Braemar Hotels & Resorts' Q4 2024: Key Contradictions in Development Spending, Demand Trends, and Share Buyback Strategy

These are the key contradictions discussed in Braemar Hotels & Resorts Inc.'s latest 2024Q4 earnings call, specifically including: Tahoe development spending, corporate demand strength, resort segment performance and demand inflection, and share repurchase authorization:



RevPAR and Revenue Growth:
- Braemar Hotels & Resorts reported a 1.9% comparable RevPAR growth and 5.3% comparable total revenue growth in the fourth quarter.
- The growth was driven by a strong 7% increase in group revenue, underscoring the continued resurgence of group bookings and events.

Capital Markets and Financing:
- The company is actively discussing the refinancing of its $293 million loan that matures in June and has a positive outlook on the debt capital market environment.
- The attractiveness of the market, with SOFR decreasing by 100 basis points and credit spreads decreasing by 100 basis points, has created favorable conditions for borrowers.

Asset Management and Capital Expenditures:
- Braemar Hotels & Resorts invested approximately $70 million in capital expenditures in 2024 and plans to spend between $75 million and $95 million in 2025.
- This investment is focused on enhancing guest experiences and long-term value across the portfolio, with projects like transforming back-of-house space into retail markets and renovating key facilities.

Shareholder Value Creation Plan:
- The company has redeemed approximately $80 million of its nontraded preferred stock, representing 17% of the original capital raise.
- This move is part of the company's strategy to deleverage its platform and improve cash flow per share.

Performance in Urban and Resort Hotels:
- Urban hotels achieved a comparable RevPAR growth of 3.3% in the fourth quarter, with January RevPAR increasing by 13% year-on-year.
- The luxury resort portfolio delivered solid performance with a comparable RevPAR increase of 1.3%, driven by strong forward bookings and improving industry fundamentals.