Braemar Hotels & Resorts Inc (BHR) Q2 2024 Earnings Call Highlights: Urban Growth and ...
Comparable RevPAR: $305, a 1.5% decrease over the prior year quarter.
Comparable Hotel EBITDA: $51.1 million.
Urban Hotels RevPAR Growth: 6% in the quarter.
Urban Hotels RevPAR: $228.
Urban Hotels Comparable Hotel EBITDA: $22.1 million.
Luxury Resort Portfolio Hotel EBITDA: $29 million during Q2.
Four Seasons Resort Scottsdale Hotel EBITDA Growth: 21.6%.
Net Loss Attributable to Common Stockholders: $21.9 million or $0.33 per diluted share.
AFFO Per Diluted Share: $0.10.
Adjusted EBITDAre: $42.7 million.
Total Assets: $2.2 billion.
Total Loans: $1.2 billion with a blended average interest rate of 8.1%.
Cash and Cash Equivalents: $120.3 million.
Restricted Cash: $60.7 million.
Common Stock Dividend: $0.05 per share, annualized yield of approximately 5.6%.
Portfolio Composition: 15 hotels with 3,667 net rooms after recent sale.
Share Count: 73.9 million fully diluted shares outstanding.
Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Braemar Hotels & Resorts Inc (NYSE:BHR) reported strong performance in its urban hotels with a 6% RevPAR growth over the prior year quarter.
The Four Seasons Resort Scottsdale at Troon North, a recent acquisition, achieved a 10% RevPAR growth and a 21.6% increase in hotel EBITDA.
The company successfully refinanced, extended, or paid down all of its 2024 debt maturities, enhancing financial stability.
Braemar Hotels & Resorts Inc (NYSE:BHR) announced a shareholder value creation plan, including a $50 million preferred share redemption program and a $50 million common share buyback authorization.
The sale of Hilton La Jolla Torrey Pines was completed at an attractive value, contributing to the company's liquidity and strategic goals.
Negative Points
Braemar Hotels & Resorts Inc (NYSE:BHR) reported a 1.5% decrease in comparable RevPAR over the prior year quarter.
The resort segment experienced softness in average daily rates, attributed to a normalization post-pandemic and specific factors like Easter timing shifts.
The Ritz-Carlton Reserve Dorado Beach had a challenging quarter, impacting overall portfolio performance.
The company's net loss attributable to common stockholders was $21.9 million, or $0.33 per diluted share.
The Cameo Beverly Hills property experienced an 18% decline in RevPAR, with ongoing challenges due to its current white-label status and loss of key revenue streams.
Q & A Highlights
Q: Can you elaborate on the softness in resort ADR and what's driving it? A: Christopher Nixon, Senior Vice President, Head of Asset Management, explained that while resort revenue is down year-over-year, it remains significantly higher than 2019 levels. The softness is attributed to a normalization in the resort and leisure segments, a shift in demand due to Easter and spring break timing, and reduced snowfall affecting ski resorts. Richard Stockton, CEO, added that the EBITDA drop at Dorado Beach, due to timing shifts, accounted for the overall decline in portfolio-wide hotel EBITDA.
Q: Are you seeing any impact from the upcoming election on your portfolio trends, particularly in DC? A: Christopher Nixon noted that while there is some softness in government-related segments due to the election, the overall group pace in DC is strong, supported by a robust citywide calendar. The recent renovation at Capitol Hilton has been well-received, offsetting any government segment softness.
Q: Can you discuss the shareholder value creation plan, particularly regarding potential hotel sales and share buybacks? A: Richard Stockton mentioned that they are evaluating non-core, non-luxury hotels for potential sales but have not yet marketed any. Regarding share buybacks, they are ensuring adequate liquidity and waiting for the right timing, considering recent announcements and earnings.
Q: What has changed in your strategy from acquiring hotels to selling assets? A: Richard Stockton explained that the shift is due to the higher cost of capital and constrained cash flow, which has led them to focus on balance sheet management and capital expenditures rather than new acquisitions.
Q: What's the current status and future plan for the Cameo Beverly Hills property? A: Richard Stockton stated that they are working on a rebranding and renovation to convert it to the LXR brand. The loss of the American Express Fine Hotels and Resorts program has impacted revenue, but they are optimistic about future performance post-renovation.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.