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BH

Braemar Hotels & Resorts Inc. (BHR)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 showed a clear inflection in operating metrics: comparable RevPAR rose 1.9% to $304.94 and comparable total hotel revenue grew 5.3% YoY, while comparable Hotel EBITDA edged up to $41.1M; GAAP diluted EPS was $(0.47) and Adjusted EBITDAre was $30.2M .
  • Urban portfolio momentum continued (comparable RevPAR +3.3%), and Lake Tahoe’s renovated asset delivered strong gains; resorts posted modest RevPAR improvement with solid EBITDA performance .
  • Balance sheet liquidity remains adequate (cash $135.5M; restricted cash $49.6M), net debt/gross assets at 40.8%; management is actively refinancing the ~$293.2M CMBS due June 2025 and extended Lake Tahoe’s mortgage at SOFR+3.25% with a $10M paydown .
  • 2025 capex guidance of $75–$95M targets further premium renovation ROI; common dividend policy maintained at $0.05 per share for Q1 2025, with Board reviewing quarterly .
  • Near-term stock reaction catalysts: (1) successful June 2025 loan refi announcement, (2) continued RevPAR traction into Q1 2025 (January RevPAR +~13%; +~9% ex-DC inauguration), and (3) progress on preferred redemptions/asset sales .

What Went Well and What Went Wrong

What Went Well

  • “After six straight quarters of declining RevPAR, our portfolio posted positive RevPAR growth in the fourth quarter,” with January RevPAR up ~13% (ex-Capital Hilton ~9%); management emphasized strong forward bookings and constrained supply aiding resort growth .
  • Urban hotels strength: comparable RevPAR +3.3% in Q4; Notary and Seattle drive outsized growth; Lake Tahoe renovation delivered +49% total hotel revenue and returned to positive EBITDA in Q4 .
  • Liquidity and liability management: extended Ritz-Carlton Lake Tahoe mortgage (SOFR+3.25% with $10M paydown), and ~$80M redeemed of nontraded preferred stock supporting deleveraging .

What Went Wrong

  • GAAP results remain pressured by financing costs and preferred dividends: Q4 diluted EPS $(0.47), net loss to common $(31.1)M; AFFO per diluted share $(0.06) .
  • Resort normalization and weather/calendar effects curtailed peak period revenue (shortened festive window, mild winter); certain markets (e.g., Cameo Beverly Hills, San Francisco) remain volatile/soft .
  • Comparable Hotel EBITDA margin down vs prior year Q4 (23.45% vs 24.52%), and certain properties (Ritz-Carlton Sarasota, Clancy) saw margin compression; financing spreads still weigh until rates/spreads ease further .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Total Hotel Revenue ($USD ‘000)$179,216 $149,255 $175,217
Net Income Attributable to Common ($USD ‘000)$(31,118) $(1,412) $(31,138)
Diluted EPS - Continuing Ops ($)$(0.47) $(0.02) $(0.47)
Adjusted EBITDAre ($USD ‘000)$37,432 $18,472 $30,225
Comparable Hotel EBITDA ($USD ‘000)$40,812 $24,653 $41,081
Comparable Hotel EBITDA Margin (%)24.52% 16.75% 23.45%

Segment breakdown (Q4 2024):

Segment KPIResorts (Q4 2024)Urban (Q4 2024)
Total Hotel Revenue ($USD ‘000)$120,688 $54,529
RevPAR (Comparable) ($)$515.14 $179.00
Occupancy (Comparable) (%)55.62% 68.29%
ADR (Comparable) ($)$926.22 $262.13

KPIs (Q4 2024 unless noted):

KPIValue
Comparable RevPAR ($)$304.94
Comparable ADR ($)$479.92
Comparable Occupancy (%)63.54%
AFFO per Diluted Share ($)$(0.06)
Adjusted EBITDAre ($USD ‘000)$30,225
Comparable Hotel EBITDA ($USD ‘000)$41,081
Cash & Equivalents ($USD ‘000)$135,465
Restricted Cash ($USD ‘000)$49,592
Net Debt / Gross Assets (%)40.8%
Capex Invested in Quarter ($USD ‘000)$15,800

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Common DividendQ1 2025$0.05/sh indicated policy $0.05/sh declared; annualized $0.20/sh; Board to review quarterly Maintained
CapexFY 2025N/A$75M–$95MInitiated (spend plan)
Lake Tahoe Mortgage TermsFY 2025SOFR+3.60%; Jan 2025 maturity Extended; paydown $10M; now SOFR+3.25%; final maturity Jan 2026 Improved terms
CMBS Loan (Sofitel/Clancy/Seattle/Notary)Jun 2025~$293.2M due; refi discussions Active discussions; expect announcement in coming weeks Pending refi

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Urban portfolio strengthUrban RevPAR +6.3% YoY; momentum cited Urban comparable RevPAR +6%; EBITDA ~$16.4M Urban comparable RevPAR +3.3% in Q4 Sustained growth; moderating vs Q3
Resort normalizationResort RevPAR pressures vs 2019 normalization Weather/events impacted Sarasota; storms limited losses Inflection to +1.3% resort RevPAR; strong EBITDA; supply constraints supportive Improving
Group demandRising leads/bookings; Q3 group +14% YoY Q1 2025 group pace +~40% Q4 group rooms +7%; 2025 pace +8%; $61M future group booked Robust pipeline
Renovations/ROILake Tahoe, Sarasota, Scottsdale projects underway Tahoe nearing completion; sales leadership added Tahoe renovation driving +49% revenue; 2025 capex $75–$95M Translating to results
Capital markets/refiPlan: asset sales; preferred redemption; buyback auth. $407M CMBS refi at SOFR+3.24% (effective +3.01%) Active refi for $293M CMBS; Lake Tahoe extension SOFR+3.25% Constructive markets
Macro/supplyN/AElection-year demand effects; DC softness Industry supply growth ~0.8% p.a. next 3 yrs → supportive RevPAR Favorable setup

Management Commentary

  • “Now, after six straight quarters of declining RevPAR, our portfolio posted positive RevPAR growth in the fourth quarter, and I believe this indicates an important inflection point. In fact, RevPAR growth for our portfolio for the month of January was approximately 13%… excluding the Capital Hilton… approximately 9%.” – Richard Stockton, CEO .
  • “Adjusted EBITDAre for the quarter was $30.2 million… We ended the quarter with cash and cash equivalents of $135.5 million plus restricted cash of $49.6 million… approximately 40.8% net debt to gross assets.” – Deric Eubanks, CFO .
  • “Following its transformative renovation, the Ritz-Carlton Lake Tahoe delivered a strong fourth quarter performance with a 49% increase in total hotel revenue… rooms up 48% and F&B up 58%… positioning our portfolio for continued success.” – Chris Nixon, EVP Asset Management .

Q&A Highlights

  • Capex/Tahoe: Tahoe renovation largely complete; only a small Café Blue project under $2M remains; no 2025 spend expected on branded residences until entitlements secured .
  • Capital allocation: Restricted from repurchasing common currently; continuing preferred redemptions as part of shareholder value plan .
  • Demand inflection: January RevPAR strength driven by calendar shifts, revenue management, higher-end unit rentals, and renovation benefits (esp. Lake Tahoe) .
  • Resort growth outlook: Industry supply growth projected ~0.8% p.a. vs historical ~2% → favorable RevPAR backdrop for resorts (higher barriers to entry) .
  • Transactions/financing: Bid for high-quality hotels is strong; CMBS bid attractive; spreads have tightened ~100 bps; refi of $293M loan progressing .

Estimates Context

  • S&P Global consensus EPS and revenue estimates for Q4 2024 were unavailable due to data access limitations during retrieval. As a result, comparisons vs Street estimates cannot be provided at this time. Values would have been sourced from S&P Global if available.

Key Takeaways for Investors

  • The operating inflection is credible: YoY RevPAR and comparable revenue improved, with margin recovery supported by renovated assets and urban strength; watch for continuation into Q1 with January data points .
  • Balance sheet catalysis: Successful refi of ~$293M CMBS and continued preferred redemptions could improve cash flow coverage and reduce financing risk, a tangible near-term catalyst .
  • Renovation ROI is showing up in property-level KPIs (e.g., Lake Tahoe revenue +49%); 2025 capex program ($75–$95M) targets further premium experiences and pricing power .
  • Segment mix: Urban momentum offsets resort normalization; group demand pipeline is healthy with $61M booked in Q4 and 2025 pace up 8%—supporting visibility into revenue .
  • Dividend continuity: $0.05 per share declared for Q1 2025; ongoing Board review implies flexibility; dividend stability should appeal to yield-oriented holders .
  • Macro tailwinds: Constrained industry supply and easing rates/spreads support margin and valuation; any rate cuts bolster interest expense trajectory .
  • Risk monitor: Markets with volatility (LA, SF) and weather/calendar sensitivities can still impact specific assets; ongoing preferred dividends continue to weigh on GAAP to common—focus on AFFO and EBITDAre trends .