Braemar Hotels & Resorts Inc.

Bremer Hotels and Resorts Inc. Second Quarter 2023 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 Jennings, Manager, Investor Relations, Thank you. Ms. Jennings, you may begin. Ms.

Good morning and welcome to today's call to review results for Braemar Hotels and Resorts for the second quarter of 2023 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 Chris Nixon, Executive Vice President and Head of Asset Management. The results as well as the 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. 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 in company tables or schedules, which have been filed on Form 8K with the SEC on August 2, 2023, and may also be accessed through the company's website at www.bhrweek.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 second quarter ended June 30th, 2023 with the second quarter ended June 30th, 2022. I will now turn the call over to Richard Stockton. Please go ahead, Richard.

Good morning and welcome to our 2023 second quarter earnings conference call. I will begin today's call by providing an overview of our business and an update on our portfolio. Then Derek will provide a review of our financial results and Chris will provide an update on our asset management activity. Afterwards, we will open the call for Q&A. We have a few key themes for today's call. First, we're pleased with the continued momentum of our urban hotels which continue to ramp up nicely and deliver a comparable hotel EBITDA of $20 million in the second quarter. We're very happy with the performance of the hotels we have acquired this cycle, which continue to exceed our original underwriting. And third, we continue to make solid progress addressing loan maturities as evidenced by our recent announcement regarding the closing of our $200 million corporate financing. Our balance sheet remains solid with ample liquidity, and we remain focused on working through our liability management program during the remainder of 2023. For the second quarter, Raymar delivered solid performance despite a volatile macroeconomic environment. Our second quarter 2023 comparable hotel EBITDA of $53.7 million was driven by the continued strong performance at our resort properties, as we've outlined on prior calls, the continued momentum and strong growth from our urban hotels. Turning to RevPar for all hotels in the portfolio, I'm pleased to report that RevPar totaled $309 for the second quarter with solid occupancy and ADRs. Having said that, Given the tougher year-over-year comparisons, this represents a decrease of approximately 4.2% for the second quarter of 2023 compared to the second quarter of 2022. Our luxury resorts are seeing some stabilization in both demand and rate, but are still far outperforming 2019 results. Taking a closer look at our assets, our best-in-class luxury portfolio remains well positioned. As you know, Many of our hotels are well-located in attractive, high barrier-to-entry leisure markets. Ten of our 16 hotels are considered resort destinations. Our luxury resort portfolio continues to deliver strong performance with combined hotel EBITDA of $33 million during the quarter. Turning to our urban assets, our second quarter performance remained solid and exhibited growth for the ninth consecutive quarter. This segment generated $20 million of comparable hotel EBITDA. We remain very encouraged by the continued momentum and ramp up of our urban hotels as demand quickly returns to our cities. This return continues to be driven by corporate transient with recent strength in corporate group demand. Overall, our urban portfolio is in solid shape and as demonstrated by our second quarter performance, we continue to believe our urban hotels will be the primary driver of growth for our portfolio in the coming quarters. Today, we are also very excited to announce that we will be rebranding our Mr. C Hotel to Cameo Beverly Hills and have entered into an agreement to join the Hilton Central Reservation System and Hilton Honors Guest Loyalty Program. This property is an iconic asset with a great location and will undergo a $25 million renovation as part of this conversion. The renovation will include updates to the guest rooms, guest bathrooms, corridors, lobby, restaurant, facade, and meeting space. We will be creating a distinctive theme and style for the property that is commensurate with Hilton's LXR brand, which it will join upon renovation completion before the end of 2025. Next, we remain very assured about our recent acquisition of the Four Seasons Resort Scottsdale at True North, which has exceeded our expectations and in the quarter delivered a rev far of $415 based on 49% occupancy and an ADR of $852. As you may recall, the 210-room luxury resort was acquired in early December 2022. Strategically, as demonstrated by its second quarter performance, it's a great addition to our portfolio and fits perfectly with our strategy of owning high rev far luxury hotels and resorts. We also continue to analyze the optimal solution for the nearly six acre development parcel we acquired as part of the acquisition. Braemar's other 2022 acquisition, the Ritz-Carlton Reserve Dorado Beach, also continues to perform very well. For the second quarter, Ritz-Carlton Reserve Dorado Beach delivered RevPar growth of 7.2%. RevPar for the quarter was $1,454 based on 64% occupancy and an outstanding ADR of $2,270. This property has shown an ability to buck other prevailing trends in the luxury resort segment due to being located in the tax favorable jurisdiction of Puerto Rico. Over the trailing 12 months, the Ritz-Carlton Reserve Dorado Beach has achieved a 9.2% yield on cost while the Four Seasons Scottsdale achieved a 7.2% yield on cost. These luxury assets have significantly outpaced our underwriting and looking ahead to the balance of the year, we remain very encouraged about the prospects for these properties. Looking at Braemar's capital position, our balance sheet remains in good shape, and we continue to emphasize balance sheet flexibility. In early June, we exercised a one-year extension option on our four-pack loan by paying down the loan balance by approximately $142 million. That loan is secured by the Notary Hotel, the Clancy, Sofitel of Chicago, Magnificent Mile, and the Marriott Seattle Waterfront. We're also pleased to announce the recent closing of our $200 million corporate financing. Derek will discuss that in more detail. In summary, I'm optimistic about our future results as evidenced by our group pace being up 20% for 2023 and 16% for 2024, which is benefiting from both corporate and social groups. As we move through the remainder of 2023 and into 2024, we're on solid footing to perform well in both the near term and the long term as business and group travel continue to accelerate. Further, we have the highest quality hotel portfolio in the public markets, and we remain well positioned with what we believe is a solid liquidity position and balance sheet with attractive debt financing in place. I will now turn the call over to Derek to take you through our financials in more detail.