BHR - Earnings call 2 2022 | Braemar Hotels & Resorts Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Braemar Hotels & Resorts, Inc.

Second Quarter 2022 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the call over to Jordan Jennings, Manager of Investor Relations. Thank you.

begin. may You

Jordan Jennings

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

over will the Eubanks, this as President Internet notice as press Deric Officer; the and be On of Financial listen-only call today Richard President on Management. Executive Chief Senior and Nixon, release. Chris yesterday of well Asset distributed of conference in Stockton, a and Head accessibility Officer; Chief Vice basis were results call The a

uncertainties this that fully call to those company's assumptions forward-looking At federal materially time, upon being in statements differ let are and or safe or subject to results you cause me more forward-looking conference unknown the certain from filings harbor could the this are pursuant and regulations. and numerous of are remind are risks, made securities discussed in actual Such based factors information known Exchange and which statements contain Commission. the provisions Securities to with the anticipated. These assumptions,

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

tables together and listener schedules, the encouraged release on may website in X-K all provided www.bhrreit.com. the which on filed release. through review at be release financial information Each company's the in to those is earnings used provided with which measures. provided In earnings have are with also August of accessed reconciliations or the call XXXX, X, been accompanying company's the terms non-GAAP addition, certain and in SEC are in this Form Reconciliations

I turn the over to call Please Richard will Stockton. Richard. now go ahead,

Richard Stockton

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

key themes X have today's We call. for

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

generate second million strong generated with of CapEx in $XX dividends. and flow Second, flow we cash approximately to cash the continue quarter after preferred

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

remaining in maturities no debt XXXX. have final We

We're with our outperformance and compared XXXX. continue pleased to extremely quarter to strong second see

of occupancy Our resort by quarter our $XX.X million driven properties. the EBITDA during comparable levels strong was hotel at

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

in EBITDA the phase exceed next We about XXXX first quarter. basis. quarter. an started the in and encouraging, recovery way the been comparable the hotel both expect in excited the opportunities hotel seeing calendar in will hotels negative the for million be urban of comparable deliver compared RevPAR actual our growth XXXX, and remain continued our to we And big both materially that and for growth. second that we year hotels Most a on XXXX $XX.X to urban our in of to million our generated EBITDA quarter $X.X We've portfolio, second saying

XX% Several a hotels second at result that XX%, very Sofitel at at Resort Seattle EBITDA tax expense the with XX%, at House margins significant during the property the recognized of reduction Marriott we Chicago Hotel The in quarter. Pier Yountville reflected Sofitel strong our and achieved hotel quarter Chicago XX%.

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

and demand quarter. be we weekends, continues a into demand. start strong to leisure to on in the strong second corporate Overall, we a trends recovery these continue finally seen the have third While particularly quarter, in saw group strong transient corporate

exceeding preliminary and month, For ADR finished figures our we $XXX XX% with by for RevPAR the of of an suggest that which XX%. to a month of occupancy XXXX $XXX, the July, equated

positioned are In and demand months. total, EBITDA considered leisure hotels our resurgence X are the from of hotels in to markets hotel this of combined of drive-to report XX $XX.X destinations. our in We're of segment that to recent well Many benefit leisure have quarter. for delivered pleased been the resort a pent-up million

$XX which over for X includes XX% or named I portfolio our second consecutive recently in would rated brand #X hotel to was brand, hotel mention representing by luxury Ritz-Carlton of year our hotels that Power. also EBITDA, million the TTM the approximately like the J.D.

the I of properties, up our by ramping be have which to advancing also quickly. urban recovery been continue encouraged

corporate a as significant quarter, X demand. demand This cities. transient quickly well our as hotel leisure as returning includes second and the corporate This properties For group turnaround posted all to EBITDA. positive is is

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

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

concluded inflation their inflation. even been historically higher during times seen, at an that rate than CBRE inflation. analysis, as Based grow As a the you hotels high they have highlighted report of some to their industry profitability have able hedge benefit hotels of may recently of on that published a against

of positioned that in hotel have We dynamic very seen play diversified during and well believe and having high-quality portfolio. this economic period this out Braemar remains varying scenarios, high a inflation

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

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

we our financing raise capital via stock offering. front, On continue preferred to non-traded the

sheet not shape, until maturity attractive our an in XXXX. next and good hard balance Our we April maturity is with have schedule

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

as Looking near resumes. segment and ahead, the our unique in portfolio, is demand which business and on and markets, resort properties urban in and long perform the with group well us focused continues and to luxury both both term travel leisure term positions

We that we corporate attractive balance positive at the a cash liquidity have hotel generating flow markets position is place. and with in public financing the in solid the and is what debt sheet highest quality believe portfolio level

I call over to will Deric. now turn the

Deric Eubanks

Thanks, Richard.

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

growth the year AFFO in For a quarter, reported share than reported quarter which reflecting Adjusted diluted the the XX% share second in of we million, EBITDAre diluted of per the was of $X.XX quarter, per $XX.X we for quarter what prior $X.XX XX%. to compared of rate higher AFFO was XXXX.

we and billion. the $XX of At Pines. had which assets loans, loan venture to had Hilton share billion joint related $X.X Capital on of of We end, quarter Hilton million the of Jolla partner our La $X.X Torrey total

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

gross of deleveraging progress debt efforts. in and assets of the to we had our end As continue quarter, approximately second the make XX.X% to net

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

quarter $XX.X debt hotel service, costs, and expenditures. million, after mentioned, during costs, EBITDA dividends our As G&A fees account taking and was capital preferred other the Richard comparable advisory corporate into

generated we million approximately $XX For flow. the of cash positive quarter,

while did capital quarter, the until XXXX. our schedule final complete maturity an we financings have not not front, next April maturity any during with the On attractive we markets

and July, million And stock, M quarter, million stock, approximately our pleased the proceeds. to Series during report X.X shares preferred approximately non-traded also issued and I'm in month net approximately million of preferred fundraising the raising proceeds. into raising momentum of X.X approximately strong has non-traded issued that third Series shares our M second in This E net we Series million E continued quarter. $XX.X Series we of during the $XX.X

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

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

stock we results, stock shares approximately share our million count X.X outstanding, in B XX.X associated and million shares OP our In financial notes. convertible units. million currently is fully and million approximately million with associated stands which count XX.X our of senior shares comprised common XX.X share fully diluted our Our count X.X preferred shares with and of Series fully our at share include diluted diluted convertible

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

Christopher Nixon

recorded RevPAR Comparable quarter. to portfolio XXXX. our The portfolio the same When outperformance XXXX scale time growth XX% market is in our increased RevPAR you RevPAR a Deric. XXXX quarter compared chain XX% with period having this only recovered the of during portfolio increased second levels. the for the contrast upscale the you, U.S. chain Thank XXXX, relative second the XX% having as to market to RevPAR whole of scale portfolio our evident over luxury upper and when only during XX%

hotel number set of during records. by resort XXXX. are comparable with Our quarter second thriving XXX% have over EBITDA to these relative grown A recent assets performance resorts having the even

assets, XXXX. quarter recovery are relative the of recovered with second pleased We hotel to with their EBITDA XX% comparable having urban our also

process I improvement are which previous with would of our completed team dive record That seeing XX% a during completed million on successes in a the some second of a number was in extensive we The hotel highlighting over management opportunities. identified record. like the time Sarasota Ritz-Carlton deep acquisition quarter asset EBITDA. an asset spend the XXXX, some the The second and portfolio. $X is best to quarter of

We benefits work. are long-term the that of now seeing

being first $X resort program, out which the and membership generates year approximately sold now The a long-term in has revenue. million

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

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

full the of benefits first already we resulting that in our of quarter Dorado second of increasing Beach relative ownership, the X% process, acquisition number during from to initiatives identified revenue quarter a Reserve the has XXXX. realized total Ritz-Carlton In the

parking and fees improve on rental Our the the fees, that team We implemented of needle fees, rentals room resort added items raised -- merchandising banner types. move would immediately. focused various to

competitor in as F&B large well team reviewed identify during the and resulted in our initiative hotels offering within revenue, addition, the as hotel's played In additional food F&B the revenue role The the drive highest to quarter the a opportunities. history. restaurants every hotel's in to hotel which pricing ability

We remaining are asset. takeover unlocking plan the are the still full items on potential about of this rolling excited our out and

urban in comparable that an Mr. XXXX. C has we RevPAR to with quarter asset XXXX also by Hills outperformed X%. acquired exceeding Moving of Beverly second August The

has While it significantly year, we have only investment underwriting. X our owned the outperformed year hotel a for already

by taking our that over team hotel will plan EBITDA we developed than a the $X more to million. increase Prior XX-point management asset hotel, stabilized believe

points dynamic results to premium more rebalancing with the These using improve expertise We and quarter more the success to our ADR from departmental second on management Remington to in see which margin profit relative line and revenue initiatives second and than strategy levels positive expense hotel as improving have manager, already XXXX rooms, profit implementing with nights demand and by the margin. quarter basis that top a be resulted exceeding in plan, occupancy included XXXX. continue X,XXX to

to on capital investment. Moving

patio the to markets. over currently We Seattle that years are the addition the position our investments In recently These advantage. a we and approximately Creek this renovation year. uniquely competitive million the completed in enhance Marriott renovation we million room to Beaver at Capital spot Ritz-Carlton the spending at the forward the $XX are heavily from pent-up our seeing portfolio portfolio at Ritz-Carlton a our to the Hyatt Sarasota the shop we in XXXX, have of invested Lake expenditures adding in guestrooms, guest restaurant anticipate at benefit and Tahoe. several plan $XX our Park on demand capital renovating to a currently last move with Overall, lobby Hilton, retail

showing forecasts level the property are signs to continued relative of strong success third Our for quarter XXXX.

the is We to of by continue bookings steadily. from will month XXXX has the levels XX%. which for This gross recovering benefit return June, of been illustrated exceeded group the in demand, which

led and San We Washington, our markets. being D.C., about Diego are enthusiastic Caribbean particularly bookings by those

assets continue well trajectory As dominant success. the and their along for the urban resort is their pace, future properties portfolio positioned our maintain

final now will call turn to over back the remarks. I Richard for

Richard Stockton

Thank seeing you, Chris. and leisure pleased clear results. diversified sheet solid demand forward portfolio. in progress balance be at We're recovery future with the forward quarters driven path financial luxury a for hotels with we in trends our our a strength summary, our positioned we a unique our We the of to In urban continue properties. continued in properties on We to resort strong updating you by our moving and ahead. see look well are

Q&A. and now our concludes we prepared remarks, This call the up for will open

Operator

from first Instructions] come questions Tyler Our the with Batory of line [Operator Oppenheimer.

Tyler Batory

the things. a in urban more your the on about rest Francisco side well? perspective operations the And question expectations Nice for in improvement bit to little of year? Can your I'm me First particular, see interested the those view in talk San hotels this your assets. and on you for of as

Deric Eubanks

I take they I Thanks, Yes, well. continue the really can their Tyler. urban of hotels. happy mean, with been continued just really We've rebound our trajectory that.

kind at each outperformed in month levels. through In year. January, XX% XXXX this of they've at context, put they were Just to it about

hotels. at our to forward of levels urban fast we XX% for You were June, 'XX

There's travel term Corporate no that strong. in standpoint. booking of signs terms a slowing window of It's remains short very down.

ADR Our group ahead. strong. remains favorable look very pace as is we

levels. that kind exceed trajectory And to so of continue expect historic ultimately and we to

San June. the citywide hotel. is it in February, some favorable that of ADR, It usually out in at seeing due RSA COVID, revenue was to great XXX the Francisco, by things for the The exceeded market. was XXXX which nearly we're but We nights to room an first hotel see. had produced It's June shifted that terms month room driven of In Clancy.

a coming out are see a short-term out We're of been Deloitte has to in seeing for market. challenge, that back. starting Salesforce, are to hotel, citywide healthy we're challenge. been but Staffing of has travel trends Francisco challenge Long-term our in and Labor group terms in again. which San market. accounts starting signs remains a that that travel of business corporate favorable pace big

Tyler Batory

Okay. bit. Switching Great. a gears little

terms much QX? perhaps preferred, think sense there the about run might there to in July is reason you in terms compared a monthly with raise raise In rate so make that a how of much why to non-traded of is And were able might way you a going forward?

Deric Eubanks

weeks. Deric. I'll X We this that. Tyler, this take is do close every

So more them. have selling open through keep you the with is that time, syndicate. it's offering be out their -- year. and broker-dealers, syndicate the to that and of that syndicates a to build brokers that more of really dealers next capital you are process for those then And investors February over that add security will And and

happen the as offering. that's expected to that's the and we so proceeded grow And we time, you've why over dollar seen what amount with

there while. a but we you to another issues be, continue it case of announce space, us comes some It in, terms private. we in of guidance in. an come capital open of non-traded that that capital be will back any Apartment July. And was be to there difficult that may not for It's for amount what just or future that could may got the to really it's the alternative we know, going called to in back, REIT that that investors but suspect those raising path capital their hard that give I may offering ended an are aware And was with or up capital. saw Preferred that and redeploy And as preferred. In as

Tyler Batory

for just And Okay. Great. last then question me.

in acquisitions, the what And out are terms pipeline and now? In are terms right sort of look does well? seeing pricing of for what expectations like What as pricing there? opportunities of you

Richard Stockton

about couple the A lot market. there, to of happy the of in comments questions make that. a I'll Well, but Tyler, acquisitions in take

to First happening pulled year, lot sellers and this the the the only back. and market actually buyers got have we XX% the have of in the trade. about of availability financing, is been or pricing is opportunities debt markets reviewed that XX% a we've you've that come with probably What's seen of

on X so discouraging. And the that's hand,

hand, relative financing creates because still going preferred this pursue that program basis other of us spread the mortgage unencumbered for is and returns have not on in without achieve on for an to our debt. opportunity an that our ample we acquisition. necessarily of to On liquidity property-level of then cost capital And even acquisitions to a one we're benefits rely non-traded next the

There At urban opportunities. evaluating acquisitions. or things. we and XX a are so time, theme. combination one looking It's at those necessarily we're a of not There's resort. are So X number any different of

on is continue everything discipline Of place, XX%. IRR of look that we're but trying to luxury, of acquiring to the in we course, at least we at income focus and targeting unlevered have

pricing the given little bit buyers kind are of of the favor, moving in just that think, a The lack there. market, our in I it's leverage out

I a I we're the tell case pricing, in you than can targeting But property specific But case we had, influence very discuss. So we'd and have X our even just have like months to what by terms say, property in little by we more returns. it's of bit feel negotiation ago.

Operator

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

Michael Bellisario

can the in strong it's context just trajectory first, some capital And on about how decision, of the you're provide your light of but today? a common on how maybe dividend are portfolio allocation Board within I you thinking know fundamentals

Richard Stockton

the kind that we Well, I'll -- sure. but XX in first, least on always, we've internally, months. lot a or do. are able but standing, at generating of have our right also take last of that. now, peers to assess not using said the said our basis generating doing or We're financial always Yes, flow opportunity dividends then cash to We deleverage. we the own what

target gross net to today. assets. We're above sitting a bit we that We've XX% said debt want XX% to little

I'd now. So that's say right company priority the the for

dividend I is will that getting think to reexamine we that, now. the Board we the we preferred I right leverage But think targeting achieve the route once policy. stated that were

Michael Bellisario

of the And are question capital if to acquisition because raising as would non-traded just to the think much the didn't back aggressive you raising But maybe preferred. much Understood. a kind weren't you you I coming as transactions. as it. you be on in you answer front? guess, Got have then and door, do tougher

kind wrong -- if am, that sense I and and maybe bit you maybe I'm more optimistic it'd me that call work in But aggressive correct much here, be think the you can preferred, today some today? of on front context it, versus, of if a do days I seem ago? acquisition raising put upbeat you capital little you the as XX weren't non-traded as

Richard Stockton

say to we front. the you think favor, out always, up, I many want at looking in markets I see markets work. to opportunities. I if the down, are worth you We're aggressive on so, out as are opportunities And off or you equally could always of think on returns turn would. missing we sentiments acquisitions acquisitions don't or don't as When be turn it's our can if team or and because can get you our some effort on do favor

market look buying just case-by-case We not time. market We're that on buying small basis. of enough at each to certain portfolio, in periods it have enough we a the is and it a important the not acquisition or

that's how about we So think it.

we right at So cranking have away. looking as we're a team acquisition and full we've got ever much now, as

deals where other raising miss in And don't to with looking weren't make trade think the be if are I want market. thing. doing same we -- any the sources preferred, of that happen. But deals regardless in then we capital to good we those we'd partner to even

Michael Bellisario

be know Got on your some would you that I unlevered it. relative yield. But mentioned be ranges then X? of on year that X just that's front closer IRRs. And provide thinking or kind I round cash on current one be the know dividend it, flows you to preferred X, funded percent maybe on XX-plus the what focus the follow-up X? call should there. non-traded how to year in year mentioned about, you to needs figures acquisition Can we

Richard Stockton

started always we've yield Historically, X%. initial minimum a Yes. of unlevered

finding that I now think particularly what properties are you've got urban still is we're rebounding.

initial bit that will so to little income property been be X. And a for year a in visibility yield I've we've a another willing got lower forthcoming accept where slightly that, or

think take So we if to I where kind are that this in I were X%, that's of reasonable down market. to

And then seller high looks today, yield higher relative some the higher you say, been to to seeing we're even so lock opportunities has is conversely, the their performance still yield attractive basis because the historic resort a can initial which very in that industry of XXXX of, on numbers.

able average be to X%, hit. to opportunities, continue opportunity the is really we'll hopefully, it which but that depending So acquisition depends on

Operator

Thank no comments. would over any you. are further at like to management for I back turn to now questions There time. closing this the call

Richard Stockton

Well, you on forward joining all with for speaking earnings to us you our the next call. thank we call, on and quarter again second look

Operator

today's you. conclude your appreciate does This We Thank participation. teleconference.

your time. the You rest your disconnect Enjoy this day. may of at lines

Braemar Hotels & Resorts (BHR) 4 Aug 222022 Q2 Earnings call transcript