Q2 2025 Braemar Hotels & Resorts Inc Earnings Call
Regina: Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Braemar Hotels & Resorts Inc. second quarter 2025 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Deric Eubanks, Chief Financial Officer. Please go ahead.
Hello, and thank you for standing by. My name is Regina and I will be your conference operator. Today at this time, I would like to welcome everyone to the brimar hotels and resorts Inc. Second quarter, 2025 results conference call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session. If you would like to ask a question during this time simply Press Start, then the number 1 on your telephone keypad to withdraw, your question, press star 1. Again, I would now like to turn the conference over to Derek Eubanks to financial officer. Please go ahead.
Deric Eubanks: Good morning, and welcome to today's call to review results for Braemar Hotels & Resorts for the second quarter of 2025 and to update you on recent developments. On the call today will also be Richard Stockton, President and Chief Executive Officer, and Chris Nixon, Executive Vice President and Head of Asset Management. The results, as well as notice of the accessibility of this conference call on a listen-only basis over the internet, were distributed yesterday in a press release. At this time, let me remind you that certain statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the safe harbor provisions of the federal securities regulations. Such forward-looking statements are subject to numerous assumptions, uncertainties, and known or unknown risks, which could cause actual results to differ materially from those anticipated.
Good morning and welcome to today's call to review results for bramar hotels and resorts for the second quarter of 2025 and to update. You on recent developments on the call. Today, we'll also be Richard Stockton president, the chief executive officer, and Chris Nixon, Executive, Vice President, and head of asset management.
The result as well, as notice of the accessibility of this conference call and also only basis over the Internet. We're distributed yesterday in a press release.
At this time, let me remind you that certain statements and assumptions in this conference call contain or based upon forward-looking information and are being made, pursuant to the safe harbor, provisions of the federal Securities regulations.
Deric Eubanks: These factors are more fully discussed in the company's filings with the Securities and Exchange Commission. The forward-looking statements included in this conference call were only made as of the date of this call, and the company is not obligated to publicly update or revise them. Statements made during this call do not constitute an offer to sell or a solicitation of an offer to buy any securities. Securities will be offered only by means of a registration statement and prospectus, which can be found at www.sec.gov. In addition, certain terms used in this call are non-GAAP financial measures, reconciliations of which are provided in the company's earnings release and accompanying tables or schedules, which have been filed on Form 8-K with the SEC on July 31st, 2025, and may also be accessed through the company's website at www.bhrreit.com.
Touch, forward-looking statements are subject to numerous assumptions, uncertainties and known, or unknown risks, which could cause actual results to differ materially from those anticipated. These factors are more fully discussed in the company's filings with Securities and Exchange Commission.
The forward-looking statements included in this conference call are only made as of the date of this call, and the company is not obligated to publicly update or revise them.
Statements made during this call. Do not constitute an offer to sell or a solicitation of an offer to buy any security Securities. Securities will be offered only by means of a registration statement and perspectives, which can be found at www.sec.gov.
Deric Eubanks: Each listener is encouraged to review those reconciliations provided in the earnings release, together with all other information provided in the release. Also, unless otherwise stated, all reported results discussed in this call compare the second quarter ended June 30, 2025, with the second quarter ended June 30, 2024. I will now turn the call over to Richard Stockton. Please go ahead, Richard.
In addition certain terms used in this call are non-gaap Financial measures. Reconciliations of which are provided in the company's earnings release and accompanying tables or schedules, which have been filed on Form 8K with the SEC on July 31st 2025 and may also be accessed through the company's website at www.bhh.com.
Each listener is encouraged to review those reconciliations provided in the earnings release together with all other information provided in the release.
Also, unless otherwise stated all reported results discussed in this call compare the second quarter into June 30th 2025 with the second quarter ended. June 30th 2024.
Richard Stockton: Morning. Welcome to our second quarter earnings conference call. I will begin today's call by providing an overview of our recent results and our strategic priorities for the second half of 2025. Then Deric Eubanks will provide a review of our financial results, and Chris Nixon will provide an update on our asset management activity. Afterwards, we will open the call for Q&A. We have a few key themes for today's call. First, I am excited to report that our portfolio achieved 1.5% growth in comparable RevPAR in the second quarter and total comparable hotel EBITDA growth of 3.7% on slightly stronger margins. Importantly, we experienced revenue and EBITDA growth in both our urban and resort hotel segments. Second, from a liquidity perspective, we remain very well positioned, having addressed our final 2025 debt maturity earlier this year and agreeing to sell the Marriott Seattle Waterfront.
I will now turn the call over to Richard Stockton. Please go ahead Richard.
Morning. Welcome to our second-quarter earnings conference call. I'll begin today's call by providing an overview of our recent results and our strategic priorities for the second half of 2025. Then, Derek will provide a review of our financial results and Chris will provide an update on our asset management activity. Afterwards, we'll open the call for Q&A.
We have a few key themes for today's call First. I'm excited to report that our portfolio achieve 1.5% growth and comparable growth for the second quarter and total comparable hotel in the Doug growth of 3.7% on slightly stronger. Margins
importantly, we experienced revenue and EBA growth in both our Urban and Resort Hotel segments.
Second.
Richard Stockton: Third, despite having significant renovations in process at three of our hotels, as we look forward, our booking pace continues to be strong. Turning to our second quarter results, our portfolio delivered solid results with a comparable RevPAR of $318, reflecting an increase of 1.5% over the prior year quarter. This marks our third consecutive quarter of RevPAR growth, which I believe reflects an important inflection point in our performance. Additionally, comparable total hotel revenue increased by 3.3% over the prior year period, and comparable hotel EBITDA was $47.8 million, which reflected a 3.7% increase over the prior year quarter. Nine of our 15 hotels are considered resort destinations, and our luxury resort portfolio continues to return to a more normalized growth trajectory, delivering a strong second quarter performance.
From a liquidity perspective, we remain very well positioned. And having addressed our final 2025 debt maturity earlier this year and agreeing to sell the marriage, Seattle waterfront.
And third despite having significant Renovations in process at 3 of our hotels. As we look forward, our booking Pace continues to be strong.
Turning to our second quarter results, our portfolio delivered solid results with comparable red part of 318 reflecting an increase of 1.5% over the prior year quarter.
This marks our third consecutive quarter of red Park growth which I believe reflects an important inflection point in our performance. Additionally comparable, total Hotel Revenue increased by 3.3% over the prior year, period and comparable hotel in V was 47.8 Million, which reflected a 3.7% increase over the prior year quarter.
Richard Stockton: Our resort portfolio reported a comparable RevPAR of $464, a 1.6% increase over the prior year period, and combined comparable hotel EBITDA of $25.7 million, a 6.9% increase over the prior year period. The brightest spots within our resort portfolio included the Ritz-Carlton, Lake Tahoe, with approximately 39% growth in total revenue, and the Ritz-Carlton Reserve Dorado Beach, with approximately 14% growth in total revenue. We are also pleased by the continued steady performance of our urban hotels, which delivered comparable RevPAR growth of 0.5% during the second quarter. As the citywide conference calendar continues to improve, The Clancy in San Francisco achieved total revenue growth of 14% in the quarter. We believe our portfolio is well positioned to outperform, and our booking pace continues to be strong. Our group pace for 2025 is up 8.6%, and 2026 shows continued growth at 3.6%.
9 of our 15 hotels are considered Resort destinations and our luxury resort. Portfolio continues to return to a more normalized. Growth trajectory delivering a strong second quarter performance.
Our Resort portfolio reported comparable RevPAR of $464 at a 1.6% increase over the prior year period and combines comparable hotel revenue, which increased by $25.7 million, or 6.9%, over the prior year period.
% growth in total revenue.
Also pleased by the continued study performance of our Urban hotels which delivered comparable repar growth of 0.5% during the second quarter.
As the citywide conference calendar continues to improve, the Clancy in San Francisco achieved total revenue growth of 14% in the quarter.
We believe our portfolio is well, positioned to outperform in our booking Pace continues to be strong.
Richard Stockton: Chris Nixon will discuss these trends in more detail. As a reminder, on the capital markets front, in March of this year, we closed on a refinancing across five hotels at a very competitive spread. Importantly, this financing addressed our only remaining final debt maturity for 2025. Also during the quarter, we restructured the 415-room Sofitel Hotel Chicago Magnificent Mile as a franchise. Under this new agreement, the hotel will continue to operate under the Sofitel Hotel Chicago Magnificent Mile brand, while day-to-day management has been assumed by Remington Hospitality. Looking ahead, we expect a meaningful uplift in the value of the property due to the Sofitel Hotel brand remaining on the hotel and the management agreement with Remington being terminable on sale.
A group based for 2025 is up 8.6% in 2026 shows. Continued growth at 3.6% Chris will discuss these Trends in more detail.
As a reminder on the capital Markets Front in March. Of this year, we closed on a refinancing across 5 hotels, at a very competitive spread,
Importantly, this financing address are only remaining final debt maturity for 2025.
Also, during the quarter, we restructured the 415 room soap Hotel. Chicago, Magnificent Mile as a franchise.
Under this new agreement, the hotel will continue to operate under the sofa Hotel. Chicago, Magnificent Mile brand while day-to-day management has been assumed by Remington hospitality.
Richard Stockton: Subsequent to quarter end, we signed a definitive agreement to sell the 369-room Marriott Seattle Waterfront for $145 million, or $393,000 per key, including anticipated capital expenditures of $7 million. The sale price represents an 8.1% capitalization rate on net operating income for the trailing 12 months ended May 31st, 2025. The transaction aligns nicely with our strategic objective to deleverage the portfolio while sharpening our focus on the luxury hotel sector. Closing is expected in the next few weeks, subject to customary conditions. I am also pleased to report that to date, we have redeemed approximately $107 million of our non-traded preferred stock, which represents approximately 23% of the original capital raise. We expect to continue to redeem these shares as we seek to deleverage our platform and improve our cash flow per share.
Looking ahead. We expect a meaningful uplift in the value of the property, due to the sofa, till brand, remaining on the hotel and the management agreement with Remington being terminable on sale.
Subsequent to quarter end, we signed a definitive agreement to sell the 369-room hotel at Seattle waterfront for $145 million, or $393,000 per key.
Including anticipated, Capital expenditures of 7 million, the sale price represents an 8.1% capitalization rate on net, operating income for the trailing 12 months. Ended May 31st 2025
The transaction aligns nicely with our strategic objective to de-lever our support portfolio while sharpening our focus on the luxury hotel sector.
Closing is expected in the next few weeks, subject to customary conditions.
I'm also pleased to report that today we have redeemed approximately 107 million of our non-traded preferred stock which represents approximately 23% of the original capital. Raise,
Richard Stockton: I will now turn the call over to Deric Eubanks to take you through our financial details.
we expect to continue to redeem these shares as we seek to de-lever our platform and improve our cash flow for share.
I will now turn the call over to Derek to take you through our financial details.
Chris Nixon: Thanks, Richard. For the quarter, we reported a net loss attributed to common stockholders of $16 million, or $0.24 per diluted share, and AFFO per diluted share of $0.09. Adjusted EBITDA RE for the quarter was $38.9 million. At quarter end, we had total assets of $2.1 billion. We had $1.2 billion of loans, of which $27.7 million related to our joint venture partner share of the loan on the Capitol Hilton. Our total combined loans had a blended average interest rate of 7.1%, taking into account in-the-money interest rate caps. Based on the current level of SOFR and our corresponding interest rate caps, approximately 22% of our debt is effectively fixed and approximately 78% is effectively floating. As of the end of the second quarter, we had approximately 44.2% net debt to gross assets.
Thanks Richard for the quarter, we reported a net loss, attributed, common stockholders of 15 million or 24 cents per diluted share and affluent. Share of 9 cents, adjusted ebit to re for the quarter was 38.9 Million at quarter end. We had total assets of 2.1 billion dollars. We had 1.2 billion dollars of loans of which 27.7 million related to our joint venture partner, share of the loan on the Capital Hilton.
Our total combined loans at a blended average interest rate of 7.1% taking into account in the money interest rate caps.
based on the current level of saer and our corresponding interest rate caps, approximately 22% of our debt is effectively fixed and approximately 78% is effectively floating
Chris Nixon: We ended the quarter with cash and cash equivalents of $80.2 million, plus restricted cash of $55.5 million. The vast majority of that restricted cash is comprised of lender and manager-held reserve accounts. At the end of the quarter, we also had $24.2 million in due from third-party hotel managers. This primarily represents cash held by one of our brand managers, which is also available to fund hotel operating costs. With regard to dividends, we again announced a quarterly common stock dividend of $0.05 per share, or $0.20 per diluted share on an annualized basis. This equates to an annual yield of approximately 9.1% based on yesterday's stock price. Our board of directors will continue to review the company's dividend policy on a quarter-to-quarter basis. As of June 30, 2025, our portfolio consisted of 15 hotels with 3,667 net rooms.
As of the end of the second quarter, we had approximately 44.2%, net debt to gross assets.
We ended the quarter with cash and cash equivalents of 80.2 million plus restricted cash of 505.5 million. The vast majority of that restricted cash is comprised of lender and manager held Reserve accounts.
At the end of the quarter, we also had 24.2 million. And due from third party Hotel. Managers this primarily represents cash held by 1 of our brand managers, which is also available to fund Hotel operating costs.
With regard to dividends we again announced a quarterly common stock dividend of 5 cents per share or 20 cents per diluted share on an annualized basis. This equates to an annual yield of approximately 9.1% based on yesterday's stock price.
Our board of directors will continue to review the company's dividend policy on a quarter-to-quarter basis.
Chris Nixon: Our share count currently stands at 73.6 million fully diluted shares outstanding, which is comprised of 68.2 million shares of common stock and 5.4 million OP units. This concludes our financial review. I'd now like to turn it over to Chris Nixon to discuss our asset management activities for the quarter.
As of June 30th, 2025 our portfolio. Consisted of 15 hotels with 3,667, net rooms our share count currently stands at 73.6 million fully diluted shares outstanding, which is comprised of 68.2 million, shares of common stock, and 5.4 million. Op units.
Chris Nixon: Thank you, Deric. We are pleased to report another strong quarter of performance across our portfolio. During the second quarter, comparable hotel RevPAR reached $318, representing a 1.5% increase compared to the prior year period. Comparable hotel EBITDA increased 3.7% during the second quarter over the prior year period, supported by a combination of healthy demand trends, disciplined cost controls, and continued execution of our strategic initiatives. Our resort properties led portfolio performance with comparable hotel EBITDA increasing 6.9% during the second quarter compared to the prior year period. Ancillary guest spending remained a key contributor to top-line growth across the portfolio, with food and beverage revenue increasing 6.6% during the second quarter compared to the prior year period. In addition to high margin revenue initiatives, our team maintained a strong focus on expense management, delivering improvements across multiple operational areas.
This concludes our financial review. I'd now like to turn it over to Chris to discuss our asset management activities for the quarter.
Thank you, Derek. We are pleased to report another strong quarter of performance across our portfolio. During the second quarter, comparable hotel RevPAR reached $318, representing a 1.5% increase compared to the prior year period.
Comparable Hotel ebita increased 3.7% during the second quarter over the prior year period supported by a combination of healthy demand Trends, discipline cost controls and continued execution of our strategic initiatives.
Compared to the prior year, period.
Ancillary guest spending remained a key contributor to the topline growth across our portfolio, with food and beverage revenue increasing 6.6% during the second quarter compared to the prior year period.
Chris Nixon: As a result, during the second quarter, comparable hotel EBITDA margin improved by 11 basis points compared to the prior year quarter. We achieved this performance despite temporary headwinds from two properties currently undergoing renovations: Park Hyatt Beaver Creek and Hotel Yountville, which muted results to some extent. Notably, comparable hotel EBITDA growth during the second quarter for the remainder of the portfolio, excluding these properties, was 6.3% compared to the prior year quarter. This performance underscores the underlying strength of our assets. We continue to see strong operating performance across the portfolio and believe we are well positioned to deliver outperformance in the periods ahead. Group performance remained strong during the second quarter, with group revenue finishing 2.3% above the prior year period. In-the-quarter bookings for in-the-quarter stays were particularly strong. We entered the quarter down 1.5% in group revenue and finished ahead 2.3%.
In addition to high margin Revenue initiatives, our team maintained a strong strong focus on expense management, delivering improvements across multiple operational areas.
As a result, during the second quarter, comparable Hotel IBA margin improved by 11 basis points compared to the prior year's quarter.
We achieved this performance despite temporary headwinds from 2 properties. Currently undergoing. Renovations Park, Heights Beaver, Creek and hotel yotel, which muted results to some extent.
Notably comparable Hotel ibida growth. During the second quarter for the remainder of the portfolio. Excluding these properties with 6.3% compared to the prior year quarter.
This performance, underscores the underlying strength of our assets. We continue to see strong operating performance across the portfolio and believe we are well positioned to deliver outperformance in the periods ahead.
Group performance remains strong during the second quarter with group Revenue, finishing 2.3% above the prior year period.
Chris Nixon: This strong recovery reflects the efforts of our property sales teams to drive short-term conversion. As we look ahead, group revenue pace is strong. For the third quarter, our portfolio is currently up 8.8% in group revenue pace compared to the prior year quarter. For the full year, group revenue is also pacing ahead by 8.6% compared to the prior year. Notably, Four Seasons Scottsdale and the Ritz-Carlton Sarasota are pacing ahead for full year 2025 by 20.3% and 26.9% compared to the prior year, respectively. At the Ritz-Carlton Lake Tahoe full year, group revenue pace is ahead by 44% over the prior year. Group catering pace of the property is also up over 100%, contributing to high margin ancillary revenue. Continued strength in group demand across the portfolio bolsters our confidence in our trajectory and underscores the broader progress we are achieving through our strategic revenue and operational initiatives.
In the quarter bookings. For, in the quarter stays were particularly strong, we entered the quarter down 1.5% in group revenue and finished ahead 2.3%.
The strong recovery reflects the efforts of our property sales, teams to drive short-term conversion.
As we look ahead group Revenue faces strong for the third quarter of portfolio is currently up 8.8% in group Revenue Pace compared to the prior year quarter.
For the full year group revenue is also pacing ahead by 8.6% compared to the prior year.
Notably 4 Seasons Scottsdale and the rich Carlton Sarasota are pacing ahead for full year, 2025 by 20.3%, and 26.9% compared to the prior year, respectively.
At the Ritz Carlton Lake Tahoe. Full year group Revenue, pace is ahead by 44% over the prior year group catering, pace of the properties. Also up over 100% contributing to high margin ancillary Revenue.
Chris Nixon: Our resort properties continue to serve as important drivers of financial growth within the portfolio. A standout example this quarter was a strong performance at the Ritz-Carlton Dorado Beach, which led the resort segment results during the second quarter. The property delivered an impressive 17% increase in RevPAR compared to the prior year period. This outperformance was driven by a proactive strategy to supplement healthy transient demand with incremental group business. Notably, group revenue increased 98%, while transient revenue increased 5.8% during the second quarter compared to the prior year period. This performance reflects the strength of the property's balanced demand mix. Our team remains focused on initiatives aimed at elevating rate and maximizing performance across all revenue streams. A key area of emphasis has been optimizing the property's residential rental program, which generated a 15% increase in residents' revenue during the second quarter compared to the prior year period.
Continued strength in group demand across portfolio of bolsters our confidence in our trajectory and underscores. The broader progress, we are achieving through our strategic revenue and operational initiatives.
Our Resort properties continue to serve as important drivers of financial growth within the portfolio. A standout example of this quarter was a strong performance at the Ritz Carlton Dorado Beach, which led the results segment the resort segment results during the second quarter. The property delivered, an impressive 17% increase in rev Park, compared to the prior year period.
This outperformance was driven by a proactive strategy to supplement healthy transient demand with incremental group business.
Notably, group revenue increased 98%, while transient revenue increased 5.8% during the second quarter compared to the prior-year period.
This performance reflects the strength of the properties balance demand mix.
Our team remains focused on initiatives aimed at elevating rate and maximizing performance across all revenue streams.
Chris Nixon: Since acquisition, the team has executed a comprehensive operational plan, streamlining the sign-up process, removing barriers for prospective owners, and successfully onboarding the asset to the Marriott Homes and Villas platform. I would like to provide a brief update on our 415-room Soak Hotel Chicago Magnificent Mile. Following its recent transition from brand managed to a franchise property in the second quarter, the hotel delivered strong performance. Total hotel revenue increased 2.4% during the second quarter compared to the prior year period, driven by a 2% increase in rooms revenue and an impressive 7% increase in food and beverage revenue. The transition to Remington Hospitality is already producing meaningful results, underscoring their strong operational alignment with our ownership strategy and their proven ability to drive performance across our portfolio. We anticipate continued upside as their full takeover strategy is implemented in the coming quarters.
A key area of emphasis has been optimized in the properties residential rental program, which generated a 15% increase in revenue during the second quarter compared to the prior year period.
Since acquisition, the team is executed, a comprehensive operational, plan streamlining. The sign up process removing barriers for prospective owners and successfully onboarding the asset to the Marriott homes and Villas platform.
I would like to provide a brief update on our 415 room. Sophie tells Chicago, Magnificent Mile.
following its recent transition from Brand managed to a franchise property in the second quarter, the hotel, delivered strong performance,
Total hotel revenue increased 2.4% during the second quarter compared to the prior year period, driven by a 2% increase in rooms revenue and an impressive 7% increase in food and beverage revenue.
The transition to Remington is already producing meaningful results, underscoring their strong operational alignment with our ownership strategy, and their proven ability to drive performance across our portfolio.
Chris Nixon: Moving on to capital expenditures, during the second quarter of 2025, we made continued progress on key renovation and value-enhancing projects across the portfolio. At Hotel Yountville, we advanced the guest room renovation aimed at further elevating its luxury positioning in the heart of Napa Valley. Completion is expected later this year. We also commenced a full guest room renovation at Park Hyatt Beaver Creek. While at Four Seasons Scottsdale, we began converting underutilized space into a cafe and gelato shop, an initiative designed to enhance the guest experience and generate new revenue streams. In addition, construction began on five luxury beachside cabanas at the Ritz-Carlton St. Thomas, which will further elevate the beachfront offering and drive incremental revenue. Looking ahead, we plan to complete the renovation of Cameo Beverly Hills as part of its strategic repositioning to Hilton's LXR luxury portfolio.
We anticipate continued upside as their full takeover strategy is implemented in the coming quarters.
Moving on to Capital expenditures during the second quarter of 2025, we may continue progress on key renovation and value enhancing projects across the portfolio.
At Hotel Janville, we advanced the guest room renovation aimed at further elevating its luxury positioning in the heart of Napa Valley.
Completion is expected later this year.
We also commenced a full guest room. Renovation at Park, High Beaver Creek while at 4 Seasons Scottsdale. We began converting underutilized space into a cafe in gelato shop and initiative designed to enhance the guest experience and generate new revenue streams.
In addition, construction began on 5 luxury beachside cabanas at the Ritz Carlton St. Thomas, which will further elevate the beachfront offering and drive incremental revenue.
Chris Nixon: Later this year, we will also initiate multiple enhancements at the Ritz-Carlton Reserve Dorado Beach, including additional beachside cabanas and the activation of a new event lawn, each aligned with our goal of enhancing experiential amenities to drive additional revenue. Our recently completed ROI-focused projects are already producing strong results. At the Ritz-Carlton Lake Tahoe, we transformed approximately 3,000 square feet of previous back-of-house space into revenue-generating public areas. Enhancements such as cabanas, fire pits, and swing suites have collectively generated approximately $300,000 in NOI through the second quarter of 2025, each significantly outperforming initial underwriting expectations. These results underscore our disciplined capital deployment strategy and our continued focus on long-term value creation through portfolio quality, brand alignment, and thoughtful reinvestment. For full year 2025, we continue to expect capital expenditures to total between $75 million and $95 million. In summary, we are pleased with our solid performance this year.
We plan to complete the renovation of Cameo Beverly Hills as part of its strategic repositioning to Hilton's LXR luxury portfolio.
Later this year, we will also initiate multiple enhancements at the Ritz Carlton Reserve Dorado Beach including additional Beach site Cabanas and the activation of a new event launched each aligned with our goal of enhancing experiential amenities to drive additional Revenue.
Our recently completed Roi focused projects are already producing strong results.
At the Ritz golf in Lake Tahoe. We transformed a approximately 3,000 square feet of previous back of house, space into Revenue generating, public areas.
And enhancements such as Cabanas, fire, pits and swing. Suites have collectively generated approximately 300,000 dollars in noi through the second quarter of 2025. Each significantly outperforming the initial underwriting expectations.
These results underscore our disciplined, Capital deployment strategy and our continued focus on long-term value creation, through portfolio, quality brand alignment and thoughtful reinvestment.
For the full year 2025, we can continue to expect the capital expenditures to total between $75 million and $95 million.
Chris Nixon: We continue to see the benefits of various operating initiatives focused on productivity and cost efficiencies. Group business also continues to demonstrate solid growth, supported by strong demand across multiple key markets. Our momentum reflects the strength and resilience of our high-quality portfolio, as well as the strategic positioning we have built over time. We are excited about the opportunities ahead and look forward to sharing further updates on our progress throughout the back half of 2025. I will now turn the call back over to Richard for final remarks.
In summary, we are pleased with our solid performance this year. We continue to see the benefits of various operating initiatives focused on productivity and cost efficiencies.
Group business continues to demonstrate solid growth, supported by strong demand across multiple key markets. Our momentum reflects the strength and resilience of our high-quality portfolio, as well as the strategic positioning we have built over time. We are excited about the opportunities ahead and look forward to sharing further updates on our progress throughout the back half of 2025.
Richard Stockton: Thank you, Chris. In summary, I would like to reiterate that we continue to be pleased with the performance of our hotels, in particular the return to normalized growth for our resort assets and continued steady performance of our urban properties. We also remain well positioned with a solid balance sheet and promising outlook. We look forward to updating you on our progress in the quarters ahead. This concludes our prepared remarks, and we will now open the call for Q&A. Thank you.
I will now turn the call back over to Richard for final remarks.
Thank you, Chris.
In summary, I'd like to reiterate that we continue to be pleased with the performance of our hotels and particular, the return to normalized growth of our Resort assets and continued steady performance of our Urban properties.
Regina: At this time, I would like to remind everyone, in order to ask a question, press star followed by the number one on your telephone keypad. Our first question will come from the line of Daniel Hogan with Baird. Please go ahead.
We also remain well, positioned with a solid balance sheet and promising Outlook, we look forward to updating you on our progress. In the quarters, have this concludes, our prepared remarks and we will now open the call for Q&A. Thank you.
In order to ask a question press star followed by the number 1 on your telephone keypad. Our first question will come from the line of Daniel Hogan with beard. Please go ahead.
Daniel Hogan: I'll just take a quick question first, just on some revenue management strategies. Is there an incremental focus on grouping up? I know you mentioned doing that at Dorado Beach. Is that something you're looking to do at more properties? Is there a change in booking leads versus signed contracts?
Let's take a quick question. Um first just on some Revenue management, strategies is there. Uh, incremental focus on grouping up. I know you mentioned doing that. Um, at Dorado Beach is that um, is that something you're looking to do a more properties? And is there a change in Booking leads versus sign? Contracts?
Chris Nixon: Yeah, great question, Daniel. We are looking to group up broadly across the portfolio. I think group, group additional group base insulates you from any external headwinds. It has to be the right group, and there's a heavy focus on our end on group that generates additional catering and banquet spend. So we've been pleased with the F&B performance across our portfolio. F&B revenue growth in the quarter outpaced rooms revenue growth, which is fantastic. In doing that, we were also able to achieve 110 basis points of margin growth through food and beverage. So we're looking for additional groups, but it's got to be the right groups. Placement's also very important at these resorts. So we're primarily focused on funneling groups in slower demand months and off-season. Broadly to your question, yes, we're looking to group up across the portfolio.
Yeah, great question. Daniel. Um, we are, uh, looking to group up broadly across the portfolio. I think, group group, additional group based insulates you from any, uh, external headwinds. Um, it has to be the right group. And there's a heavy focus on our end on group that generates additional, uh, catering and banquet spend. And so, we've been pleased with the f&b performance across our portfolio. Uh, FMB Revenue growth in the quarter outpaced rooms Revenue growth, uh, which is fantastic. And in doing that, we were also able to achieve 110 basis points of margin growth uh, through food and beverage. And so we're looking for for additional groups, but it's got to be the right groups, placements. Also very important that these Resorts. Um, so we're we're primarily focused on funneling groups and Florida, demand months, and off-season. Um, but but broadly to your question, yes. Uh, we're looking to group up across the portfolio.
Daniel Hogan: Okay, great. I know April was affected by the Easter shift. How did May and June perform versus your expectations and performance throughout the quarter? Was that more in line being more normalized months and calendars?
Chris Nixon: May and June performed more in line with our expectations. I think broadly across the portfolio, there are some headwinds that we experienced this quarter. We have a couple of hotels that are under renovation, which did have some displacement within the quarter. In addition, we saw extreme softness out of the government segment, which impacted Capitol Hilton in D.C. So government business was soft in the quarter. The rest of the business was extremely strong and allowed us to outrun those challenges. We talked already about the group strength, which was up high single digits in the quarter. Corporate business was up in the quarter, and leisure was very strong, where we saw strength in leisure at our resorts.
Okay, great. And then I know uh, with April was affected by the Easter shift, maybe how did May and June perform, uh, versus your expectations and performance throughout the quarter was that, uh, more in line being, you know, more normalized months, and, and calendars.
Chris Nixon: There were some challenges with Easter in April, some challenges with the hotels that were under renovation, but we were very pleased with the results, given government softness and how we were able to outrun that.
Yeah, May and June performed more in line with our expectations. I think broadly across the portfolio. You know, there are some headwinds that we experience this quarter. We've got a couple hotels that are under renovation which which did have some displacement within the quarter. Um, you know, in addition, uh, we saw extreme softness out of the government segment, which impacted uh, Capital Health and in DC. So government business was soft in the quarter. Uh, the rest of the business was, was extremely strong and allowed us to kind of outrun those challenges. So, uh, we talked already about the group strength, uh, which was up high single digits in the quarter, uh, corporate business was up, uh, in the quarter and then Leisure was very strong, uh, where we saw, you know, strength and Leisure at our Resorts. And so, there were some challenges with Easter in, in April, um, some challenges with the hotels that were under renovation, but we were very pleased, uh, with the results uh given you know, kind of government softness and how we were able to outrun that.
Daniel Hogan: Okay. Last one for me. Following the Seattle sale, does this make there be less of an urge to sell more assets? Is that still a focus, and does that affect any of the upcoming transactions that you are looking to do?
Okay. And then last one for me, following the Seattle sale, does this...
Make, uh, there be less of an urge to to sell more assets, is that, um, is that still a focus and does that affect any of the upcoming transactions? Um, that you're looking to do?
Richard Stockton: Yeah, thanks, Daniel. I think with the sale of Seattle, we'll have a significant cash balance on the balance sheet, gives us more flexibility to pursue various initiatives. I'd say, as I said in our public announcement, we don't have any further property sales planned for this year. I think 2026, we'll assess when it comes. I certainly wouldn't rule it out. I think the transaction environment continues to improve. We had a very interested group, a large group of interested buyers in the Seattle process. I feel like we achieved full market value for that asset. As the debt markets continue to heal, potentially cost of financing comes down a bit, we should see even more interest in our assets going into next year. I'm definitely open to it at that point.
Yeah, thanks Danielle. Uh, yeah, I think with the sales Seattle, we'll have a, you know, significant cash balance on the balance sheet, uh, gives us, you know, more flexibility to pursue various initiatives. Um, you know that. So so I'd say and as I said in our Public Announcement, uh, we don't have any, uh, further property sales plan for this year, but I think, you know, 2026, we'll we'll assess when it comes certainly. Wouldn't rule it out. Uh, yeah, I think the, the transaction environment, uh, continues to improve.
We had a, uh, very uh,
Interested group, a large group of interested buyers on this in the Seattle process. So I feel like we achieved um you know, full market value for that asset and you know as as the debt markets continue to heal uh you know potentially cost of financing comes down a bit uh we should see even you know more interest in our assets going into next year. So some definitely uh open to it at that point.
Daniel Hogan: Great. Thank you very much.
Great, thank you very much.
Regina: That will conclude our question and answer session. I will turn the call back over to management for any closing remarks.
Richard Stockton: Thank you for joining us on our Q2 earnings call. We look forward to speaking with you again next quarter.
And that will conclude our question and answer session. I'll turn the call back over to management for any closing remarks.
Thank you for joining us on our second quarter earnings call. We look forward to speaking with you again next quarter.
Regina: This concludes today's call. Thank you all for joining. You may now disconnect.
This concludes today's call, thank you all for joining. You may now disconnect