Ashford Inc. (Holding Company)

Greetings and welcome to Ashford, Inc. First Quarter 2021 Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during a conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jordan Jennings, Investor Relations for Ashford, Inc. Thank you. You may begin.

Good day, everyone, and welcome to today's conference call to review results for Ashford for the first quarter of 2021 and to update you on recent developments. On the call today will be Jeremy Walter, President and Chief Operating Officer, Derek Eubanks, Chief Financial Officer, and Eric Batis, Managing Director and Senior Vice President of Portfolio Management. The results as well as notice of accessibility of this conference call on a listen-only basis over the Internet were distributed yesterday in a press release. At this time, let me remind you that certain statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the safe harbor provisions of the Federal Securities Regulations. Such forward-looking statements are subject to numerous assumptions, uncertainties, and known or unknown risk, which could cause actual results to differ materially from those anticipated. These factors are more fully discussed in the company's filings with the Securities and Exchange Commission. The forward-looking statements included in this conference call are only made as of the date of this call, and the company is not obligated to publicly update or revise them. In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in the company's earnings release and accompanying tables or schedules, which have been filed on Form 8K with the SEC on May 5, 2021, and may also be accessed through the company's website at www.ashfordinc.com. Each listener is encouraged to review those reconciliations provided in the earnings release together with all other information provided in the release. Also, unless otherwise stated, all reported results discussed in this call compare the first quarter of 2021 with the first quarter of 2020. I will now turn the call over to Jeremy.

Good morning, and welcome to our call to discuss our financial results for the first quarter of 2021. I will begin by discussing Ashford's operations and strategy. Derek will then review our financial results for the quarter, and then Eric will provide an update regarding our products and services businesses. After that, we will open it up for Q&A. I want to begin by thanking our associates for their relentless hard work during this unprecedented time. I can't tell you how proud I am of our executive leadership team, as well as our associates throughout the country. It's been a long year, for those of us in the hospitality industry. We're now seeing demand come back, and the recovery is here. As we look forward, I'm extremely optimistic about the future of our company. The key themes we are going to highlight today are we stabilized Ashford Trust and secured ample liquidity for that platform with years of runway, while the Braymar portfolio has already gotten back to cash flow positive at the corporate level. We are already seeing strong results in our third party growth initiative. We are ramping up our efforts at Ashford Securities and we have a comprehensive asset light business that is unique in the hospitality industry and well positioned for growth going forward. We believe the continued positive news around vaccine developments and distribution has created optimism for our industry. and we're starting to see positive trends in our operating results. Ashford advises two publicly traded REIT platforms, Ashford Trust and Braemar, which together owned 115 hotels with approximately 26,000 rooms and approximately $7.3 billion of gross assets as of March 31st, 2021. Braemar is currently benefiting from its focus on the luxury segment and specifically its luxury resorts, which have been the first properties to recover. During the quarter, Ashford Trust closed a $450 million strategic corporate financing that provides multiple years of liquidity. Both REIT platforms now have ample liquidity. Looking forward, with both REITs stabilized and performing well, we believe both are well positioned for the recovery of the hotel industry. and we remain focused on their future strategic objectives. Remington and Premier continue to execute on their long-term growth strategies. Both companies are benefiting from the improved demand trends we are seeing at our hotels, and we continue to believe that these two businesses are well-positioned to achieve growth with their third-party business initiatives. Both Remington and Premier have solid reputations, and neither has historically focused on third-party business. We're still in the early stages of this effort, but we have already seen strong momentum with Remington signing seven new hotel management contracts with third-party hotel owners and Premier signing 15 new third-party contracts. Looking ahead, we are extremely excited about the long-term opportunity for third-party growth at both Remington and Premier. We formed Ashford Securities in 2019 to be a dedicated platform to raise retail capital through financial intermediaries and the broker-dealer channel in order to grow our existing and future platforms. Our goal for Ashford Securities is to provide the market with highly differentiated alternative investment products. Types of capital raised may include but are not limited to non-traded preferred equity, non-traded convertible preferred equity, and non-traded REIT common equity for future platforms. I'm sure security is ramping up nicely and we anticipate beginning fundraising sometime this year. We're excited to pursue a fresh source of capital that will help us grow all of our platforms over the long term and all with the goal of increasing shareholder value. One of the businesses where we are seeing strong growth is Red Hospitality. Red Hospitality and Leisure is a leading provider of water sports activities and other travel and transportation services in the U.S. Virgin Islands and in Key West, Florida. Red had a very strong quarter, driven by strong leisure demand in its markets. Red anticipates that these markets will continue their strong performance in the coming months. Additionally, the products offered by Open Key and Pure Wellness continue to thrive in this environment. As the hotel industry strives to implement measures to provide a clean and safe environment, many hotels and guests are seeking automatic check-ins, allowing them to bypass the front desk with keyless entry and secure digital key capabilities. The industry is also seeking enhanced sanitation and air purification standards within the guest rooms. We believe the benefits that Open Key and Pure Wellness offer will position them well to achieve accelerated adoption and growth of our hotels nationwide. Looking ahead, we believe we have a superior strategy and structure that is unique within the hospitality space. We're starting to see the recovery in our industry and are also seeing investment opportunities of very attractive, unlevered returns that we did not see pre-pandemic. There are four ways our business can grow from here. The recovery of the hospitality industry and higher hotel revenues. An increase in our assets under management. Growth over third-party business. and the acquisition or incubation of additional businesses. For investors seeking exposure to an industry significantly impacted by the pandemic, we believe Ashford is an attractive option. In fact, in the coming weeks, we plan to publish an investor presentation that outlines the growth prospects we see for our businesses over the coming years. We believe the growth story for Ashford is compelling and look forward to sharing our perspective with investors. I will now turn the call