Sign in

You're signed outSign in or to get full access.

BH

Braemar Hotels & Resorts Inc. (BHR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue and profitability were solid with a clear beat versus consensus: total hotel revenue of $179.1M vs consensus $172.6M, Adjusted EBITDAre of $38.9M vs consensus ~$38.0M, and diluted EPS of -$0.24 vs consensus -$0.37, driven by steady urban hotels and resorts resuming normalized growth . Revenue/EPS consensus values marked with * from S&P Global.
  • Comparable RevPAR increased 1.5% to $318, with comparable hotel EBITDA up 3.7% to $47.8M and slightly higher margins, marking the third consecutive quarter of RevPAR growth .
  • Balance sheet/liquidity improved: sale of Marriott Seattle Waterfront (closed Aug 11) generated $50.8M net proceeds and paid down $88.4M of debt; net debt to gross assets was 44.2%, cash/Restricted cash totaled $135.7M at quarter end .
  • Operational catalysts ahead: strong group pace (Q3 +8.8%, FY +8.6%), Sofitel Chicago’s franchise conversion with Remington showing early improvement; later in the quarter, the Board initiated a sale process to maximize shareholder value (Aug 26), potentially a stock-moving event .

What Went Well and What Went Wrong

What Went Well

  • “Solid second quarter performance” with comparable RevPAR +1.5% to $318, comparable total revenue +3.3%, and comparable hotel EBITDA +3.7%; “third consecutive quarter of comparable RevPAR growth” (CEO) .
  • Resorts normalized: resort comparable total revenue +5.0% YoY to $113.6M and comparable hotel EBITDA +6.9% to $25.7M; Ritz-Carlton Lake Tahoe total revenue +39%, Dorado Beach total revenue +14% YoY; group/catering momentum highlighted (EVP Asset Mgmt) .
  • Sofitel Chicago franchise transition “already producing meaningful results”: Q2 total hotel revenue +2.4% YoY; rooms +2.0%, F&B +7.0% (EVP Asset Mgmt) .

What Went Wrong

  • Renovation displacement muted results at Park Hyatt Beaver Creek and Hotel Yountville; Park Hyatt Beaver Creek posted Q2 hotel EBITDA of -$1.8M and RevPAR down 23% YoY .
  • Government segment softness weighed on Capital Hilton D.C., with Q2 hotel net income down ~90% YoY and EBITDA margin compressed (EVP Asset Mgmt) .
  • Cameo Beverly Hills continued to be loss-making: Q2 hotel EBITDA -$0.223M and negative margins, reflecting ongoing repositioning .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Total Hotel Revenue ($USD Millions)$173.3 $215.8 $179.1
Diluted EPS ($)-$0.47 -$0.04 -$0.24
Adjusted EBITDAre ($USD Millions)$30.2 $63.0 $38.9
Comparable Hotel EBITDA Margin (%)23.45% 32.42% 26.57%
Q2 2025 Actual vs ConsensusConsensusActual
Revenue ($USD Millions)$172.6M*$179.1M
Diluted EPS ($)-$0.37*-$0.24
EBITDA/Adj. EBITDA ($USD Millions)$38.0M*Adj. EBITDAre $38.9M
Segment Breakdown (Comparable)Q2 2024Q2 2025
Resort Total Hotel Revenue ($USD Millions)$108.1 $113.6
Resort Hotel EBITDA ($USD Millions)$24.0 $25.7
Urban Total Hotel Revenue ($USD Millions)$66.1 $66.4
Urban Hotel EBITDA ($USD Millions)$22.1 $22.1
KPIs (Comparable)Q1 2025Q2 2024Q2 2025
All Hotels RevPAR ($)$404.0 $313.5 $318.1
All Hotels Occupancy (%)64.6% 71.5% 71.9%
All Hotels ADR ($)$625.6 $438.8 $442.8

Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Common Dividend ($/share)Q3 2025$0.05 $0.05 Maintained
Capital Expenditures ($USD Millions)FY 2025N/A$75–$95 (management expectation) Established
Group Revenue Pace (%)Q3 2025N/A+8.8% vs prior year (pace) Positive
Group Revenue Pace (%)FY 2025N/A+8.6% vs prior year (pace) Positive
Debt Maturities2025One remaining maturity (Q1 disclosure) None remaining in 2025 (addressed/refinanced) Improved
Asset Sales2025Announced Seattle sale (July 8) Closed Aug 11; no further 2025 sales planned (CEO) Completed/Clarified

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Resort normalizationQ4: inflection after 6 quarters of declines ; Q1: resorts modest growth Third consecutive RevPAR growth; resort comparable EBITDA +6.9% Improving
Balance sheet & refinancingQ4: strong liquidity, Lake Tahoe extension ; Q1: $363M refinancing across five hotels Seattle sale closed; net proceeds $50.8M, debt paydown $88.4M Deleveraging
Group demand & cateringQ1: urban strength, events boost Group pace Q3 +8.8%, FY +8.6%; catering up; “grouping up” strategy Strengthening
Renovations/capexQ4/Q1: active capex schedules Ongoing projects; FY capex $75–$95M Ongoing investment
Portfolio/asset strategyQ1: Sofitel to franchise Sofitel performance improving ; CEO: no further 2025 asset sales planned Executing/steady
Strategic alternativesNot discussed in Q4/Q1Board initiated sale process (Aug 26) New potential catalyst

Management Commentary

  • CEO: “I’m pleased with Braemar’s solid second quarter performance…third consecutive quarter of comparable RevPAR growth…urban portfolio again performed well…our planned sale of the upper upscale Marriott Seattle Waterfront will help deleverage our portfolio” .
  • CFO: “Net loss…$18 million or $0.24 per diluted share and AFFO $0.09 per diluted share…cash & equivalents $80.2M; restricted cash $55.5M…net debt to gross assets ~44.2%…quarterly common dividend of $0.05” .
  • EVP Asset Mgmt: “Comparable hotel EBITDA increased 3.7%…F&B revenue increased 6.6%…margin improved 11 bps…group pace strong…Dorado Beach RevPAR +17%, group revenue +98% year-over-year” .

Q&A Highlights

  • Strategy to “group up” across the portfolio with focus on high-margin catering/banqueting; placement in off-season to optimize mix (EVP Asset Mgmt) .
  • Government business softness in the quarter impacted Capitol Hilton; renovations caused displacement, but other demand segments (corporate, leisure) strong (EVP Asset Mgmt) .
  • Asset sales outlook: following Seattle sale, “no further property sales planned for this year”; 2026 may be reassessed as transaction environment improves (CEO) .

Estimates Context

  • The company beat Wall Street consensus on Q2 revenue and EPS; Adjusted EBITDAre modestly above consensus. Revenue actual $179.1M vs $172.6M*; EPS actual -$0.24 vs -$0.37*; Adj. EBITDAre $38.9M vs ~$38.0M*. Values marked with * retrieved from S&P Global .
  • Given stronger top-line and stable margins, estimates for H2 could see upward revisions in revenue and EBITDA for resorts and select urban markets, while renovation-related properties may retain conservative assumptions (Park Hyatt Beaver Creek, Hotel Yountville) .

Key Takeaways for Investors

  • Revenue/EPS beat with third consecutive quarter of RevPAR growth; underlying demand trends and F&B strength indicate improving operating momentum .
  • Deleveraging actions (Seattle sale) and refinancing support balance sheet flexibility heading into sale process—monitor strategic alternatives timeline and terms (including advisory termination fee arrangements) as potential stock catalysts .
  • Resorts are normalizing and driving EBITDA growth; focus on Dorado Beach, Lake Tahoe, Sarasota, and Four Seasons Scottsdale for incremental rate/mix upside .
  • Near-term watch items: renovation impacts and government demand softness at D.C.; expect variability until projects complete and segment rebounds .
  • Sofitel Chicago franchise conversion is taking hold; Remington alignment suggests further operational uplift in coming quarters .
  • Dividend policy remains at $0.05/quarter; reassessment depends on sustained performance and sale process outcomes .
  • Tactical trade: lean long into sale process/asset monetization optionality and improving operating prints; hedge exposures tied to renovation-heavy assets.

Values marked with * retrieved from S&P Global.