Ashford Hospitality Trust, Inc. (NYSE: AHT) is a real estate investment trust (REIT) that primarily invests in upper upscale full-service hotels in the United States. The company's portfolio currently consists of 75 consolidated operating hotel properties, representing 18,021 total rooms, as well as four consolidated operating hotel properties, representing 405 total rooms, owned through a 99.4% ownership interest in Stirling OP.

Financials

For the fiscal year ended December 31, 2023, Ashford Hospitality Trust reported annual revenue of $1,367,533,000 and a net loss of $178,489,000. The company's annual operating cash flow was $14,390,000, while its annual free cash flow was negative $123,038,000.

In the first quarter of 2024, the company reported net income attributable to common stockholders of $67.4 million, or $0.60 per diluted share. Adjusted FFO (AFFO) per diluted share for the quarter was negative $0.35. Adjusted EBITDAre for the quarter was $59.5 million.

Business Overview

Ashford Hospitality Trust's portfolio is geographically diversified, with hotel properties located across the United States. The company's hotel properties are primarily branded under the widely recognized upscale and upper upscale brands of Hilton, Hyatt, Marriott, and Intercontinental Hotel Group.

Liquidity

One of the key priorities for Ashford Hospitality Trust is preserving capital and maintaining significant cash and cash equivalents liquidity. As of March 31, 2024, the company held cash and cash equivalents of $113 million and restricted cash of $136 million, the vast majority of which is comprised of lender and manager-held reserve accounts.

Recent Developments

The company is also focused on the disposition of non-core hotel properties and the acquisition of hotel properties that are expected to be accretive to its portfolio. During the first quarter of 2024, Ashford Hospitality Trust completed the sale of the 144-room Residence Inn located in Salt Lake City, Utah for $19.2 million. Subsequent to the quarter end, the company also closed on the sale of the 390-room Hilton Boston Back Bay in Boston, Massachusetts for $171 million and the 85-room Hampton Inn in Lawrenceville, Georgia for $8.1 million.

In addition to asset sales, Ashford Hospitality Trust is pursuing capital market activities and implementing strategies to enhance long-term stockholder value. This includes accessing cost-effective capital, such as through the issuance of non-traded preferred securities, and opportunistically exchanging preferred stock into common stock.

The company is also focused on implementing selective capital improvements designed to increase profitability and maintain the quality of its assets, as well as effective asset management strategies to minimize operating costs and increase revenues. During the first quarter of 2024, the company initiated a comprehensive renovation of the guestrooms and public space at the Embassy Suites in Dallas and the guest room renovation at the Marriott Sugar Land.

Performance Metrics

Ashford Hospitality Trust's hotel portfolio has demonstrated resilience, with the company reporting a 1% decrease in comparable hotel RevPAR for the first quarter of 2024 compared to the prior year quarter. The company's food and beverage revenue and other revenue departments saw growth of 4% and 17% on a per occupied room basis, respectively, compared to the prior year quarter.

The company's group business continues to accelerate, with group rooms revenue for the full year pacing ahead of the prior year by 7% and the second quarter through the balance of the year pacing ahead by 8%. Additionally, group business booked in the first quarter for all future dates was secured at a 9% ADR premium over the business booked during the prior year quarter.

Debt Management

Ashford Hospitality Trust's management team is also actively working to refinance and modify existing property-level indebtedness, with the goal of enhancing the company's liquidity and financial flexibility. The company is currently in discussions with lenders to refinance loans secured by several of its hotel properties, including the Renaissance Nashville in Nashville, Tennessee, the Morgan Stanley Pool Loan with 17 hotels, the loan secured by the Marriott Gateway in Arlington, Virginia, and the loan secured by the Indigo Atlanta in Atlanta, Georgia.

Outlook

Looking ahead, Ashford Hospitality Trust's management team remains cautiously optimistic about the company's prospects. While the company does not anticipate reinstating a common dividend in 2024, it is focused on paying off its strategic corporate financing, which had a remaining balance of approximately $107 million as of March 31, 2024. The company's plan to accomplish this goal includes a combination of asset sales, mortgage debt refinancings, and the continued issuance of non-traded preferred securities.

Conclusion

Overall, Ashford Hospitality Trust's diversified portfolio, strategic asset management initiatives, and proactive approach to capital markets and debt management position the company to navigate the evolving hospitality landscape and create value for its shareholders over the long term.