Braemar Hotels & Resorts(US:BHR)2021-10-28 21:05Financial Data and Key Metrics Changes - The company reported a net loss attributed to common stockholders of $9.0 million or $0.15 per diluted share for Q3 2021 [20] - AFFO per diluted share was $0.17 compared to negative $0.21 in the prior year quarter [20] - Adjusted EBITDAre for the quarter was $21.9 million, and the company was cash flow positive at the corporate level for the quarter [20][22] - Total assets at quarter end were $1.8 billion, with $1.2 billion in loans and a blended average interest rate of 2.6% [21] - The company ended the quarter with cash and cash equivalents of $195.5 million and restricted cash of $44.8 million [21] Business Line Data and Key Metrics Changes - Comparable hotel EBITDA was $27.8 million, driven by strong occupancy levels and a 16.3% increase in ADR over the prior year quarter [9] - RevPAR for all hotels increased approximately 168% compared to Q3 2020, but decreased approximately 6.1% compared to Q3 2019 [9] - The portfolio's overall comparable EBITDA margin was 23.5%, with several hotels achieving strong margins, such as Bardessono at 45% and Hotel Yountville at 50% [10] Market Data and Key Metrics Changes - The company reported strong performance in leisure markets, particularly in drive-to leisure destinations, with eight of its 14 hotels classified as resort destinations [12] - Napa Valley properties saw comparable RevPAR increases of 138% at Bardessono and 179% at Hotel Yountville during Q3 [11] - The Ritz-Carlton St. Thomas produced $5.3 million in hotel EBITDA during the quarter, with a forecast of close to $30 million for the full year [11] Company Strategy and Development Direction - The company completed the acquisition of the Mr. C Beverly Hills Hotel for $77.9 million, which aligns with its strategy of owning high RevPAR luxury hotels [14] - The company plans to continue its growth strategy with a disciplined investment approach, focusing on transactions that are accretive to total shareholder return [16] - The portfolio is positioned to perform well in both the near-term and long-term as business and group travel resumes [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about recovery trends driven by strong leisure demand at luxury resort properties [38] - The company is seeing a meaningful uptick in acquisition opportunities and is focused on maintaining a solid balance sheet [16][18] - Management acknowledged challenges in labor markets but noted that they are managing to deliver service and achieve improved margins [52] Other Important Information - The company raised approximately $30 million in net proceeds through common share issuance during the quarter [24] - Capital expenditures for 2021 are anticipated to be between $20 million and $30 million, with several value-add projects planned [35] Q&A Session Summary Question: Outlook for the winter season/ski season at Hyatt Beaver Creek and Ritz-Carlton Lake Tahoe - Management indicated strong bookings for December with an ADR of approximately $550 across the portfolio [40] Question: Thoughts on share sales and capital raising - Management acknowledged that common equity was not the preferred method for raising capital at this time, given the current trading conditions [42][43] Question: Revenue management strategy and ADR performance - Management highlighted a unique, data-driven revenue optimization strategy that has contributed to strong ADR performance [47][48] Question: Corporate transient and group demand recovery - Management noted that while urban properties are improving, significant corporate transient demand has not yet returned [49] Question: Labor market challenges - Management confirmed that labor remains a challenge but emphasized that they are managing to maintain service levels and margins [52] Question: Acquisition strategy and preferences - Management expressed a preference for acquiring assets with in-place yield and a focus on disciplined pricing [56]