BHR - Earnings call transcript Q2 2024 | Braemar Hotels & Resorts Inc.

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Operator

Hello, and thank you for standing by. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to the Braemar Hotels & Resorts, Inc.

Second Quarter 2024 Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Deric Eubanks, Chief Financial Officer. ahead. go Please

Deric Eubanks

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

will the well of as Nixon, Asset be On Chris today Richard President Executive as and and President Vice Stockton, Executive Management. Officer; Chief Head call

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

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

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

all quarter results this XX, stated, quarter XX, otherwise second ended in unless XXXX, compare the call June Also, XXXX. reported with the June second ended

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

Richard Stockton

asset Deric earnings our and by value. our additional create overview the morning, will will update welcome on provide financial second a to Afterwards, open announced our we begin will portfolio quarter recently call XXXX Then business, for call. Chris of of providing call our today's I'll conference shareholder results our plans an and our to management Good review provide an an update and activity. on Q&A.

have call. We several key themes today's for

X% in quarter. our comparable hotels the First, RevPAR with year performance growth urban delivered of over quarter strong the prior

Resort our of the RevPAR most recent in at Troon and North, Four Scottsdale XX% acquisition, Second, well growth perform achieved the to quarter. continues Seasons

the Third, work closing our of have as have fourth, we XXXX Pines La an attractive debt creation we through at our value. diligently refinancing we're down the shareholder with value extended of all And we Jolla recently with plan the the Hilton refinanced, program, pleased to announced in of our made sale progress continue or paid maturities. Torrey

of Let a and X.X% reflected our $XX.X RevPAR me We reported comparable to the over first prior year comparable of $XXX, hotel decrease turn results. which quarter, EBITDA million.

X% to which in hotels, the continue RevPAR quarter. our by achieved We very urban be of performance strong encouraged the of growth

EBITDA quarter comparable assets, $XXX $XX.X was Regarding hotel was and the for our RevPAR urban million.

portfolio. remain for the encouraged we of momentum segment ahead, this by very Looking continued our

EBITDA resort million quarter. resort performance, softness the average by However, of which with second admirable portfolio Nevertheless, during in still $XX off our performance was daily offset coming hotel are pandemic. rates, followed luxury historic highs impressive this that our the delivered

continues with RevPAR which performance hotel our owning Seasons hotels Four was spot of perfectly higher recent EBITDA resort Troon fits strategy our in Resort a our and brightest our most the North, second property acquisition, was expectations. with luxury exceed up within Scottsdale quarter to resorts. XX.X%. XXXX December and The acquired portfolio strong delivered The at It

to this hotel. for very be excited about the continue We prospects

a the acquisition While Reserve, quarter, and of compared challenging underwriting. well to initial our acquisitions Ritz-Carlton continue both recent to Dorado Beach had perform our our cost

outpaced Over on a Seasons And ahead X% looking the our on several Beach to the cost. Ritz-Carlton have the Reserve, next achieved These an prospects quarters, properties. well-positioned yield while we Four for these trailing luxury XX yield the about very achieved Dorado months, the Scottsdale X.X% assets cost, both remain encouraged underwriting.

at continue balance to capital Looking emphasize position, flexibility. sheet Braemar's we

recent the the our now La closing addressed XXXX debt we've Pines, Torrey Jolla of maturities. of Hilton With sale the of all

number we X a share four, the redemption are: million three, million quarter, including which share value our debt of program; Torrey During asset the select number of maturities; announced remaining two, repayment preferred creation Pines; $XX has execute number one, common plan, authorization. They buyback sale components. $XX Jolla Hilton XXXX and a a shareholder non-core sales, the number the La recent

La Including March XXXX. of end, Pines the sales million, $XX trailing million capital the or for represents price anticipated income operating XX, for the $XXX XX Jolla rate quarter months X.X% net $XXX,XXX expenditures Hilton to sold Subsequent on a we Torrey ended capitalization per key.

X are more hotels. we the evaluating of ahead, also Looking sale

providing reflect coming nontraded million as To plan. date, to through believe we approximately we weeks our our in months shareholders maximize work forward our the of look these announcements preferred redeemed commitment to We more for our updates stock. and and $XX.X have value

In summary, unique and position. portfolio has a Braemar a well-positioned solid liquidity

on in we the well long and term. believe remainder perform near the both As firm we look ahead Braemar is XXXX, to to footing of

turn the our detail. through in Deric call to take you financials now more over will to I

Deric Eubanks

Thanks, Richard.

net Adjusted per on we diluted and was diluted quarter, partner Hilton million. million a $XX.X which $XX.X our $XX.X related the end, of At reported stockholders AFFO venture per of quarter total of $X.XX had Torrey For of attributable We had for to the loss share Pines. to loans $X.X the $X.XX. Hilton EBITDAre we share quarter Jolla million loans, joint assets billion. Capital and the La of of billion $X.X common share or

average combined total a into of interest rate loans in-the-money blended caps. interest X.X%, Our account taking at rate

Based interest on rate of and approximately of debt is floating. and XX% fixed our corresponding current XX% approximately caps, level effectively the effectively our is SOFR

As end of had second of debt net to the the quarter, we assets. gross approximately XX.X%

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

stock of dividend based $X.XX With yesterday's again share regard stock $X.XX annual approximately per on a on price. quarterly announced dividends, an per or to annualized basis. an X.X% to of diluted yield common share This we equates

Our dividend financial review the improves. Board of view Directors policy will increasing quarter-to-quarter it a on as company's a basis performance to with

we paid $XX Beverly Hills, Cameo the by off the now million property the secured loan California. Beverly unencumbered. is During quarter, This Hills in

Pines, But X,XXX of with consisted the our of Hilton Jolla the consists June with Torrey XX, portfolio rooms. net hotels net X,XXX hotels XXXX, XX the sale currently of with rooms. As portfolio recent XX La of

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

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

Christopher Nixon

you, Thank Deric.

the compared XX% for quarter, $XXX. increase continues of second the portfolio our X.X% This For down Group hotel a results, for at half RevPAR year quarter with drive showing represents quarter strength. was XXXX. second with the compared to year comparable portfolio in the pace to prior revenue the the

revenue growth the in prior citywide year Our quarter. calendars, total urban from assets over in benefited have strong resulting X%

Four Lastly, helped in our the XX% hotel prior EBITDA drive quarter. Seasons the team's growth involvement at year over Scottsdale

increase compared by compared group represents quarter of rate some quarter. full year pace X%, to alone in ahead XXXX. through by of third more I XX% Group to continues achievements has across rooms pacing to Group the year will is for revenue ahead the rooms go full balance now by the pacing last full throughout completed This into year with a XXXX. portfolio. the X%. year of the Group year increased detail the XX% the accelerate revenue on

compared group is pace ahead XXXX revenue year. currently rooms prior the XX% to by Our

strong While efficiencies sales year-over-year group the average to increase. remain booking normalize, and group increased hotels. lead This size continues to volume of rates conversion has our in started resulted across has many

employees St. XX%. highest-performing during growth the corporations their continued performed Ritz-Carlton Thomas in quarter, particularly The market, exceeding incentive quarter market the seeing well prior and rewarding are revenue We group year with the partners. which incentive second the represents by from has

audiovisual INSPIRE Event the addition, in-house partnered In with groups. Solutions, services provides to hotel which has

clients' Event a for and approximately increased occupied prior revenue compared unique needs to audiovisual During experiences deliver room win-win INSPIRE client the second hotel. understands the providing year. services, quarter, per group our XXX% and to Solutions the exceptional

are across urban increasing X% quarter, continued second over with We hotel the year seeing EBITDA hotels success the during quarter. prior our

margin Additionally, hotel points. by XX basis EBITDA increased

Hilton, first the to guest finished the of transformative which Capital just hotel, first a quarter renovation, largest Our from room lasted XXXX. quarter XXXX of

XX% the to year the renovation, total hotel revenue year. by prior under XXXX compared grew While full

the renovation second growth the further the is performance. even that evidenced for positioned as Now complete, fully by is quarter hotel

total prior second over by During increased the the XX% the revenue quarter. hotel quarter, year

XXX XX% by over margin basis hotel approximately prior the and quarter. increased EBITDA EBITDA Additionally, hotel expanded year points by

asset's pleased particularly the the our with and creating our plan been detailed acquisition, which value-add opportunities Four in performance also of optimizing for the takeover executed recent Scottsdale. have Seasons identified a We created We most and value. team

the During over increased the over year More prior impressively, the prior revenue increased quarter. EBITDA quarter. second XX% year quarter, total hotel XX%

that other the team by XX% the targeting sales target year as groups quarter We markets was efforts buyout segments. efforts, The expanded revenue solicitation for secured to up well solicitation underdeployed over had Group underperformed. markets a program quarter. and as large segments expanding and entertainment prior our

per beverage, EBITDA on our quarter. addition, margin, positions. hotel the by basis deep approximately These treatments, including several minimizing and year backfilling to food only into driving focused hotel initiatives XXX efforts improving critical treatment and dive cost a pricing implementing margin implemented and the prior spa compared dynamic points the to on led team spa more In

courtyard on second the new made the bar. significant Moving Ritz-Carlton on into multiple major to of a capital outdoor At unused renovations. we expenditures. XXXX, In bar an the quarter progress transformation of Sarasota, we started

at started epicurean market space back-of-house converting We retail into retail outlet. underutilized on also a construction Seasons Scottsdale the Four by an

initiated relocation center, Living at expansion area. and the Lake and the Ritz-Carlton the Tahoe, pool several of fitness Lastly, including renovations outdoor Room the space bar, we transformational meeting

of Ritz-Carlton and at across the Ritz-Carlton Thomas, the Tahoe Beach. XXXX, Dorado our Ritz-Carlton we third Ritz-Carlton St. Lake portfolio. will several the the embark include to These comprehensive Reserve, the on In updates major quarter restaurants renovations Sarasota, the

Thomas St. Ritz-Carlton Additionally, begin we the renovating beach adding beachside will X underutilized luxury by at space cabanas.

the renovation -- In quarter, begin to plan we guest we to begin Yountville. a fourth Hotel room at

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

initiatives further underutilized full We conversion potential transformative are executing which development includes a enhance new our and portfolio, already of property the to brand land.

are these With initiatives for future new the portfolio. we optimistic underway, this about

back the turn call now to will I Richard.

Richard Stockton

summary, In the pleased Chris. we you, continue be of hotels. to to Thank performance reiterate I'd with our like that

a balance very also We well-positioned sheet solid promising remain and with outlook.

in limited Please on quarters We call note be remarks This concludes we'll Q&A. been the Blackwells progress that our for filed. recent look forward comments will settlement our publicly what to and our regarding prepared updating the now has you open ahead. to with the

company's questions questions and allocation as as be plan. to your respond to creation announced operations, to well that not management's assets, we'll specific our industry able the outlook shareholder value capital limit matter. on those priorities you. recently concerning So Thank Please

Operator

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

Tyler Batory

that much depth? seeing, demand So in specific versus of in address resort sure more bit in of versus that that kind you just not of a a ADR macro terms how you're is can little the softness asset pullback. I'm

get to good that. trying driving really of sense what's a Just

Christopher Nixon

Yes. I that. take Tyler, it's Chris. can

performance. So our of resorts at down look we are when kind year-over-year revenue

they're up significantly However, versus still XXXX.

Our resorts were up versus XXXX. over XX%

at in think things play a demand. so We there's is And few some there there. softening

on the some the there impact a this of are also kind spring QX last think There than with break were normalizing kind schools in We Easter of resort shift. in saw and last and year bit. spring year. spring breaks break there I week significantly leisure segments more were that was -- March,

breaks that in spring April there were second same, there That significantly last the April, but was than year. fewer in first week was week this year roughly

out And of shift so March, there a of was the which affected kind into resorts. demand in and April also

the the resort Tahoe we've you than year resulted at April mountains seen resorts, a experienced X When closing ski and prior significant this our Beaver Ritz-Carlton pretty the than revenue snowfall did Hyatt across had Creek, look our impact significantly earlier to resorts, softer year and That Lake in year. both they last Park in portfolio.

a combination was it of those things. So all

Richard Stockton

the at is add Yes, that that of more portfolio-wide Dorado to of the I'd down can performance EBITDA Tyler, and for you Chris as X%, second about Beach into factors notably accounted year-over-year look EBITDA be said, and the quarter. hotel drop that a timing that, if at all performance, by play most which shift quarter the from of Easter first the And lot at property. there, the

Dorado of just timing that. a Beach that, as certainly accounted missed shift quarter out So that the result second in but really in it's for a

Tyler Batory

side forward been group that, quick things upcoming portfolio trends. from election. Okay. a on of some you're that in bookings about that your That the makes Is sense. on something November? There's especially discussion impact And the DC, follow-up in then seeing

Christopher Nixon

I pace whole citywide year. Capital on the this DC's mean, very got At strong is Hilton, group a there. calendar Yes. strong

seeing groups other for are relates to been it to segments. government specifically effectively group other business. softness, and able hotel, with that We as we've some segments offset and government it Luckily

spot so renovation on. I timing that And think hotel, the was

revenue. prepared heard are us, remarks, the we really -- renovation the strong renovation, And now to responding year. a with my very well customers the you had that the behind product. is We As is through market new really the drove

period. very certainly government the softness seeing the But it those we're excited specifically so And through yes, to relates kind about of as inauguration some segments we're outlook.

Tyler Batory

that you of decision, out you've plan, a of off number market? the Okay. well. got as what million you're about And into bought terms go Talk sell, the the And the could but you've of seeing creation out you share there $XX in me in value hotels boxes X buyback there. what then checked still then more might I back, preferred, there shareholder the last for think, that's

how on So about too. potentially thinking you're talk executing about that,

Richard Stockton

we're so process therefore, Sure. in actively that through hotels right but Sure. towards on we'll Yes, non-core, finalize anything don't candidate marketing the would and still those months, internal have our going asset leaning the that, X moving. get candidates. on say in right for the sales, evaluating the I coming our potential what more non-luxury We now, of as work

So that's in much very play. still

there appropriate In that of progress are the and buyback terms of that, on considerations for couple the share there's a timing. things

the in authorization have We place.

also liquidity that hurdle to ensuring of because we kind program preferred first redemption was The for this us the move forward we time. have at announce did adequate same

With Pines, pretty the sale of Torrey liquidity we've significantly. shored up our

to us and terms we cetera, hope be back in some of that hurdle, here that of has nonpublic the then front we necessarily coincided as action have other but our well. call the shortly do Pines when announcements the sale buy But earnings it the other Torrey the have shares in into other timing not made, the with et as prevented proceeding. to that information. to go on factor market is, -- by having ability I we, But wouldn't management, And from

Operator

B. from question of Bryan Maher line the with Riley. comes next Our

Bryan Maher

Just on kind has couple course X.X kind a of now sale. interest X got few of Tyler really color most or higher the an of seems just maybe me. can about a change in were years, there? hotels What's Deric? cost mean like for sold we Richard Is company it key give market rates? changed like I for the it quarters asset, that, that I a you X, felt more a ago, possibly capital, only been X the It little of for talking was that maybe we being And year. year, the buying, X mine.

Richard Stockton

that, said our our Yes, sure. Bryan. XXX% was that was objective. it plan, we Sure, Yes,

longer the But has constrained. we've availability we've that flow higher. been surprised of been our Cost capital in. for think all I by higher of also environment significantly cash been excess

And so us the that on sidelines. puts as a result,

some tap and have of our Yes, that we're I those. CapEx interesting various some focused we've really balance us, we would pursuing acquisition there for much on as seen more say out that there available projects still doing and are the sheet opportunities well. our But on peers probably

so those acquisitions. the And than of best that's rather things pursue is new highest to use and liquidity, our been

Bryan Maher

is that's was my I What's mean which second And question, weak. segue going maybe to pretty the there? a RevPAR good on Cameo.

underway? the XX% was I for is property? How Can there it starting? you the for think are it down quarter. When that renovation plans tell what planning Is us on is it? deep the

Christopher Nixon

rebranded, with room sure get Once get make about the converted excited through hotel. Yes. that that to it want model the outlook renovated, the LXR we're we to Hilton. we Right We're very brand. that now, We fully right. working of

on guest very design. the through spaces, going We're figuring room, very, going full the far, got But hasn't pools. so the what we're So public We're about. started. model excited the renovation we've room through out

generated We're we're biggest as in period been of but we're kind where segment Without Hotels business American Until the that longer more then, hotel. for impact the on millions has Express no program. + loss this we're year. labeled. strong there dollars hotel, of white of a hotel on Resorts. Fine an website, that each That's in independent of the brand The the Hilton's

selected hotel big why the is every influence LXR-branded is in program. of we Part in that LXR

the the program. be that And we'll back that biggest very is renovation has that But so optimistic in we're been complete, impact. revenue outrunning once stream

Bryan Maher

Maybe sticking with Cameo second. for X more the

of -- I a ago. touring correct I thought that asset, years -- think What's that component thought that of those. property? a on was and wrong think current the -- I few residences/condos. process me X of sell like remember was if of I plan to there there And I'm was kind the them there the

Richard Stockton

bit been those. to city regulation That recently in That has the Yes. serves liked. we little you soon. sell than Bryan, we a process get would order hired approval the plan. start correctly. that forward working your sell an rapidly, moving more a have agent and residences to taken expect process to very longer permission Nevertheless, We've those still through is have memory to

Operator

from And question Baird. our will with next Michael of the Bellisario line come

Michael Bellisario

for questions of couple A you.

you come First, there fee, can that the for of us the with the on on there incentive the side? payment? what Is sort incentive calc fee the remind Deric. on to Maybe cap inputs are And of a up calculation?

Deric Eubanks

Yes. based The is purely versus peers. incentive total the advisory shareholder agreement return fee outperformance under on

not of on peer for the final performance it happened result the So do be if It's during the quarter. firm year. But of the stock of we and the in look end year, so basis, year-to-date. we what at the an that's annualized won't until and would Braemar average. it as that be a purely accrue It's owed

a there is XX% is X% capped based And of it's it. outperformance the -- the cap And and on outperformance. on cap the is at

So market equity it's the cap fee. is X.XX% that the cap of on

Michael Bellisario

converted And outstanding? is shares outstanding? is shares equity that as that -- market preferred Or

Deric Eubanks

equity preferreds. It's just the equity current does the market market, include common not cap,

Michael Bellisario

capital than then Helpful. a from within the XX, Got spend gears on portfolio XX over greater elevated the given of rate that, I that's CapEx underlying it. the especially And know some you're outflows CapEx Maybe number of switching the cash of is sort and onetime some for this next your understand us help then cash some just that little flow and year. operations? run projects. how balancing months, allocation, inflows on

Christopher Nixon

question. the Michael, for thanks

We've on finished projects We more are that the see at a going we're very this to of in run excited rate size, year. that renovation this projects based the the Bardessono, We portfolio We've volatility kind the we're public got that at that that just doing. mentioned and Ritz-Carlton guestrooms a you're underway we're to transformed. with of terms Tahoe Hilton. we're about So of -- average space number of all going and and excited completely the we now. at about. is of projects up be are hotel finished have ongoing guestrooms very Capital space a That outdoor number doing meeting got Lake the

cite projects in remarks. opening my value-add heard me you smaller Some

so And a year. there's spike this

And us than looking slightly think we under higher past. had spend size. the forward, what fall, where in of think go in here there revenue that's back projects stabilized we're to just having as terms But is portfolio from of a I the forward. of terms I get see and a of what From basis percentage revenue this we've some you'll of levels. percentage historic we in going is volatility

Richard Stockton

that our we've our that, which of also it's terms Yes. looking a sequencing projects. of able And reduce goal Michael, amount CapEx, closely very to reduce in to XX%. owner-funded at kind something close I'd add by year just this we're to been specific We've of had to

So well, cash an as objective flow. conserve definitely to that's

Michael Bellisario

remind just me, figure? what's the And XX%

Richard Stockton

owner-funded this The amount CapEx versus year year. of last

Michael Bellisario

Got it.

balance same Okay. the XX% lastly, quarters, sheet just along And then I target. is talked XX%. In about leverage prior lines, sort guess of you've a

target? pro guess or while. plan is a down the You kind about Jolla? for leverage that what's to is haven't talked I And still timeline La that in Where to forma of back one, a then XX%? that the get

Richard Stockton

Yes. chime That's as in our Yes. definitely let plan. well. Deric I'll

going With needle I much. once to would next a on in know But second. asset the this I which that Deric's we achieve anticipate honing that be us I time La X sales or in have by too we the lower, about, that know we'll think Jolla we'll other sale, year. talked XX% let moves that, don't the

Operator

the to with back call for I'll turn management And closing that, any remarks.

Richard Stockton

joining Thank next we for call all you look forward with quarter on earnings again Thank second right. quarter. us and to speaking you All our you.

Operator

you This for does joining. conclude all earnings today's Thank call.

You may disconnect. now

Braemar Hotels & Resorts (BHR) 1 Aug 242024 Q2 Earnings call transcript