Ashford Hospitality Trust(AHT) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a net loss attributable to common stockholders of $27.8 million or $4.91 per diluted share for Q1 2025 [14] - AFFO per diluted share was negative $0.98, although total AFFO improved by $8.2 million compared to the prior year quarter [14] - Adjusted EBITDAre for the quarter was $61.7 million, reflecting a $2.2 million increase over the prior year quarter [14] - Total revenue decreased by $26.5 million compared to the prior year quarter [14] - The company ended the quarter with cash and cash equivalents of $85.8 million and restricted cash of $139.2 million, with restricted cash increasing by $39 million from the previous quarter [15] Business Line Data and Key Metrics Changes - Comparable RevPAR grew by 3.2%, total revenue increased by 3.6%, and comparable hotel EBITDA rose by 8.7% [6] - La Pavion Hotel achieved 78% total revenue growth, while La Concha Hotel realized 27% total revenue growth [6][7] - Hotel EBITDA across the entire portfolio grew by 9% during the first quarter compared to the prior year quarter [20] Market Data and Key Metrics Changes - Comparable hotel RevPAR increased by 3% over the prior year period, driven by demand related to the presidential inauguration [19] - Group room revenue pace increased by 10% for the top five hotels in the portfolio compared to the prior year [21] - The company observed softness in a few markets starting in February, largely due to recent policy changes [21] Company Strategy and Development Direction - The company is focused on achieving $50 million in run rate EBITDA improvement through the Grow AHT initiative [7][9] - Strategic decisions have been made to reduce corporate expenses, including a 50% reduction in cash compensation for Board members [8] - The company plans to continue improving its capital structure by extending near-term debt maturities and exploring strategic dispositions [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic uncertainties but remains focused on controlling internal factors to achieve growth goals [12] - The company is optimistic about its portfolio's outlook for 2025 and confident in its ability to unlock additional value [29] - Management highlighted the importance of maximizing performance and value of hotels while reducing corporate expenses [12] Other Important Information - The company completed the sale of the Courtyard Boston Downtown for $123 million, which provided significant capital expenditure savings [10] - The company has fully repaid its corporate strategic financing, leaving it free of corporate debt [10] - Capital expenditures for the full year 2025 are anticipated to range between $95 million and $115 million [28] Q&A Session Summary Question: Can you help us think about the monthly RevPAR progression in the quarter and the impact of calendar shifts? - Management noted that January was the strongest month, with softening observed in February and March due to various factors including calendar shifts [32][33] Question: How much of the portfolio do you think is exposed to international inbound travel and government demand? - Management indicated that international demand is less than 5% of the portfolio, with government demand being larger but still less than group or leisure segments [39] Question: Can you help us think about the AHT GROW initiative and areas of success? - Management stated that while low-hanging fruit has been harvested, there are still significant opportunities remaining to achieve the $50 million goal [41][42] Question: Is there any update on the Bammel Island loan and conversations with lenders? - Management confirmed a forbearance agreement is in place and they are working on refinancing options [44] Question: Any color about potential dispositions and what the market's pricing currently? - Management highlighted that they are focused on selling underperforming assets and have flexibility in asset release prices due to recent loan negotiations [46][47]