Braemar Hotels & Resorts(US:BHR)2023-08-02 19:58Financial Data and Key Metrics Changes - For Q2 2023, the company reported a net loss attributable to common stockholders of $13 million, or $0.20 per diluted share, with an adjusted EBITDAre of $46.3 million [25] - Comparable hotel EBITDA for Q2 2023 was $53.7 million, driven by strong performance at resort properties and urban hotels [7][6] - RevPAR for all hotels in the portfolio totaled $309 for Q2 2023, representing a decrease of approximately 4.2% compared to Q2 2022 [48] Business Line Data and Key Metrics Changes - Urban assets generated $20 million of comparable hotel EBITDA in Q2 2023, marking solid performance and growth for the ninth consecutive quarter [8] - The luxury resort portfolio achieved combined hotel EBITDA of $33 million during the quarter, with the Ritz-Carlton Reserve, Dorado Beach delivering RevPAR growth of 7.2% [17][52] - The Notary Hotel reported a comparable RevPAR growth of 24% over the prior year quarter, outperforming the Philadelphia market by approximately 16 percentage points [31] Market Data and Key Metrics Changes - The company noted a reduction in airlift impacting some resort properties, with St. Thomas and Key West seeing seat reductions of about 20% and 10% respectively compared to last year [81] - Urban hotels are experiencing strong demand recovery, driven by corporate transient and group demand, with group room revenue exceeding the prior year quarter by 9% [63][49] Company Strategy and Development Direction - The company is focused on owning high RevPAR luxury hotels and resorts, with a strategy that balances urban and resort properties [10][41] - A significant rebranding initiative is underway for the Mr. C Hotel to Cameo Beverly Hills, which will join the Hilton Central Reservation System and Hilton Honors loyalty program [9][50] - The company plans to invest between $80 million and $90 million on capital expenditures in 2023, including renovations at several properties [36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future results, citing a 20% increase in group pace for 2023 and 16% for 2024, benefiting from both corporate and social groups [54] - The balance sheet remains solid with ample liquidity, and the company is focused on liability management amid a volatile macroeconomic environment [16][53] - Management noted that while luxury resorts are stabilizing, they are still outperforming 2019 results, indicating a positive long-term outlook [48][104] Other Important Information - The company closed a $200 million corporate financing, which includes a $150 million term loan and a $50 million revolving credit facility, secured by three hotels [59] - The company has a total asset value of $2.3 billion and a net debt to gross assets ratio of approximately 37.3% [56] Q&A Session Summary Question: Thoughts on RevPAR outcomes and capital recycling opportunities - Management indicated a preference for upgrading portfolio quality rather than choosing between resort and urban properties, emphasizing a balanced approach [71][72] Question: Insights on the Hilton Cameo planned conversion - Management confirmed that the conversion will involve extensive renovations over two years, with some anticipated disruption, but expressed excitement about the long-term potential [74][76] Question: Dividend strategy and potential for stock buybacks - Management acknowledged the high dividend yield and indicated that while buybacks are not currently prioritized, they are open to considering them in the future [78][101] Question: Booking patterns and group pace outlook - Management reported strong group pace growth, with Q4 2023 pacing ahead by 23% compared to the prior year, and noted shorter booking windows are beginning to extend [110][111]