R A Y M O N D J A M E S / W E L L S F A R G O L O D G I N G H Q T O U R - M A Y 2 0 2 4
AC HOTEL BOSTON DOWNTOWN
RLJ INVESTMENT HIGHLIGHTS
The evolution of RLJ's portfolio in recent years has positioned it to benefit from the upside in urban demand and to capitalize on unique internal and external growth catalysts
HIGH QUALITY
PORTFOLIO
High-quality portfolio
with an attractive
growth profile
INTERNAL GROWTH
Phase I & II initiatives to generate $14M to $18M of incremental EBITDA
EXTERNAL GROWTH
Well positioned to drive
external growth
BALANCE SHEET
Strong balance sheet with ~$1B of liquidity providing optionality((1)
- Urban-centricportfolio growth expected to exceed the industry
- Urban markets represent over two- thirds of RLJ's portfolio
- Three conversions announced in 2023 underway in New Orleans, Houston and Nashville
- Two conversion of the Renaissance and the Wyndham in Pittsburgh
- Expanded conversion pipeline by acquiring Wyndham Boston Beacon Hill
- Ability to execute all- cash transactions in a constrained lending environment
- Attractive pipeline of off-market, external growth opportunities
- Low leveraged balance sheet with a strong track record of returning capital
- In 2023, repurchased $77.2M of common shares while doubling dividend
2
- As of March 31, 2024
THE PIERSIDE SANTA MONICA
OPERATING PERFORMANCE
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OPERATING PERFORMANCE | Q1 2024
RLJ's urban-centric portfolio outperformed the industry and gained market share
RevPAR increased 1%, led by increased Occupancy
- Q1 RevPAR growth exceeded the industry for the 5th consecutive quarter
- Portfolio gained 110 bps of market share in Q1
Urban-centric portfolio benefitted from improvement in all segments of demand
- BT revenue growth of 13% driven by balanced contribution of Occupancy and ADR growth
- Benefitted from strength in SME's and broadening BT across consulting, technology and financial services
- Group strength continued, with January and February achieving revenue increases of 10% and 9%, respectively
- Q1 Group ADR increased ~3% despite Easter impact in March
- March impacted by Easter shift
- Leisure revenues increased 2%
- Urban leisure revenues increased 3%
Total Revenues increased 3%
- ROI initiatives drove ~8% increase in out-of-room spend
Seeing strong returns from Conversions
- Charleston, Mandalay Beach, and Santa Monica, achieved ~27% RevPAR growth in Q1
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OPERATING PERFORMANCE | 2024 OUTLOOK
RLJ's urban-centric portfolio with multiple channels of growth position the portfolio to outperform the industry
Urban markets are expected to benefit from positive growth in all demand segments
- Group is expected to remain strong due to continued demand from small group and favorable citywides
- Expect continued momentum in business transient and improvement in international travel demand
- Leisure should remain healthy, with urban leisure to benefit from special events
Expect Q2 to sequentially improve from Q1
- 2nd quarter RevPAR growth to be below the mid-point of the full-year range
- May expected to be the strongest month of Q2
- Citywides in Boston, Washington DC, Southern California, and Louisville to benefit from 150th Kentucky Derby
Performance should benefit from a favorable footprint
- Citywide calendars and event locations to drive divergence in individual market performance
- RLJ has a favorable footprint in urban markets such as Boston, Southern California and New York
Outlook
- Reaffirmed FY 2024 Outlook
- Expect Q2 RevPAR growth to be below the mid-point of the full-year range
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RLJ | MULTIPLE CHANNELS OF GROWTH
URBAN CENTRIC
PORTFOLIO ORGANIC
GROWTH
- Multiple demand drivers
- Capture new normal
- Limited new supply
- Next leg of recovery
INITIAL CONVERSIONS /
ACQUISITIONS
- Pacing ahead of underwriting
- External growth from high-growth markets
- Additional growth to stabilization
FUTURE PIPELINE OF
CONVERSIONS
- Targeting two conversions per year
- Executing incremental revenue enhancement opportunities
BALANCE SHEET
OPTIONALITY
- Strong Liquidity
- Generate significant free cash flow
- Optionality to drive external / internal growth
- Ability to return capital to shareholders
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THE PIERSIDE SANTA MONICA
HIGH-QUALITYPORTFOLIO
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RLJ | HIGH QUALITY PORTFOLIO
RLJ owns a geographically diversified portfolio of premium branded, high-margin hotels
Portfolio Overview (1)
Hotels | 96(1) |
ADR | $197 |
RevPAR | $141 |
EBITDA/Key | $19k |
Urban Footprint | 66% |
Y/Y Growth
+4.5%
+9.0%
+8.5%
Brand Exposure
12%
42%
36%
9%
Independent/Oth er
(1) Based on proforma FY 2023 for Comparable Hotels owned as of December 31, 2023
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THE MILLS HOUSE CHARLESTON
RLJ | HIGH QUALITY PORTFOLIO
RLJ owns a geographically diversified portfolio of premium branded, high-margin hotels
Urban | Urban | Resort | Urban |
Lifestyle | Gateway | Metro |
COURTYARD / RESIDENCE INN / SPRINGHILL | |
MOXY DENVER CHERRY CREEK | SUITES HOUSTON DOWNTOWN CONVENTION |
CENTER |
33 | 32 | |
# of Hotels | # of Hotels | |
41% | 31% | |
of EBITDA1 | of EBITDA1 | |
$21K | $22K | |
EBITDA / KEY | EBITDA / KEY |
ZACHARI DUNES ON MANDALAY BEACH HOTEL & RESORT
11
# of Hotels
17%
of EBITDA1,2
$25K
EBITDA / KEY
HYATT PLACE MADISON DOWNTOWN
20
# of Hotels
11%
of EBITDA1
$16K
EBITDA / KEY
- Based on FY 2023 for Comparable Hotels owned as of December 31, 2023
(2) Includes the Pierside Santa Monica, Mills House Charleston and Zachari Dunes conversions currently in ramp up
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URBAN LIFESTYLE
P R O P E RT I E S I N T O P U R B A N S U B M A R K E T S T H AT B E N E F I T F R O M
S E V E N - D AY- A - W E E K D E M A N D A N D " B L E I S U R E " W I T H H I G H L E I S U R E M I X 4 1 % O F E B I T D A ( 1 )
THE BANKER'S ALLEY HOTEL NASHVILLE
THE KNICKERBOCKER NEW YORK
AC HOTEL BOSTON DOWNTOWN | MOXY DENVER CHERRY CREEK | MARRIOTT LOUISVILLE DOWNTOWN | HYATT CENTRIC MIDTOWN ATLANTA |
(1) Based on FY 2023 for Comparable Hotels owned as of December 31, 2023; excludes Chateau LeMoyne which is unconsolidated
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Disclaimer
RLJ Lodging Trust published this content on 06 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 May 2024 20:44:00 UTC.