management conference and update call I’ll and and review a an to Q&A. earnings financial an on will the provide Jeremy call. overview our portfolio. business activity. of our Afterwards, then results, quarter After will for open

rate We for our daily have luxury and over key average $XX.X continues our million to of call company resulting for the and first, for are: an themes quarter. they outperform, in portfolio EBITDA today’s resort hotel $XXX five of

Second, for corporate quarter the a level. we second flow row, at the in positive were cash

levels $XX.X City. was Rodeo the planned our with and Third, from shopping occupancy driven to continue pleased located the sheet fifth, debt Hills Hotel we outperform good properties City in the on year Beverly in acquisition hotel no resort balance close positioned I comparable third C bookings during Century of which Drive increase XX.X% ADR at Fourth, million over EBITDA near-term of by maturities. high-end the ideally business quarter. forward and Angeles, report proximity announced in hotel, a our strong is and our strong California, to Culver prior the to in to for with very a portfolio demand am shape quarter. quarter, And luxury is Los Mr. well

the increased second approximately XXXX, quarter of in to compared all second for hotels XXXX. the the quarter RevPAR portfolio XXX% Additionally, for of

to to over Pier House be second decreased portfolio. Bardessono, strong RevPAR XX% XX% the the portfolio This at each margins result and margins across compared Yountville, XX%. excess particularly accentuated continue when healthy results is XXXX at by EBITDA Hotel Our approximately of of quarter in entire had RevPAR. which

continues Beaver our hotels hotels and Ritz-Carlton recent that uptake XX and of Pines, are have to rely the be eight leisure any resorts and $XXX. XX% leisure in strong, demand looking in Overall, July, weekends, Torrey Yountville, Pier in of continue resurgence is to our group Bardessono, transient particularly benefit continue our Resort, of over our Hotel a to with perform likely performance for significant months. While been the on demand In Lake RevPAR recovery positioned well over of considered corporate total, are markets to resort Creek, include forward look Many pent-up from portfolio, ultimately of and Hyatt in at well demand. drive House Hilton Park Thomas. Jolla St. strong bookings destinations. to occupancy Sarasota, Ritz-Carlton rate on for leisure These come demand like LA will the Ritz-Carlton Tahoe, hotels to

by properties We that are this Hilton, Marriott Seattle the Hotel, I’m of recovery a Capital the The include hotel $XX.X the delivered the also pleased combined advancing quarter. and of EBITDA the Notary encouraged for urban our segment million report to Waterfront, Sofitel Clancy properties. Chicago. The These

EBITDA. five of hotel two quarter, posted second the these properties For positive

our that results This and returning leisure demonstrates the extent, the properties negative is demand While quickly a the quarter both down segment. was $XXX,XXX. corporate one transient a lesser approximately significant most only cities, to and is of turnaround to of the

during trend We office continued to second half as expect this XXXX. reopenings of accelerate the

cash were we level at again Additionally, consecutive quarter. the corporate second positive flow for the

as shape was stronger this in financially. much sheet balance puts our XXXX, While position good us a we entered in

our with diversifies further portfolio. irreplaceable in of happy strategy our California acquisition Los a C luxury with Angeles, impressive including property Mr. a $XXX,XXX the high-end an is resorts array Hills cultural simple and luxury and resume in our of demand vibrant price Hotel in An fits premier also hotels various this an It in key We a Los planned owning XXX-room growth Beverly high are of perfectly of and location Angeles, $XX.X the strategy middle property acquisition retailers, for million. also with It’s restaurants to RevPAR feet of luxury world-renowned of wide the square art supporting substantial per XX demand million unrivaled leisure generators, and of attractive ownership shopping over hotel. space, attractions. corporate for office fee and

residences extended-stay As monetized. transaction, acquire be for ultimately we the prior of part will being will condominium five luxury also hotel offered to to which the rentals adjacent

the over we believe Additionally, first this our will property take we post-acquisition industry cycle, and portfolio. of Mr. The hotel operating property forward. to during be drive the represents great will addition going superior Remington believe will the help performance C at management a which our current acquisition

million the On the aggregate front, private capital during Senior principal markets we amount Convertible due placement X.X% of XXXX. of completed $XX.XX Notes a quarter,

prior amount we repay secured The used portion the our proceeds but had under acquisition. that dispositions, term expenditure property term dividends, disallowed Importantly, to program, have a limited restrictive us of loan. not also common and Mr. C prohibited the capital outstanding complete offering the severely not covenants the our loan net to corporate allowed of only would

reconstitution. the Index, the community investment believe our added Russell execute Russell as XXXX were to broad-market annual will We to also XXXX as increase Microcap on and our we Russell U.S. the Indexes recently Russell the strategic part Index, small-cap addition visibility Index, of within initiatives. indexes the U.S. the We our

focused near with and luxury markets, on resumes. properties us well unique the travel term in our the ahead, Looking segment, business in portfolio, and the many to positions group long leisure perform drive-to both term as

compelling represents in Braemar continue opportunity to space. a believe that We lodging REIT the

now desirable very and position the public are positive is Deric. what with assets place. we level, locations, quality markets, solid We the turn highest I balance in the flow at that over differentiated believe a of in a portfolio story, portfolio is resort in financing generating our attractive sheet the debt call a with corporate liquidity and to majority the cash will

Deric Eubanks

Richard. Thanks,

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

per quarter. share for diluted was At Adjusted quarter, of we the at to and of Torrey compared of loans, the million, the positive quarter the flow EBITDAre per joint in corporate to Hilton the of diluted were AFFO assets La related prior loan $XX our share we We For cash share quarter. year negative we AFFO $X.XX reported Hilton $XX.X $X.XX on the $X.X Jolla billion. quarter Pines. million had billion total which end, partner’s of the venture had and $X.X of for level Capital

average loans total Our X.X%. interest had rate combined a of blended

approximately moved and their Thomas primarily quarter, due held of accounts. to reserve of end we managers. approximately fund operating April had of of Resort of cash debt final net of was majority equivalents next assets is of Pier cash available of also out also to the ended had XX% House a and Ritz-Carlton represents the the our the managers we million. the St. million is cash quarter cash one manager-held cash cash in at by the restricted At cash respective that of to and brand in end The debt subsequent lender from $XX.X vast the As is cash and restricted with gross the equivalents comprised of cash to quarter of and maturity also result and which from hotel $XX XXXX. third-party our restricted second the hotel million We cash coming end $XXX.X quarter, million quarter included that of end as This costs. traps. of restricted cash The the $XX.X

during mentioned, Richard million. quarter the As our Hotel was $XX.X EBITDA

$X.X service million. current run-rate Our approximately monthly debt is for

is Our current fees approximately monthly and million. run-rate corporate advisory $X.X G&A for

our conversion conditions. is maturity XXX.XXXX of initial share or stock, and at at Notes mentioned, excess used of amount principal fund $XX.XX year and stock, $X.XX to the convertible interest per obligations shares under The of unless acquisition. common of due gross the unsecured senior shares June secured during Senior converted, under XXXX Company’s XXXX, portion the Richard mature common net approximately Braemar’s the of component The amount C stock. of private Notes, $X,XXX Convertible with rate repay completed semi-annually a company’s redeemed the will of a to term The accordance on for will was per combination shares the and the of Braemar, Company’s the cash per cash, conversion at X, pay the proceeds. the the a option outstanding Notes Notes is of Notes of used loan, proceeds initial their stock of be for for price in A As quarter, and and we rate repurchased common or common million X.X% placement in earlier cash the are company’s certain terms. the the are Mr. offering proceeds of from

of into the raising several We $XX.X utilized quarter, subsequent to our in proceeds. approximately X.X entered capital equity and Also, our our end issued of the in ATM, the and million quarter, we during a million approximately million XXX,XXX line million liquidity common During the issued improve $XX shares approximately $X.X under shares position. to management to proceeds. gross approximately gross strategies quarter, continue raising common we

our raises on we of XXX,XXX that our the allows Preferred lowering exchanged and exchanges us our the the the We the Each raising and improved at common share to stock, leverage B discount lower in value remove $X shares of capital of have dividend also all our accessing a the common preferred with our liquidity cash completed Series markets. increase capital proceeds. maturity, our of of shares several and our approximately efficiently B par Preferred by These has preferred common not our of stock. year, shares, but associated SEDA also X.X equating these into XX% we’ve our have to also in Stock, our cash and count, maximize quarter beginning stock. the of to increasing in completed million debt during balance negotiated benefits approximately to exchanges Convertible our been under million have serve flexibility extending stock sheet only Since instruments privately original float. exchanges the of issued hand. equity These X.X leverage, approximately shares shares million a into total, These the certain Series

also approximately Series these to believe We pursue of perpetual gross approach Series common to I from if that them am our non-traded is pleased to and shareholders. and raised accretive we preferred have million we will continue report opportunistic will to our E proceeds $X.X take an it stock. exchanges M

with division the of Ashford preferred Company, a FINRA as Securities, Ashford and respect broker-dealer been licensed of behalf has Inc., a order in dealer-manager on to these as established series. to act by

sales just the to preferred forward purposes, started, from in continued progress proceeds and general facilitate any effort is M the use for Company’s capital the of future Series perpetual raising Series our to to we and non-traded expect We look growth. This E corporate or reporting getting stock quarters.

excited per We and $XX.X million to will warrants price our and a price mortgage and for OP C portfolio. be Beverly five million approximately condominium key, consideration Total $XXX,XXX of be $X.XX, $XX The will the about addition be units, great are $XX Hotel a X.X adjacent of hotel, acquisition an the million of of cash, allocated Mr. will will of acquisition strike in XXX,XXX for million funded units. consist Hills, at also equates a $XX.X with our loan. million million which $XX.X planned to the which

We the expect to close soon. on acquisition

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

Series B turn currently is million stands in with count it In at shares of diluted stock count review. asset This we Senior over fully shares financial concludes fully approximately and million the stock I’d OP XX.X count associated results, of for Convertible like million Notes. convertible shares fully to preferred diluted to million in now outstanding, XX.X our with diluted our our units. our our our include Jeremy comprised approximately X.X activities shares to share management million discuss X.X and X.X which Our our common financial share quarter. associated share

Jeremy Welter

Thank during flow-through we for portfolio to you, our XX%. increased Hotel Deric. XXX% able second an EBITDA quarter, Comparable and impressive of generate the were RevPAR

incredible its chain respectively. comparable and of to an XX% for scales, and XXXX Luxury recorded Braemar U.S. XX% period the quarter, compared second the RevPAR Upper For XX% Upscale

second over assets period, an Our our of more testament all-time of half management some quarter RevPAR the our of quarter a RevPAR continued second records. increase assets our market is of quality of last performance outperformance higher these over XXXX property set than comparable Within and basis, XX% strength hotels the our another asset the a comparable achieved these and of the team. than overall quarter period. XXXX had aggregate On assets the portfolio,

Asset be quarter. of Our performance could some not hotel of team’s from these now unmatched, results. I is drive provide second to outperformance prouder we will commitment the Management and highlights the

during by newly-developed will revenue in First, generated nearly month revenue quarter the month Spa which contribution the was the of upside June to momentum in property. of the villa, The than provide and Bardessono Hotel aided any continue more in history. a believe performance the for luxury $XXX,XXX resort’s the we from

Park during Next, our results two Beaver mountain resorts, the spectacular Ritz-Carlton Lake had Creek second quarter. Tahoe Hyatt the and also

XX% RevPAR Lake XX% ADR period. aggregated their the With over the comparable XXXX increasing XXXX increase over period. saw Tahoe its The comparable Ritz-Carlton

season. this relative on the that of the which capitalized Historically more in following trend, to end creating closed April leisure doubled of in than increase the XXXX. to by team due resort’s low packages staycation ski period Our the demand a package revenue the the demand, property for has targeted time

effort time, to Park strategic property team’s open. is for where Creek performing stay additional the the of its And month. Hyatt ADR in first decision to June’s positive made for to month a uncover we for highest GOP However, the Beaver our well, history being that April. due reported the demand drivers, also

versus the Our of during increase period. pushed comparable more property their resulted revenue in the aggressive team upselling upsell efforts, June has be XXX% which in the a month has on XXXX to

the quarter, Thomas in Ritz-Carlton, EBITDA, Resort beach during hotel XXX% Sarasota have & and Lastly, increased year RevPAR produced St. full compared renovation property to the The been stand the is out in these The our the period. hurricane that properties impressive which Collectively Ritz-Carlton the all Thomas, Spa, at in produced year quarter resorts. million second number particularly House comparable million Ritz-Carlton the performers. of last displacement. XXXX St. the over EBITDA $X.X the when $X.X was XXXX, second hotel or without Pier

leisure and $X is emphasis in as of has experiencing. that year we’ve our ability XXXX. property-wide the produced this second through the nearly our beach has $XX.X team’s property. trailing higher the are clarity, be and it For any capitalize full to membership also long-term Part with revenue outperformance exhibited demand quarter, XX of recent to has of success month revenue that The has which our This generated results, golf than successfully of on generated access million, attributed the accomplishment renovation which on the Sarasota EBITDA recurring in program, which as owned out. been Ritz-Carlton, we much property since significant sold merely million securing club significant can the full year-to-date. year hotel membership revenue program, club revenue now to includes

Finally, and the XXXX levels had a solid ADR Spa & period. for both comparable occupancy the Resort with House second Pier quarter exceeding

During occupancy same days. or more the of XX for XX% an achieved the quarter, property

the renovation expenditures last XXXX, million investment. like we’re grab-and-go competitive our include Sarasota, construction only on Ritz-Carlton Not projects value-add in Marriott, and the of invested portfolio. benefit luxury the the to of to Hilton mid-XXs our month keys currently see performance our Pines, extremely a are July. a are assets, at Marriott green In demand are space and restarting the were capital club position in and Tahoe the We’ve urban our Moving at Seattle to I’d XXXX. at to we remainder including market about portfolio the seeing for XX capital pent future the enhance investments million These markets. several in heavily bullish mid-XXs our across the of several our we $XX Ritz-Carlton looking by the the of that pace occupancy new to portfolio, in and the portfolio respectively at we the Waterfront up Seattle. on the new shoots. to at total, advantage. we over from Torrey Lake Through beach significant uniquely $XX adding These stating that guest Clancy at the finish retail La room of achieve cafe anticipate forward Jolla to to beginning years

segment. pleased to with across Coast final We’re And further near-term now remarks. strong demand turn back to should hotels. West these call realize will see we over in the for demand improvements returning, such Richard two the urban I

Richard Stockton

strong our In Jeremy. you, the be recovery luxury seeing continue resort Thank in our we’re by to properties. summary, with demand we pleased driven at hotels trends leisure

in we see of continued we While a stages for in the still path results. our financial clear recovery early recovery, the a steady are

We and position have financial to flexibilities look this taken balance This challenges the are unique progress our we crisis well sheet forward and diversified prepared as We future we move assets with remarks, and decisive protect forward our of of half near-term our maintain actions updating to us a navigate second portfolio. Q&A. to of will I’m you proud for the on success. to now our through solid XXXX. efforts we for the positioned call up open and concludes moving

Operator

At of is Batory question we this session. Capital Janney from Our question. Tyler a Instructions] state be first question-and-answer conducting time, will [Operator Markets. your Please

Jonathan Jenkins

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

should talk compared what management First is an one broadly, like the to normal wondering I it And Rich, guess be strategy coming continue I was revenue is say? or tremendous. you incremental that And to spend pre-COVID could across times, properties, portfolio pretty I from guest? me the who’s about into your if

Jeremy Welter

very In that terms at – phenomenal, you as property would this wind out terms we would would be we I has first time clock risk, our have proved certainly to properties, St. be these been can that lot but a maybe that of that not to benefit we’re to got is traveling taking we – that of potentially if aggressive being right, a just for see, Caribbean it’s little it’s closed guests be you’ve bit overseas. otherwise were a resort or – ago, it’s properties demand in right been the to are so example but of cases, or and in a of just year We’ve has benefited we Yes, – resort working we that Europe, maybe really more maybe Jeremy, at pushing, in demand guests the question. to would guests, proactive parts thought coming great anything those a the markets our the teams be sometimes Thomas, or lot where guests from to able seeing from. – it’s with attractive the that team the of the very think take have management to I of are even not from thought less ever perceived of go be other closed this

And it’s additions talked great have demand that a added reposition so, we phenomenal it, gives to about you’ve see lot if benefited we redesign, resort, we’ve given which redevelopment a from gone we’ve just quarters. of a that us opportunity previous that in

little the those that’s amount haven’t portfolio. gave that hotels. that actually probably growth it right We’ve exist, I and make given pushing we just bit a of gained a good on but some It’s opportunity of don’t short-term strategy it of believe the think in be to so other should shows portfolio the proved been tremendous us out that – rate, the to on our also do go-forward all phenomenal probably we’ve market had. to comps why is disclosed, hotel. non-recurring Braemar we’ve So and alternatives the through a tough and a do I aggressive quality that share and basis, that showcase tremendous a really very spike lot

Richard Stockton

add And Jeremy. that. to think Thanks, I’d I

lot a I’d we’re than those thing to out historically. segment of we that The at is, other have you if mix business the group of doing look necessity add

of being compares segment demand mix the about with second the kind to that transient group and group the balance quarter so a of generally. majority or our XX% was of for So vast called mid-XXs segment XX%

going properties, occupancy, we’re of rate result our at ADR. of in sort in which transient leisure because that’s is when that because to running overall resort that’s uptick much XX% so, business, higher primarily an And properties transient,

look we Managers, how the in it think as Now, of that’s ongoing of favor aggressive rate General challenge are business booking be either transient I you many decline deciding shorter And strategy? very into do on the turn forward, group who our business. that or window an to for

– that’s property-by-property thing two, given basis, trend. it’d that’s very future of happening, business overly a the on that’s one be cautious kind this about so And discounting

Jeremy Welter

I properties And we’ve you job I a the of really resort also in think about asked our ancillary think spend. good capturing spend, done

so just resort And guests that’s resort fees at aggressive the our stay helped resort being on and to properties. getting quite and and at – a bit able and of eat in more terms to drink shouldn’t be price more properties our

a I and properties you’d that open we’d urban rooms venues the revenue non all of higher quarter, well. as their have if think see for much mix our

lot So hours our entire pleased urban we’ve across portfolio. of or had given the overall with closures had that revenue non-driver locations, a we in lower really the I’m

Jonathan Jenkins

properties? of Notary a That’s total detail. question segue into that remarks Seattle provide the urban some to strength The on San additional if Jeremy, strong urban these in positive in there what’s July. prepared the Waterfront wondering you the all your fairly EBITDA. driving And drove next my I compared our performance some or in posting in you expectation on color and appreciate I and Seattle at nice terms of markets. was But great. color Okay, Francisco could gave came

Jeremy Welter

And locations – and the you been mostly – over up still your great going these that it’s at within to locked up transient think pent are the it’s course have guest of our look leisure and markets market. are Yes, last be I year.

always as otherwise be Marriott is Seattle it anyone. you at the it’s as would it’s the So property in want have look we beautiful wouldn’t Seattle out not a portfolio, get that because about that’s which and as the being the one a in is and a water, Waterfront, for market, this But we’ve think of like anyone hotel travel good into talked we can luxury. property that probably right a hotel just it’s portfolio, the natural wants to premium, I on a location and things

we’re as Francisco, that surprised. July, that mid-XXs that’s we a seen Clancy end to eight weeks Francisco, weeks we much that would demand. in so, would’ve reported that And in ever San that that thought in six what we’re in of, at we – I will the and up I we’re seeing ago seeing San don’t kind we’re expect we’re mean, say demand experiencing think ago, I would’ve

so And nature of pickup seeing we’re kind that portfolio. just of short-term our explains in the that the

And sure. of forward, couple so, next as over for quarters we if some optimistic that continues, very the of we’re look

Richard Stockton

Yes.

of up demand other in the believe lifted restrictions I thing think yes, quarter. is I to July into note release both that those of to markets allows pent and And August. the were second fully during kind some leisure

We’re also even experiencing a very strong outlook for August and September.

leisure confidence giving So to that’s part is people of lifted and these it ability too, getaways. having restrictions take this full the

Jonathan Jenkins

also you And Can the it? property some is additional on ways by that the managed Mr. just Remington? Okay, alternative synergies funding anticipating me. the you transaction, why that of made C color for from acquisition sense nearby over on one then possible possible last any are great. provide structure And

Jeremy Welter

Yes.

the take Rich part. question, of that second take first part the I’ll Let

Richard Stockton

Yes.

part available or the structure, It’s prepared it do little a have transaction utilize property transaction. cash those year. in of we the to to really the or weren’t So warrants, kind And just of a complicated early simply cash evolved discussions liquidity discussions over the it a over a didn’t We’ve a on in et was OP for been units cetera. time. consideration that given this package

many very time. They price over share one, are they and is excited addition to create shareholder In an better to there we and BHR share value become Braemar. that, that value OP sellers are will unit to major to they get portfolio ride this that are very case. the doing the the benefits reflect shareholders that there of upside Number transaction in for the price will confident in

they’re So something that’s very interested seeing in happen.

against to losses receive deferral passive other ability can the them transaction type any the and tax gain set through potential this addition allocated that for capital In to on income. of they

sense So made at it’s a was of negotiated. the really both it of structure us transaction lot that time that a for

seen an would how came You’ve cash more then, – have to considerably, to flexibility position all all we since that’s we liquidity we our do parties, to deal certainly improved have given I benefits ultimately agreement. But the much think today.

Jeremy Welter

to give cash, things you this for all we’ve time. it to I’ll one a for give I higher some have credit talking I opportunity want Rich about for the long expected issue we sellers after – price. were quite you a like they And been as to of some the purchase staying lot if time, Yes. is would mentioned, that

They certainly so Braemar. they partners in with us. be the And want to story believe of

it’s also quality relationship. have build that the here. think in team management portfolio we good of a I confidence And the the of

we supply huge build think market’s the generators on am the where Moving so Also this the barriers is exist. side, dynamics entry just to to There’s that many are about just the this going just from demand to a There’s excited currently property. in virtually there’s of favorable we no outlet. ton there’s just market where in are. extremely very I and operation terms opportunities of coming in this that

that operational got but from that, opportunity acquisition company not process, a This the about is comprehensive our right but operator. just diligence management that a to F&B which takeover history company our exact an excited not They taking great is operator. through uncovered restaurants hotel this They’ve up account even that want of a management not we’ve as in asset we They’re the an but wheelhouse. we’re a is is group, type more So so, plan. operate a we really make, F&B. buying have selling necessarily

Marriott. Beverly which could through, should generate EBITDA. operated asset, day Beverly we just we’ve XX a maybe with XXs think we the as pulled that plus market Ashford it way Hills the we been is that incredibly think Hills. when to the we initiatives that the think is acquired a operated. There’s early amount $X I now the uncovering this much there’s hotel, well, know goes – million a we’ve into known think incremental back RTC, just the And And of also which Marriott we as that’s when Trust see in is I originally synergies since have hotels tremendous which

No In terms strong there really beautiful we’re that. offers collected very, there’s audio, floor top a outsource visual got city. space. been beautiful just other the sales. group track and record. a to There’s participation, selling the of they many across revenue And very been effort semi all synergies, to hasn’t that’s meeting it optimize revenue. There’s views third-party little think among we’ve very that a opportunities, premium just And I great that a a excited

hotel. think goes just this I and that of in took first I really increased – XX% at by was where all the the back acquisition operator look think year Pier hotels. but back Traditionally, we didn’t that can in from way, House XXXX, an EBITDA You operate an over we

So and we we’ll get. we’re where excited but see

Jonathan Jenkins

Okay, great. Thank me. you color. for for all That’s the all

Operator

Our next Bank. your state question Please is question. from Chris Deutsche Woronka of

Chris Woronka

that’s know kind been guys, that’s share maybe or morning. Sofitel there term? but today, update a situation? get interrupted saga anything COVID, on longer with for I we plans Can with of thoughts is us can been Hey good any you the have you

Richard Stockton

courts. it’s the ongoing within still complaint, active An

But So can discussions as say soon continue all is something concretely, well. we I discussions announce continue the course, there. have as can of we as that

Chris Woronka

as on, I on a there’s guess necessarily sense in maximized on think adequate of context trying do operationally is its to just is background being it focus there to not thing this in – the right now? you to, that or that you it’s do there the Okay. much attention think so potential get that going

Jeremy Welter

very that well that We’ve working got professional. Braemar, relationship a as I say incredibly the the they’ve professional, think would them. Ashford at with team, and court all we’re great team as here Chris, been I

to thankful performance, I ability just the continue to what be but work do teams. to see the So to Naturally, together more performance. of couldn’t with the with we work are disappointed can optimize we we

Chris Woronka

I then I back you view, in Okay. to think which the about And guess, mile at the away, is neighborhood closed, permanently City, point, turning I Fair enough. come do InterCon is to How right. the changing C Mr. there’s then acquisition, that’s I some going online. Century Plaza And in options the a property know think kind rate Century other believe the of upstream? get – couple and that I now? how you years a far from hotel is brand taking context maybe do any that, taking to versus potential you’re there things, question the of is could And considering potential right know what guess is, you I a but further now it that of below

Richard Stockton

we talked I can well Yes, all Jeremy where we see think talked bring with to that new about opportunity, about. property bear manager. as improvements what’s interesting Or what about operational the here’s that Jeremy as and

coin years XXXX XXXX, the peaked of property six an side state let’s product. a its just that decline the bit other see, And The really little in – the is aging product. was a of due and renovation to was actually and of started through Bruce then which the into physical

generate that believe to how so rate can up the our was had invest standard, XX% I XXXX up is $XX to to it bring that to that in seen. bring luxury race million about standard attained, And much if it higher to a product exactly tell higher higher higher order is we not the what in was will that plan be to a And now. you the originally and result remains better. our it it into than really even ability

can coming we think into then there certainly So, coming market. I get the a supply little you’re but demand there’s But market, additional more also of there’s the it’s, and bit some. right into

Pavilion street. taken going right feet, at that’s put down to the square being Westside by the mall, Google. where look you if it Google’s that of property over be XXX,XXX used a into now employees So, to thousands

able improvements share we’re but get fair that market our future planning share only to into the increase to property. demand, that through the so our be we’ll we’re that put confident not also of And

Mr. We perspective for soft C a operating or perspective it revenue. while as will a be branding maximize branding to options the assess other being, we time from

Deric Eubanks

make it we as independent. And

you high decision peak We where say, index from RevPAR they yet, were but XX% what about their today, I’d it’s at that look haven’t Chris, if that is a made to where discount. are they

share tremendous think opportunity – we hotel. this for there’s more So gain there’s to market

Chris Woronka

I but you today, ago, a that, been an Okay. all you you then had said Mr. is, transaction. happening financing do Appreciate minute that And have last color. creative to for all was think in C, position probably if mentioned question a could obviously that cash you solution Richard,

at that those past in So, improved since the you add if to in be look liquidity an look you’ve some Arizona you talked others, there Las at pins of are and that about and Hawaii possible and you Vegas might another on position the things today are map that acquisition?

Richard Stockton

already months the Yes. of starting tell I expansion we’re of In you June nothing virtually there five available the markets other we than there of you’ve other And for in that time, had course. this a the that was me of can X, that there of around interest seeing. on markets some mentioned, flying to but pipeline the year year, working to love was opportunities first we’d now a are been flag. where dramatic also opportunities multiple

are looking number things. we So, of a at

stay to You Deric went our liquidity and position, through deals cash – we tuned. have do do so

some certainly more. we’re to looking to We’re – going to going be do

Chris Woronka

Okay. good. Very guys. Thanks

Operator

of Our Securities. state Please Riley is your Bryan question. next Maher and question B. from

Bryan Maher

point the currently you fully a Deric, guys. if is count morning that Yes, Maybe share said clarification, of XX.X. diluted good

not of be clear today, the end as at Just to of second correct? that quarter, the

Deric Eubanks

right. Yes, the most That’s number. recent right. That’s that’s

Bryan Maher

of and you’re was equity case? that who Richard the as investors well, that Okay. so. to clarify and are opportunities liquidity why curious to from do is kind maybe to on that following and up made that you of things guys continue you just you the then And kind emails so But just point, was issue want it’s have calls the going can seeing number of to to

Richard Stockton

Bryan. right, That’s Yes.

firstly, of for abundance – right. it’s think I a conservatism, combination of the it’s It’s things.

still of it we’ve that There’s we’re but which of talked the over of we’re out woods. looks de-leveraging I at you assets. about. the XX%, out some there, negative had gross the told that’s – It’s think woods. it like the certainly we’re Deric like headlines looks strategy time, out that

then been the of the or bad, of much Maybe peers, sort get If there. And the we thing, that’s acquisition you a to half be years. natural as is have place we’d at coming to the a these they’re want to this the have Maybe year are able only owners we in what ourselves has the look two. fun of we second year as be one of business and thoughtful seeing is But opportunities, which across sellers avail XX% hotels. our that we they and not of in to like very past long-term in maybe number being as exit. a seeking and last own are how they’re about hotel half they want

that sellers Mr. merge monetize that was could refinance our We to as efficiently maturity that a and least something the debt have they case some therefore C with or in had that at felt wasn’t they chose portfolio.

we that being metrics. in would of cases higher as But returns we’re opportunities ever that In well. seeing driven are our as even So, we’re than terms as disciplined financial seeking dynamic pre it of the being by the make have narrow of But those things us. so COVID, and for therefore it’s we down combination before sense kind have things. to to all can look at really that a we lot some

that us. of focused and guide absolutely in creating are value We all continues this to on shareholder

these with doing recent raises. we’re what that’s So equity

Bryan Maher

Yes.

fun we’ve handle the I about we much had as think as year. all past over can

go news delta You to relative every out you any bookings day. met month impact that in to see that to there you are seeing the continue next point, the headlines negative on few we variant

Richard Stockton

We’ve seen no impact absolutely of it.

at now and the U.S., just it’s you in XXX,XXX at the XX we’re at slightly plummeting, cases UK think you just per medias cases I look just Yes, day per people U.S. frankly. in if fear-mongering the are plummeting. India look way really but of up the

the but well fun soon, side. it. they’re So other there’s having going U.S. is the think meanwhile as media a in is My suspicion be on in fairly the I turnaround with to the

Bryan Maher

Okay.

Just two more for me.

going On Is is I million. go deployed? said to $XX that going or to you think the rooms for How be to lobby? Mr. that renovations money mainly C,

Richard Stockton

It’s a little of bit Yes. everything.

where out they if in as heavy It little refreshed think portholes the above and theme nautical a way. the We’ll been were of deck we’d And rooms have up – deck the a restaurant of in some features to of metal impressive nicked pool very fixtures ultimately floors and including teakwood lot design, the that designed are on years. this there we come have kind then a and lobby. unique be thing. over are goods gotten has but will refreshed like replaced. outside, hard of I soft – and and, sort goods see Certainly a retain,

not in So, bit at But no really scope. structural our work, major of little least it’s a everything.

Bryan Maher

just last And that Notary right? Clancy for the did occupancy from he urban July were me the I mentioned, get hotels, mid on and said XXs Jeremy think I

Richard Stockton

Now we’re running.

then on close is echos Seattle mid XXs two mid properties. And and Clancy to Waterfront, for XXs. – We’re pace

Bryan Maher

the And can you give is some idea Notary how doing?

Richard Stockton

Yes, it’s about on page in XX% occupancy July.

Bryan Maher

for we And turn looked there of Capital just, Hilton, word, that sad I what’s better there? on just thing. going And around? mean, at one lack is last a occupancy, Okay. might And when the

Richard Stockton

We know that big is property. property a

and and meetings XXX groups, also on very It’s heavily ballrooms largest meeting various its rooms. our space. So it’s dependent with citywide

a anything. looks waiting than we’re that quarter the in to phenomenon be So addition at moment more business corporate fourth trends to for business in of DC, to return that in

our ahead property think relative But of that So kind look you up its rear for until terms the if is XXXX it’s And at of in bring I get then about So quarter. results, of then its pace XX% fourth actually there. quarter, only our the pace? is by question continue down we to group will what XXXX. first group X%,

to we’re going it there. So more have really us, But months still wait a for in. that few indicates property, to get that we to to kick that for

Deric Eubanks

and there mind July. just on in Yes, that and still were in say relisted were June, just lifted restrictions museums, in then XX, I the restrictions in capacity DC, keep would June were all Bryan, what that

slowly up, the as versus opening other it’s So some markets well. maybe of

Bryan Maher

considered. really It All Thanks. Right. was things Thanks. good. Congrats a quarter. on good

Deric Eubanks

Bryan. Thanks,

Richard Stockton

Thanks, Bryan.

Operator

Baird. from is question. question Bellisario Michael of Robert next state Our W. your Please

Michael Bellisario

Thanks. morning, everyone. Good

Richard Stockton

morning. Good

Michael Bellisario

clarification to ahead to just and X% the entire First quick figures was or for was specific you DC that XX% down gave that the portfolio? the

Deric Eubanks

the compared XXXX. is more the entire you mix a of as give flat; basically XXXX clarity, Michael, it’s I bit think, But little interesting. just is, into I’ll $XX,XXX. The slightly pace very looking was to portfolio; actually That that group up overall

We’re nights. and up in XX% down room XX% ADR

So perfect scenario us. the for that’s like

very, speaks a excited we doing. discipline standpoint. that we’ve And where that teams that, portfolio right, to about high got very we we’re the that’s a from group that just and been what position And of had So quality now stand pushing

Michael Bellisario

that helpful. back that you’ve X% the going are to that simply you. kind operational? And of you piece the we do recovering? then to in? targeting in $XX together Thank you yield a is far, then come much That’s much C just few much maybe years. How go put a said And market to to is how Maybe Mr. you’re think transaction, is going million the everything how renovation from upside the high guys get thing to just so level from

Deric Eubanks

the didn’t, share, do and into halt. forma look gain and to at to to perspective. have recovery to we’re branding that going we we still fully want market, of identify. pro quoting, that from a independent some decided that market and we going have anticipate the is the in we’re not anticipate it’s operational the account going But Rich we’re when to we the anticipate exceed we synergies doesn’t certainly then we what we all think or take Yes, it Because we’ve I we identified that. continue combination so opportunities hopefully

we we’ve assets be process, within think got about this it, record that plan I but through great to a diligent going of portfolio. track We’re reposition

that do asset with well. excited this are as we So to

Michael Bellisario

unlevered pandemic on that things versus what the couple XX% and then picture, you’re And the number maybe think maybe at seen target and then have and looking last IRR, based price how, of XX%, how what why today? today unlevered on same IRR, to looking how you topic pandemic, number yield, that be that were change pre things deals kind at acquisitions, priced the walk might were you is the just I right big X% of it. Got pre

Richard Stockton

that is, type I Yes, believe of XX% for flows. cash unlevered how just lodging that’s I IRR the of that’s return Mike assess the right risk. riskiness

the match can little pre then capital own will, that visibility And, also have lodging, post you cost cash lodging of is cost have capital. has materially cost that because interest average our but a riskiness feel over pandemic, weighted because XX% I like had, capital, flows, just which capital. cash And on bit that And pandemic, back don’t my up returning But how others there’s just debt, weighted economic a so bogey, lodging we equity timing get I we you’ve we’re calculate were. we mind I’m we’ve I industry believe on And back sure back there’s really of if cost the flows, our haven’t changed. our than of ever be certainly on a premium to with capital, you as your average value-added doubt there. does well. capital, more changed you represents in that there that we’re to wrong we of rate And no get of of to where going about have. X.X% the calculated there. think nicely that can in to

we’ve it’s forecast, to to easy had what the my past. in do versus so And perspective, least fairly at from now

And to a going think how that’s value. So deliver it. And I go approach. we that’s about I good that’s think

Michael Bellisario

you. Thank Understood.

Richard Stockton

the right, well, all time that’s All think we have. I

call. We again then in details joining. later. in XX. that us Thank joining And we’re forward And with second have York do in our New planning you addition, to the on everybody want on for for on I look earnings October to provide thank we’ll Investor So Day to call. quarter speaking all additional you next

Operator

today’s Thank conference. concludes you. This

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

Braemar Hotels & Resorts (BHR) 30 Jul 212021 Q2 Earnings call transcript