Braemar Hotels & Resorts Inc. Q1 FY2025 earnings call

• Portfolio achieved 4.2% comparable RevPAR growth in Q1, with growth in urban and resort segments.
• Addressed final 2025 debt maturity, resulting in lower cost of capital and improved maturity schedule.
• Closed refinancing on 5 hotels with $363 million loan, interest only with SOFR plus 2.52% rate.
• Restructured Sofitel Chicago Magnificent Mile as franchise, expecting immediate value uplift.
• Redeemed approximately $90 million of nontraded preferred stock, aiming to deleverage.
• Group pace for 2025 up 7% and 2026 up 10%.
• Property managers implemented cost control initiatives, improving EBITDA margin by 34 basis points.

The portfolio achieved 4.2% comparable RevPAR growth in the first quarter. The resort portfolio reported comparable RevPAR of $800, a 1.9% increase over the prior year period, with combined comparable hotel EBITDA of $62 million, a 2% increase. Urban hotels delivered comparable RevPAR growth of 11.3%, with the Capital Hilton seeing 19.3% year-over-year RevPAR growth due to the presidential inauguration. Even excluding the Capital Hilton, the urban portfolio achieved 8.1% RevPAR growth.

• Group pace for 2025 is up 7% and 2026 shows continued growth at 10%.
• Anticipate spending between $75 million and $95 million on capital expenditures in 2025.
• Quarterly common stock dividend of $0.05 per share announced, annualized yield ~10.4%.

• Economic uncertainty was mentioned but portfolio is well-positioned.
• International inbound exposure is minimal and market-specific, with muted impact on the portfolio.

Q: On the group side, any trends in booking window, cancellations?

A: Portfolio is insulated from macro headwinds; booking window shortening slightly but no major impact to group, Q1 group revenue up 31%.

Q: International inbound exposure impact?

A: International inbound is a small part of the portfolio, mid-single digits; market specific with minimal impact.

Q: EBITDA margin opportunity?

A: Optimistic about margin, productivity improved, cost containment measures in place, wage growth stabilizing.

Q: Magnificent Mile conversion details?

A: Convert to franchise with Remington Hospitality, unencumbered assets trade at lower cap rates, CapEx for public and meeting space renovation next year.

Q: Preferred redemptions mechanics?

A: Preferred stock redeemable by company after 2 years, by holder at par after 3 years; issuance occurred over time with different stages.

Q: Asset sales update?

A: Testing market with upper upscale assets, expecting 1-2 closings this year; proceeds for preferred redemptions, share buybacks, or retiring corporate convertible note.