Braemar Hotels & Resorts Earnings Call: Mixed Results, Optimistic Outlook

Braemar Hotels & Resorts ((BHR)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call for Braemar Hotels & Resorts presented a mixed sentiment, reflecting both achievements and challenges. The company highlighted strong performance in its resort segment, successful asset sales, and refinancing efforts, which were overshadowed by underperformance in urban hotels and a net loss for the quarter. Despite these mixed outcomes, the company’s strategic initiatives and asset management activities suggest optimism for future performance.

Strong Resort Performance

Braemar Hotels & Resorts reported a commendable performance in its resort segment, with a 5.5% increase in Comparable RevPAR and a notable 58% growth in combined comparable hotel EBITDA over the prior year period. The Four Seasons Resort Scottsdale and Ritz-Carlton Lake Tahoe were standout performers, achieving 25% and 32% growth in RevPAR and total revenue, respectively.

Successful Asset Sales and Refinancing

The company successfully completed the sale of the Marriott Seattle Waterfront for $145 million and announced the planned sale of the Clancy for $115 million. Additionally, Braemar Hotels & Resorts refinanced several loans, including those for the Four Seasons Resort Scottsdale, effectively addressing all 2025 debt maturities.

Increase in Group Room Revenue

Braemar Hotels & Resorts experienced a 9.1% increase in group room revenue pace for the full year 2025 compared to the prior year. The Ritz-Carlton Lake Tahoe notably achieved an 80.2% increase in group room revenue, underscoring the strength in this segment.

Expansion of EBITDA and GOP Margins

The company reported a 15.1% increase in total comparable hotel EBITDA over the prior year quarter, alongside a 160 basis point expansion in GOP margin, indicating improved operational efficiency.

Urban Hotels Underperformance

The urban hotel segment faced challenges, with a 3.9% decrease in Comparable RevPAR. This decline was attributed to extensive renovations and citywide occupancy declines in locations such as Philadelphia.

Net Loss for the Quarter

Braemar Hotels & Resorts reported a net loss attributable to common stockholders of $8.2 million, or $0.12 per diluted share, with AFFO per diluted share at negative $0.19, reflecting the financial challenges faced during the quarter.

Impact of Renovations

Significant renovations at three hotels impacted the overall portfolio results, with RevPAR growth being lower at 3.4% when excluding hotels under renovation, highlighting the temporary setbacks due to ongoing improvements.

Forward-Looking Guidance

Looking ahead, Braemar Hotels & Resorts remains optimistic, with key metrics indicating continued growth. Comparable RevPAR grew by 1.4% to $257, marking the fourth consecutive quarter of growth. The luxury resort segment is expected to maintain its robust performance, supported by strategic transactions and renovations aimed at enhancing property value. Liquidity remains strong, with a net debt to gross assets ratio of 43.2% and cash equivalents of $116.3 million.

In summary, the earnings call for Braemar Hotels & Resorts reflected a blend of strong achievements and notable challenges. While the resort segment and strategic financial maneuvers offer a positive outlook, the underperformance in urban hotels and net loss highlight areas needing attention. The company’s forward-looking guidance suggests a focus on sustaining growth and enhancing property value through strategic initiatives.