Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Braemar Hotels & Resorts Inc. | ahpinvestorpresentation8-k.htm |
November 2017
Company Presentation // November 2017
Forward Looking Statements and Non-GAAP Measures
2
In keeping with the SEC's "Safe Harbor" guidelines, certain statements made during this presentation could be considered forward-looking
and subject to certain risks and uncertainties that could cause results to differ materially from those projected. When we use the words "will
likely result," "may," "anticipate," "estimate," "should," "expect," "believe," "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, projected operating results, and projected capital expenditures.
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 and the market price of our common
stock; changes in our business or investment strategy; availability, terms and deployment of capital; availability of qualified personnel;
changes in our industry and the market in which we operate, interest rates or the general economy, and the degree and nature of our
competition. These and other risk factors are more fully discussed in the company's filings with the Securities and Exchange Commission.
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 or debt amount. 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 or in the
appendix to this presentation.
The calculation of implied equity value is derived from an estimated blended capitalization rate (“Cap Rate”) for the entire portfolio using
the capitalization rate method. The estimated Cap Rate is based on recent Cap Rates of publically traded peers involving a similar blend of
asset types found in the portfolio, which is then applied to Net Operating Income (“NOI”) of the company’s assets to calculate a Total
Enterprise Value (“TEV”) of the company. From the TEV, we deduct debt and preferred equity and then add back working capital and the
company’s investment in Ashford Inc. to derive an equity value.
The capitalization rate method is one of several valuation methods for estimating asset value and implied equity value. Among the
limitations of using the capitalization rate method for determining an implied equity value are that it does not take into account the
potential change or variability in future cash flows, potential significant future capital expenditures, the intended hold period of the asset, or
a change in the future risk profile of an asset.
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
Hospitality Prime, Inc. or any of its respective affiliates, and may not be relied upon in connection with the purchase or sale of any such
security.
Company Presentation // November 2017
Management Team
3
20 years of hospitality
experience
1 year with Ashford
15 years with Morgan Stanley
Cornell School of Hotel
Administration, BS
University of Pennsylvania
MBA
RICHARD J. STOCKTON
Chief Executive Officer &
President
17 years of hospitality
experience
14 years with Ashford
3 years with ClubCorp
CFA charterholder
Southern Methodist University
BBA
DERIC S. EUBANKS, CFA
Chief Financial Officer
12 years of hospitality
experience
7 years with Ashford (5 years
with Ashford predecessor)
5 years with Stephens
Investment Bank
Oklahoma State University BS
JEREMY J. WELTER
EVP of Asset Management
Company Presentation // November 2017
Strategic Overview
4
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
Company Presentation // November 2017
Q3 Earnings Highlights
5
• Comparable RevPAR for all hotels decreased 5.3% to $211.36 during Q3
• Comparable RevPAR for all hotels not under renovation decreased 2.9% to $204.72
during Q3
• Comparable Hotel EBITDA flow-through for all hotels was 72% for Q3
• Comparable Hotel EBITDA margin was 30.6%
• Adjusted funds from operations (AFFO) was $0.37 per diluted share for Q3 as compared
with $0.38 per diluted share from the prior-year quarter
• Adjusted EBITDA was $26.0 million for Q3 reflecting 18.3% growth over the prior year
quarter
• Adjusted EBITDA margin was 25.5% (adjusted for Hilton JV revenue)
• Capex invested during Q3 was $11 million
QUARTERLY DIVIDEND PER SHARE AFFO PER SHARE
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
Q1 Q2 Q3 Q4
2014 2015 2016 2017
REVPAR GROWTH
$0.18 $0.26
$0.38 $0.46
$0.45
$0.60
$0.60 $0.50
$0.42
$0.39
$0.38 $0.37 $0.21
$0.22
$0.34
$0.00
$0.50
$1.00
$1.50
$2.00
2014 2015 2016 2017
Q1 Q2 Q3 Q4
$0.05 $0.05 $0.10
$0.16 $0.05 $0.10
$0.12
$0.16
$0.05
$0.10
$0.12
$0.16
$0.05
$0.10
$0.12
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
2014 2015 2016 2017
Q1 Q2 Q3 Q4
Company Presentation // November 2017
Recent Developments
6
Announced
Refined
Strategy &
Amendment
to Advisory
Agreement
Common
Equity &
Convertible
Preferred
Equity Raise
Acquisition of
Park Hyatt
Beaver Creek
Acquisition of
Hotel
Yountville
Stockholders
Approve
Amendment
to Advisory
Agreement
Announced
Progress on
Non-Core
Hotels
Strategy #1
Announced
Progress on
Non-Core
Hotels
Strategy #2
JAN 2017
Refined Strategy
Luxury focus
Increase dividend by 33% to $0.16
45% Net Debt / Gross Assets
10%-15% of gross debt in cash on-
hand
Identified non-core hotels strategy
Amended Advisory Agmt
Removal of 1.1x multiple and tax
gross up
Change in majority no longer
triggers termination fee
Payment of $5 million to Ashford
Inc.
MAR 2017
Courtyard Philadelphia
Upbranding to Autograph
Collection by Marriott
Courtyard San Francisco
Upbranding to Autograph
Collection by Marriott
Marriott Plano Legacy
Sold 11/1 for $104MM
Tampa Renaissance
Listed for sale
MAR 2017 JUN 2017 JUN 2017 NOV 2017
$105M $145.5M $96.5M
PARK HYATT BEAVER CREEK
HOTEL YOUNTVILLE
$207
FY16 REVPAR(1)
$212
Q1 17 REVPAR(1)
$223
Q3 17 REVPAR(1),(2)
#1
REVPAR LEADER
(1) TTM comparable RevPAR as reported
(2) Pro forma for sale of Marriott Plano Legacy
MAY 2017
$217
Q2 17 REVPAR(1)
Company Presentation // November 2017
High-Quality Hotels in Leading Urban & Resort Markets
7 Non-Core Assets
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.
The Ritz-Carlton St. Thomas
St. Thomas, USVI
Hotel Yountville
Yountville, CA
Park Hyatt Beaver Creek
Beaver Creek, CO
Core Assets
Company Presentation // November 2017
Number of TTM TTM TTM TTM Hotel % of
Core Location Rooms ADR(1) OCC(1) RevPAR(1) EBITDA(1),(2) Total
Bardessono Napa Valley, CA 62 $779 82% $640 $5,380 4.2%
Hotel Yountville Napa Valley, CA 80 $555 80% $442 $6,232 4.9%
Ritz-Carlton St. Thomas St. Thomas, USVI 180 $573 74% $424 $9,432 7.4%
Pier House Key West, FL 142 $426 80% $343 $9,994 7.9%
Park Hyatt Beaver Creek Beaver Creek, CO 190 $445 62% $277 $9,972 7.9%
Marriott Seattle Waterfront Seattle, WA 361 $270 87% $235 $15,927 12.6%
Capital Hilton Washington D.C. 550 $238 90% $214 $17,988 14.2%
Sofitel Chicago Magnificent Mile Chicago, IL 415 $205 82% $168 $6,389 5.0%
Hilton Torrey Pines La Jolla, CA 394 $203 85% $172 $14,831 11.7%
Total Core 2,374 $302 83% $250 $96,144 75.8%
Non-Core
Courtyard San Francisco Downtown San Francisco, CA 408 $268 83% $222 $12,288 9.7%
Renaissance Tampa Tampa, FL 293 $190 82% $155 $6,860 5.4%
Courtyard Philadelphia Downtown Philadelphia, PA 499 $171 81% $139 $11,497 9.1%
Total Non-Core 1,200 $209 82% $171 $30,645 24.2%
Total Portfolio 3,574 $271 82% $223 $126,789 100.0%
• Core portfolio quality unparalleled in the
public lodging REIT sector
• Geographically diversified portfolio
located in strong markets
Portfolio Overview
8
(1) As of September 30, 2017
(2) Reconciliations provided in Q3 earnings release filed on 11/1/17
(3) Announced repositioning to Autograph Collection by Marriott
Note: Hotel EBITDA in thousands
$223
OVERALL REVPAR
$250
CORE REVPAR
(3)
(3)
Company Presentation // November 2017
Why We Focus on Luxury
9 (1) Total nominal growth from December 1987 to July 2017
Source: STR
Greatest long-term
RevPAR growth of
229%(1)
LUXURY
Second greatest long-
term RevPAR growth of
150%(1)
UPPER-UPSCALE
0
50
100
150
200
250
300
350
D
e
c
-8
7
A
u
g
-8
8
A
p
r-
8
9
D
e
c
-8
9
A
u
g
-9
0
A
p
r-
9
1
D
e
c
-9
1
A
u
g
-9
2
A
p
r-
9
3
D
e
c
-9
3
A
u
g
-9
4
A
p
r-
9
5
D
e
c
-9
5
A
u
g
-9
6
A
p
r-
9
7
D
e
c
-9
7
A
u
g
-9
8
A
p
r-
9
9
D
e
c
-9
9
A
u
g
-0
0
A
p
r-
0
1
D
e
c
-0
1
A
u
g
-0
2
A
p
r-
0
3
D
e
c
-0
3
A
u
g
-0
4
A
p
r-
0
5
D
e
c
-0
5
A
u
g
-0
6
A
p
r-
0
7
D
e
c
-0
7
A
u
g
-0
8
A
p
r-
0
9
D
e
c
-0
9
A
u
g
-1
0
A
p
r-
1
1
D
e
c
-1
1
A
u
g
-1
2
A
p
r-
1
3
D
e
c
-1
3
A
u
g
-1
4
A
p
r-
1
5
D
e
c
-1
5
A
u
g
-1
6
A
p
r-
1
7
Luxury Class Upper Upscale Class Upscale Class Upper Midscale Class Midscale Class Economy Class
R
e
v
PA
R
(
In
d
exe
d
)
Company Presentation // November 2017
Long-Term Trading Premium
10
Source: STR, SNL
Top Quartile: BEE, PEB, LHO
Peers: AHT, CLDT, CHSP, DRH, FCH, HT, HPT, HST, INN, RLJ, SHO
The top quartile of lodging REITs (by RevPAR)
have consistently had higher quality assets and
traded at a premium relative to other peers
over a long-term 10 year period
5.0x
7.0x
9.0x
11.0x
13.0x
15.0x
17.0x
19.0x
21.0x
23.0x
25.0x
1/3/2006 1/3/2007 1/3/2008 1/3/2009 1/3/2010 1/3/2011 1/3/2012 1/3/2013 1/3/2014 1/3/2015
Top Quartile Avg NTM EBITDA Multiple Peer Avg NTM EBITDA Multiple
2.5
PREMIUM EBITDA TRADING MULTIPLE
(TURNS)
Company Presentation // November 2017
19.1%
15.8%
7.6%
6.1%
3.6% 3.5%
2.5% 2.3% 2.0% 1.7% 1.6% 1.1% 0.8% 0.5% 0.4% 0.3%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
20.00%
AHT AHP HT APLE CLDT REIT
Avg
CHSP RLJ PEB INN HST DRH SHO XHR LHO PK
Highly Aligned Management Team
11
Management has significant personal wealth invested in the Company
Highly-aligned management team with
among highest insider equity ownership
of publicly-traded Hotel REITs
REIT Avg includes: AHT, HT, APLE, CLDT, CHSP, RLJ, PEB, INN, HST, DRH, SHO, XHR, LHO, PK
Source: Company filings
* Insider equity ownership for Ashford Prime includes direct interests and interests of related parties
16%
Insider ownership 4.5x higher than REIT industry average 4.5x
Total dollar value of insider ownership (as of 11/20/17) $54M
Company Presentation // November 2017
Asset Management Overview
12
TEAM
• 1 - EVP
• 10 - Asset managers
• 2 - Revenue optimization
• 3 - Risk & Insurance
• 4 - Capex specialists
• 2 - Legal
• 1 - Property tax specialist
• 4 - Analysts
MEETINGS WITH PROPERTY
MANAGEMENT
• Asset manager has a weekly
meeting with hotel
leadership
― Revenue trends
― Expense management
― Special projects
• Twice annual portfolio
meetings
PROPERTY SITE VISITS
• 4 times a year
• Full day meetings
― Revenue
― Market share
― Expenses
― Guest satisfaction
― Asset care
REVENUE OPTIMIZATION
• Monthly meetings
― All channels & segments
of business
• Annual business transient/
corporate negotiated RFP
discussions
• Annual budget guidance,
meetings, and revenue
discussions
• Team tests and implements
revenue enhancement and
upsell opportunities
STAFFING AND EXPENSES
Asset Management Team:
• Interviews / approvals of hotel
leadership candidates
• Benchmarks hourly
productivity and leadership
org charts
• From time to time engages
consultants for time and
motion studies
• Ensures hotels are evaluating
and negotiating hotel level
contracts for favorable terms
PROPERTY TAX APPEALS
• Dedicated professional on
the team with sole
responsibility to monitor and
appeal tax assessments
Company Presentation // November 2017
Past Operating Performance Relative to Peers
13
RevPAR Growth
2.4% 4.3% 2.4%
1.7% 1.3% 0.4%
Hotel EBITDA Growth
3.7% 5.0% 2.2%
2.5% 0.2% -1.6%
0.4%
-0.6%
2.9%
-2.9%
2016
2.5%
0.8%
2.1%
-5.2%
2016 Q3 2016 Q4 2017 Q1 2017 Q2
Peers: CHSP, PEB, DRH, LHO, SHO
• Prime has outperformed its REIT peers 3 of the past 4 years and 4 of the
past 5 quarters (Prime results in green, red, or black; REIT averages in
black)
2017 Q3
-5.3%
-1.4%
-4.4%
-4.4%
Investor and Analyst Day // New York
Case Study – The Ritz-Carlton St. Thomas
14
MAKE CHART RATHER THAN
TABLE; INCLUDE EBITDA
FLOWTHROUGH
2016 (1st Full Year of Ownership)
450 83%
RPI INCREASE (BPS) HOTEL EBITDA FLOW-THROUGH
Ritz Carlton St. Thomas Quarterly Performance
2016 Q1 2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2
GOP Flow % 114.1% 135.1% 55.4% 17.9% 2.1% 84.7%
RPI % Change 1.5% -1.4% 12.7 4.5 0.8 3.7
Acquired in
December 2015
from Marriott for
$64 million
Going-in TTM NOI
cap rate of 10%
Performance has
been strong
despite zika
headwinds
Top resort in U.S.
Virgin Islands
Quarterly NOI and NOI Yield
$3,953 $4,155 $3,624
$1,548
$1,882 $2,406
$134
($387)
$272 $908 $649
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
($1,000)
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
2015 2016 2017
Q1 Q2 Q3 Q4 NOI Yield
Note: NOI yield based on gross book value
*For 2017 represents TTM NOI Yield as of Q3
*
Company Presentation // November 2017
Case Study – Pier House Resort
15
Ashford Prime acquired in early 2014 for $92.7
million
2015
2.5% 255 86%
RPI GROWTH
HOTEL EBITDA MARGIN
INCREASE (BPS)
HOTEL EBITDA
FLOW-THROUGH
2016
4.9% 170 206%
RPI GROWTH
HOTEL EBITDA MARGIN
INCREASE (BPS)
HOTEL EBITDA FLOW-
THROUGH
Pier House Resort Performance
2015 2016 2017 YTD
RPI % Change 2.1% 4.0% 2.9%
RevPAR $357.88 $361.08 $403.42
Total Revenue % Change 5.8% 1.0% 2.1%
GOP Flow % 73.4% 195.1% 89.6%
YTD September 2017
0.1% 91 73%
RPI GROWTH
HOTEL EBITDA MARGIN
INCREASE (BPS)
HOTEL EBITDA FLOW-
THROUGH
Q1 Q2 Q3 Q4
2017 RPI % Change 4.4% 1.0%
2016 RPI hange 0.8 3.9 8.4% 4.5%
Remington has demonstrated the ability to
achieve considerable upside especially when
replacing a small, owner/operator
Quarterly NOI and NOI Yield
$2,854 $3,224 $3,385 $3,383
$1,773
$2,104 $2,185 $2,469
$1,116
$1,316 $1,480 $999
$2,020
$2,157
$2,242
7.0%
7.5%
8.0%
8.5%
9.0%
9.5%
10.0%
$0
$2,000
$4,000
$6,000
$8,000
$10,000
2014 2015 2016 2017
Q1 Q2 Q3 Q4 NOI Yield
Note: NOI yield based on gross book value
*For 2017 represents TTM NOI Yield as of Q3
*
Company Presentation // November 2017
Case Study – Bardessono Hotel & Spa
16
• Acquired in July 2015 for $85 million and installed affiliated property
manager Remington
• Proven ability to outperform
2016 (First Full Year of Ownership)
10% 518 242%
REVPAR GROWTH
HOTEL EBITDA MARGIN
INCREASE (BPS)
HOTEL EBITDA FLOW-
THROUGH
YTD September 2017
4.6% 211 181%
REVPAR GROWTH
HOTEL EBITDA MARGIN
INCREASE (BPS)
HOTEL EBITDA FLOW-
THROUGH
Quarterly NOI and NOI Yield
($438) $4
$93
$1,025 $1,339
$1,369
$1,566
$1,692 $1,915
$1,061
$1,238
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
($1,000)
$0
$1,000
$2,000
$3,000
$4,000
$5,000
2015 2016 2017
Q1 Q2 Q3 Q4 NOI Yield
Note: NOI yield based on gross book value
*For 2017 represents TTM NOI Yield as of Q3
*
Investor and Analyst Day // New York
Opportunity – Bardessono Resort and Spa
17
Received approval to construct luxury villa consisting of 3 large keys, hospitality suite and private auto court
Favorable ground lease amendment to capture adjacent parcel
Unsatisfied demand for large luxury rooms
Appeals to celebrities, wedding parties, couples traveling in pairs, families, high-end board meetings, and
executive retreats
As part of transaction, Ashford is getting additional 10 years on existing ground lease
Project
Location
SEE RICHARD’S SLIDE IN
PRINTOUT (SLIDE 14), MAKE
SURE THAT WE ARE NOT
REPEATING AND THAT WE ARE
GOING IN TO MORE DETAIL
• Received approval to construct luxury villa consisting of 3 large keys, hospitality suite, and
private auto court
• Expected completion by August 2018
• Appeals to celebrities, wedding parties, high-end board meetings, and executive retreats
• 10-year extension on existing ground lease; Expires on October 31, 2115 (includes options)
$475
$495
$515
$535
$555
$575
$595
$615
$635
$655
2013 2014 2015 2016 2017 TTM
Consistent YoY RevPAR Growth
+26.7% increase in
RevPAR since Jan.
2013
Expected Performance - Additional Keys
$8.2M ~$5M
EXPECTED VALUE
ENHANCEMENT
ESTIMATED COST
~$1,150 ~50%
PROJECTED ADR
ADR PREMIUM TO
CURRENT KEYS
~20%
EXPECTED UNLEVERED IRR
Company Presentation // November 2017
External Growth – Luxury Markets
18
TOP 15 LUXURY MARKETS BY ROOMS(1)
(1) Based on information provided by STR for luxury class as of May 2017
Market Hotels Rooms
Las Vegas 18 26,273
New York 71 17,288
Miami 51 13,132
Los Angeles 53 11,340
Hawaii 28 8,398
San Francisco 40 7,920
Chicago 22 7,795
San Diego 31 7,691
Washington D.C. 27 7,306
Mountain Resorts 59 6,472
Orlando 8 5,418
Phoenix 14 5,238
New Orleans 24 4,963
New Jersey 35 4,793
Atlanta 14 4,486
TOP 15 LUXURY MARKETS BY REVPAR(1)
Market RevPAR
Hawaii $405
New York $348
California Central Coast $330
Los Angeles / Long Beach $324
San Francisco $313
Boston $282
Mountain Resorts $262
Washington D.C. $233
Austin $223
Orlando $220
Miami $210
Seattle $208
Chicago $193
Phoenix $181
Philadelphia $175
~260,000 total luxury hotel rooms in U.S.(1)
Company Presentation // November 2017
0
5
10
15
20
25
30
35
40
45
50
Fundamentals Market Size Pricing
Target Market Analysis(1)
19 (1) Based on internal analysis
Market Size Fundamentals Pricing Desirability
Investor and Analyst Day // New York
Acquisition Rationale – Hotel Yountville
20
Expected Savings by Department
ROOMS
OTHER DEPARTMENT
SALES & MARKETING
EXPENSES
• Acquired 80-room Hotel Yountville in May 2017
• Announced TTM NOI cap rate at time of acquisition: 6.2%
F&B
ADMINISTRATIVE &
GENERAL EXPENSES
Stabilized Yield(2): 8% IRR(3): 10%
$301K
$36K
$233K
$302K
$174K
RevPAR(1): $469
(1) TTM RevPAR at time of announcement
(2) Expected unlevered stabilized yield
(3) Underwritten unlevered IRR
Investor and Analyst Day // New York
Acquisition Rationale – Park Hyatt Beaver Creek
21
Purchased 190-room Park Hyatt Beaver Creek for $145.5 MM in April 2017
Immediately commenced PIP that found initial $230k in savings
Developing value-add program, including addition of upscale membership ski club
Club will provide ski valet, ski tuning and waxing, private locker rooms, and
complimentary breakfast and lunch during ski season
Daily passes will be available for purchase to hotel guests
Planning key additions in underutilized spa and office space
Planned lobby renovation to enhance and activate space, maximize apres ski and
evening beverage periods
Reviewing options for spa lease when it expires in 2018
NEED TO SELL HARD…
• Acquired 190-room Park Hyatt Beaver Creek in March 2017
• Announced TTM NOI cap rate at time of acquisition: 6.0%
Q2 2017 (First Full Quarter of Ownership)
19.7% 613 68%
REVPAR GROWTH
HOTEL EBITDA MARGIN
INCREASE (BPS)
HOTEL EBITDA FLOW-
THROUGH
Concierge lounge &
exclusive membership
club
Opportunities
7 Key additions in
underutilized spa and
office space
• 5 traditional
• 2 luxury suites
Lobby renovation to
enhance and activate
space
Changing spa manager
Maximize opportunities during soft
shoulder season
Acquired 190-room Park Hyatt Beaver Creek in April 2017
Developing value-add program, including addition of upscale membership ski club
Club will provide ski valet, ski tuning and waxing, private locker rooms, and complimentary breakfast and
lunch during ski season
Daily passes will be available for purchase to hotel guests
Planning key additions in underutilized spa and office space
Planned lobby renovation to enhance and activate space, maximize apres ski and evening beverage periods
Reviewing options for spa lease when it expires in 2018
Opportunity to renegotiate condo / spa agreements
Stabilized Yield(2): 8% IRR(3): 10%
(1) TTM RevPAR at time of announcement
(2) Expected unlevered stabilized yield
(3) Underwritten unlevered IRR
RevPAR(1): $271
Company Presentation // November 2017
Conservative Capital Structure(1)
22
45%
TARGET LEVERAGE
Net Debt
Gross Assets
(1) As of September 30, 2017
Non-recourse debt
lowers risk profile of
the platform
OVERVIEW
Floating-rate debt
provides a natural
hedge to hotel cash
flows
Maximizes flexibility
in all economic
environments
Long-standing lender
relationships
100%
NON-RECOURSE DEBT
100%
PROPERTY LEVEL,
MORTGAGE DEBT
0%
CORPORATE LEVEL DEBT
DEBT PROFILE
Company Presentation // November 2017
Cash Management Strategy
23
(1) As of September 30, 2017
(2) Adjusted for sale of the Marriott Plano Legacy
(3) At market value as of November 20, 2017
NET WORKING CAPITAL(1)
10-15%
CASH TO GROSS DEBT TARGET
18%
CURRENT CASH TO
GROSS DEBT(2)
Defend our assets at financing maturity
BENEFITS
Hilton Torrey Pines
La Jolla, CA
$4.43
NWC / SHARE
(2)
(3)
Opportunistic investments in severe
economic downtown
Cash & Cash Equivalents $137.6
Restricted Cash 29.8
Accounts Receivable, net 18.9
Insurance Receivable 16.4
Prepaid Expenses 4.3
Due from Affiliates, net (0.7)
Due from Third-Party Hotel Managers, net 5.1
Investment in Ashford Inc. 16.7
Total Current Assets $228.1
Accounts Payable, net & Accrued Expenses $54.2
Dividends Payable 8.6
Total Current Liabilities $62.8
Net Working Capital $165.3
Company Presentation // November 2017
Value-Add
Refinancings
Long-Term Interest Rate Improvement
Cash Flow and Dividends
24
(1) As of September 30, 2017
(2) GAAP reconciliation in appendix
$12M
3-PACK REFI - JAN 2017
$43M
CAD(1),(2),(3) 4.0% SEP 2017
Expected Cash Flow Savings
$1M
BARDESSONO REFI - AUG 2017
Expected Cash Flow Savings
$13M
Total Expected Annual
Cash Flow Savings
+ =
4.8% 2016
4.7% 2015
5.0% 2014
5.3% 2013
~1
3
5
b
p
s to
ta
l inte
res
t ra
te
im
p
ro
v
e
m
e
n
t since
2
0
1
3
7.0%
DIVIDEND YIELD(4)
55%
CAD PAYOUT RATIO(1)
Bardessono Hotel & Spa
Yountville, CA
(3) Deducts preferred dividends and actual FF&E reserve payments which are
between 4% and 5% of hotel revenue and adds back amortization of loan costs
(4) As of November 20, 2017
Company Presentation // November 2017
$80.0 $112.0
$190.5
$436.1
0
50
100
150
200
250
300
350
400
450
500
2017 2018 2019 2020 2021 Thereafter
Fixed-Rate Floating-Rate
Laddered debt maturities
Debt Maturities
25
2019
NEXT HARD DEBT MATURITY
2.1x
FCCR
OVERVIEW(1)
(1) As of September 30, 2017
(2) Adjusted for sale of the Marriott Plano Legacy
Note: Excludes an $8.1 million TIF note maturing in 2018
Courtyard Philadelphia
Philadelphia, PA
(2)
Company Presentation // November 2017
AHP
SHO
DRH
CHSP
LHO
PEB
Valuation Opportunity
26
(1) As reported by company earnings releases
(2) Pro forma for acquisitions of Park Hyatt Beaver Creek and Hotel Yountville
and sale of Marriott Plano Legacy
TEV / 2018E EBITDA MULTIPLE(3),(4) PRICE / 2018E AFFO / SHARE MULTIPLE(3),(4) TTM CAP RATE(3)
Discount to
average peer
trading cap
rate (bps)
Valuation Opportunity
2016 Comparable RevPAR(1)
200
Discount to
average peer
trading AFFO
multiple (turns)
5.6
Discount to
average peer
trading EBITDA
multiple (turns)
2.6
Opportunity to capture significant
valuation upside relative to peers and
NAV
#1
#2
#3
#4
#5
#6
$225
$211
$204
$190
$180
$164
(2)
(3) As of November 20, 2017
(4) Based on consensus estimates
9.3%
7.7% 7.6%
7.3%
6.7%
6.4%
6.1%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
10.3x
11.9x
12.5x
12.9x 12.9x
14.2x
15.5x
10.0x
11.0x
12.0x
13.0x
14.0x
15.0x
16.0x
5.7x
11.2x 11.3x
11.9x 11.9x
13.3x
14.0x
5.0x
7.0x
9.0x
11.0x
13.0x
15.0x
Company Presentation // November 2017
$340
$607
$710
$812
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
Current
Market Cap
Low End -
Implied
Equity Market
Cap
Avg - Implied
Equity Market
Cap
High End -
Implied
Equity Market
Cap
ASHFORD PRIME PORTFOLIO
*(ADJUSTED FOR SALE OF MARRIOTT PLANO)
(millions) Low-End High-End
TTM NOI*(5) $100 $100
Cap Rate(6) 7.5% 6.5%
Implied Value $1,337 $1,543
NWC*(7),(8) $165 $165
Preferred Equity(7) ($124) ($124)
Debt*(7) ($771) ($771)
Implied Equity Mkt Cap $607 $812
Intrinsic Value(1),(2)
27
Valuation
Disconnect
$340M
Current Equity
Market Cap(3)
$710M
Implied Equity
Market Cap(4)
$369M
Implied Equity
Value Upside
(1) See valuation methodology disclaimer
(2) Excludes termination fee
(3) As of November 20, 2017
(4) Based on average of estimated cap rates
(5) See GAAP reconciliation in appendix
(6) Based on current implied cap rates of publicly traded peers
(7) As of September 30, 2017; Adjusted for Hilton JV
(8) Investment in Ashford Inc. at market value as of November 20, 2017
--
108% Increase
Company Presentation // November 2017
Hurricane Irma Update
28
Accepting reservations and has resumed full operations
PIER HOUSE RESORT
Working with insurers to assess the damage and will be examining the
implementation of a planned renovation program
THE RITZ-CARLTON ST. THOMAS
Online reservations suspended while the resort remains open to walk-
ins and groups and currently has approximately 80 guest rooms
available
Working with insurers to assess the damage and will be examining the
implementation of a planned renovation program
All Ashford Prime hotels have comprehensive property, casualty, flood
and business interruption insurance. Expect uncovered losses of ~$5M.
Company Presentation // November 2017
Key Takeaways
29
Bardessono Hotel & Spa
Yountville, CA
Pier House Resort
Key West, FL
The Ritz-Carlton St. Thomas
St. Thomas, USVI
Highest Quality Portfolio Amongst All Lodging REITs…In
The Segment With Greatest Growth Trajectory
Growing Organically: Rigorous Asset Management
While Mining Portfolio for Investment Opportunities
Growing Externally: Redeploying Capital into
Accretive Acquisitions
Shares Are Significantly Undervalued vs Peers
Highly Aligned Mgmt Team That Is a Major Shareholder
Appendix
Company Presentation // November 2017
Reconciliation of Net Income (Loss) to Hotel NOI
31
Three Months Ended Three Months Ended Three Months Ended Three Months Ended TTM Ended
September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2017
Net income (loss) 10,705$ 21,607$ 14,951$ 12,615$ 59,878$
(Income) loss from consolidated entities attributable to noncontrolling
interest (872) (1,825) (1,444) (971) (5,112)
Net (income) loss attributable to redeemable noncontrolling interests in
operating partnership - - - - -
Net income (loss) attributable to the Company 9,833 19,782 13,507 11,644 54,766
Non-property adjustments 1,008 - - 1 1,009
Interest income (18) (10) (10) (10) (48)
Interest expense 2,744 2,204 1,280 1,672 7,900
Amortization of loan cost 307 271 130 135 843
Depreciation and amortization 14,134 13,468 11,851 11,555 51,008
Income tax expense (benefit) (404) 366 133 (21) 74
Non-hotel EBITDA ownership expense 4,554 465 396 379 5,794
Income (loss) from consolidated entities attributable to noncontrolling
interest 872 1,825 1,444 971 5,112
Hotel EBITDA including amounts attributable to noncontrolling interest 33,030 38,371 28,731 26,326 126,458
Less: EBITDA adjustments attributable to noncontrolling interest (746) (817) (779) (751) (3,093)
(Income) loss from consolidated entities attributable to noncontrolling
interest (872) (1,825) (1,444) (971) (5,112)
Net income (loss) attributable to redeemable noncontrolling interests in
operating partnership - - - - -
Hotel EBITDA attributable to the Company and OP unitholders 31,412$ 35,729$ 26,508$ 24,604$ 118,253$
Non-comparable adjustments (2,402) (2,474) 4,573 635 332
Comparable hotel EBITDA 30,628$ 35,897$ 33,304$ 26,961$ 126,790$
FFE reserve (4,738)$ (5,133)$ (5,143)$ (4,616)$ (19,630)
Comparable net operating income 25,890$ 30,764$ 28,161$ 22,345$ 107,160$
NOI adjustments attributable to noncontrolling interests (1,311) (2,284) (1,885) (1,416) (6,896)
NOI attributable to the Company and OP unitholders 24,579$ 28,480$ 26,277$ 20,929$ 100,264$
Company Presentation // November 2017
Reconciliation of Net Income (Loss) to Cash Available for Distribution
32
Three Months Ended Three Months Ended Three Months Ended Three Months Ended TTM Ended
September 30, 2017 June 30, 2017 March 31, 2017 December 31, 2016 September 30, 2017
Net income (loss) (217)$ 386$ (289)$ 845$ 725$
(Income) loss from consolidated entities attributable to noncontrolling interest (1,143) (1,614) 21 (536) (3,272)
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership 360 343 255 95 1,053
Preferred dividends (1,707) (1,707) (1,673) (994) (6,081)
Net income (loss) attributable to common stockholders (2,707) (2,592) (1,686) (590) (7,575)
Depreciation and amortization on real estate 13,406 12,752 11,251 10,838 48,247
Impairment charges on real estate 1,008 - - - 1,008
Net income (loss) attributable to redeemable noncontrolling interests in operating partnership (360) (343) (255) (95) (1,053)
Gain on sale of hotel property - - - - -
FFO available to common stockholders and O P unitholders 11,347 9,817 9,310 10,153 40,627
Preferred dividends 1,707 1,707 1,673 994 6,081
Transaction and management conversion costs 260 2,112 4,328 (44) 6,656
Other (income) expense 22 113 157 77 369
Write-off of loan costs and exit fees 380 - 1,963 - 2,343
Unrealized (gain) loss on investments (1,875) 1,563 (3,091) 879 (2,524)
Unrealized (gain) loss on derivatives 531 100 898 1,791 3,320
Non-cash stock/unit-based compensation (921) 597 (1,668) 615 (1,377)
Legal, advisory and settlement costs 560 3 2,945 (2,862) 646
Contract modification cost - 5,000 - - 5,000
Software implementation costs - 79 - - 79
Uninsured hurricane related costs 3,573 - - - 3,573
Adjusted FFO available to the Company and O P unitholders 15,584$ 21,091$ 16,515$ 11,603$ 64,793$
FFE reserve (net of noncontrolling interest) (4,774) (5,219) (5,233) (4,703) (19,929)
Preferred dividends (1,707) (1,707) (1,673) (994) (6,081)
Amortization of Loan Costs 1,356 1,349 1,049 763 4,517
Cash available for distribution to the Company and O P unitholders 10,459 15,514 10,658 6,669 43,300