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Company Presentation – June 2017
Certain statements and assumptions in this presentation contain or are based upon “forward-looking” information and are being made
pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to
risks and uncertainties. When we use the words “will likely result,” “may,” “anticipate,” “estimate,” “should,” “expect,” “be lieve,” “intend,” or
similar expressions, we intend to identify forward-looking statements. Such forward-looking statements include, but are not limited to, our
business and investment strategy, our understanding of our competition, current market trends and opportunities, and projected capital
expenditures. Such statements are subject to numerous assumptions and uncertainties, many of which are outside of our control.
These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ
materially from those anticipated, including, without limitation: general volatility of the capital markets, the general economy or the hospitality
industry, whether the result of market events or otherwise; our ability to deploy capital and raise additional capital at reasonable costs to repay
debts, invest in our properties and fund future acquisitions; unanticipated increases in financing and other costs, including a rise in interest
rates; the degree and nature of our competition; actual and potential conflicts of interest with Ashford Hospitality Trust, Inc., Ashford Hospitality
Advisors, LLC (“Ashford LLC”), Ashford Inc., Remington Lodging & Hospitality, LLC, our executive officers and our non-independent directors; our
ability to implement and execute on planned initiatives announced in connection with the conclusion of our independent directors’ strategic
review process; changes in personnel of Ashford LLC or the lack of availability of qualified personnel; changes in governmental regulations,
accounting rules, tax rates and similar matters; legislative and regulatory changes, including changes to the Internal Revenue Code and
related rules, regulations and interpretations governing the taxation of real estate investment trusts (“REITs”); and limitat ions imposed on our
business and our ability to satisfy complex rules in order for us to qualify as a REIT for U.S. federal income tax purposes. These and other risk
factors are more fully discussed in the section entitled “Risk Factors” in our Annual Report on Form 10-K, and from time to time, in our other filings
with the Securities and Exchange Commission (“SEC”).
The forward-looking statements included in this presentation are only made as of the date of this presentation. Investors should not place
undue reliance on these forward-looking statements. We are not obligated to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or circumstances, changes in expectations or otherwise.
EBITDA is defined as net income before interest, taxes, depreciation and amortization. EBITDA yield is defined as trailing twelve month EBITDA
divided by the purchase price. A capitalization rate is determined by dividing the property's net operating income by the purchase price. Net
operating income is the property's funds from operations minus a capital expense reserve of either 4% or 5% of gross revenues. Hotel EBITDA
flow-through is the change in Hotel EBITDA divided by the change in total revenues. EBITDA, FFO, AFFO, CAD and other terms are non-GAAP
measures, reconciliations of which have been provided in prior earnings releases and filings with the SEC.
This overview is for informational purposes only and is not an offer to sell, or a solicitation of an offer to buy or sell, any securities of Ashford Prime
or any of its respective affiliates, and may not be relied upon in connection with the purchase or sale of any such security.
2
Certain Disclosures
Strategic Overview
3
Bardessono Hotel & Spa
Yountville, CA
Pier House Resort
Key West, FL
The Ritz-Carlton St. Thomas
St. Thomas, USVI
Focused strategy of investing in luxury hotels and
resorts
Grow organically through strong revenue and
cost control initiatives
Grow externally through accretive acquisitions
of high quality assets
Targets conservative leverage of Net Debt / Gross
Assets of 45% with non-recourse property debt
Highly-aligned management team and advisory
structure
Recent Developments
4
Q1 2017 Earnings Release:
• RevPAR growth for all hotels not under renovation of 5.8%
• RevPAR growth for all hotels of 2.5%
• AFFO per share growth of 18%
• Hotel EBITDA margin for all hotels not under renovation
increased 50 bps
In March 2017, completed common equity and convertible
preferred equity raise for approximately $105 million in net proceeds
In March 2017, completed the acquisition of the 190-room Park
Hyatt Beaver Creek for $145.5 million ($766,000 per key)
In May 2017, completed the acquisition of the 80-room Hotel
Yountville for $96.5 million ($1,200,000 per key)
In June 2017, the fourth amendment to the advisory agreement with
Ashford Inc. was approved by shareholder vote
Focus on Luxury
5
The luxury hotel segment exhibits greater long term RevPAR growth trend than the
other chain scale segments
The Upper Upscale segment represents the second greatest long term RevPAR growth
trend
Source: STR
50
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Luxury RevPAR Upper Midscale RevPAR Upper Upscale RevPAR Upscale RevPAR
TTM RevPAR by Chain Scale
$140.20
$148.64
$171.35
$186.76
$207.30
$216.86
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
2012 2013 2014 2015 2016 TTM
6
Successfully Increasing Portfolio RevPAR...
ACCRETIVE
GROWTH OF
HOTEL
PORTFOLIO
The luxury hotel segment exhibits greater long term RevPAR growth
rates than the other chain scale segments
Acquired the Ritz-Carlton St. Thomas, Bardessono Hotel & Spa,
Sofitel Chicago Magnificent Mile, Pier House Resort, Park Hyatt
Beaver Creek & Hotel Yountville since spin-off
Increased portfolio RevPAR since spin-off by 55% to $217 as of TTM
March 2017*
*Pro forma for the acquisition of Hotel Yountville
*
5.3%
5.0%
4.7% 4.8%
3.9%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
2013 2014 2015 2016 2017
7
Increased quarterly common dividend per
share by 220% since spin-off
Disciplined Capital Strategies
Weighted Average Interest Rate
Jun 2015: Raised $72mm in convertible preferred
offering at $18.90 conversion price
Jan 2017: Refinanced $365mm of debt extending debt
maturity and lowering interest cost
Mar 2017: Raised $105mm of common and convertible
preferred equity to finance $250mm of accretive
acquisitions
...While Delivering Strong Financial Results
$0.05
$0.10
$0.12
$0.16
$0.00
$0.05
$0.10
$0.15
$0.20
2013 Q2 15 2016 2017
Attractive AFFO per Share Growth
15%
70%
18%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
FY2016 Q4 16 Q1 17
15.9%
7.6%
6.1%
3.6%
2.8% 2.5% 2.5% 2.3% 2.0% 1.7% 1.6%
1.1% 0.8% 0.5% 0.4%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
AHP HT APLE CLDT FCH REIT Avg CHSP RLJ PEB INN HST DRH SHO XHR LHO
8
HIGHLY
ALIGNED
MANAGEMENT
TEAM
Insider ownership of 15.9%, 6.3x higher than hotel REIT industry average
Management has significant personal wealth invested in the Company
Incentive fee based on AHP total return outperformance vs. its peers
Insider Equity Ownership
Highly-aligned management team with
among highest insider equity ownership
of publicly-traded Hotel REITs
Public Lodging REITs include: APLE, HT, RLJ, CLDT, FCH, CHSP, INN, HST, PEB, DRH, SHO, LHO, XHR
Source: Company filings
* Insider equity ownership for Ashford Prime includes direct & indirect interests and interests of related parties
AHP’s Management Team Is Highly Aligned
High-Quality Hotels in Leading Urban & Resort Markets
9 Current Hotels
Marriott Seattle
Seattle, WA
Hilton Torrey Pines
La Jolla, CA
Bardessono Hotel & Spa
Yountville, CA
Pier House Resort
Key West, FL
Renaissance Tampa
Tampa, FL
Sofitel Chicago Magnificent Mile
Chicago, IL
Capital Hilton
Washington D.C.
Courtyard San Francisco
San Francisco, CA
Renaissance Tampa
Tampa, FL
Courtyard Philadelphia
Philadelphia, PA
Capital Hilton
Washington D.C.
Marriott Plano Legacy
Plano, TX
The Ritz-Carlton St. Thomas
St. Thomas, USVI
Hotel Yountville
Yountville, CA
Park Hyatt Beaver Creek
Beaver Creek, CO
Portfolio Overview
10
Pro forma overall portfolio TTM ADR and RevPAR of $264 and $217, respectively
Geographically diversified portfolio located in strong markets
Opportunistic pruning of non-core assets will further enhance portfolio positioning
Pro forma for the acquisition of Hotel Yountville we have the highest RevPAR portfolio of all public
lodging REITs
Core Portfolio Quality Unparalleled in the Public Lodging REIT Sector
(1) As of March 31, 2017
(2) Data as of December 31, 2016
Note: Hotel EBITDA in thousands
Number of TTM TTM TTM TTM Hotel % of
Core Location Rooms ADR
(1) OCC(1) RevPAR(1) EBITDA(1) Total
Bardessono Napa Valley, CA 62 $743 84% $628 $5,120 3.7%
Hotel Yountville(2) Napa Valley, CA 80 $534 88% $469 $6,600 4.8%
Ritz-Carlton St. Thomas St. Thomas, USVI 180 $539 78% $422 $8,250 6.0%
Pier House Key West, FL 142 $412 87% $359 $10,223 7.4%
Park Hyatt Beaver Creek Beaver Creek, CO 190 $436 63% $273 $9,951 7.2%
Marriott Seattle Waterfront Seattle, WA 358 $263 85% $223 $15,511 11.2%
Capital Hilton Washington D.C. 550 $237 90% $213 $18,812 13.6%
Sofitel Chicago Magnificent Mile Chicago, IL 415 $214 83% $177 $7,947 5.8%
Hilton Torrey Pines La Jolla, CA 394 $197 84% $166 $13,384 9.7%
Total 2,371 $299 84% $249 $95,798 69.4%
Non-Core
Courtyard San Francisco Downtown San Francisco, CA 405 $272 87% $238 $12,500 9.0%
Renaissance Tampa Tampa, FL 293 $191 80% $154 $6,287 4.6%
Courtyard Philadelphia Downtown Philadelphia, PA 499 $183 82% $149 $12,441 9.0%
Marriott Plano Legacy Dallas, TX 404 $188 71% $134 $11,100 8.0%
Total 1,601 $210 80% $169 $42,329 30.6%
Total Portfolio 3,972 $264 82% $217 $138,127 100.0%
Capital Structure and Net Working Capital
Conservative leverage in line with platform strategy
Targeted Net Debt / Gross Assets of 45%
All debt is non-recourse, property level mortgage debt
Targeted excess cash balance of 10% to 15% of gross debt
Maintain excess cash balance for both opportunistic acquisitions and hedge
against economic uncertainty
11
(1) As of March 31, 2017
(2) Pro forma for acquisition of Hotel Yountville
(3) At market value as of June 16, 2017
Total Enterprise Value(1) Net Working Capital(1)
Figures in millions except per share values
Stock Price (As of June 16, 2017) $9.80
Fully Diluted Shares Outstanding 36.7
Equity Value $359.7
Plus: Convertible Preferred Equity 121.6
Plus: Debt (2) 859.6
Total Market Capitalization $1,340.9
Less: Net Working Capital (134.6)
Total Enterprise Value $1,206.3
Cash & Cash Equivalents (2) $112.3
Restricted Cash 34.2
Accounts Receivable, net 23.1
Prepaid Expenses 6.1
Due from Affiliates, net (3.0)
Due from Third-Party Hotel Managers, net 9.2
Investment in Ashford Inc.(3) 9.8
Total Current Assets $191.7
Accounts Payable, net & Accrued Expenses $49.1
Dividends Payable 8.0
Total Current Liabilities $57.1
Net Working Capital $134.6
Debt Maturities and Leverage
Next hard debt maturity in 2019
Laddered debt maturities
Exclusive use of property-level, non-recourse debt
Net Debt / Gross Assets of 41.8%(1)
FCCR of 1.90x(1)
12
(1) As of March 31, 2017
(2) Assumes extension options are exercised
(3) All floating-rate debt has interest rate caps in place
(4) Pro forma for acquisition of Hotel Yountville
Debt Maturity Schedule (mm) (1) (2) (3)
$8.1 $80.0
$152.0
$192.1
$483.5
$0.0
$100.0
$200.0
$300.0
$400.0
$500.0
$600.0
2017 2018 2019 2020 2021 Thereafter
Fixed-Rate Floating-Rate
(4)
9.1%
7.5%
7.3%
7.1%
6.8%
6.6%
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
8.0%
8.5%
9.0%
9.5%
AHP DRH CHSP LHO SHO PEB
5.5x
12.2x
14.5x 14.7x
15.9x
17.5x
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
16.0x
18.0x
20.0x
AHP CHSP DRH LHO PEB SHO
11.2x
12.3x
12.9x 12.9x 12.9x
15.6x
10.0x
11.0x
12.0x
13.0x
14.0x
15.0x
16.0x
AHP DRH LHO CHSP SHO PEB
Peer Comparison
13
$164
$180
$190
$204
$211
$216
$150
$160
$170
$180
$190
$200
$210
$220
SHO DRH CHSP LHO PEB AHP
2016 Comparable RevPAR
Pro forma for the acquisitions of Park Hyatt Beaver Creek and Hotel Yountville
we have the highest RevPAR portfolio of all public lodging REITs
(1) As of June 16, 2017
(2) Based on consensus estimates
(3) Pro forma for acquisitions of Park Hyatt Beaver Creek and Hotel Yountville
3
TEV / 2018E EBITDA Multiple1,2 Price / 2018E AFFO per Share Multiple1,2
TTM Cap Rate1
3
3 3
Compelling Growth Opportunity – Park Hyatt Beaver Creek
14
Acquired for $145.5 million ($766,000 / key)
190 keys, 20,000 sq. ft. of meeting space
Purchase price represents a 5.7% TTM NOI
cap rate*; 14.6x TTM EBITDA*
Purchase price represents a 6.4% FWD NOI
cap rate; 14.0x FWD EBITDA
Located in Beaver Creek, CO overlooking
Beaver Creek Mountain
Ski-in / ski-out access
AAA Four Diamond Resort
TTM RevPAR of $273*
Hotel Overview
18,000sf of retail lease space provides stable
income
Opportunity to improve flow-through with
Ashford asset management
Opportunity to improve operations during
shoulder seasons
Potential to improve luxury product offering
through renovation of public space and
guestroom bathrooms
Lower insurance costs
Only ~3% of roomnights are booked through
Expedia
Opportunities
Park Hyatt Beaver Creek
Lobby
*As of March 31, 2017
Compelling Growth Opportunity – Hotel Yountville
15
Acquired for $96.5 million ($1.2 mn / key)
80 keys, 4,392 sq. ft. of meeting space
Purchase price represents a 6.2% TTM
NOI cap rate; 14.6x TTM EBITDA*
Located in Yountville, CA in Napa Valley
Over 450 wineries nearby as well as
boutique shopping, golf courses, and
award winning restaurants
TTM RevPAR of $469*
Hotel Overview
Significant ADR upside relative to
competitors (34% discount to peers**)
Second highest RevPAR asset in Ashford
Prime portfolio
Implementation of Remington revenue and
cost savings initiatives
Significant synergies with Bardessono Hotel &
Spa including shared services for general
manager, front office manager, sales, HR,
etc.
Opportunities
Hotel Yountville
*As of December 31, 2016
**Based on competitive peer set
Key Takeaways
16
High quality portfolio with focused strategy of investing in luxury hotels
and resorts
Announced recent corporate governance enhancements, appointment
of new independent director, and appointment of new CEO
Q1 RevPAR growth for all hotels not under renovation of 5.8% & Q1 AFFO
per share growth of 18%
Highly aligned management team
Announced strategy refinements and amended advisory agreement with
Ashford Inc.
Completed acquisitions of the luxury resorts Park Hyatt Beaver Creek &
Hotel Yountville
Company Presentation – June 2017