Key Highlights

  • Net loss to common stockholders was USD 240.9 million, USD 3.51 per share, against an estimated loss of USD 0.71.
  • Hotel Revenue was USD 101.58 million against an estimate of USD 103.61 million and USD 143.56 million a year earlier.
  • A USD 480.0 million termination fee payable to the external advisor was recorded during the quarter.
  • Comparable RevPAR for all hotels was USD 284, and Comparable Hotel EBITDA was USD 12.9 million.

The answer starts with a single charge. Braemar Hotels & Resorts Inc. (NYSE:BHR) recorded a USD 480.0 million termination fee payable to its external advisor in the third quarter, which the company cited as the primary reason net loss attributable to common stockholders reached USD 240.9 million, against USD 8.2 million a year earlier. The charge relates to the company's move to self-management, which the chief executive said is on schedule for mid-November.

Revenue

Total hotel revenue was USD 101.58 million, against USD 143.56 million a year earlier and an estimate of USD 103.61 million. Rooms revenue was USD 63.15 million, food and beverage was USD 25.98 million and other revenue was USD 12.45 million. The prior-year quarter included hotels that have since been sold, among them the Ritz-Carlton Sarasota, Hotel Yountville and Bardessono Hotel and Spa, sold July 14 for a total of USD 437.5 million, and the Pier House Resort & Spa, sold August 12 for USD 190.0 million.

On a comparable basis, all-hotel RevPAR was USD 284, up 14.4%, and Total RevPAR was USD 452, up 10.0%, with comparable total hotel revenue of USD 95.2 million, up 9.9%. Urban properties posted RevPAR of USD 211, up 23.3%, and resort properties USD 457, up 5.9%, with resort ADR up 8.4% to USD 889.

Profit and Margins

Operating loss was USD 243.81 million against Operating Income of USD 29.81 million, with a gain on disposition of hotel properties of USD 259.93 million partly offsetting the termination fee. Comparable Hotel EBITDA was USD 12.9 million, up 20.7%, with a Margin of 13.6%. Urban Comparable Hotel EBITDA rose 63.2% to USD 10.1 million, at a margin of 24.3%.

Adjusted EBITDAre was USD 3.9 million against USD 16.4 million, and the company noted the third quarter is traditionally its lowest-earning quarter. Adjusted funds from operations were a loss of USD 0.25 per diluted share against a loss of USD 0.19. Interest expense was USD 14.53 million against USD 22.46 million.

Cash and Balance Sheet

Cash and cash equivalents were USD 78.9 million, with restricted cash of USD 39.6 million, mostly manager-held reserves. Indebtedness was USD 624.4 million, all non-recourse, at a blended rate of 7.25% with none of it fixed-rate. Net Debt to gross Assets was 33.3%, and the trailing twelve-month Comparable Hotel EBITDA debt Yield was 19.0%. The company redeemed about USD 5.0 million of non-traded preferred stock in cash, and redeemable preferred redemptions payable were USD 63.5 million.

After quarter end, it sold the Four Seasons Resort Scottsdale on October 28 for USD 372 million and, on October 30, refinanced the Ritz-Carlton Lake Tahoe loan, replacing a USD 43.4 million balance with a new USD 60.0 million Loan priced at SOFR plus 2.65%, against SOFR plus 3.25%. Management said the next hard debt Maturity is December 2028.

Figures Worth Comparing

Net loss of USD 240.9 million sits alongside the USD 480.0 million termination fee, a USD 259.93 million disposition gain and USD 624.4 million of non-recourse debt.

Management named its mid-November completion of the transition to a self-managed REIT, which follows the final sale needed to pay the remaining fees owed to the advisor. The board also intends to nominate seven new independent directors at the 2026 annual meeting. Preferred dividends are scheduled for January 15, 2027 on Series B and Series D shares, at USD 0.3438 and USD 0.5156 per share.