8-K: Braemar Hotels Reports Q4, Full Year 2025 Results Amid Sale Process

Braemar Hotels & Resorts reported mixed Q4 and full-year 2025 results, including a net loss, while actively pursuing a company sale.

Summary

• For the fourth quarter ended December 31, 2025, Comparable Total RevPAR for all hotels increased 1.8% to $579, while Comparable RevPAR was relatively flat at $340.
• Comparable ADR increased 5.4% to $559, but Comparable Occupancy decreased 5.2% to 60.8% for Q4 2025.
• Net loss attributable to common stockholders for Q4 2025 was $(46.0) million, or $(0.67) per diluted share, and Adjusted Funds From Operations (AFFO) was $(0.02) per diluted share.
• Adjusted EBITDAre for Q4 2025 was $28.8 million, and Comparable Hotel EBITDA was $38.0 million.
• For the full year ended December 31, 2025, Comparable Total RevPAR increased 3.1% to $583, and Comparable RevPAR increased 1.0% to $347.
• Full Year 2025 Comparable ADR increased 3.9% to $538, while Comparable Occupancy decreased 2.7% to 64.6%.
• Net loss attributable to common stockholders for Full Year 2025 was $(72.7) million, or $(1.07) per diluted share, compared to a net loss of $(50.9) million, or $(0.77) per diluted share, in the prior year.
• Full Year 2025 AFFO per diluted share was $0.28, up from $0.21 in the prior year, and Adjusted EBITDAre was $147.0 million.
• Comparable Hotel EBITDA for Full Year 2025 was $164.2 million, up from $159.3 million in the prior year.
• The Company ended Q4 2025 with $124.4 million in cash and cash equivalents and $42.5 million in restricted cash.
• Net debt to gross assets was 46.7% at the end of Q4 2025, with $23.4 million in Capex invested during the quarter and $77.9 million for the full year.
• In August 2025, the Company initiated a process for the sale of the Company or its assets to maximize shareholder value.
• During Q4 2025, the Company completed the sale of The Clancy in San Francisco for $115 million and repositioned Cameo Beverly Hills to Hilton's luxury LXR brand.
• Renovations were completed at Hotel Yountville in Napa Valley and Park Hyatt Beaver Creek.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a challenging quarter with significant net losses and declining occupancy, partially offset by strategic asset management and strong resort performance. The ongoing sale process introduces uncertainty but also potential for shareholder value realization.

Positives

• Comparable Total RevPAR increased 1.8% in Q4 2025 and 3.1% for Full Year 2025.
• Comparable ADR increased 5.4% in Q4 2025 and 3.9% for Full Year 2025.
• For hotels not under renovation, Comparable RevPAR increased 2.6% in Q4 2025 and 2.39% for Full Year 2025, with Comparable Hotel EBITDA increasing 6.4% in Q4 and 6.66% for the full year.
• Full Year 2025 AFFO per diluted share increased to $0.28 from $0.21 in the prior year.
• Full Year 2025 Comparable Hotel EBITDA increased to $164.2 million from $159.3 million in the prior year.
• Successful sale of The Clancy in San Francisco for $115 million ($280,487 per key), representing a 5.2% capitalization rate.
• Strategic repositioning of Cameo Beverly Hills to Hilton's luxury LXR brand completed.
• Completed renovations of Hotel Yountville in Napa Valley and Park Hyatt Beaver Creek.
• Acquired the minority interest in the Capital Hilton for $14.5 million, consolidating ownership.
• The resort portfolio performed well, with comparable RevPAR growth of 4.1% and comparable EBITDA growth of 6.0% in Q4 2025.

Negatives

• Net loss attributable to common stockholders for Q4 2025 was $(46.0) million, or $(0.67) per diluted share.
• Full Year 2025 net loss attributable to common stockholders worsened to $(72.7) million, or $(1.07) per diluted share, compared to $(50.9) million, or $(0.77) per diluted share, in the prior year.
• Adjusted Funds From Operations (AFFO) was negative $(0.02) per diluted share for Q4 2025.
• Comparable Occupancy decreased 5.2% in Q4 2025 and 2.7% for Full Year 2025.
• Comparable RevPAR for all hotels was relatively flat over the prior year quarter.
• The Company recorded significant impairment charges of $54.492 million in Q4 and Full Year 2025.
• Net debt to gross assets was 46.7% at the end of Q4 2025.
• No common equity dividend policy has been declared for 2026 due to the ongoing Company sale process.
• Hotel net income (loss) for all hotels was $(49.403) million in Q4 2025, a significant decrease from $(2.180) million in Q4 2024.
• Hotel net income (loss) for all hotels was $(13.005) million for Full Year 2025, a significant decrease from $26.505 million for Full Year 2024.

Risks

• The Company's ability to repay, refinance, or restructure its debt and the debt of certain subsidiaries.
• Uncertainty regarding anticipated or expected purchases or sales of assets.
• Risks associated with the Company's ability to effectuate its dividend policy, including factors such as operating results and the economic outlook influencing the board's decision.
• General volatility of the capital markets and the market price of the common stock and preferred stock.
• Availability, terms, and deployment of capital.
• Availability of qualified personnel.
• Changes in the industry and the markets in which the Company operates, interest rates, or the general economy.
• The degree and nature of the Company's competition.
• There is no assurance that the initiated sale process will result in a sale of the Company or its assets, and no definitive timetable is set.
• The Board has not declared a common equity dividend policy for 2026, as the ongoing Company sale process could result in assets being sold in more than one transaction with net proceeds distributed after satisfying other obligations.

Future Outlook

The Company is actively pursuing a process for the sale of the Company or its assets, initiated in August 2025, with the goal of maximizing shareholder value. There is no definitive timetable for completion, and no assurance that this process will result in a sale. The Board has not declared a common equity dividend policy for 2026 due to the ongoing sale process, which could involve multiple transactions and distribution of net proceeds after satisfying obligations.

Management Comments

• "I'm pleased with Braemar's solid fourth quarter performance, highlighted by comparable total revenue growth of 1.8%." Richard J. Stockton, President and Chief Executive Officer.
• "Renovations at a few properties significantly impacted our portfolio results. For hotels not under renovation, comparable total revenues increased 4.2% and comparable Hotel EBITDA increased 6.4% over the prior year period." Richard J. Stockton.
• "Our resort portfolio again performed well, benefiting from a return to a more normalized growth trajectory. Resorts delivered a solid fourth quarter with comparable RevPAR growth of 4.1% and strong fourth quarter comparable EBITDA growth of 6.0% over the prior year period." Richard J. Stockton.
• "We're also very pleased to have recently completed the conversion of our Cameo Beverly Hills to Hilton's luxury LXR brand. This transformation honors the property's storied history while aligning with the expectations of today's luxury traveler." Richard J. Stockton.
• "Lastly, and in the context of evaluating all potential options to create shareholder value, we have appointed real estate broker co-advisors to evaluate the potential for individual asset sales in conjunction with the Company Sale Process." Richard J. Stockton.

Industry Context

StockSavvy.ai notes that the luxury hotel and resort sector, while generally resilient, can be impacted by renovation cycles and broader economic shifts affecting travel demand, as evidenced by Braemar's mixed occupancy and ADR trends. The strategic repositioning of properties like Cameo Beverly Hills to luxury brands aligns with a broader industry trend of enhancing asset value through branding and premium guest experiences. The pursuit of a company sale or asset sales reflects a strategic response to market conditions and shareholder value maximization, a common theme in the REIT sector, particularly as companies seek to optimize portfolios and address debt structures in a dynamic interest rate environment.

Comparison to Industry Standards

• The sale of The Clancy for $115 million at a 5.2% capitalization rate on trailing 12-month net operating income provides a benchmark for urban hotel valuations. This can be compared to recent transactions involving similar urban hotel assets by peers like Host Hotels & Resorts or Pebblebrook Hotel Trust to assess if the valuation is competitive within the current market.
• The comparable RevPAR growth of 4.1% and EBITDA growth of 6.0% for the resort portfolio in Q4 2025 can be benchmarked against the performance of other luxury resort REITs such as Ryman Hospitality Properties or Sunstone Hotel Investors to gauge relative strength in the high-end leisure segment.
• The overall comparable RevPAR growth of 1.0% for the full year 2025 is modest and should be compared to the average RevPAR growth reported by the broader U.S. hotel industry and luxury segment, as tracked by STR, to understand if Braemar is outperforming or underperforming its direct competitors.

Corporate Governance

Related Party Transactions

• Deposit paid to Ashford Inc. of $17.0 million.
• Due to Ashford Inc., net of $5.148 million.
• Due to related parties, net of $0.257 million.

Stakeholder Impact

• Shareholders face uncertainty regarding the outcome and timing of the company sale process, but also potential for value maximization. Common equity dividends are suspended for 2026, while preferred dividend processes have been aligned.
• Creditors are exposed to a net debt to gross assets ratio of 46.7% and a blended average interest rate of 6.7%. The ongoing sale process could impact debt repayment strategies.
• Customers (guests) may benefit from strategic repositioning and completed renovations of properties, enhancing the luxury experience.
• Employees are not explicitly mentioned, but a company sale or asset sales could lead to operational changes that may affect personnel.

Next Steps

• Continue the process for the sale of the Company or its assets, with no definitive timetable set.
• The Board of Directors will approve a specific transaction or other course of action related to the sale process when appropriate.
• Real estate broker co-advisors have been appointed to evaluate the potential for individual asset sales in conjunction with the Company Sale Process.
• A conference call will be held on Friday, February 27, 2026, at 11:00 a.m. ET to discuss the results.

Key Dates

Recommendation

The company is actively pursuing a sale, which could unlock value, but the current financial performance shows significant net losses and declining occupancy, making it a speculative investment. The strategic asset sales and renovations are positive, but the overall uncertainty warrants a hold position until more clarity emerges on the sale process and its potential valuation.

Keywords

Hotels, Resorts, REIT, Hospitality, Luxury Hotels, SEC Filing, Earnings, Financial Results, Q4 2025, Full Year 2025, RevPAR, ADR, Occupancy, AFFO, EBITDAre, Hotel EBITDA, Company Sale, Asset Sale, Corporate Governance, Debt, Capital Expenditures, Renovations, The Clancy, Cameo Beverly Hills, LXR, Hotel Yountville, Park Hyatt Beaver Creek, Capital Hilton, Braemar Hotels & Resorts