BHR — Braemar Hotels & Resorts Inc.

Summary of Braemar Hotels & Resorts, Inc. Q3 2025 Earnings Call

1. Key Financial Results and Metrics:

• Comparable RevPAR: Increased by 1.4% to $257.
• Total Hotel Revenue: Grew by 3.9% year-over-year.
• Comparable Hotel EBITDA: Rose by 15.1% to $21.4 million.
• Net Loss: Reported at $8.2 million or $0.12 per diluted share; AFFO per diluted share was negative $0.19.
• Adjusted EBITDA: Recorded at $16.4 million.
• Portfolio Size: 14 hotels with 3,298 net rooms; total assets valued at $2 billion.
• Debt: $1.2 billion in loans with a blended average interest rate of 6.9%.
• Cash Position: $116.3 million in cash and cash equivalents, plus $47.7 million in restricted cash.
• Dividend: Quarterly common stock dividend maintained at $0.05 per share.

2. Strategic Updates and Business Highlights:

• Sale Process: Initiated a sale process for the company with Robert W. Baird & Co. as the financial adviser; no updates provided during the call.
• Renovations: Significant renovations are ongoing at three hotels, impacting RevPAR growth. Excluding these properties, RevPAR growth was 3.4%.
• Luxury Segment Performance: Resorts showed strong growth, with a 5.5% increase in RevPAR and a 58% increase in comparable hotel EBITDA.
• Recent Sales: Sold the Marriott Seattle Waterfront for $145 million and entered into an agreement to sell the Clancy for $115 million.
• Preferred Stock Redemption: Approximately $125 million of nontraded preferred stock redeemed, representing 27% of the original capital raise.

3. Forward Guidance and Outlook:

• Booking Trends: Strong booking base with expectations of continued performance improvement.
• Capital Expenditures: Anticipated spending between $75 million and $85 million on capital expenditures for 2025.
• Group Revenue: Group room revenue pacing up 9.1% for the full year 2025, with Q4 group room revenue currently pacing ahead 1.7% compared to the prior year.

4. Challenges and Points of Concern:

• Urban Hotel Performance: Comparable RevPAR for urban hotels decreased by 3.9%, attributed to renovations and citywide occupancy declines.
• Government Impact: Some softness in group bookings due to government pullbacks, particularly affecting the Capital Hilton in D.C.
• Debt Exposure: Approximately 87% of debt is floating, which poses risks in a rising interest rate environment.

5. Notable Q&A Insights:

• CapEx Discussion: Maintenance CapEx is targeted at low single digits as a percentage of revenue; no significant deferred CapEx noted.
• Sales Process Impact: Management believes the ongoing sales process has not affected property-level performance.
• Leisure Trends: Strong leisure revenue growth with less price sensitivity noted among luxury consumers; increased ancillary spending observed.
• Acquisition Environment: Positive trends in the acquisition backdrop with increased interest from private equity and capital availability.

Overall, Braemar Hotels & Resorts reported solid growth in key financial metrics, particularly within its luxury resort segment, while navigating challenges in urban markets and ongoing renovations. The company remains focused on strategic divestitures and enhancing its portfolio value amid a favorable acquisition environment.