Ashford Hospitality Trust Inc

Greetings and welcome to Ashford Hospitality Trust's first quarter 2023 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, Manager of Investor Relations. Thank you. You may begin.

Good day, everyone, and welcome to today's conference call to review the results for Ashford Hospitality Trust for the first quarter of 2023 and to update you on recent developments. On the call today will be Rob Hayes, President and Chief Executive Officer, Derek Eubanks, Chief Financial Officer, and Chris Nixon, Executive Vice President and Head of Asset Management. The results as well as notice of accessibility of this conference call on a listen-only basis over the internet were distributed yesterday afternoon 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 risks which could cause actual results to differ materially from those anticipated. These factors are more fully discussed in the accompanying filings with the Securities and Exchange Commission. Before 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. Statements made during this call do not constitute an offer to sell or solicitation of an offer to buy any securities. Securities will be offered only by means of a registration statement and prospectus which can be found at www.sec.gov. 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 1, 2023, and may also be accessed to the company's website at www.ahtread.com. Each listener is encouraged to review those reconciliations provided in the earnings release together with all of their information provided in the release. Also, unless otherwise stated, all reported results discussed in this call compared the first quarter ended March 31st, 2023 with the first quarter ended March 31st, 2022. I will now turn the call over to Raul Pate. Please go ahead, sir.

Good morning. Welcome to our call. After my introductory comments, Derek will review our first quarter financial results, and then Chris will provide an operational update on the portfolio. The main themes for our call today are, first, We are very pleased with a strong REVPAR growth we achieved in the first quarter. Second, our liquidity and cash position continue to be strong. We ended the quarter with approximately $442 million of net working capital. We feel well positioned for upcoming extension tests and continue to have access to undrawn capital if needed via our strategic financing. And third, the capital raising for our non-trader preferred is ramping up nicely and increased over 400% from the previous quarter. We believe this offering will provide an attractive cost of capital and allow us to accretively grow our portfolio over time, subject to future market conditions. We believe access to this growth capital is a significant competitive advantage, particularly given the fact that lodging REITs are currently trading at material discounts to their net asset values. Our preference would be to use that capital for future growth, though we may use some of the capital to pay down debt as needed. We continue to build the selling syndicate and currently have 30 signed dealer agreements representing over 4,700 representatives selling the security. We are still very early in the capital raising process, and today we have issued approximately $21.5 million of gross proceeds, including $9.1 million in March alone. We expect this fundraising momentum to accelerate as we get further into 2023. Let me now turn to offering performance at our hotels. RevPAR for all hotels in our portfolio increased approximately 30% in the first quarter compared to the prior year quarter. This RevPAR growth was led by occupancy, which increased 17% over the prior year quarter, and we saw strong growth in average rates, which increased 10% over the prior year quarter. In addition to our solid hotel performance, the majority of our hotels are now out of their respective cash traps, and only 40% of our hotels remain in cash traps under their respective loans, compared to 79% at the end of the fourth quarter of 2022. Further, the hotels that are now out of their cash traps generated approximately 70% of the company's full-year 2022 hotel EBITDA. One of our main priorities for 2023 is maximizing our operating performance to minimize potential paydowns for any extension tests associated with our property-level loans. We continue to make great progress on this front with the successful extension modification of the JPMorgan Chase 8 hotel loan, as well as the completed extension of our BAML Highland pool loan. We're also working with a lender on the refinancing of the La Posada de Santa Fe and Hilton Alexandria loans, which are the company's only final debt maturities of 2023. Derek will talk about these more in detail. While we feel well prepared for the remaining upcoming extension test, there may be situations where we have loan balances that exceed current market values of underlying hotels. If those situations arise, we may give assets back to lenders or allocate additional capital to focus on maximizing value for our shareholders. Looking ahead, we believe our geographically diverse portfolio consisting of high-quality assets with best-in-class brands and management companies is well positioned. We believe that our relationship with our affiliated property manager, Remington, really sets us apart as well. Remington has been able to consistently manage costs and optimize revenues aggressively, enabling us to outperform the industry from an operations standpoint for many years. Additionally, capital recycling remains an important component of our strategy, and we continue to pursue opportunities to sell certain non-core assets. We've identified several assets that we may bring to market for sale if market conditions warrant. We expect any net proceeds from these sales go towards paying down debt. Turning to investor relations, we continue to have a robust outreach effort to get in front of investors, communicate our strategy, and explain what we believe is an attractive investment opportunity at Ashford Trust. We have attended numerous industry and Wall Street conferences, which have led over 600 investor meetings over the past year. And we have several conferences coming up this year. We look forward to speaking with many of you at those events. We believe the right plan in place to move forward and maximize value at Ashford Trust. This plan includes continuing to grow liquidity across the company, optimizing operating performance at our assets, improving the balance sheet over time, and looking for opportunities to invest and grow the portfolio. We have a track record of success when it comes to property acquisitions, joint ventures, and asset sales, and we expect that they will continue to be part of our plans moving forward. We ended the first quarter with a substantial amount of cash on our balance sheet, and with the launch of this non-trader preferred offering, We are excited about the opportunities we see in front of us. And now I'll turn the call over to Derek to review our first quarter financial performance.