Good day, everyone. My name is Janine, and I will be your lead operator for today's call. At this time, I would like to welcome everyone to the Ashford Hospitality Trust fourth quarter 2024 results conference call. All lines have been placed on mute to prevent any background noise. After today's presentation, there will be an opportunity to ask questions. To ask a question, you will press star one on your touch tone phone. And to withdraw your question, please press star one again. I will now hand the call over to Deric Eubanks, Chief Financial Officer. Sir, please go ahead.

Thank you. Good morning, everyone, and welcome to today's conference call to review results for Ashford Hospitality Trust for the fourth quarter and full year 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 discussed in the company's file 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 February 5, 2025, 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 fourth quarter and full year ended December 31, 2024, with the fourth quarter and full year ended December 31, 2023. I will now turn the call over to Stephen Zsigray. Please go ahead.

Good morning, everyone, and thank you for joining us today. After my introductory comments, Deric will review our fourth quarter and full year financial results, then Chris will provide an operational update on our portfolio. Our fourth quarter performance was highlighted by 3.1% comparable RevPAR growth, 4.6% comparable total revenue growth, and 6.2% growth in comparable hotel EBITDA. These results underscore the impact of the strategic decisions our team has made over past several quarters and the strength of our high-quality, geographically diverse portfolio. Total revenue growth meaningfully exceeding RevPAR growth is reflective of the efforts that our asset management team and property managers have taken to grow ancillary revenues, and that discrepancy widened even further in December with total revenue growth of 7.7% outpacing RevPAR growth by 350 basis points. The 6.2% growth in comparable hotel EBITDA for the quarter reflects efforts by our property managers to operate more efficiently as margins across the industry narrowed. Beyond the impressive operating results, we were also very active in the quarter on the investment and capital markets fronts. We announced the conversion of the La Concha Hotel in Key West to Marriott's Autograph Collection. Upon conversion, it was rebranded to Autograph La Concha, and we've created a distinctive theme and style for the hotel that is commensurate with the higher-end autograph product. This included transforming the lobby, bar, and restaurant, as well as upgrading the exterior, guest rooms, guest bathrooms, corridors, pool, and meeting space. Ideally located in Old Town Key West, the transformation elevated the property into a desirable niche in the high barrier to entry high RevPAR Key West market. Post conversion, we believe the new autograph property should realize a 20% to 30% RevPAR premium compared to pre-conversion. And the hotel recently posted 25% year-over-year revenue growth in…

Thanks, Stephen. For the fourth quarter, we reported a net loss attributable to common stockholders of $131.1 million or $23.83 per diluted share. For the full year, we reported a net loss attributable to common stockholders of $82.5 million or $17.54 per diluted share. For the quarter, we reported AFFO per diluted share of negative $2.01. And for the full year, reported AFFO per diluted share of negative $4.84. Adjusted EBITDAre for the quarter was $45.2 million and $235.9 million for the full year. At the end of the fourth quarter, we had $2.6 billion of loans with a blended average interest rate of 7.9%, taking into account in-the-money interest rate caps. Considering the current level of SOFR and the corresponding interest rate caps, approximately 23% of our debt is now effectively fixed and 77% is effectively floating. During the quarter, we successfully extended our mortgage loans secured by the 226-room Le Pavillon Hotel located in New Orleans, Louisiana. The loan had an initial maturity date in December of 2024 and has two additional one-year extension options subject to the satisfaction of certain conditions, with a final maturity date in December 2027. The loan was extended with no pay down and continues to have an outstanding balance of $37 million. During the quarter, we also successfully refinanced our mortgage loan secured by the 703-room Marriott Crystal Gateway Hotel located in Arlington, Virginia, which had a final maturity date in November 2026. The new non-recourse loan totals $121.5 million and has a three-year initial term with two one-year extension options subject to the satisfaction of certain conditions. The loan is interest-only and provides for a floating interest rate of SOFR plus 4.75%. The refinancing resulted in approximately $31 million of excess proceeds, which were used to pay down our strategic financing.…

Thank you, Deric. In the fourth quarter, we delivered strong performance across our geographically diverse portfolio. Comparable hotel RevPAR increased by 3% over the prior year period, reflecting solid demand and the impact of our strategic revenue management initiatives. Group dynamics and corporate transient demand are improving, and we are starting to see accelerating benefits from our Grow AHT initiatives, many of which were rolled out in November. December was a particularly strong month with a 12% increase in hotel EBITDA over the prior year period. Driven in large part by the successful execution of several Grow AHT initiatives that were in full swing. This performance was broad-based, demonstrating the resilience of our portfolio and the effectiveness of our strategies. I would now like to go into more detail on some of the achievements completed throughout the quarter. Group room revenue for the fourth quarter increased by 5% over the prior year period. Booking activity remains strong, with group pace continuing to accelerate across our portfolio. Our Washington DC properties delivered a healthy group performance this period. During the fourth quarter, Embassy Suites Crystal City produced a 22% increase in group room revenue compared to the prior year period. With the presidential election cycle presenting both opportunities and challenges, our team implemented an aggressive strategy to drive results. We focused on targeted marketing to political organizations supporting the election, particularly security and campaign teams. 2025 group room revenue pace for the broader portfolio remains strong, currently pacing ahead by 5% over the prior year period. Additionally, booking volumes have been robust. We added over $13 million in additional group room revenue during the fourth quarter for the first quarter of 2025, representing an increase of approximately 6% compared to the prior year quarter for the first quarter of 2024. Turning…

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star one on your touch tone phone, and you will hear a prompt that your hand has been raised. Should you wish to withdraw, please press star one again. If you are using a speakerphone, please lift the handset before pressing any keys. Our question comes from the line of Jonathan Jenkins from Oppenheimer. Sir, please go ahead.

Good morning. Thanks for taking my questions. First one from me on the Grow initiative. Chris, I think you noted some changes in benefits already seen here in 4Q, but can you maybe quantify the benefits that you've seen and provide some color on the ramp period and the cadence throughout the year, and maybe some additional color on potential opportunities that get you to that $50 million target?

Yeah. Great question, Jonathan. Thanks for the question. So we've begun rolling out all initiatives. I would say more than half of the initiatives are fully rolled out and underway. Obviously, we've seen the impact of performance that a number of these initiatives started having immediately. As we look ahead to Q1 and January, that outperformance is pulling through, so we're very optimistic. Many of the initiatives will continue to roll out through the course of the year. As we're going through 2025, we're still identifying new initiatives and potential new partnerships and things we can do to build on. And so we're very happy, but we're not satisfied. So I'd say roughly half of the initiatives have been fully rolled out, and then the remainder will be rolled out throughout the remainder of the year.

Very helpful. That's great to hear. And then switching gears to the conversions, Stephen, I believe you talked about 20% to 30% RevPAR premiums and revenue growth in January was in or above that, which is impressive. Do you think those assets have largely stabilized, or is there additional ramp period from here? And then more broadly, any additional thoughts regarding conversions in the portfolio and how much of an opportunity that could be?

Yeah. Hey, Jonathan. This is Chris. I'll take that. We're very encouraged by the performance of the conversions. As Stephen indicated, we underwrote pretty aggressive returns, and both hotels are outperforming that. In La Pavillion, the outperformance is, as Stephen said, north of 40% in January. That continued through February, and that's accounting for normalizing for Super Bowl impact. So when you remove Super Bowl, the hotel is still performing at that level, outperforming underwriting. When you throw an event like Super Bowl in there, it's again through the roof. I think the hotel had La Pavillion was sold out for four straight nights over Super Bowl with a RevPAR which exceeded $900. So extremely strong performance. The hotel continues to ramp. We're seeing strong distribution performance as we expected from Marriott. So I think there is still some additional runway before that stabilizes. But performance at both hotels is kind of blowing our underwriting out of the water. Down in Key West, occupancy has outperformed the market. We're starting to see the broader market soften a little bit in occupancy, so it's great that we're outperforming there. But where we've really seen the benefit is on the ADR side, with ADR gains that are just significantly outperforming underwriting, which is obviously great news for us.

Okay. That's excellent. And then switching gears to the transaction environment, can you provide some additional color there? Has there been any noticeable pickup or changes in conversations you've been having as of late? Any changes in bid-ask spreads or differences in portfolio deals versus one-offs that are worth calling out? Any additional color there would be helpful.

Yeah. We've definitely seen improvement in the financing market, and that has driven an improvement in transaction markets, certainly driven optimism that 2025 will be a much better year for transactions. From our perspective, I expect that we'll continue to sell a handful of additional assets, but I'd caveat that and say that we're going to continue to be very disciplined. We want to ensure that we're getting optimal value on our sales. And there does remain a bid-ask spread in a handful of markets. And so we need to explore several different opportunities. We're not going to transact on all of them, similar to what we've done in prior quarters. But we also expect to continue to deleverage and improve our balance sheet overall.

Okay. That's great. And then lastly for me, if I could, just a clarification question on your floating rate exposure. I assume that increased sequentially. Is it just the expiration of swaps? Is that the case? And more broadly, is there any additional color you can provide to us on how you're thinking about your fixed versus floating rate exposure? Do you expect to re-enter swaps to lower that floating exposure?

Yeah, Jonathan. This is Deric. I'll take that. It's a combination of interest rate caps burning off as well as SOFR dropping back below strike prices on those caps. That's why we're more floating now. I think, look, historically, we've always preferred floating rate financing just because it has more flexibility. We think it's more of a natural hedge to our business. And we believe over time, that you'll typically pay less floating. Obviously, that's been a challenge for us over the last year or two. But I think you'll continue to see us have a mix of fixed and floating, sort of a bent to more floating.

Okay. Very helpful. Appreciate all the color, everyone. Thank you for your time.

Thank you.

That concludes our call today as well. Thank you for joining today's call, and we look forward to speaking with you all again next quarter. That concludes our conference call for today. Thank you for joining, and you may now disconnect.