8-K: Ashford Hospitality Trust Announces Preliminary Q1 2024 Results, RevPAR Down Slightly

Ashford Hospitality Trust reported a preliminary 1% decrease in comparable RevPAR for the first quarter of 2024, with occupancy at approximately 67% and an average daily rate of $191.

Summary

• Ashford Hospitality Trust expects to report an occupancy rate of approximately 67% for the first quarter of 2024.
• The average daily rate (ADR) is estimated to be around $191 for the same period.
• This results in a preliminary RevPAR of approximately $128 for Q1 2024.
• Comparable RevPAR decreased by approximately 1% compared to the first quarter of 2023.
• January 2024 saw a 2.1% increase in comparable RevPAR compared to January 2023.
• February 2024 experienced a 0.3% decrease in comparable RevPAR compared to February 2023.
• March 2024 had a 3.7% decrease in comparable RevPAR compared to March 2023, which the company attributes to the Easter holiday shift.
• The company has raised approximately $114.6 million in gross proceeds through the sale of non-traded preferred stock as of March 31, 2024.

Sentiment

Score: 5

Explanation: The sentiment is neutral to slightly negative. While the company highlights positive aspects like increased demand and deleveraging efforts, the overall RevPAR decrease and soft March results temper the positive outlook.

Positives

• The company continues to benefit from increased corporate and group demand.
• Ashford Trust has made meaningful progress towards its deleveraging plan.
• The company believes its high-quality, geographically diverse portfolio is well-positioned to outperform in the remainder of 2024.
• The company successfully raised $114.6 million through the sale of non-traded preferred stock.

Negatives

• Comparable RevPAR decreased by approximately 1% in Q1 2024 compared to Q1 2023.
• March 2024 operating results were soft, with a 3.7% decrease in comparable RevPAR compared to March 2023.

Risks

• The company's ability to repay, refinance, or restructure its debt is a risk.
• The company faces risks related to market trends, competition, and interest rate changes.
• The company's projected operating results may not be achieved.
• The company's ability to complete pending transactions is uncertain.
• The company's performance is subject to general volatility of the capital markets.

Future Outlook

The company expects to see a marked improvement in operating results for April and believes its portfolio is well-positioned to outperform for the remainder of 2024. They are also focused on paying off strategic corporate financing and deleveraging.

Management Comments

• While our March operating results were soft, which we directly attribute to the Easter Holiday shift, we expect to see a marked improvement for April, commented Rob Hays, Ashford Trusts President and Chief Executive Officer.
• Additionally, we remain focused on paying off our strategic corporate financing and have made meaningful progress towards our deleveraging plan.

Industry Context

The hospitality industry is experiencing fluctuations in demand, with some months showing growth and others showing declines. Ashford Trust's results reflect these trends, with a slight overall decrease in RevPAR for the quarter, but with some positive signs in corporate and group demand.

Comparison to Industry Standards

• While the document does not provide specific industry benchmarks, a 1% decrease in RevPAR could be seen as a mixed result compared to other hotel REITs. Some competitors may have seen stronger growth, while others may have experienced similar or worse declines.
• Companies like Host Hotels & Resorts (HST) and Park Hotels & Resorts (PK) are often used as benchmarks for comparison in the hotel REIT sector. Without their specific Q1 results, it's difficult to make a direct comparison.
• The company's focus on deleveraging is a common theme in the industry as many hotel REITs are working to improve their balance sheets post-pandemic.

Stakeholder Impact

• Shareholders may be concerned about the decrease in RevPAR, but encouraged by the deleveraging efforts.
• Employees may be impacted by any changes in operations or strategy.
• Customers may experience changes in service or pricing.
• Suppliers may be affected by changes in the company's purchasing patterns.
• Creditors will be interested in the company's deleveraging progress.

Next Steps

• The company expects to see a marked improvement in operating results for April.
• The company will continue to focus on paying off strategic corporate financing and deleveraging.
• The company will continue to monitor market trends and competition.

Key Dates

Keywords

RevPAR, Occupancy, Average Daily Rate, Hotel, REIT, Ashford Hospitality Trust, Preferred Stock, Hospitality, Deleveraging