• Comparable RevPAR: $261 for the third quarter, a 1.6% decrease over the prior year quarter.
• Comparable Hotel EBITDA: $24.7 million for the quarter.
• Urban Hotels RevPAR Growth: 6% increase over the prior year quarter.
• Net Loss Attributable to Common Stockholders: $1.4 million or 2 per diluted share.
• FFO per Diluted Share: Negative 24.
• Adjusted EBITDAre: $18.5 million for the quarter.
• Total Assets: $2.2 billion at quarter end.
• Total Loans: $1.2 billion with a blended average interest rate of 7.6%.
• Cash and Cash Equivalents: $168.7 million at quarter end.
• Restricted Cash: $48.5 million at quarter end.
• Common Stock Dividend: 5 per share, equating to an annual yield of approximately 6.8%.
• Portfolio Composition: 15 hotels with 3,667 net rooms as of September 30, 2024.
• Group Revenue Increase: 14% increase year-to-date through the third quarter compared to the prior year period.
• Urban Portfolio Revenue Growth: 8% increase in total hotel revenue and 4% growth in occupancy compared to the prior year period.
• Ancillary Revenue Increase: 8.3% increase on a per occupied room basis compared to the prior year quarter.

• Warning! GuruFocus has detected 6 Warning Signs with BHR.

Release Date: November 07, 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 a strong performance in their urban hotels with a 6% RevPAR growth over the prior year quarter.
• The company successfully addressed all 2024 debt maturities and is working on refinancing its sole 2025 maturity.
• Braemar Hotels & Resorts Inc (NYSE:BHR) completed the sale of Hilton La Jolla Torrey Pines at an attractive value, contributing to their shareholder value creation plan.
• The company reported a 7.5% increase in comparable RevPAR for October, with total revenue growth of almost 11%, setting a positive outlook for the fourth quarter.
• Group revenue increased by 14% through the third quarter compared to the prior year, with group rooms revenue pacing ahead by 13% for the full year of 2025.

Negative Points

• Braemar Hotels & Resorts Inc (NYSE:BHR) reported a net loss attributable to common stockholders of $1.4 million or 2 cents per diluted share for the quarter.
• Comparable hotel RevPAR for the portfolio decreased by 1.6% over the prior year quarter, primarily due to renovation work at the Ritz Carlton Lake Tahoe.
• The company experienced a slight decline in leisure demand year over year, impacting their resort hotels.
• San Francisco remains a challenging market for Braemar Hotels & Resorts Inc (NYSE:BHR), with high office vacancy rates affecting corporate demand.
• The company faced some group cancellations and estimated an impact of $500,000 to $700,000 at the Ritz Carlton Sarasota due to hurricane damage.

Q & A Highlights

Q: Can you discuss the impact of the mix shift towards more business travel demand and how the strong group outlook might affect this mix going forward? Also, what has been your historical mix? A: Historically, our mix has been 25-30% group business. For 2025, we're pleased with our group pace, especially in Q1, which is our strongest quarter for RevPAR. Group pace for March is up over 70% year-over-year. We're seeing softer leisure trends, particularly on weekends at resorts, but corporate demand is up 12% year-over-year, except in San Francisco, which remains challenged.

Q: Is the strength in corporate demand post-Labor Day a shift or a continuation of steady improvement throughout the year? A: There was a slight acceleration post-Labor Day, but we've seen consistent year-over-year growth in corporate demand. The strength in Q3 was notable, with some acceleration after Labor Day.

Q: How has the election impacted demand, particularly in November? A: In DC, we saw some softening in government segments and other areas due to election uncertainty. However, the Capital Hilton mitigated this with strong group pace and high ADRs post-renovation. We expect demand to rebound post-election.

Q: Can you comment on the transaction market in terms of volume and pricing, and any changes in refinancing conversations given recent interest rate movements? A: The transaction market is positive, with buyers no longer modeling recession risk and the FED cutting rates. We've seen firming cap rates and positive broker opinions on asset values. On refinancing, spreads have come down, and there's plenty of debt capital available, particularly in the CMBS market. Large banks remain on the sidelines, but we're well-positioned for refinancing our 2025 maturity.

Q: Is there an expected impact on Q4 demand due to hurricane damage? A: The main impact was at the beach club, with some group cancellations in October, estimated at $500-700K. However, the rest of the portfolio performed well, offsetting this impact.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.