Braemar Hotels’ Earnings Call: Resorts Shine Amid Debt

Braemar Hotels & Resorts ((BHR)) has held its Q4 earnings call. Read on for the main highlights of the call.

Braemar Hotels & Resorts’ latest earnings call struck a cautiously optimistic tone, balancing clear operating momentum at its luxury resorts with lingering financial and strategic overhangs. Management highlighted strong RevPAR gains at key properties, rising group and ancillary revenue, and active asset recycling, but these positives were tempered by net losses, high floating‑rate debt and uncertainty around an ongoing sale process.

Comparable Revenue and EBITDA Growth

Comparable total revenue edged up 1.8% in the fourth quarter of 2025 and 2.8% for the full year, signaling steady if modest top‑line progress. Adjusted EBITDAre reached $28.8 million in Q4 and $147.0 million for 2025, underscoring improved operating profitability despite renovations and other headwinds that weighed on reported earnings.

Resort Portfolio Strength

Resort assets remained the engine of the portfolio, with comparable resort RevPAR at $536 in Q4, up 4.1% year over year, and comparable hotel EBITDA of $32.5 million, a 6.0% gain. Management emphasized that excluding hotels under renovation, RevPAR growth and hotel EBITDA were materially higher, highlighting the underlying strength of the core resort business.

Standout Property Performances

Several flagship properties posted standout results, led by The Ritz‑Carlton, Sarasota, where Q4 RevPAR jumped 25.5% and hotel EBITDA surged 48% from a year earlier. Four Seasons Resort Scottsdale and Ritz‑Carlton Reserve, Dorado Beach also delivered double‑digit RevPAR and EBITDA gains, supported by higher group room nights, robust ancillary spend and ultra‑high‑end rate power.

Group and Ancillary Revenue Momentum

Group and ancillary revenue emerged as key growth drivers, with full‑year group room revenue up 7.1% from 2024. Catering and food‑and‑beverage revenue climbed sharply at top resorts, while other revenue per occupied room increased about 10.1% for the year, providing meaningful operating leverage and helping to fuel outsized hotel EBITDA growth across the portfolio.

Asset Disposition and Deleveraging Actions

On the capital allocation front, Braemar sold The Clancy in San Francisco for $115.0 million, or $280,000 per key, at a 5.2% cap rate on trailing NOI. The company used the deal to pay down roughly $65.0 million of debt and retained about $44.0 million in net proceeds, while also redeeming $149.0 million of non‑traded preferred stock as part of its broader deleveraging push.

Capital Investments and Repositionings

The company invested approximately $78.0 million in capital expenditures in 2025, channeling funds into high‑impact projects such as the Cameo Beverly Hills conversion to LXR and room upgrades at Park Hyatt Beaver Creek and Hotel Yountville. Management framed these renovations as key to repositioning the portfolio upmarket and expects them to drive improved performance as properties fully return to service.

Liquidity and Balance Sheet Highlights

Braemar closed the quarter with $124.4 million in cash and cash equivalents, plus $42.5 million in restricted cash and $17.1 million due from third‑party managers, supporting near‑term liquidity. The company controls total assets of about $1.9 billion across 13 hotels with 3,028 rooms and has a fully diluted share count of roughly 73.3 million.

Net Losses and AFFO Shortfall

Despite healthy operating metrics, the company reported a net loss attributable to common stockholders of $46.0 million in Q4 and $72.7 million for 2025, translating to a per‑share loss of $0.67 and $1.07, respectively. AFFO per diluted share was slightly negative at $0.02 in Q4, though it remained positive at $0.28 for the full year, reflecting the drag from interest, depreciation and renovation disruptions.

Renovation‑Related Disruptions

Management acknowledged that significant renovation work at Cameo Beverly Hills, Hotel Yountville and Park Hyatt Beaver Creek materially weighed on fourth‑quarter results. These projects suppressed consolidated RevPAR and EBITDA comparisons, masking some of the strength in the rest of the portfolio but positioning the assets for higher rates and profitability once work is completed.

Weather‑Related Operating Pressure

Weather also played against the company, as below‑normal snowfall and delayed mountain openings hurt performance at Park Hyatt Beaver Creek and The Ritz‑Carlton, Lake Tahoe. These conditions reduced demand and seasonal revenue at Braemar’s mountain resorts, adding another temporary headwind on top of ongoing renovation activity.

High Floating‑Rate Debt Exposure

Braemar’s capital structure remains a key investor focus, with about $1.1 billion of loans at a blended interest rate of 6.7%. Only approximately 14% of this debt is effectively fixed while about 86% floats, leaving earnings highly sensitive to interest‑rate moves and reinforcing the importance of the company’s deleveraging and asset recycling initiatives.

Leverage and Capital Structure Uncertainty

Net debt to gross assets stands around 46.7%, and management reiterated that the company remains in an active sale process without a defined timetable or guarantee of a transaction. The Board has not established a common dividend policy for 2026, adding an additional layer of short‑term uncertainty for equity holders around capital returns and strategic direction.

Remaining Liquidity and Balance Sheet Considerations

While cash balances and recent preferred redemptions demonstrate progress, Braemar still faces sizable debt and preferred obligations that will require continued attention. The company’s ability to execute further asset sales, refinance floating‑rate loans and maintain liquidity will be central to reducing leverage and supporting long‑term shareholder value.

Forward‑Looking Guidance and Strategic Outlook

Looking ahead, management outlined capital expenditures of $25–$35 million for 2026, down from 2025’s elevated $78 million level as major projects wind down. They expect to continue redeeming non‑traded preferred stock as part of a broader deleveraging strategy tied to the ongoing sale process, with current liquidity, recent asset sales and strong resort performance providing the financial foundation for this plan.

Braemar’s earnings call painted a picture of a high‑quality resort portfolio generating solid operating gains but operating under a complex balance sheet and strategic backdrop. For investors, the story hinges on whether management can translate strong property‑level trends and disciplined asset sales into sustainable earnings growth, lower leverage and a clearer path for shareholder returns in the coming years.