Braemar Hotels & Resorts Inc.

Greetings and welcome to the Braemar Hotels and Resorts Incorporated fourth quarter 2020 results conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the 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 Gentry. You may begin.

Good morning and welcome to today's call to review results for Braymore Hotels and Resorts for the fourth quarter and full year 2020 and to update you on recent developments. On the call today will be Richard Stockton, President and Chief Executive Officer, Derek Eubanks, Chief Financial Officer, and Jeremy Welter, Chief Operating Officer. Your results as well as notice of the 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 State Harbor provisions of the Federal Security Regulations. Such forward-looking statements are subject to numerous assumptions and certainties and known or unknown risks 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 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. 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 8A with SEC on February 25, 2021, and may also be accessed through the company's website at www.dhrweek.com. Each listener is encouraged to review those reconciliations provided in the earnings release together with all other information provided in the release. I will now turn the call over to Richard Sutton. Please go ahead, Richard.

Good morning, and welcome to our fourth quarter 2020 earnings conference call. I'll begin by providing an overview of our business and an update on our portfolio, which includes our hotels again achieving positive hotel EBITDA for the quarter. After that... Derek will provide a review of our financial results, and Jeremy will provide an update on our asset management activity. Afterward, we'll open the call for Q&A. The four key themes for today's call are luxury resort outperformance resulting in positive portfolio-wide hotel EBITDA, very strong forward bookings, significantly reduced monthly cash utilization, and no near-term debt maturities. 2020 was an extraordinary year, and while the COVID-19 pandemic has created both social and economic disruption on an unprecedented level and has created a volatile landscape throughout the hospitality industry, the rollout of vaccines gives us hope that the hospitality industry can return to a more normal environment in the near future. In the meantime, we are proactively navigating through any potential challenges, And as I have said previously, our entire leadership team has been steadfast in our commitment to protect all of our stakeholders during this unprecedented time. I am pleased to report that during the fourth quarter, all of our properties remained open, and we continued to achieve positive hotel EBITDA across the portfolio. In December alone, we delivered positive hotel EBITDA of $3.3 million, our highest month since March of last year. This dollar performance in the quarter was driven by strong occupancy levels at our resort properties and a 10.8% increase over prior year ADR, with three luxury resorts achieving an ADR of over $1,000 during the holiday season. While leisure demand is holding up nicely, particularly on weekends, any significant uptake in REVPAR performance is likely to rely on the recovery of corporate transient demand and ultimately group demand as a result of widespread vaccination or achieving herd immunity. We are encouraged to see a significant decline in the number of daily new cases, which we believe to be a precursor to the end of the pandemic. Overall, our resorts continue to perform well, and forward bookings are solid throughout our portfolio. For the month of January, our rev bar was down 55% to $104, which demonstrates continued improvement. It looks like February will finish with an occupancy of close to 40% and an ADR of around $400, resulting in rev bar of approximately $160. Our current bookings for March and April look strong, with current ADR above $500 for reservations on the books for the month of March. Many of our hotels are in drive-to leisure markets and have been well-positioned to benefit from the resurgence of pent-up leisure demand in recent months. In total, eight of our 13 hotels are considered resort destinations. These hotels include the Ritz-Carlton Sarasota, Bartisono, Hotel Yonville, Ritz-Carlton Lake Tahoe, Pier House Resort, Park High at Beaver Creek, Hilton La Jolla at Torrey Pines, and Ritz-Carlton St. Thomas. We are pleased to report that this thesis has played out just as we expected as these hotels have a combined facility bidet of $7.1 million for the quarter. While it is still early in recovery and the impact of the virus is still unpredictable, it is clear from the early feedback we are hearing from guests that they are enthusiastic about traveling again. We are also excited about the Clancy opening at the beginning of the fourth quarter. Located in San Francisco's vibrant Soma District, the former Courtyard San Francisco downtown underwent a rebranding and renovation in excess of $30 million to create the Clancy. It joins Marriott International's Autograph Collection Hotels, and the property features 410 guest rooms and over 11,000 square feet of modern meeting space throughout 16 event rooms. While construction restrictions delayed the Clancy's reopening by several months, and we expect that occupancy levels will be challenged in the near term given COVID-19's negative impact on group and business transient demand in this market, we look forward to realizing enhanced financial performance from this property over the long term as a result of the rebranding and renovation. While we continue to face the challenges of the pandemic and the uncertainties that go with it, we have taken proactive and aggressive actions to protect and enhance our corporate liquidity. This includes cutting expenses at the corporate level and significantly reducing our planned cap expense for the year. We will continue to preserve cash until we have more clarity on the recovery and the direction of the lodging industry. Our focus on the luxury segment, with many properties in drive-to markets, positions us to perform well in the near term, as well as for the ultimate recovery in our industry. Looking forward, we continue to believe that Braemar presents a compelling opportunity in the lodging REIT space. We are a unique story, with the majority of our assets in very desirable resort locations, a portfolio that is generating positive hotel EBITDA, and what we believe is a solid liquidity position and balance sheet with attractive debt financing in place as we come out of this pandemic. I will now turn the call over to Derek.