Ashford Hospitality Trust’s Earnings Call Highlights Growth Amid Challenges

Ashford Hospitality Trust ((AHT)) has held its Q4 earnings call. Read on for the main highlights of the call.

Ashford Hospitality Trust’s recent earnings call painted a picture of a company experiencing robust growth and strategic success, albeit with some financial hurdles. The sentiment was largely positive, with strong revenue growth and strategic initiatives taking center stage. However, concerns were raised regarding significant net losses and high exposure to floating rate debt, which slightly tempered the overall optimistic outlook.

RevPAR and Revenue Growth

The fourth quarter was marked by a notable 3.1% growth in comparable RevPAR, accompanied by a 4.6% increase in total revenue and a 6.2% rise in comparable hotel EBITDA. December was particularly strong, with total revenue growth of 7.7%, outpacing RevPAR growth by 350 basis points, indicating a healthy demand for Ashford’s hospitality offerings.

Successful Hotel Conversions

Ashford’s strategic hotel conversions proved to be a significant success. The transformation of La Concha Hotel in Key West and La Pavillion Hotel in New Orleans resulted in substantial RevPAR premiums and revenue growth. Notably, La Pavillion achieved over 45% year-over-year revenue growth in January, showcasing the effectiveness of these initiatives.

Capital Markets and Financing

The company’s efforts in capital markets and financing were highlighted by the refinancing of mortgage loans and the lucrative sale of the Courtyard Boston Downtown for $123 million. These actions contributed to Ashford’s deleveraging strategy, improving its financial position and providing a more stable foundation for future growth.

Grow AHT Initiative

Ashford introduced the Grow AHT initiative, aiming to bolster corporate EBITDA by $50 million. This ambitious plan focuses on reducing general and administrative expenses, maximizing revenue, and enhancing operational efficiency, setting the stage for sustained financial improvement.

Net Loss and AFFO

Despite the positive strides, Ashford reported a net loss attributable to common stockholders of $131.1 million for the quarter and $82.5 million for the full year. Additionally, the AFFO per diluted share was negative $2.01 for the quarter and negative $4.84 for the full year, highlighting ongoing financial challenges.

Floating Rate Debt Exposure

A significant concern for Ashford is its exposure to floating rate debt, with approximately 77% of its debt effectively floating. This presents a risk in volatile interest rate environments, potentially impacting the company’s financial stability.

Forward-Looking Guidance

Looking ahead, Ashford Hospitality Trust remains optimistic about its growth prospects. The company expects continued RevPAR premiums from its hotel conversions and plans to leverage the Grow AHT initiative to increase corporate EBITDA by $50 million. These strategic moves are designed to enhance operational efficiency and financial performance, positioning Ashford for future success.

In conclusion, Ashford Hospitality Trust’s earnings call revealed a company making significant strides in revenue growth and strategic initiatives. While financial challenges such as net losses and floating rate debt exposure remain, the overall sentiment was positive, with a clear focus on operational improvements and future growth opportunities.