Braemar Hotels & Resorts Inc.

What they do

Braemar invests in high RevPAR luxury hotels and resorts, targeting properties with RevPAR at least twice the U.S. national average. The company operates through a portfolio of properties managed by third-party hotel managers, with a focus on maximizing revenue per available room and hotel-level profitability. It is structured as a REIT and pays dividends from cash flows.

Revenue drivers

• Comparable RevPAR — Revenue per available room across all comparable hotels, driven by occupancy and average daily rate; reported at $396 in Q2 2026, up 12.3% year-over-year.
• Comparable Total RevPAR — Includes rooms and ancillary revenues (food and beverage, spas, etc.); reported at $652 in Q2 2026, up 10.6% year-over-year.
• Property sales — Disposition of hotels provides significant cash inflows; e.g., sale of Park Hyatt Beaver Creek for $176M, and sale of Ritz-Carlton Sarasota, Hotel Yountville, and Bardessono for $437.5M, with Pier House Resort under contract for $190M.

Recent performance

In Q2 2026, net loss attributable to common stockholders was $0.7 million, or ($0.01) per diluted share. AFFO was $0.13 per diluted share, and Adjusted EBITDAre was $37.8 million. Comparable Hotel EBITDA rose 14.2% year-over-year to $48.4 million. Revenue was $171.0 million for the quarter, and total assets were $1.66 billion with $745.9 million in long-term debt.

Strategy

The company is actively recycling capital by selling non-core assets at attractive capitalization rates, as evidenced by recent dispositions. It is focusing on high-performing luxury properties, such as the Ritz-Carlton Reserve Dorado Beach, which delivered 28.4% RevPAR growth. Braemar is also managing its capital structure by paying down debt, redeeming preferred stock, and extending loan maturities. The company is pursuing conversions to strengthen brand positioning, like the Cameo Beverly Hills conversion to Hilton's LXR Hotels & Resorts.

Risks

• Floating-rate debt exposure — All of the company's $1.0 billion loans are effectively floating rate (6.82% blended rate), with no fixed-rate debt and no in-the-money interest rate caps, exposing it to interest rate increases.
• Dependence on luxury travel demand — High-end hotels are sensitive to economic downturns, geopolitical events, and changes in consumer discretionary spending, which could reduce occupancy and RevPAR.
• Concentration of cash with managers — A significant portion of restricted cash ($52.6M) is manager-held reserves, and $13.9M is due from third-party managers, creating counterparty risk if managers face financial difficulties.
• Dividend sustainability — Despite stable dividends of $0.20 per share annually, the company has posted net losses in four of the past five years, raising questions about the sustainability of dividends from operating cash flow.

Outlook

Management is focused on completing the sale of Pier House Resort & Spa expected in mid-August 2026, which would provide additional liquidity. They are also managing upcoming debt maturities, such as the Ritz-Carlton Lake Tahoe loan extended to October 2026 with a possible further three-month extension. The company expects to continue improving RevPAR through brand conversions and operational enhancements, while deleveraging through asset sales.