The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Tyler Batory - Oppenheimer & Co., Inc. - Analyst
: Hey. Good morning. Thanks for taking my questions. So in terms of the softness in resort ADR that you're seeing, can you just address that a little
bit more in-depth? I'm not sure how much of that is kind of asset specific versus macro versus a demand pullback, just really trying to get a good
sense of what's driving that?
Question: Tyler Batory - Oppenheimer & Co., Inc. - Analyst
: Okay. Makes sense. And then quick follow-up on portfolio trends. There's been some discussion about DC impact from the upcoming election. Is
that something that you're seeing in your forward bookings now especially on the group side of things in November?
Question: Tyler Batory - Oppenheimer & Co., Inc. - Analyst
: Okay. And then last for me in terms of the shareholder value creation plan, you've checked off a number of boxes there. Talk more about, the two
hotels you could sell, what might go into that decision, which you're seeing out there in the market and then, you bought back, I think, 40 million
of the of the preferred, but you still got the share buyback that's out there as well. So talk about how you're thinking about potentially executing
on that too.
Question: Bryan Maher - B. Riley Securities, Inc. - Analyst
: Thank you and good morning. Just a couple from me. Tyler got most of mine. It seems like only a few quarters ago, maybe it was a year, year and
a half that I felt like we were talking about being in the market buying one or two hotels a year and now we just sold an asset, possibly two more
for sale. What's been the key change that has kind of changed course for the company there? Is it really kind of cost of capital, higher interest rates?
I mean, maybe you can give a little color on that, Richard or Deric.
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AUGUST 01, 2024 / 3:00PM, BHR.N - Q2 2024 Braemar Hotels & Resorts Inc Earnings Call
Question: Bryan Maher - B. Riley Securities, Inc. - Analyst
: And that's maybe a good segue to my second question, which is the cameo. What what's going on there? I mean, RevPAR was pretty weak. I think
it was down 18% for the quarter. Is the renovation there underway? When is it planning on starting? How deep is it? Can you tell us what the plans
are for that property? Yeah.
Question: Bryan Maher - B. Riley Securities, Inc. - Analyst
: Maybe sticking with the cameo for one more second. I think that there was, correct me if I'm wrong, I think there was like five kind of residences
slash condos. I remember two of them a few years ago and I and I thought that there was a plan to sell those. What what's the current thought
process on that asset of the component of the portfolio of that property?
Question: Michael Bellisario - Robert W. Baird & Co. - Analyst
: Thank you. Good morning, everyone. A couple of questions for you. First for Deric, maybe on the incentive fee. Can you remind us of the calculation?
Is there a cap on the payment and sort of what are the inputs there to come up with that calculation on the incentive fee side?
Question: Michael Bellisario - Robert W. Baird & Co. - Analyst
: And is that -- equity market shares -- outstanding or is that preferred as converted shares outstanding? (technical difficulty)
Question: Michael Bellisario - Robert W. Baird & Co. - Analyst
: Got it. Helpful. And then just switching gears a little on capital allocation, elevated CapEx this year. I know some of that's on some onetime projects.
Maybe help us understand sort of the underlying run rate for spend within the portfolio and then how you're balancing some of the cash inflows
and outflows, over the next 12 to 24 months, especially given that CapEx number is greater than your cash flow from operations?
Question: Michael Bellisario - Robert W. Baird & Co. - Analyst
: And just remind me, what's the 30% figure?
Question: Michael Bellisario - Robert W. Baird & Co. - Analyst
: Okay. And then just lastly, sort of along the same lines, balance sheet leverages 40%. In prior quarters, you've talked about a 35% target. You haven't
talked about that in a while. I guess, one, is that still a target? Where is leverage pro forma for La Jolla? And then kind of what's the timeline or the
plan to get that back down to 35%? And that's all for me. Thank you.
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