Braemar Hotels & Resorts (BHR) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw total hotel revenue rise 0.5% year-over-year to $188.3 million, but higher expenses and interest costs led to a net loss of $21.9 million, or $0.33 per diluted share, compared to a $13.0 million loss in Q2 2023.

• Urban hotels outperformed with a 6.3%–6.7% RevPAR increase, while resort properties saw a 6.4% RevPAR decline and ADR softness.

• The company completed the sale of Hilton La Jolla Torrey Pines for $165 million, repaid the $66.6 million mortgage, and used proceeds for debt repayment, preferred share redemptions, and distributions.

• A $407 million refinancing was completed in August 2024, improving the debt maturity profile and interest spread.

• A cooperation agreement with Blackwells Capital ended a proxy contest, expanded the board, and established a standstill through 2034.

Financial highlights

• Q2 2024 comparable hotel ADR was $418 (down 4.1%), occupancy 72.8% (up 2.7%), and RevPAR $305 (down 1.5%).

• Adjusted EBITDAre for the quarter was $42.7 million; comparable hotel EBITDA was $51.1 million.

• Net debt to gross assets stood at 40.4% at quarter end.

• Cash and cash equivalents at quarter end were $120.3 million, with restricted cash of $60.7 million.

• Quarterly dividend of $0.05 per share, annualized yield of 5.6%.

Outlook and guidance

• Management expects continued urban hotel momentum and strong group revenue pace, with 2025 group rooms revenue pacing 20% ahead.

• $80–$100 million in capital expenditures planned for 2024, including major renovations and conversions.

• Board will review the dividend policy quarterly, with potential increases as performance improves.

• Targeting net debt to gross assets ratio of 35% or lower by next year, contingent on further asset sales.