Investor Presentation Investor Presentation June 2007 June 2007 - - PowerPoint PPT Presentation
Investor Presentation Investor Presentation June 2007 June 2007 - - PowerPoint PPT Presentation
Investor Presentation Investor Presentation June 2007 June 2007 Safe Harbor Safe Harbor In keeping with the SEC s s Safe Harbor Safe Harbor guidelines, certain statements made during this guidelines, certain
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Safe Harbor Safe Harbor
In keeping with the SEC In keeping with the SEC’ ’s s “ “Safe Harbor Safe Harbor” ” guidelines, certain statements made during this guidelines, certain statements made during this presentation could be considered forward presentation could be considered forward-
- looking and subject to certain risks and
looking and subject to certain risks and uncertainties that could cause results to differ materially from uncertainties that could cause results to differ materially from those projected. When we those projected. When we use the words use the words “ “will likely result, will likely result,” ” “ “may, may,” ” “ “anticipate, anticipate,” ” “ “estimate, estimate,” ” “ “should, should,” ” “ “expect, expect,” ” “ “believe, believe,” ” “ “intend, intend,” ” or similar expressions, we intend to identify forward
- r similar expressions, we intend to identify forward-
- looking
looking
- statements. Such forward
- statements. Such forward-
- looking statements include, but are not limited to, our
looking statements include, but are not limited to, our business and investment strategy, our understanding of our compe business and investment strategy, our understanding of our competition, current market tition, current market trends and opportunities, projected operating results, and proje trends and opportunities, projected operating results, and projected capital expenditures. cted capital expenditures. These forward These forward-
- looking statements are subject to known and unknown risks and
looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materi uncertainties, which could cause actual results to differ materially from those anticipated ally from those anticipated including, without limitation: general volatility of the capita including, without limitation: general volatility of the capital markets and the market l markets and the market price of our common stock; changes in our business or investment price of our common stock; changes in our business or investment strategy; availability, strategy; availability, terms and deployment of capital; availability of qualified perso terms and deployment of capital; availability of qualified personnel; changes in our nnel; changes in our industry and the market in which we operate, interest rates or t industry and the market in which we operate, interest rates or the general economy, and he general economy, and the degree and nature of our competition. These and other risk the degree and nature of our competition. These and other risk factors are more fully factors are more fully discussed in the Company discussed in the Company’ ’s filings with the Securities and Exchange Commission. s filings with the Securities and Exchange Commission. EBITDA is defined as net income before interest, taxes, deprecia EBITDA is defined as net income before interest, taxes, depreciation and amortization. tion and amortization. EBITDA yield is defined as trailing twelve month EBITDA divided EBITDA yield is defined as trailing twelve month EBITDA divided by the purchase by the purchase
- price. EBITDA, FFO, AFFO, CAD and other terms are non
- price. EBITDA, FFO, AFFO, CAD and other terms are non-
- GAAP measures,
GAAP measures, reconciliations of which have been provided in prior earnings re reconciliations of which have been provided in prior earnings releases and filings with leases and filings with the SEC. the SEC.
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Ashford Advantages Ashford Advantages
- Best in class portfolio
Best in class portfolio
- Strong performance
Strong performance
- Attractive valuation with high dividend
Attractive valuation with high dividend
- Commitment to value add strategies
Commitment to value add strategies
- Comprehensive capital recycling program
Comprehensive capital recycling program
- Positioned to capitalize on lodging cycle
Positioned to capitalize on lodging cycle
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Ashford Overview Ashford Overview
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Ashford Snapshot Ashford Snapshot
6.0% 6.0% Debt Weighted Average Cost Debt Weighted Average Cost 56% 56% Net Debt / TEV Net Debt / TEV (4)
(4)
7.3 years 7.3 years Debt Weighted Average Maturity Debt Weighted Average Maturity ~ 80% ~ 80% % Debt Fixed % Debt Fixed 2 2nd
nd largest
largest Peer Comparison Peer Comparison (2)
(2)
92% 92% % EBITDA Top 50 MSA % EBITDA Top 50 MSA (3)
(3)
7.4% 7.4% % Insider Ownership % Insider Ownership (4)
(4)
Financial Statistics Financial Statistics 142.5 Mil 142.5 Mil # Shares Outstanding # Shares Outstanding 1.0 Mil 1.0 Mil
- Avg. Daily Trading Volume (3 Month)
- Avg. Daily Trading Volume (3 Month)
$4.5 $4.5 Bil Bil Total Enterprise Value Total Enterprise Value (1)
(1)
6.8% 6.8% Dividend Yield % Dividend Yield % (1)
(1)
$98.08 $98.08 RevPAR RevPAR (3)
(3)
121 121 # of Hotels # of Hotels 27,443 27,443 # of Rooms # of Rooms $135.91 $135.91 ADR ADR (3)
(3)
AHT AHT Portfolio Statistics Portfolio Statistics
(1) (1) Assumes 5/31/07 share price of $12.41. Assumes 5/31/07 share price of $12.41. (2) (2) Ranked by Total Enterprise Value of pure lodging peers. Ranked by Total Enterprise Value of pure lodging peers. (3) (3) All hotels included in continuing operations for the 1Q All hotels included in continuing operations for the 1Q ’ ’07. 07. (4) (4) Proforma Proforma for April equity raise. for April equity raise.
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“ “Best in Class Best in Class” ” Portfolio Portfolio
51% 31% 8% 1% 6% 2%1% M arriott Hilton Hyatt Starwood R adisson IHG Other
37% 25% 10% 6% 1% 9% 11% 1%
- S. A
tlantic Pacific N . Central
- S. Central
M id A tlantic M
- untain
N . England Canada
45% 18% 21% 1% 2% 8% 3% 2%
M arriott Rem ington H ilton H yatt Starw
- od
Interstate H
- tel Equities
D unn
1% 60% 35% 4% Luxury Upper-Upscale Upscale M idscale w/o F&B
Chain Scale Chain Scale Brand Brand Geography Geography Manager Manager
Note: Proforma based on 2006 EBITDA. Note: Proforma based on 2006 EBITDA.
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Strong Brands and Markets Strong Brands and Markets
Marriott (62) Marriott (62) 7 7 2 2 1 1 20 20 17 17 12 12 2 2 1 1 Hilton (40) Hilton (40) 14 14 14 14 3 3 7 7 Hyatt (5) Hyatt (5) 5 5 Starwood (7) Starwood (7) Other (7) Other (7) 6 6 1 1 1 1 1 1
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“ “Best in Class Best in Class” ” Assets Assets
Hyatt Anaheim JW Marriott San Francisco Courtyard SF Downtown Residence Inn Salt Lake City Westin O’Hare Embassy Suites Portland Renaissance Tampa Courtyard Irvine Capital Hilton Courtyard Philadelphia Hyatt Regency Coral Gables Marriott Legacy Center Marriott Seattle Waterfront Residence Inn San Diego Hilton La Jolla Torrey Pines Residence Inn Fairfax Hilton Costa Mesa Courtyard Seattle Downtown Residence Inn Sea World Marriott Gateway
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Strong Performance Strong Performance
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Strong Performance Strong Performance
- Significant external growth
Significant external growth
$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 IPO 2003 2004 2005 2006 Current TEV (in $ millions) 5,000 10,000 15,000 20,000 25,000 30,000 # of Hotel Rooms Total Enterprise Value Hotel Rooms
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Strong Performance Strong Performance
- Industry
Industry-
- leading
leading RevPAR RevPAR growth growth
- Solid EBITDA margin expansion
Solid EBITDA margin expansion
12.1% 9.5% 10.3% 11.1% 9.1% 8.7% 9.7% 8.2% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 2Q 06 3Q 06 4Q 06 1Q 07 AHT RevPAR Growth Hotel REITs RevPAR Growth
RevPAR Growth % RevPAR Growth %
151 124 206 286 50 100 150 200 250 300 350 2Q 06 3Q 06 4Q 06 1Q 07
Margin Growth (bps) Margin Growth (bps)
Note: Hotel REITs include: BEE, DRH, EHP, ENN, FCH, HIH, HPT, HS Note: Hotel REITs include: BEE, DRH, EHP, ENN, FCH, HIH, HPT, HST, HT, KPA, LHO, SHO & WXH. T, HT, KPA, LHO, SHO & WXH. AHT RevPAR & margin growth numbers are for those hotels not unde AHT RevPAR & margin growth numbers are for those hotels not under renovation. r renovation.
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Attractive Valuation & Attractive Valuation & High Dividend High Dividend
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High Dividend High Dividend
- Dividend Growth: 250% since 1Q 2004
Dividend Growth: 250% since 1Q 2004
- Strong Dividend CAD Coverage:
Strong Dividend CAD Coverage: – – 1Q 2007 1Q 2007 – – 1.33x 1.33x – – Full Year 2006 Full Year 2006 – – 1.24x 1.24x
- Attractive dividend yield of 6.8%
Attractive dividend yield of 6.8%
(1) (1)
(1) (1) Assumes 5/31/07 stock price of $12.41. Assumes 5/31/07 stock price of $12.41. Note: Peers include BEE, DRH, EHP, ENN, FCH, HIH, HPT, HST, HT, Note: Peers include BEE, DRH, EHP, ENN, FCH, HIH, HPT, HST, HT, KPA, LHO, SHO & WXH. KPA, LHO, SHO & WXH.
$0.00 $0.05 $0.10 $0.15 $0.20 $0.25 1Q 04 2Q 04 3Q 04 4Q 04 1Q 05 2Q 05 3Q 05 4Q 05 1Q 06 2Q 06 3Q 06 4Q 06 1Q 07
Dividend ($)
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0%
Dividend Yield %
Dividend Dividend Yield Dividend Yield - Peer Avg.
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Attractive Valuation Attractive Valuation
$ 182,000 $ 182,000 MeriStar Hospitality MeriStar Hospitality February 2006 February 2006 April 2007 April 2007 January 2007 January 2007 April 2007 April 2007 April 2007 April 2007
- Ann. Date
- Ann. Date
Innkeepers USA Innkeepers USA CHR 51 CHR 51-
- Hotel Portfolio
Hotel Portfolio Eagle Hospitality Eagle Hospitality Highland Hospitality Highland Hospitality Target Target $ 190,000 $ 190,000 $ 155,000 $ 155,000 $ 177,000 $ 177,000 $ 230,000 $ 230,000 $ / Key $ / Key Transaction Metrics Transaction Metrics – – $ Price Per Key $ Price Per Key
1) Assumes 5/31/07 stock price of $12.41 and mezzanine platform 1) Assumes 5/31/07 stock price of $12.41 and mezzanine platform valuation at book value. valuation at book value. 2) Assumes 5/31/07 stock prices and First Call numbers. 2) Assumes 5/31/07 stock prices and First Call numbers.
$ 165,000 $ 165,000 Current AHT Value per Key Current AHT Value per Key (1)
(1)
- The attractiveness of Ashford
The attractiveness of Ashford’ ’s relative value is clear when s relative value is clear when compared with what hotel REITS are trading for in the market: compared with what hotel REITS are trading for in the market:
12.7x 12.4x 12.0x 11.9x 11.9x 11.6x 11.4x 10.6x 9.8x 9.4x 9.1x 8.6x 9.4x 9.3x
6.0x 7.0x 8.0x 9.0x 10.0x 11.0x 12.0x 13.0x 14.0x
BEE LHO EHP HIH HST ENN DRH WXH KPA FCH HPT SHO HT AHT
2008 FFO Multiples 2008 FFO Multiples (2)
(2)
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Value Value-
- Add Strategies
Add Strategies
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$0 $50 $100 $150 $200 $250 $300 2004 2005 2006 2007-2008E
Value Value-
- Added Capex
Added Capex
Maintenance Capital Expenditures Maintenance Capital Expenditures Value Value-
- Added Capital Expenditures
Added Capital Expenditures
239 bps of RevPAR 239 bps of RevPAR Penetration in 2005 Penetration in 2005 240 bps of RevPAR 240 bps of RevPAR Penetration in 2006 Penetration in 2006
- Focus on value
Focus on value-
- added capex grows RevPAR and captures
added capex grows RevPAR and captures market share through higher RevPAR penetration market share through higher RevPAR penetration
$2.8 $2.8 $30.6 $30.6 $11.4 $11.4 $38.4 $38.4 $9.6 $9.6 $7.7 $7.7 $224.0 $224.0 $56.0 $56.0
Capex ($ millions) Capex ($ millions)
Source: Company estimates. Source: Company estimates.
CHR CHR AHT AHT CHR CHR AHT AHT
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Asset Management Opportunities Asset Management Opportunities
- There are numerous value add asset management opportunities
There are numerous value add asset management opportunities across the CHR & AHT portfolios: across the CHR & AHT portfolios:
Capital Hilton Capital Hilton Washington DC Washington DC
Opportunities Opportunities Rebrand / Reposition Rebrand / Reposition Room / Public Area Refresh Room / Public Area Refresh Restaurant reconcepts Restaurant reconcepts Residential components Residential components Expand meeting space Expand meeting space Lease space Lease space Retail conversions Retail conversions Excess land Excess land Additional rooms Additional rooms Spa additions Spa additions
Hilton El Conquistador Hilton El Conquistador Tucson, AZ Tucson, AZ Hilton Lincoln Centre Hilton Lincoln Centre Dallas, TX Dallas, TX Hilton Orange County Hilton Orange County Costa Mesa, CA Costa Mesa, CA Embassy Suites Embassy Suites Portland, OR Portland, OR Marriott Seattle Waterfront Marriott Seattle Waterfront Seattle, WA Seattle, WA JW Marriott JW Marriott San Francisco, CA San Francisco, CA Renaissance Tampa Renaissance Tampa Tampa, FL Tampa, FL Marriott Legacy Marriott Legacy Plano, TX Plano, TX Hilton Santa Fe Hilton Santa Fe Santa Fe, NM Santa Fe, NM Crowne Plaza Crowne Plaza Key West, FL Key West, FL Hyatt Dulles Hyatt Dulles Herndon, VA Herndon, VA
CHR Portfolio CHR Portfolio AHT Portfolio AHT Portfolio
Radisson Radisson Indianapolis, IN Indianapolis, IN Sea Turtle Inn Sea Turtle Inn Jacksonville, FL Jacksonville, FL
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Case Study Case Study– –Hilton Fort Worth Hilton Fort Worth
- Rebranded from Radisson to
Rebranded from Radisson to Hilton 1Q06 after $10.5 million Hilton 1Q06 after $10.5 million renovation ($36,000 per key) renovation ($36,000 per key)
- Reduced room count by taking
Reduced room count by taking 220 220-
- room East Tower out of
room East Tower out of hotel inventory and listing for hotel inventory and listing for sale as office sale as office
- Following renovation, guest mix
Following renovation, guest mix shifting from group to higher shifting from group to higher-
- rated transient business
rated transient business
- T12
T12 RevPAR RevPAR Index increased Index increased from 83.7% in April 2005 to from 83.7% in April 2005 to 98.4% in April 2007 on 98.4% in April 2007 on RevPAR RevPAR gain of 55% gain of 55%
- 2007 GOP tracking well ahead of
2007 GOP tracking well ahead of historical levels as a Radisson historical levels as a Radisson
- Expected to achieve higher
Expected to achieve higher returns on smaller asset basis returns on smaller asset basis
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Value Value-
- Add Next Steps
Add Next Steps
- 59 assets expected to be renovated in 2007 and 2008 for $280
59 assets expected to be renovated in 2007 and 2008 for $280 million million
- Put hotels on
Put hotels on capex capex refresh cycles refresh cycles – – Strategy yields superior returns with minimal overall Strategy yields superior returns with minimal overall disruption to hotel performance over time disruption to hotel performance over time
- Achieve savings in hotel fixed expenses
Achieve savings in hotel fixed expenses – – Risk management policy should yield lower insurance costs Risk management policy should yield lower insurance costs – – Aggressively pursuing real estate tax appeals Aggressively pursuing real estate tax appeals
- Currently analyzing additional ROI projects across portfolio
Currently analyzing additional ROI projects across portfolio – – Identified potential projects at as many as 54 assets Identified potential projects at as many as 54 assets – – Scope and timing to be communicated later in 2007 Scope and timing to be communicated later in 2007
- Elevate brand discussions given increased scale
Elevate brand discussions given increased scale
- Experienced asset management team enhanced by additions
Experienced asset management team enhanced by additions from CHR transaction from CHR transaction – – Realigned by region to be more efficient than previous Realigned by region to be more efficient than previous assignments by brand/chain scale assignments by brand/chain scale
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Capital Recycling Capital Recycling
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Capital Recycling Capital Recycling
- Capital recycling of assets out of portfolio purchases enhances
Capital recycling of assets out of portfolio purchases enhances value value and delivers higher returns and delivers higher returns
- $170 million sales price of Phase I assets is nearly 25% higher
$170 million sales price of Phase I assets is nearly 25% higher than than book value book value
- Potential sale of $400 million of Phase II assets currently on m
Potential sale of $400 million of Phase II assets currently on market arket
FGS Portfolio (9) FGS Portfolio (9) Best Western (1) Best Western (1) Gull Wing Suites (1) Gull Wing Suites (1) Holiday Inn (1) Holiday Inn (1) Howard Johnson (2) Howard Johnson (2) Inn on the Square (1) Inn on the Square (1) Ramada Inn (2) Ramada Inn (2) Radisson (1) Radisson (1) ’ ’05 CNL Portfolio (15) 05 CNL Portfolio (15) Residence Inn (8) Residence Inn (8) TownePlace Suites (7) TownePlace Suites (7) Office Buildings (3) Office Buildings (3) Fort Worth, TX Fort Worth, TX
- W. Palm Beach, FL
- W. Palm Beach, FL
Bucks County, PA Bucks County, PA MIP Portfolio (2) MIP Portfolio (2) Marriott (1) Marriott (1) Sheraton (1) Sheraton (1) Full Service Portfolio (2) Full Service Portfolio (2) Embassy Suites (1) Embassy Suites (1) Doubletree Suites (1) Doubletree Suites (1) Contributed Assets (1) Contributed Assets (1) Radisson (1) Radisson (1) Dunn Portfolio (3) Dunn Portfolio (3) Fairfield Inn (2) Fairfield Inn (2) Hampton Inn (1) Hampton Inn (1) CHR Portfolio (10) CHR Portfolio (10) Hilton (3) Hilton (3) Marriott (1) Marriott (1) JW Marriott (1) JW Marriott (1) Hyatt (1) Hyatt (1) Doubletree (1) Doubletree (1) Residence Inn (3) Residence Inn (3)
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Current Lodging Cycle Current Lodging Cycle
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Lodging REITs vs. Other REITs Lodging REITs vs. Other REITs
Source: FBR Property Week Source: FBR Property Week – – 5/29/07. 5/29/07.
- Lodging REITs lag other multiples despite having one of
Lodging REITs lag other multiples despite having one of the highest dividend yields and the highest projected the highest dividend yields and the highest projected 2008 FFO growth 2008 FFO growth
4.5% 5.9% 3.7% 3.8% 3.4% 3.8% 12.4% 6.6% 9.7% 7.2% 7.7% 8.2%
8.0x 10.0x 12.0x 14.0x 16.0x 18.0x 20.0x Apartment Office Retail Industrial Healthcare Lodging
2008 FFO Multiple
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%
Dividend Yield / FFO Growth %
2008 FFO Multiple Dividend Yield 2008 FFO Growth %
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RevPAR / Supply Spread RevPAR / Supply Spread
- 8.0%
- 6.0%
- 4.0%
- 2.0%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0%
'89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07E '08E '09E
Supply RevPAR
- There is still a very favorable spread between new room
There is still a very favorable spread between new room supply and RevPAR growth supply and RevPAR growth
Source: Smith Travel Research & Pricewaterhouse Coopers. Source: Smith Travel Research & Pricewaterhouse Coopers.
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Supply Overview Supply Overview
- Supply growth is still well below historical averages
Supply growth is still well below historical averages
1) 2007 Full Year Forecast. 1) 2007 Full Year Forecast. 2) Percentage of 2006 EBITDA 2) Percentage of 2006 EBITDA proforma proforma for CHR transaction. for CHR transaction. Source: Lodging Econometrics, Smith Travel Research, Pricewater Source: Lodging Econometrics, Smith Travel Research, PricewaterhouseCoopers & Merrill Lynch research. houseCoopers & Merrill Lynch research.
Upscale Upscale Upper Upscale Upper Upscale Top 25 Markets Top 25 Markets Total US Total US Market Market 78% 78% 1.7% 1.7% 99% 99% 1.6% 1.6% 35% 35% 3.0% 3.0% 60% 60% 2.2% 2.2% % AHT EBITDA % AHT EBITDA(2)
(2)
’ ’07 Growth 07 Growth (1)
(1)
2007 US Supply Growth 2007 US Supply Growth
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Lodging Values Lodging Values
- High construction costs and strong inflows of hotel
High construction costs and strong inflows of hotel capital support further value appreciation capital support further value appreciation
Source: Smith Travel Research, Pricewaterhouse Coopers, Bureau Source: Smith Travel Research, Pricewaterhouse Coopers, Bureau of Labor & Statistics & HVS International.
- f Labor & Statistics & HVS International.
25% 50% 75% 100% 125% 150% 175%
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07E
Price per Key / Construction Cost Index (1990=100%) 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% Change in Supply (%) Change in Supply Price per Key Index Construction Cost Index
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Conclusion Conclusion
- Best in class portfolio
Best in class portfolio
- Strong performance
Strong performance
- Attractive valuation with high dividend
Attractive valuation with high dividend
- Commitment to value add strategies
Commitment to value add strategies
- Comprehensive capital recycling program
Comprehensive capital recycling program
- Positioned to capitalize on lodging cycle
Positioned to capitalize on lodging cycle