Financial Data and Key Metrics Changes - The company reported a net loss attributable to common stockholders of $30.3 million or $0.88 per diluted share for Q2 2023 [13] - Adjusted EBITDAre for the quarter was $104 million, reflecting an 8% growth rate over the prior year quarter [13] - RevPAR for all hotels in the portfolio increased by 6.7% compared to the prior year quarter, driven by a 2.8% increase in occupancy and a 3.8% increase in average rates [7][20] Business Line Data and Key Metrics Changes - Comparable RevPAR for the portfolio increased approximately 7% over the prior year quarter, outperforming national averages for upscale and upper upscale chain scales [20] - Group room revenue increased by 14% year-over-year, marking the 9th consecutive quarter of positive growth [24] - Catering revenues increased by 19% over the prior year quarter, indicating strong performance in food and beverage [25] Market Data and Key Metrics Changes - The company noted significant performance improvements in urban markets, with a 12% increase in comparable hotel EBITDA driven by key markets like Washington, D.C., New York, New Jersey, and Atlanta [21] - Airport hotels achieved a 15% growth in comparable hotel EBITDA over the prior year quarter, capitalizing on increased airlift and demand trends [22] Company Strategy and Development Direction - The company is focused on capital recycling and has sold a small asset in Orlando for nearly $15 million, with four other assets currently being marketed for sale [10] - The management emphasized the importance of raising capital through non-traded preferred stock and potential asset sales to improve the capital structure [19] - The company plans to spend between $110 million and $130 million in capital expenditures for 2023, with a strategic approach to renovations and repositioning of hotels [26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the portfolio's future, highlighting strong RevPAR growth and a solid liquidity position with approximately $442 million of net working capital [6][19] - The company is committed to deleveraging and improving its balance sheet, with plans to lower debt by approximately $700 million or more than 18% [9] - Management acknowledged challenges in the hotel debt financing market but remains confident in the portfolio's performance and recovery trajectory [19] Other Important Information - The company ended the quarter with cash and cash equivalents of $252 million and restricted cash of $150 million [17] - The consolidated portfolio consisted of 100 hotels with 22,316 rooms as of June 30, 2023 [18] Q&A Session Summary Question: Can you provide details on the KEYS loans pool that you extended? - Management conducted a rigorous evaluation of loan pools and felt confident about the value and refinancing potential of the extended pools, with no foreseeable issues for future extensions [30] Question: What is the current status of labor availability and staffing? - The company reported flat labor counts year-over-year despite increased occupancy, with a 14% decrease in contract labor utilization [34] Question: How is the company addressing asset sales and market conditions? - Management indicated that four assets are currently in the market, with plans to be more aggressive in asset sales to improve the capital structure [43] Question: What is the strategy for paying off Oaktree debt? - The company is focused on generating proceeds from asset sales and non-traded preferred stock to pay off strategic financing, with a conservative approach to planning [46] Question: When should the 19 hotels be removed from the model? - Management recommended removing the hotels from the portfolio model now, as the process of handing them back could happen imminently [63]
Ashford Hospitality Trust(AHT) - 2023 Q2 - Earnings Call Transcript