BHR - Earnings call transcript Q1 2022 | Braemar Hotels & Resorts Inc.

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Operator

Greetings, and welcome to Braemar Hotels & Resorts Inc.

First Quarter 2022 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Jordan Jennings, Manager, Investor Relations. Thank you, and please go ahead.

Jordan Jennings

to welcome and morning, today's call. Good results first quarter review recent for update Braemar the for developments. Resorts and of on Hotels you To XXXX to and

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

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

Richard Stockton

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

for today's key five We themes have call.

and to First, increase luxury outperform the an resort quarter, our $XX.X the continues [indiscernible] comparable comparable help of versus in XXXX. drive EBITDA quarter for of portfolio million XX.X%

of more XXXX. the Second, flow corporate than we year first the for flow we positive did the quarter cash to cash at level generated and in full be continue

segment. strong on with the recovery as is shape continue top good to bookings is now Beaver accelerating Third, our very group in strong we Hyatt our Fourth, Creek. of leisure portfolio outperform in of well recent transient with corporate already positioned the to their seeing sheet Park are our business and balance forward refinancing

RevPAR. one And luxury Dorado, most of of debt Puerto no already XXXX. have remaining our Dorado the further in increase Rico, iconic acquisition Reserve, in completed We fifth, Beach Americas, maturities the the Ritz-Carlton final assets the industry-leading which we in will

quarter. by during increase million year and at in ADR the hotel a the Our strong quarter levels driven over $XX.X XX.X% properties prior was occupancy our comparable EBITDA of resort

the for for compared to RevPAR the in of when RevPAR Additionally, all XX% increased quarter of approximately XXXX, the XX% hotels XXXX quarter portfolio our portfolio first increased and compared to comparable first first approximately of quarter XXXX. the

history fact, see RevPAR In exceed company's XXXX and our are very we in achieved the quarterly RevPAR portfolio to encouraged the first we highest our comparable in levels. quarter,

the Additionally, the Beach as discussed, Ritz-Carlton we disclosed acquisition Dorado mid-March. on in of Reserve,

of month XXXX very basis. now Several that going comparable Assuming both property RevPAR continued strong $XXX. XX%, in for we Park hotels the quarter. XX%. the Hyatt month Resort XX% Ritz-Carlton owned The had we have expect of of the and I'm March, to RevPAR and hotel for EBITDA the speak growth achieved materially Ritz-Carlton to entire we would of XXXX, a unprecedented March an both significantly about increase hotel XX%. achieved forward. a remain our our calendar a to XXXX few opportunities at RevPAR Sarasota EBITDA this going going exceed is moments. asset luxury in little We our St. excited at Creek this Thomas on a more about at But property Pier House reported the and year deliver actual Beaver to at and margins The during

overall Our hotel XX%, including portfolio with one negative hotel was EBITDA comparable despite EBITDA. margin

we continues start the strong, second in seen properties. resort quarter and rely likely corporate a is and weekends, the leisure trinity to at have to be on performance to on ultimately, particularly demand of demand recovery our RevPAR While uptick strong group demand. any corporate significant Overall,

occupancy Creek, leisure XXXX These and considered Bardessono, Yountville, finished the Ritz-Carlton For our Lake been RevPAR Sarasota, the the House Tahoe, in benefit well-positioned to Ritz-Carlton of drive-to In Beaver The in leisure markets $XXX Hotel and Pines from Reserve, April, Pier XX have XX recent Ritz-Carlton Beach, Dorado XX%. with to hotels Hilton Park are Resort, Ritz-Carlton Hyatt XX% are months. almost destinations. total, equated our month St. by the of of ADR of Many hotels Jolla Torrey which Thomas. month hotels include resort an resurgence we and the La for of X exceeding demand the

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

quarter, five of positive that segment. the our demonstrates This first is amongst and and hotel a a lesser returning EBITDA. cities, posted demand turnaround both to significant the the transient leisure to these properties quickly six For corporate extent, is

expect its We office accelerate to continue trend this during XXXX. re-openings

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

enter markets development. estate as both Puerto sheet The also balance XX-room XXXX, an hotel world-class strategy Resort, Rico, real only million, happy Reserve of situated Beach Ritz-Carlton States. worldwide. our guests as properties the shape Rico in United Reserve, this ultra-luxury the planned the numerous the implement as of well property is the a one Rico our within X,XXX-acre with in puts iconic continuing North the of one asset. financially. offers in first [indiscernible] This be While $XXX the stronger the this luxury well Ritz-Carlton community acquisition growth We're amenities, as With Dorado already Puerto position the beachfront surrounding to asset most of Puerto we resort within much in in Dorado for Reserve was us in Ritz-Carlton Coast is was master Dorado, and premier good residential five location as a on to Beach the Americas both

units in acquired addition, income resort XX $X,XXX are of luxury stream performance property first during XX% with and quarter RevPAR an participate ultra-luxury of the portfolio rental acquisition this the that adjacent and the believe great our as management very excited residential attributable delivered to a of program. is $X,XXX. addition to the we ADR comparable prospects a this to about In the hotel's We occupancy

Looking ahead, opportunities in acquisition see to of we pipeline a continue market. the robust

focus transactions accretive be approach to that we and We our shareholder only extremely will total on be believe in continue to return. investment disciplined will

refinancing continue the capital the attractive the capital raise stock markets quarter, completed preferred and offering. more that during On Park Beaver non-traded provide Spa front, details will Deric on we a in the Resort we via our moment. Hyatt very to of terms. Creek And

is our in Importantly, shape. balance sheet good

April and schedule or recently We have our our not dividend. next we reinstated common until XXXX, with attractive an maturity maturity

We to strategy meet the road Braemar. in on front. continue get been active our ahead, the of we and have will the investment attractiveness investors to months on Relations Investor In an also with communicate to the out

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

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

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

Deric Eubanks

Richard. Thanks,

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

For rate growth which of quarter was the what share quarter per Pines. compared of $X Adjusted per on and At related Capital billion to La Torrey reported Hilton $XX.X quarter $XX of of was assets had the which $X.XX joint a loan share higher XX% of quarter, Jolla $X.XX venture XXX%. diluted had of reported end, for loans, of the to reflecting of diluted we first AFFO year EBITDA share prior partner the we total quarter, billion. the AFFO than in in our We we XXXX. million the $X.X million Hilton

held rate average cash of $XX.X the vast comprised gross cash had million. equivalents combined net a third-party hotel blended million had cash the total is manager as costs. interest cash brand cash $XX.X restricted X.X% ended which of is also and assets. and Our quarter held At $XXX.X one of of in loans our that We of restricted of operating with end to debt million we also The majority due This fund available managers. to by the and lender from of accounts. managers, represents quarter, hotel primarily reserve

EBITDA As other capital G&A costs, the Richard we and $XX during our flow. hotel the fees comparable cash quarter taking advisory into million. was almost in preferred positive After and debt service, for generated quarter, mentioned, dividends million costs, corporate expenditures, account $XX.X

totaled options The certain the During a floating a with and quarter, we rate completed interest-only two-year The Highest initial is the pleased million XXXX there and of high-quality launched financing Resort maturity in SOFR those net has extension we conditions. Spa refinancing and final also term our $XX.X in loan X.XX%. of terms. attractive preferred is Beaver loan effort the for nonrecourse last of in satisfaction Park illustrate stock. for million only and one-year report non-traded we provides I'm $XX.X Series-M Creek to the to new have subject plus Company's addressed The three very the proceeds that since on that Series-D and of from year, attractive financing the portfolio. available July approximately debt like raised assets our of

We and expect the as proceeds generated Series-D preferred be deleveraging flow source cash from as primary and goals. Series-M the non-trade to the our to of facilitate capital our our of growth sale internally well stock

Beach $XXX funded was cash the Braemar additional we was the Dorado X The Richard Total million Puerto As excess No approximately portion portion to consideration. assumption the during the of issued acquisition of mentioned, stock in inclusive million acquisition of the for the Reserve funded quarter, million million with $XX from Dorado in completed and the key, cash. fund was common cash, Beach, the equity per units available The acquisition mortgage $XXX of or rental was of cash million Ritz-Carlton loan. a program. shares the $X.X of consideration residential Rico.

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

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

Chris Nixon

for Deric. XX% increased RevPAR Thank Comparable you, period relative XXXX. to the our same during the first portfolio time quarter in

portfolio the reached RevPAR For outperformance growth period and XX% upper the markets when the contrast chain XXXX. as in levels, our RevPAR evident respectively. and this to is only you portfolio as portfolio The of whole luxury a first XX% market reported same the scale have upscale U.S. quarter, over of XXXX our XX%

Ritz record-setting A of performances management market some during assets team. testament the would that best is in tireless XXXX million with portfolio's is number the time of quarter improvement the first Our over well the outperformance over asset St. which in our success. EBITDA. was as quarter quarter, as XX% and The history a quarter record. Thomas highlighting just to driver and hotel's of the our XX% quality completed previous a improvement to second the This $XX.X a the Carlton hotel of XXXX have I the of assets spend like first the

in transient value-add the demand. order team to advantage increase Our implemented of in opportunities has take

initiatives and team capital $XX those performance and on the completed for the a These back a XX% over of to area, The producing is to quarter To million Sarasota part million a improvement XXXX XX The approximately in over quarter $XX.X in results $XX quarter the last hotel in another our during million quarter. has elite investing hotel EBITDA. hotel invested first in initiatives in contributed EBITDA due is for perspective, and One remarkable executing was put large additional more this identified record. previous XXXX [indiscernible] a also $XXX,XXX months. and than with hotel prospering, that initiatives the purchased during Ritz-Carlton XX% been XXXX of the expenditures. process. This of of record are into million produced we $XX.X it the investment. was in we This which Beach during which acquisition and revenue the the pool other second improvement first

we million resort year now and sold in have revenue. membership first a out is recurring $X The being approximately which producing the program, since

the us Another project, to allowing with completed These XX in keys the the are which on addition keys was hotel. demand additional capitalize December additional the of to market. in

in anticipate initiatives continue place, to long-term hotel outperform. we these that With

XX% the would previous over a like improvement which completed record I over XXX% Finally, of Hyatt quarter XXXX of the quarter quarter highlight a record. the Creek, first XXXX [indiscernible] to was first improvement the also Park the Beaver and which

last re-categorize hotel's which year, RevPAR the During hotel, premium the of types of relative the room decided the in summer XXXX. to first of several to the quarter to our rooms within outperformance team contributed XX%

decision our our restaurants hotel XX% our In beverage beverage and pricing XXXX which contributed market completed their revenue informed of to a menu on hotel's food historic initiative and to the and exceeding the addition, study by to outlays. and competitive food contributed quarter increase team This pricing first the performance.

investment. Moving on to capital

to pent-up to invested to In have of the million Overall, year. over by room adding optimistic finish enhance we a competitive Sarasota, with in to our about shop $XX patio the seeing our this uniquely the Hyatt last We forward Capital Ritz-Carlton portfolio like are restaurant approximately a our million the the These to lobby $XX plan currently retail in our of future in XXXX, how would that renovation Creek investments several our edition expenditures guest portfolio. the and Lake advantage. at years heavily position at demand Ritz-Carlton are Tahoe. portfolio the the this Park I we renovation the capital at anticipate markets. benefit from at Beaver Hilton, the on spending we move spa emphasizing we

number As our already mentioned earlier, hotel I hotels EBITDA records. breaking a of are

and During the of hotels such as first San Washington during with in the remaining located returning quarter demand of in Francisco, exceeding hotels urban Seattle is quarter, by bookings Group relative XXXX first to XX%. Philadelphia, eight XXXX. portfolio EBITDA hotel month are our destinations March The exceeded gross our D.C.

back to will as to turn return this us potential our the the over of and final the for anticipate well call start of I urban that that outperform full remarks. Richard will unlock fully to now portfolio. business, hotels With we allow

Richard Stockton

In we Chris. resort see continue leisure our future seeing in luxury be continued the to demand with for strong trends recovery by you, driven we are pleased summary, Thank properties. results. in clear our path a hotels our strength financial We in

and our We call our up the for a a portfolio. with now concludes quarters updating balance on will we positioned and look solid prepared the diversified you remarks, ahead. progress forward in Q&A. We open forward moving are sheet to well unique This

Operator

[Operator Instructions] comes The Tyler line first with the Batory of from question Oppenheimer.

Tyler Batory

little to sort time, line just be the seems about better? is the recovery. upside think and piece on urban ask summer? resort I of these some help help missing wanted April, exceptional. more urban to in catalysts trends so you if more time is returning of kind of the urban in what a seeing really so The bit the back could you're unpack What same are just about performance what little XXXX urban trajectory looking perspective strong and I clearly, at bit the you so turning or the terms has us most the mean, here, a getting just what at your terms And levels? to assets in of the of us

Deric Eubanks

I'll Sure. and urban as basically Thanks, Chris think is the the saw breaking first I the let Look, start from even, property chime as Tyler. results, I'll in quarter, in you well. right.

that by, barely story. they So but squeak tell the doesn't whole

If April. and break the month January getting saw given particularly results, stronger that month was [indiscernible] February. month, of considerable a you impacted in April preliminary And RevPAR by in look each sequentially from acceleration point see numbers and off then to you and taper it of kind you we and that the in significantly down there stronger we've getting January

impediment. So a a and there it's catalyst, is also there's lack of -- little

of XX% I certainly look impediment sitting terms the throughput right. So thing properties. [indiscernible] TSA statistics. have the pre-pandemic, an catalysts, now it We're to urban was behind we one is right what because at at in the us of that's say hopefully, would then But

Because now for was improvement. predict me, growth And our in look change to a right. in next now, represents portfolio pre-pandemic. it suffice we amount the contribution travel the what right the literally three continuing of of say over that And It's the significantly right urban to the that's air continuing-- out that's So in quarter. absolutely opportunity to you. results, XX% zero Chris, first as going But quarters.

Chris Nixon

we're at digits for year, as our urban The meaningful we're And of be hotels. to back main we some be down the positive segment. low there forecast hotels. look of back Yes, got 'XX, less to shortened year. visibility half to urban single hotels, currently, our the have half the the in from expecting through in some improvements we've urban kind our in drivers and because the bit the We're but seeing windows group of there booking a may there, upside little so our forecasting signs speak very

You in March, also that is thing We're bookings. there improvements heard that seeing on ADR positive me the of bookings significantly corporate was our up some those we—[indiscernible] XXXX. group cite other over out

the improved of acceleration Notary lead the volume San of Corporate the saw in our couple from March corporate increased as But just corporate received optimistic Francisco Clancy for bookings Autograph they extreme significantly. in and a from to hotels, we our we of month kind that Philadelphia, standpoint. in the month the So double they over in cite two we throughout segment, what March, March quarter booking hotels, saw ahead, the corporate a February. urban look bookings continue will saw we're From group each

for seeing we we continue books and in behind we're these hotels. as look what so to really this segments of office us, to these on optimistic the key as kind ever we're some of see And re-openings ahead variance

Tyler Batory

helpful. Thank you. Very

levels, of perhaps make to sort year are as as the trigger follow-up just view at what side that the perhaps on to that something dividends. progress sense could allocation your What's of that you that points starts terms decision? your making outlook? reinstated question Obviously, of in a on pre-COVID common looking the positive given things. Just increasing Is capital

Deric Eubanks

to any other, Yes. Thanks, one have don't Tyler. current way be We honest. plans or the

go So doing through of what results we is we're kind assessing as our quarterly.

into and not setting past, to process a trying What talked As about necessarily as next rate that grow as we're that's is to take us business deleverage is pre-pandemic related also we've a year. will that which responsibly dividend goal. in do the a far both is the levels,

And was generating corporate cash internal in so, our flow. continue assess quarter we'll the to first terms of fantastic cash Obviously, flow.

the that at have And to there that And And see that. so insider very Board the to is increase [indiscernible] the or as look, we [indiscernible] remaining that dividend, I how suffice play quarters second ample ownership say reinstate out. well. the extent think to will cash closely highest in flow we'll the look

perspective as aligned looking certainly at being with well investors. we're personal So it from and a

as topic So on can moment. much the I that's at about clarity give the

Operator

with The Riley the Kyle Securities. next line comes from [Operator of question B. Menges Instructions]

Kyle Menges

and the and thinking of is performance Kyle as bit hoping was for March February? This Beach the quarter at of it more performed we RevPAR I how Dorado should you in the could a balance in that Hotel we on then progress Brian. versus about talk XXXX? be about the how And hotel through little January maybe

Chris Nixon

Yes, I'd be happy to take that.

So $X.X exceeded adding proven of I about excited room million potential we've sales. a well was extremely record-breaking Dorado quarter. value was a strong hotel that we by We're The very of rate due record resort. really in growth. previous the and got the that for December to the March month actually XXXX, think to Beach acquisitions. record immediate track performed of very, And the in

hitting two in that a C year and Hotel You Mr. Hills, year three we into our see not acquired even the ownership Beverly is pro-forma as levels. now which year

of running. potential been there there. re-evaluating the currently place really reengineer happy value the we've ground model. the we're selling residents another We're really So hit the to of got plan management about to well. We've value-add component But to a add Dorado. the working are that's offerings They're in with the company of excited lot some and going staffing great a

those ADR nights five-bedroom was unit kind a occupied an the we at there month impact in highlight the $XX,XXX. to March, XX for of that of have of Just had

to just in portfolio whole. his as so really that that RevPAR as of Richard the we drive increased said is And a comments, a expect an hotel

Kyle Menges

bit luxury just of could kind many maybe quarter? of the Maybe stay, just per occupied a how are little touch you length the then average kind on residences typically maybe more? of Okay. And

Chris Nixon

can said units high. you The typically a are we've there. is pretty seasonality. than of resort in That got ADRs They stay that What tell Yes. of a itself have longer long the on resort. are length flexed I and XX residential stay. has depending get five-bedroom we we But the mark I how very, they I unit, to XX% our a working very saw the Throughout residents. around can with it's as for the distribution quarter, residences. believe right those for hotel revamp We're occupancies

And platforms merchandising all we those so selling opportunity it some we're how residences, there's the think that through, they're there.

that residents’ a be So driver expect the forward. kind much we of component to of hotel more significant moving

Operator

to and the end gentlemen, session. of question-and-answer for turn reached management the I like closing back to remarks. And the Ladies have call would we

Jordan Jennings

Thank our with quarter you next and look call. earnings again call, you, on joining to we speaking first us on everyone, the for forward

Operator

concludes This today's conference.

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

Braemar Hotels & Resorts (BHR) 7 May 222022 Q1 Earnings call transcript