Hello and welcome to the Ashford Hospitality Trust's Third Quarter 2024 Results Conference Call. All lines have been placed on mute to prevent any background noise. Following the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Deric Eubanks, Chief Financial Officer. Please go ahead.

Good day, everyone and welcome to today's conference call to review results for Ashford Hospitality Trust for the third quarter of 2024 and to update you on recent developments. On the call today will also be Stephen Zsigray, 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 afternoon 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. These factors are more fully disclosed in the company's filings with the 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 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 November 5th, 2024 and may also be accessed through the company's website at www.ahtreit.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 third quarter ended September 30, 2024 with the third quarter ended September 30, 2023. I will now turn the call over to Stephen Zsigray. Please go ahead.

Good morning and welcome to our call. After my introductory comments, Deric will review our third quarter financial results and then Chris will provide an operational update on our portfolio. I'll begin by reiterating how pleased I am with the significant progress that we've made executing on our plan to pay off our strategic financing. We announced this plan back in January and since then we've done exactly what we said we would do. We've sold over $310 million of hotels. We've completed a refinancing of our Renaissance Nashville that generated significant excess proceeds and we've now raised approximately $173 million of gross proceeds from the sale of our non-traded preferred stock. We've used some of the proceeds from each of these efforts to pay down our strategic financing by more than $100 million since the beginning of the year to approximately $82 million today. Additionally, we announced this morning that we've agreed to an amendment to the strategic financing. This amendment provides the company with an opportunity for a discounted exit fee if the financing is fully paid off by December 15th, provided that the outstanding balance has been reduced to $50 million or less by next Friday, November 15th. We are currently working on a couple of transactions that we hope will close in the near term and we continue to believe we have a viable path to paying off this financing entirely before the end of the year. Operationally, in light of underwhelming revenue growth across the lodging industry through the first three quarters, our property managers are aggressively driving sales and managing expenses. We are pleased to announce that October saw our highest monthly top-line growth of any month this year with RevPAR growth of 4.6% versus October 2023. We believe we will also begin to…

Thanks, Stephen. For the third quarter, we reported a net loss attributable to common stockholders of $63.2 million or $12.39 per diluted share. For the quarter, we reported AFFO per diluted share of negative $1.71. Adjusted EBITDAre for the quarter was $52.4 million. At the end of the third quarter, we had $2.7 billion of loans with a blended average interest rate of 8%, taking into account in the money interest rate caps. Considering the current level of sulfur and the corresponding interest rate caps, approximately 83% of our debt is now effectively fixed and 17% is effectively floating. We ended the quarter with cash and cash equivalents of $119.7 million and restricted cash of $114.3 million. The vast majority of that restricted cash is comprised of lender and manager held reserve accounts and $2.4 million related to trapped cash held by lenders. At the end of the quarter, we also had $26.7 million due from third-party hotel managers. This primarily represents cash held by one of our property managers, which is also available to fund hotel operating costs. We ended the quarter with net working capital of approximately $160 million. As of September 30, 2024, our consolidated portfolio consisted of 73 hotels with 17,644 rooms. After taking into account, our recently completed one for 10 reverse stock split, our share count at the end of the quarter consisted of approximately 5.6 million fully diluted shares outstanding, which is comprised of 5.4 million shares of common stock and 0.2 million OP units. While we are currently paying our preferred dividends quarterly or monthly, we do not anticipate reinstating a common dividend in 2024. This concludes our financial review and I would now like to turn it over to Chris to discuss our asset management activities for the quarter.

Thank you, Deric. For the third quarter, comparable hotel RevPAR for our portfolio decreased 1% over the prior-year quarter. While achieving growth in RevPAR has been challenging, our team has been actively working with our property managers to roll out several initiatives to grow ancillary revenue, which increased 15% per occupied room compared to the prior-year quarter. Corporate transient is improving with year-to-date corporate revenue up 9%, compared to the prior-year period. Additionally, we are seeing an acceleration in attendance at major events and decreased price sensitivity around those events. We've also benefited from non-annual events. For example, in August, when Chicago hosted the Democratic National Convention, our Silversmith Hotel experienced an 85% increase in group room revenue and a 50% increase in group ADR. I will now go into more detail on some of the achievements completed throughout the quarter. Many of our historically group dominant markets are operating at full steam significantly surpassing levels seen in 2019. Group room revenue for the full-year 2024 is pacing ahead of last year by 2% and group room revenue for the full-year 2025 is pacing ahead by 8% with all quarters pacing ahead to the prior year. We are pleased with the positive outlook and continue to build momentum as evidenced by our group lead volume, which increased by 4%, compared to the prior-year quarter. Our revenue optimization team has worked diligently with the hotel teams to capitalize on the positive 2025 group outlook seen across the industry to grow group block sizes and extend the booking window. Additionally, our team has set optimal group mix targets across the portfolio for sales teams and is meticulously audited spending for digital channels and event space demand generators. This process has positioned our two largest hotels in favorable positions with Marriott Crystal Gateway…

Thank you. [Operator Instructions] Your first question comes from the line of Tyler Batory with Oppenheimer. Your line is open.

Hi. good morning. This is Jonathan on for Tyler. Thanks for taking my questions. First one from me, Chris, helpful commentary on the group side. but maybe, could you walk us through what you saw on the leisure and BT side for demand in the quarter, maybe on a monthly basis? Has it been kind of a continuation of trends from last quarter? And also, was there any noticeable pickup post Labor Day on the BT side?

Yes. Thanks, Jonathan. I'd be happy to talk to that. We continue to see softening on the leisure side. Weekend retail was soft for both us and other hotels within our markets. So, we saw some -- we see some continued softening there. It's not necessarily accelerating; it's just continued softness. Corporate business remains strong. BT for our portfolio was up over 4% in Q3 to last year. Those increases were split between occupancy and ADR. So, it was roughly half and half. We see that continue to accelerate as we progress. We did see some increase post-Labor Day weekend. One segment that we saw softness in for the quarter was the government segment and we saw that government and government related travel was soft as I think there was just some unease around the election and that impacted some of our DC hotels. We're hoping that now that the election is over that segment starts to pick up is kind of what we anticipate.

Okay, very helpful. And then maybe, switching gears there, Stephen the release this morning obviously a positive update. You noticed some additional transactions in the coming weeks. I mean, I'm hoping you can provide some details on kind of the type of those transactions. I'm assuming they're asset sales, you're optimistic and they can close kind of before that December deadline. Just maybe hoping you could add any color on that?

Yes. I will say it's -- it is a combination of transactions. So, we're looking at some asset sales still. We're looking at some refinancings. I'm hesitant to comment prematurely on what exactly those transactions will entail, but I think as you watch over the next couple of weeks, we'll have plenty to announce as it relates to those.

Okay, great. And then maybe last one from me, if I could, kind of on that line. Can you provide some additional color on the transaction environment more broadly? Has there been any noticeable pickup or changes in demand as of late? Any changes in the bid ask spread, this is in large valuations versus smaller assets? Any color there you can provide would be helpful given the move in interest rates as of late?

Sure, sure. Yes, certainly post the rate cut in September, I think we've seen an uptick in interest particularly from institutional buyers. We've certainly seen more interest in a number of our assets both assets that we've marketed it and [Technical Difficulty] where we've gotten some inbound interest. I think the election and the uncertainty around that also brought a significant amount of uncertainty to the market. And so hopefully, with that largely behind us here, we start to see continued tightening of that bid ask spread and continued improvement both in the financing markets and the transaction markets that rely on it.

Okay. That's very helpful color. I appreciate all the color and the time. Thanks. Thank you very much.

[Operator Instructions] Oh, my apologies. We have a question from Michael Bellisario with Baird. Your line is open. Michael, your line is open.

Good morning.

Hey, good morning.

Good morning, Michael.

Thanks for taking my question. I think in the prepared remarks, you mentioned some cost savings or the potential for cost savings related to, I think you said Ashford Inc. Could you just elaborate on that? Is that something that would be at the property level related to Remington and management fees, or is that something around the advisory agreement related to Ashford Inc.?

So, yes, look, our property managers are doing everything they can to manage expenses at the property level. We'll have more details to announce on this as we move forward over the next couple of months. But Ashford Inc. is very, very committed to the profitability of Ashford Hospitality Trust and making significant improvement there as we look to 2025 and beyond. And so, I believe we'll see some corporate level cost savings as well, in addition to what we're getting from the portfolio.

And is it too early in the process to quantify that at this point?

Yes. I think it's a little bit premature. Obviously, there will be negotiations on between Ashford Inc. And Ashford Hospitality Trust as it relates to this, and we certainly will comment as that starts to come into view and put out more details around what those changes look like.

Yes. And Mike, this is Deric. I'd just also comment. We're right in the middle of budget season. And really, the comment was just meant to convey the level of attention and commitment that Ashford Inc. has in making this platform successful and thriving platform. And so, that's what we're focused on doing.

Got it. Thanks for that. And then just last one from me, maybe fast forward to the end of the year, you've paid off Oaktree. Can you just remind us of your strategic priorities and how you expect to allocate capital in 2025 once you've completed these near-term transactions and paid off the Oaktree financing? Thank you.

Sure, sure. Strategic priorities for us, once we've completed the Oaktree payoff, the first one is, we have a number of upcoming debt maturities in the next 12 months. I think priority one for us is getting those maturities pushed out, getting refinancings done, getting extensions done throughout the portfolio. As we start to look forward and we're driving performance on the existing portfolio, I do think there will be opportunities within that portfolio to strategically turn over some of those assets. Again, the sales we've done to date kind of through 2024 have been geared towards paying off Oaktree. I think as we look forward it will be more strategic and looking to reposition the portfolio in some ways. And we're excited. The industry fundamentals are really lining up nicely. The supply growth is something that I think everybody's harped on, but it's virtually nil for the next two or three years. And I think the other thing that very few people have touched on so far is the return to office. And we saw Amazon do it. We've seen 3M now comment and do something similar. I think as more and more of these corporates are starting to bring people back to centralized locations. I think that could be a tremendous driver for that business transient segment that I think we all kind of assumed was tapped out. And so, we've seen great strides on the group side. I think there's opportunity on the business side and we'll look to take advantage of that with Ashford Trust portfolio, which has really a strong exposure to those segments.

Very helpful. Thank you.

This concludes the question-and-answer session. I'll turn the call to management for closing remarks.

Thank you for joining our call. We look forward to speaking with you again, next quarter.

This concludes today's conference call. Thank you for joining. You may now disconnect your lines.