Ashford Hospitality Trust, Inc. Q1 FY2025 earnings call

• First quarter performance highlighted by 3.2% comparable RevPAR growth, 3.6% comparable total revenue growth, and 8.7% growth in comparable hotel EBITDA. - Recent conversions of La Concha Hotel in Key West to Marriott’s Autograph Collection and Le Pavillon Hotel in New Orleans to Marriott’s Tribute portfolio showed strong results: Le Pavillon had 78% total revenue growth, La Concha had 27% total revenue growth. - GRO AHT initiative aims to drive $50 million in run rate EBITDA improvement; nearly $30 million of run rate EBITDA improvement expected from fully implemented initiatives. - Corporate expense reductions: 50% reduction in Board members' cash compensation, Board size reduced from 9 to 7, executive management incentives reduced by over 50%, and adviser implemented corporate cost savings. - Capital structure improvements: Sold Courtyard Boston Downtown for $123 million, refinanced 16 assets, repaid corporate strategic financing, extended mortgage loans for Hotel Indigo Atlanta Midtown and MS-17 mortgage loan secured by 17 hotels. - Operational updates: Geographically diverse portfolio had 3% comparable hotel RevPAR growth; hotel EBITDA grew 9% year-over-year; group room revenue pace positive despite macroeconomic pressures; recent hotel renovations and capital projects underway. - Hurricane recovery efforts: Some properties provided accommodations and room nights to support recovery, generating revenue and serving the community.

For the first quarter, Ashford Hospitality Trust reported a net loss attributable to common stockholders of $27.8 million or $4.91 per diluted share. AFFO per diluted share was negative $0.98, but total AFFO improved by $8.2 million over the prior year quarter. Adjusted EBITDAre for the quarter was $61.7 million, a $2.2 million increase over the prior year quarter despite total revenue being down $26.5 million. At the end of the first quarter, the company had $2.6 billion of loans with a blended average interest rate of 8.1%, $85.8 million in cash and cash equivalents, $139.2 million in restricted cash, and net working capital of approximately $156 million. The consolidated portfolio consisted of 72 hotels with 17,329 rooms.

• GRO AHT initiatives expected to contribute more than $30 million of run rate EBITDA improvement towards the $50 million goal. - For full year 2025, capital expenditures anticipated to range between $95 million and $115 million. - Plan to initiate additional capital projects later in the year, including guest room renovations, public space enhancements, and brand conversions.

• Forward-looking statements subject to numerous assumptions, uncertainties, and known or unknown risks that could cause actual results to differ materially from anticipated. - Macroeconomic events introduce uncertainty to industry forecasts. - Volatility in government demand and potential impact on hotel performance, though isolated in the short-term. - Uncertainties related to loan maturities and refinancing negotiations.

Q: Dive into the portfolio trends, monthly RevPAR progression in the quarter, impact of calendar shifts, and real-time demand trends A: January was strong post-inauguration, February had leap day impact, Easter affected March and April. Softness in some markets due to policy changes, but group room revenue pace positive. Working to backfill government business in D.C. with transient accounts, focusing on labor productivity and cost control Q: How much of the portfolio is exposed to international inbound travel and government demand, and if demand volatility is structural or short-term A: International inbound travel is less than 5% of the portfolio's demand. Government demand is a smaller percentage, isolated to D.C., and seen as short-term with ability to backfill with other segments Q: AHT GRO initiative progress, low-hanging fruit harvested, and confidence in reaching $50 million goal A: Low-hanging fruit harvested, still have $10-plus million of improvement potential at corporate level. Confident in ability to deliver on $50 million goal, though hard to quantify exact progress Q: Update on BAML Island loan and conversations with lenders A: Forbearance agreement in place with extension option to next month, working on potential refinancing with existing and other lenders, expecting favorable conclusion Q: Update on potential asset sales and market pricing A: Shifted focus to asset sales after paying off Oaktree corporate strategic financing and negotiating loan extensions for flexibility. Primarily focused on select service and underperforming full-service assets with attractive cap rates relative to cash flows to deleverage and improve capital structure