Braemar Hotels & Resorts Inc.

and Resorts Third Quarter 2023 Results Conference Call. Today's call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, you can press star one on your telephone keypad. If you would like to withdraw your question, that is star one again. I would now like to turn the call over to Jordan Jennings, Director of Investor Relations. Please go ahead.

Good morning and welcome to today's call to review results for Braemar Hotels and Resorts for the third 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 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 accompanying filings of the Securities and Exchange Commission. The forward-looking statements included in this conference call are only made as 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 a 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 in Form 8K with SEC on November 8, 2023, and may also be accessed through the company's website at www.bhreit.com. Each listener is encouraged to review those reconciliations provided in the earnings release together with all other information provided in the release. Unless otherwise stated, all reported results discussed in this call compare the third quarter ended September 30th, 2023 with the third quarter ended September 30th, 2022. I will now turn the call over to Richard Stockton. Please go ahead, Richard.

Good morning. Welcome to our 2023 third 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 report a comparable hotel EBITDA of $16 million in the third quarter. Second, we remain pleased with our two most recent acquisitions, the Ritz-Carlton Reserve Dorado Beach and the Four Seasons Resort Scottsdale at True North. They are each performing well and continue to exceed our original underwriting. And third, we continue to work diligently through our refinancing program, and we are making solid progress addressing loan maturities as demonstrated by our recent announcement regarding the closing of our $200 million corporate financing, as well as the upsizing and extension of our four-season resort Scottsdale loan and the extension of our Ritz-Carlton Lake Tahoe loan. Turning to our results, third quarter is weakest from a seasonality perspective. Despite a volatile macroeconomic environment, our portfolio delivered solid results with third quarter comparable hotel EBITDA of $34.9 million. Our resort properties continue to outpace 2019 results, and our urban properties continue to recover. Turning to REVPAR for all hotels in the portfolio, our third quarter REVPAR result of $263 reflected a decrease of 7.1% over the prior year quarter. It's important to note that while the performance at our luxury resorts is down year over year, we're pleased with their overall performance, especially when you consider that, A, both demand and rates remain solid versus historical comparisons, and, B, their performance is still far outperforming 2019 results. In fact, year to date, our portfolio has seen the highest REVPAR growth versus 2019 compared to any other lodging REIT. Taking a closer look at our best-in-class luxury portfolio, many of our hotels are well-located in attractive, high-barrier-to-entry leisure markets. Ten of our 16 hotels are considered resort destinations, and this luxury resort portfolio continues to deliver strong performance with combined hotel EBITDA of $19 million during the quarter. Regarding our urban assets, our third quarter performance remains solid. We remain very encouraged by the continued momentum for this segment, which generated $16 million of comparable hotel EBITDA. As we've emphasized before, demand continues to return to our cities, and Braemar's urban hotels continue to ramp up. This return continues to be driven by corporate transient as well as recent strength in corporate group demand that is expected to accelerate during 2024, which Chris will discuss in greater detail shortly. Overall, as demonstrated by our results, our urban portfolio is in solid shape. Moving forward, we continue to believe our urban hotels will be the primary driver of growth for our portfolio in the coming quarters. During the quarter, we announced the rebranding of our Mr. C. Beverly Hills 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, our recent acquisition of the Four Seasons Resort Scottsdale at True North continues to exceed our expectations. As demonstrated by its third quarter and year-to-date performance, It's been a great addition to our portfolio as it fits perfectly with our strategy of owning high rev par luxury hotels and resorts. We also continue to analyze the optimal solution for the nearly six acre development parcel we acquired as part of this acquisition. Braemar's other 2022 acquisition, the Ritz-Carlton Reserve Dorado Beach, also continues to perform very well. For the third quarter, rev bar was $906. based on 58% occupancy and an ADR of $1,570. Over the trailing 12 months, the Ritz Carlton Reserve Dorado Beach has achieved a 9.3% yield on cost, while the Four Seasons Scottsdale achieved a 7.4% yield on cost. These luxury assets have outpaced our underwriting, and looking ahead to the next several quarters, we remain very encouraged about the prospects for these well-positioned properties. Looking at Braymar's capital position, we continue to emphasize balance sheet flexibility, and our balance sheet remains in solid shape. During the third quarter, we were pleased to announce the closing of our $200 million corporate financing. We also recently completed the upsizing and extension of our four-season Scottsdale loan and extended our Ritz-Carlton Lake Tahoe loan. Derek will discuss those in more detail in a minute. In summary, we have a unique, well-positioned portfolio, and I'm optimistic about our future results supported by our group pace being up 15% for 2023 and 17% for 2024, which is benefiting from both corporate and social groups. Moving through the remainder of 2023 and into 2024, as business and group travel continue to accelerate, Braemar is on solid footing to perform well in both the near term and the long term. Further, we have the highest quality hotel portfolio in the public markets and 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.