Braemar Reports RevPAR Decline, But Occupancy Lifts in Leisure

DALLAS—Braemar Hotels & Resorts Inc. has reported a net loss of $18.7 million, a 65.6% decline in RevPAR and a 67.8% decrease in occupancy for the third quarter ended Sept. 30, 2020, but sees increasing demand in leisure markets.

“While the unprecedented COVID-19 pandemic continues to present significant challenges to the hospitality industry, I am proud of our efforts to protect our hotels and ensure the safety of our associates and guests, while maintaining financial flexibility to position ourselves for future success,” said Richard J. Stockton, Braemar’s president/CEO.

Q3 Highlights:

  • Net loss attributable to common stockholders for the quarter was $18.7 million or $0.55 per diluted share.
  • Comparable RevPAR for all hotels decreased 65.6% to $80.84 during the quarter for all hotels on a 7% increase in ADR.
  • Adjusted funds from operations (AFFO) was negative $0.15 per diluted share for the quarter.
  • Adjusted EBITDAre was negative $3.1 million for the quarter.
  • Comparable hotel EBITDA was $0.4 million for the quarter.
  • The company ended the quarter with cash and cash equivalents of $88.2 million and restricted cash of $34.7 million. The vast majority of the restricted cash is comprised of lender and manager-held reserves. The company is currently working with its property managers and lenders in order to utilize lender and manager-held reserves to fund operating shortfalls. At the end of the quarter, there was also $14.3 million in due from third-party hotel managers, which is the company’s cash held by one of its property managers and is also available to fund hotel operating costs.

“Operationally, we have a high-quality, well-positioned portfolio, all of our hotels are now open and we continue to benefit from increased demand for drive-to leisure resorts,” Stockton added. “We also reached an important milestone by achieving positive hotel EBITDA across our portfolio for the quarter, driven by the strong occupancy performance of over 50% at our leisure properties. Additionally, with the signing of several forbearance agreements over the past few months, our balance sheet is well positioned, and we have no defaults. Looking ahead, we will continue to focus on ways to maximize value for our shareholders as we navigate these uncertain times.”

  • All of the company’s 13 properties are open and operating.
  • Subsequent to quarter end, the company opened The Clancy, an Autograph Collection property, located in San Francisco’s South of Market district. The rebranded property is a conversion of the Courtyard San Francisco Downtown.
  • During the quarter, the company signed a forbearance agreement on its mortgage loan on the Capital Hilton and Hilton La Jolla Torrey Pines. Both properties are currently open, with the Capital Hilton reopening to guests on Aug. 20th after a temporary suspension of operations due to lack of demand as a result of governmental closure orders. The forbearance agreement allowed the company to defer interest on the loan for a period of six months through the September 2020 payment date. The forbearance agreement also allows the company to utilize lender and manager-held reserve accounts, which are included in restricted cash on the company’s balance sheet, in order to fund operating shortfalls at the hotels.
  • During the quarter, the company announced that it signed an agreement allowing it to utilize lender and manager-held reserve accounts to fund operating shortfalls for its mortgage loan on the Chicago Sofitel Magnificent Mile, The Clancy Hotel, the Seattle Marriott Waterfront and The Notary Hotel.
  • As of Sept. 30, 2020, no loans are in default.
  • Capex invested during the quarter was $9.2 million.

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