ASHFORD HOSPITALITY TRUST INC (AHT)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 delivered solid comparable operations: Comparable RevPAR rose 3.1% to $125.95 on ADR +3.4% and flat occupancy, while comparable total hotel revenue grew 4.6% and comparable hotel EBITDA increased 6.2% to $68.0M .
• GAAP results were pressured by non-cash items and higher interest: Total revenue was $275.5M (vs. $319.9M in Q4 2023), net loss attributable to common shareholders was $(131.1)M or $(23.83)/share; Adjusted EBITDAre was $45.2M .
• Strategic actions de-risked the balance sheet: Post-quarter, AHT refinanced $580M across 16 hotels and fully repaid its strategic financing; cash and restricted cash ended Q4 at $112.9M and $107.6M, respectively .
• GRO AHT plan targets +$50M run-rate corporate EBITDA via G&A cuts, revenue maximization, and operational efficiency; conversions at La Concha (Autograph) and Le Pavillon (Tribute) expected to drive 20–30% RevPAR premiums, with January performance running ahead of underwriting .
• Near-term catalysts: ongoing group strength (2025 group pace +5%), portfolio conversions ramping, and continued deleveraging; management does not expect to reinstate the common dividend in 2025, keeping cash for balance sheet and growth initiatives .

What Went Well and What Went Wrong

What Went Well

• Comparable operating momentum: Q4 comparable RevPAR +3.1%, comparable total hotel revenue +4.6%, and comparable hotel EBITDA +6.2% with comparable hotel EBITDA margin up ~37 bps YoY to 25.12% .
• Strategic repositioning/brand conversions: La Concha (Key West) and Le Pavillon (New Orleans) conversions to Marriott’s Autograph/Tribute expected to drive 20–30% RevPAR premiums; early results exceeded expectations with January revenue growth +25% at La Concha and >45% at Le Pavillon (ex‑Super Bowl normalization), per management .
• Balance sheet progress and capital markets: Successfully refinanced Marriott Crystal Gateway ($121.5M; SOFR+4.75%) in Q4 and post‑quarter closed $580M refinancing across 16 hotels, fully repaying strategic financing; sold Courtyard Boston Downtown for $123M at ~5.9–6.9% cap rate (TTM NOI basis) .

What Went Wrong

• GAAP earnings pressure: Q4 net loss to common $(131.1)M and $(23.83)/share driven by higher interest expense, $59.3M impairment, and other non‑cash items; Adjusted EBITDAre declined YoY to $45.2M (from $62.5M) .
• Hotel EBITDA down on an all-in basis: Q4 hotel EBITDA fell to $69.4M (from $78.6M YoY) as portfolio pruning and market pockets weighed; though comparable hotel EBITDA grew, all-hotel reported EBITDA declined .
• Continued rate sensitivity and margin pressures: Management highlighted industry-wide margin compression and mix headwinds; gross operating margins improved ~141 bps YoY in Q4, but overall margin trends remain a focus area for 2025 initiatives .

Financial Results

GAAP Results (YoY)

Notes: Share and per-share amounts reflect the 1‑for‑10 reverse split effective Oct 25, 2024 .

Comparable Portfolio & Profitability (QoQ and YoY)

RevPAR Drivers (YoY)

Geographic RevPAR (Selected Markets, Q4 YoY)

Balance Sheet & Liquidity (Quarter-End and Updates)

• Q4 cash $112.9M; restricted cash $107.6M; due from managers $21.2M; net working capital ~$122M .
• Debt $2.6B; blended average rate 7.9%; ~23% effectively fixed, ~77% floating at Q4 .
• Post‑quarter: Closed $580M refinancing across 16 hotels and fully repaid strategic financing; sold Courtyard Boston Downtown for $123M .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Our improved performance highlights the impact of the strategic decisions our team has made… With the conversions of La Concha and Le Pavillon expected to drive 20–30% premiums to pre‑conversion RevPAR… we’re excited to begin the next chapter for Ashford Trust.” – CEO Stephen Zsigray .
• “GRO AHT… a massive strategic initiative… We believe GRO AHT will transform Ashford Trust with the goal of adding $50 million to our run rate corporate EBITDA, an increase of more than 20%.” – CEO Stephen Zsigray .
• “Adjusted EBITDAre for the quarter was $45.2 million… we had $2.6 billion of loans with a blended average interest rate of 7.9%… approximately 23%… fixed and 77%… floating.” – CFO Deric Eubanks .
• “December was a particularly strong month with a 12% increase in hotel EBITDA… driven in large part by… GRO AHT initiatives…” – EVP Chris Nixon .

Q&A Highlights

• GRO AHT ramp and quantification: ~half of initiatives already rolled out; benefits visible in December; remainder phased through 2025; still identifying new opportunities toward the $50M target .
• Conversions ramp/stabilization: Both hotels outperforming underwriting; Le Pavillon saw multiple sold-out Super Bowl nights with RevPAR over $900; ADR outperformance driving gains; further runway expected before stabilization .
• Transaction environment: Financing market improvement is aiding transaction activity; company to remain disciplined, targeting optimal value and deleveraging .
• Floating-rate exposure: Mix shifted more floating as caps rolled off and SOFR moved below strikes; preference for floating as a natural hedge over time .

Estimates Context

• Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable at the time of this analysis due to data access limits. As a result, we cannot assess beat/miss versus consensus for Q4 2024 at this time (S&P Global data unavailable).
• Company does not provide formal revenue/EPS guidance; qualitative outlook centers on GRO AHT cost/revenue initiatives, conversions, group strength, and balance sheet actions .

Key Takeaways for Investors

• Comparable operating momentum and margin discipline are improving despite GAAP noise from impairments and elevated interest expense; focus evaluation on comparable hotel revenue/EBITDA and margin trajectory rather than GAAP net loss .
• GRO AHT is a material self-help lever with a quantified target (+$50M run-rate corporate EBITDA) and early evidence of traction (December hotel EBITDA +12% YoY; ancillary revenue lift) .
• Conversions are a tangible growth driver with visible early outperformance (La Concha/Le Pavillon), supporting ADR and RevPAR premiums into 2025 .
• Balance sheet risk has improved: repayment of strategic financing and the $580M refinancing reduce near-term maturity/recourse risk and support continued deleveraging .
• 2025 group pace is positive (+5%), providing visibility; management does not expect to reinstate the common dividend in 2025, prioritizing balance sheet and growth returns over distributions .
• Trading angle: Watch for continued execution on GRO AHT, sustained outperformance at converted assets, and additional selective asset sales/refis as potential catalysts for multiple re‑rating .

Appendices

Additional Relevant Press Releases (Q4 2024 and Surrounding)

• GRO AHT launch (Dec 17, 2024): outlines three pillars and $50M run-rate EBITDA target .
• La Concha conversion (Dec 9, 2024): $35M renovation; Autograph Collection; expected RevPAR premium .
• Le Pavillon conversion (Nov 21, 2024): $19M renovation; Tribute Portfolio; timing ahead of Super Bowl/Mardi Gras .
• Crystal Gateway refinancing (Nov 7, 2024): $121.5M, IO, SOFR+4.86%, ~$31M proceeds to strategic financing .
• Strategic financing amendment (Nov 6, 2024): reduced exit fee contingent on paydown; remaining balance ~$82M as of early Nov .
• Courtyard Boston Downtown sale agreement (Dec 4, 2024): $123M; 5.9%–6.9% cap rate on TTM NOI basis .
• Mortgage extension (Le Pavillon) (Dec 19, 2024): extended to Dec 2027 with no paydown .

Reconciliation and Non-GAAP

• Adjusted EBITDAre and AFFO reconciliations are provided in the 8-K Exhibit 99.1 and associated tables for Q4 and FY 2024 .
• Significant non-cash impairment charge in Q4 ($59.3M) impacted GAAP net loss .