8-K: Ashford Trust Reports Mixed Q4 and Full Year 2024 Results, RevPAR Up, Net Loss Persists

Ashford Hospitality Trust reports a 3.1% increase in comparable RevPAR for Q4 2024, but still posts a net loss attributable to common stockholders of $(131.1) million.

Summary

• Ashford Hospitality Trust (AHT) reported its financial results for the fourth quarter and full year ended December 31, 2024.
• Comparable RevPAR for all hotels increased 3.1% to $126 for the quarter, driven by a 3.4% increase in Comparable ADR, but offset by a 0.3% decrease in Comparable Occupancy.
• Net loss attributable to common stockholders was $(131.1) million, or $(23.83) per diluted share for the quarter.
• Adjusted EBITDAre was $45.2 million for the quarter.
• Adjusted funds from operations (AFFO) was $(2.21) per diluted share for the quarter.
• Comparable Total hotel revenue increased 4.6% over the prior year quarter.
• Comparable Hotel EBITDA was $68.0 million for the quarter, reflecting a 6.2% growth rate.
• The Company ended the quarter with $112.9 million in cash and cash equivalents and $107.6 million in restricted cash.
• For the full year, Comparable RevPAR increased 0.7% to $134, with a 2.3% increase in Comparable ADR and a 1.6% decrease in Comparable Occupancy.
• Net loss attributable to common stockholders for the year was $(82.5) million, or $(17.54) per diluted share.
• Adjusted EBITDAre for the year was $235.9 million.
• AFFO for the year was $(4.84) per diluted share.
• Capex invested during the year was $108.0 million.
• The company launched a strategic initiative called GRO AHT to drive EBITDA growth and improve shareholder value.
• The company successfully extended and refinanced mortgage loans on two hotels.
• The company completed the sale of the Courtyard Boston Downtown for $123.0 million.
• The company completed a refinancing of 16 hotels for $580 million and fully paid off its strategic financing.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the company reports a net loss, there are positive trends in RevPAR and EBITDA, along with strategic initiatives and successful refinancing efforts. Management's comments are optimistic, but the financial results are mixed.

Positives

• Comparable RevPAR increased for both the quarter and the year.
• Comparable ADR increased for both the quarter and the year.
• Comparable Hotel EBITDA increased for the quarter.
• The company successfully extended and refinanced mortgage loans.
• The company completed the sale of a hotel at an attractive cap rate.
• The company paid off its strategic financing.
• The company is focused on growing ancillary revenue streams.
• The company is current on dividends on its outstanding preferred stock and plans to pay dividends on its outstanding preferred stock on a current basis going forward.

Negatives

• Net loss attributable to common stockholders was $(131.1) million for the quarter and $(82.5) million for the year.
• AFFO was negative for both the quarter and the year.
• Comparable Occupancy decreased for both the quarter and the year.
• The company did not pay a dividend on its common stock and common units for the fourth quarter ended December 31, 2024.

Risks

• The company's ability to repay, refinance, or restructure its debt.
• General volatility of the capital markets and the market price of the company's stock.
• Changes in interest rates or the general economy.
• The degree and nature of the company's competition.

Future Outlook

The company sees strong group demand entering 2025 and remains focused on executing its GRO AHT strategy to drive outsized EBITDA growth.

Management Comments

• 'I'm extremely pleased with the Company's fourth quarter 2024 financial results highlighted by solid RevPAR performance and even stronger total revenue growth,' said Stephen Zsigray, President and Chief Executive Officer of Ashford Trust.
• Mr. Zsigray stated that improved performance highlights the impact of strategic decisions and reflects early results on efforts to grow ancillary revenue streams.
• Mr. Zsigray concluded that the company is excited to begin the next chapter for Ashford Trust with recently completed refinancing and the successful repayment of corporate strategic financing.

Industry Context

The hotel industry is recovering, but Ashford Trust's results are mixed, with RevPAR increases offset by net losses. The company is taking steps to improve performance through strategic initiatives and asset management.

Comparison to Industry Standards

• While the document does not provide specific comparisons to industry standards, it does mention key performance indicators such as RevPAR, ADR, and Hotel EBITDA, which are commonly used to benchmark hotel performance.
• Without further information, it's difficult to assess how Ashford Trust's performance compares to its peers, such as Host Hotels & Resorts (HST), Park Hotels & Resorts (PK), or Pebblebrook Hotel Trust (PEB).
• The sale of the Courtyard Boston Downtown at a 5.9% capitalization rate on net operating income for the trailing twelve months ended September 30, 2024, or 14.3x Hotel EBITDA for the same time period, can be compared to recent hotel transactions to assess its attractiveness.

Related Party Transactions

• The company is committed to achieving significant reductions in corporate overhead with the full support of its advisor, Ashford Inc.
• The company is negotiating to reduce advisory fees and reimbursable expenses with advisor Ashford Inc.

Stakeholder Impact

• Shareholders: The company's performance impacts shareholder value, with the GRO AHT initiative aimed at improving shareholder returns.
• Employees: The company is implementing measures to reduce payroll expense, including reductions in force and changes to PTO policies.
• Customers: The company is focused on enhancing top-line performance and improving the guest experience through revenue maximization and operational efficiency initiatives.
• Creditors: The company's ability to repay, refinance, or restructure its debt is a key risk factor.

Next Steps

• The company will conduct a conference call on February 26, 2025, to discuss the results.
• The company will continue to execute its GRO AHT strategy to drive EBITDA growth.
• The Board of Directors will continue to monitor the situation and assess future quarterly common dividend declarations.

Key Dates