Braemar Hotels & Resorts(BHR) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a net loss attributable to common stockholders of $2.5 million or $0.04 per diluted share for the quarter [14] - Adjusted EBITDAre for the quarter was $63 million, with total assets at $2.1 billion and total loans of $1.2 billion [14][15] - The company achieved a comparable RevPAR of $400, reflecting a 4.2% increase year-over-year, marking the highest quarterly RevPAR in its history [8][9] Business Line Data and Key Metrics Changes - Comparable total hotel revenue increased by 4.4% year-over-year, while comparable hotel EBITDA was $70.8 million, representing a 5.3% increase [9] - The resort portfolio reported a comparable RevPAR of $800, a 1.9% increase, and combined comparable hotel EBITDA of $62 million, a 2% increase [9] - Urban hotels delivered a comparable RevPAR growth of 11.3%, with the Capitol Hilton achieving a 19.3% year-over-year RevPAR growth due to the presidential inauguration [10] Market Data and Key Metrics Changes - Group revenue increased by 31% compared to the prior year period, indicating strong demand and effective sales strategies [21] - The urban assets delivered a 10% increase in comparable total revenue and a 39% increase in comparable hotel EBITDA [24] - Group room revenue pace for 2025 is up 7%, with continued growth expected at 10% for 2026 [11][24] Company Strategy and Development Direction - The company successfully addressed its final 2025 debt maturity, resulting in a lower cost of capital and improved maturity schedule [7][12] - The company is focused on strategic reinvestment and brand alignment, with planned capital expenditures between $75 million and $95 million for 2025 [30] - The company is exploring asset sales, particularly upper upscale assets, to enhance shareholder value and potentially fund preferred equity redemptions and share buybacks [55][56] Management's Comments on Operating Environment and Future Outlook - Management noted that economic uncertainty rhetoric has dissipated, and booking pace remains strong, positioning the portfolio to outperform [7] - The company remains optimistic about the opportunities ahead, highlighting the resilience of its diversified portfolio [30] - Management expressed confidence in continued EBITDA growth due to effective cost containment measures and productivity improvements [42] Other Important Information - The company redeemed approximately $90 million of its non-traded preferred stock, representing about 20% of the original capital raise [13] - The company announced a quarterly common stock dividend of $0.05 per share, equating to an annual yield of approximately 10.4% [15] Q&A Session Summary Question: Any trends or variability worth calling out outside of PACE in light of macroeconomic volatility? - Management indicated that the portfolio is well insulated from macro headwinds, with a slight shortening of the booking window but no significant impact on group performance [34][35] Question: How much inbound international exposure does the portfolio have? - The international inbound is a small part of the portfolio, with minimal impact observed, as some markets saw growth while others experienced slight declines [36][38] Question: What is the opportunity to grow margin in the near term? - Management is optimistic about margin growth, citing improved productivity and effective cost containment measures [39][42] Question: Can you provide additional color on the Magnificent Mile conversion? - The conversion is expected to enhance asset value and performance, with minimal CapEx planned for public and meeting space renovations [43][44] Question: How much can you buy back in preferred redemptions? - The company can redeem preferred stock after two years, with timing and sequencing being the limiting factors for repurchases [50][52] Question: What is the update on asset sales and expected proceeds utilization? - Management noted increased buyer activity and plans to utilize proceeds for preferred equity redemptions, share buybacks, and retiring corporate convertible notes [56]