Braemar Hotels & Resorts (BHR) Sidoti Micro-Cap Virtual Conference summary

Strategic focus and portfolio overview

• Focused on luxury hotels with high barriers to entry and strong RevPAR growth over 30 years.

• Portfolio includes 15 hotels, $2.2 billion in assets, and $700 million in annual revenue.

• Balanced mix: 60% resort, 40% urban, with major brands like Ritz-Carlton and Four Seasons.

• Recent asset sales and capital recycling to optimize portfolio and reduce non-luxury exposure.

• Ongoing renovations and repositioning, including Cameo Beverly Hills and several resort upgrades.

Industry trends and performance

• Luxury hotel segment outperforms other chain scales in rate growth and resilience.

• Occupancy at 95% of pre-COVID levels; ADRs up 25% from 2019, driving RevPAR 18% above pre-pandemic.

• Urban hotel demand expected to rise as work-from-home policies are repealed.

• Hotel supply growth will be less than half historical levels for the next four years, supporting rate increases.

• Resort ADRs remain 40% above 2019, with mean reversion signaling renewed growth ahead.

Financial management and capital allocation

• Refinanced loans to lower interest costs and extend maturities, with more refinancing planned for 2025.

• Portfolio is 75% floating rate debt, positioning for increased cash flow as rates decline.

• Plans to sell one or two hotels in 2024, using proceeds for preferred equity redemption, share buybacks, or potential internalization.

• $50 million share buyback authorization in place.

• Added experienced board members to support transactions and restructuring.