Richard Stockton, president and CEO of Braemar Hotels & Resorts Inc . (NYSE: BHR), sat down for a video interview during Nareit’s REITworld: 2024 Annual Conference in Las Vegas, Nevada on Nov. 18-21.
Stockton noted that in the near term, Braemar is benefiting from a declining interest rate environment, with its balance sheet consisting of about 80% floating rate debt, allowing for increased free cash flow as rates decrease.
Stockton also discussed the company’s shareholder value creation plan, which involves selling assets and using the capital to buy back shares, including non-traded preferred equity and common equity. This strategy aims to improve the company’s net asset value per share, especially as the sector is currently undervalued.
Looking ahead to 2025, Stockton expects a challenging operating environment with modest revenue per available room (RevPAR) growth of 1%-2% and higher expenses. However, Braemar's portfolio will benefit from strong group bookings, with a 40% increase in group pace, particularly in Washington, D.C., driven by events like the inauguration. Additionally, Stockton anticipates upward pressure on RevPAR growth beyond 2025, due to a reduced supply of new hotel rooms.
One of the key initiatives Stockton is excited about is the $25 million repositioning of the Mr. C Hotel in Beverly Hills, which Braemar acquired during the pandemic. The hotel is being rebranded as the Cameo Beverly Hills and will reopen in 2026 as a completely renovated LXR franchise, marking an important milestone for the company.