CITI'S GLOBAL PROPERTY CEO CONFERENCE
MARCH 2024
RLJ | INVESTMENT HIGHLIGHTS
The evolution of RLJ's portfolio over the last several 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
INTERNAL
GROWTH
EXTERNAL
GROWTH
BALANCE
SHEET
High-quality portfolio with an attractive growth profile
- Urban-centricportfolio growth expected to exceed the Industry
- Urban markets represent over two-thirds of RLJ's portfolio
Phase I and II initiatives to generate $14M to $18M of incremental EBITDA
- Three conversions announced in 2023 underway in New Orleans, Houston and Nashville
- Two conversions of the Renaissance and the Wyndham in Pittsburgh
- Acquired the Wyndham Boston Beacon Hill for $125M, unlocking a new conversion
Well-positioned to drive external growth
- 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
- ~$1.1B of liquidity, including $0.5B of cash
- In 2023, repurchased $77.2M of common shares while doubling dividend
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OPERATING PERFORMANCE
THE PIERSIDE SANTA MONICA
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OPERATING PERFORMANCE | Q4 & FY 2023
RLJ's urban-centric portfolio yielded top-quartile performance throughout 2023
RLJ was a top performer among peers and outperformed the industry throughout 2023
- Q4 and 2023 RevPAR growth of 5.2% and 9.0% exceeded industry by 4x and 2x, respectively
- RLJ's RevPAR growth was consistently in the top-quartile of its peers throughout the year
Urban-centric portfolio benefitted from improvement in all segments of demand
- Robust group demand, improving Business and international inbound travel were key drivers during the year
- Urban leisure remained healthy, benefitting from large-scale events and hybrid work flexibility allowing for "Bleisure"
- Urban markets strength allowed portfolio RevPAR to be driven by balanced Occupancy and ADR growth
Portfolio benefitted from ramping conversions
- Exceeded our initial projections for our Phase I conversions, revenue enhancement and margin expansion initiatives
- ROIs were a key driver of out-of-rooms revenues growing by +8.1% and +19.7% in Q4 and 2023, respectively
Lean operating model drove EBITDA growth
- Q4 and FY Hotel EBITDA increased 2.3% and 8.5%, respectively
- Continued to benefit from lean operating model with fewer FTEs
MARCH 2024 | 4 |
OPERATING PERFORMANCE | 2024 OUTLOOK
RLJ's urban-centric portfolio and multiple channels of growth well-positioned to continue to drive outperformance relative to 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
- RLJ group booking pace is +12%
- Expect further improvement in business transient and international travel demand
- Leisure should remain healthy, with urban leisure to benefit from special events
Performance will benefit from a favorable footprint
- Expect divergence in individual market performance to emerge given citywide calendars and event locations etc.
- RLJ's urban markets such as Boston, Southern California and New York are expected to outperform in 2024
January 2024 RevPAR growth up 5.8%
- Occupancy and ADR growth of 4.3% and 1.5% respectively
- Q1 impacted by the timing of Easter and difficult comparisons to prior year growth rates
Full Year Outlook
- Anticipates a continuation of the current operating and macroeconomic environment
- Comparable RevPAR Growth of 2.5% - 5.5%
- Comparable Hotel EBITDA of $395.0M to $425.0M
- Adjusted EBITDA of $360.0M to $390.0M and Adjusted FFO per diluted share between $1.55 and $1.75
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RLJ | MULTIPLE CHANNELS OF GROWTH
URBAN CENTRIC PORTFOLIO
ORGANIC GROWTH
INITIAL CONVERSIONS /
ACQUISITIONS
FUTURE
PIPELINE OF CONVERSIONS
BALANCE SHEET
OPTIONALITY
- Multiple demand drivers
- Capture new normal
- Limited new supply
- Next leg of recovery
Pacing ahead of | Targeting two conversions |
underwriting | per year |
External growth from high- | Executing incremental |
growth markets | revenue enhancement |
Additional growth to | opportunities |
stabilization |
- Strong Liquidity
- Generate significant free cash flow
- Optionality to drive external / internal growth
- Ability to return capital to shareholders
Based on pro forma FY 2019 EBITDA for hotels owned As of June 30, 2023
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HIGH-QUALITY PORTFOLIO
THE PIERSIDE SANTA MONICA
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RLJ | HIGH QUALITY PORTFOLIO
RLJ owns a geographically diversified portfolio of premium branded, high-margin hotels
Portfolio Overview(1)
Hotels96(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/Other
Based on proforma FY 2023 for Comparable Hotels owned as of December 31, 2023
MARCH 2024 | 8 |
RLJ | HIGH QUALITY PORTFOLIO
U R B A N L I F E S T Y L E
U R B A N G AT E W AY
R E S O R T
U R B A N M E T R O
33 | 32 | 11 | 20 |
# of HOTELS | # of HOTELS | # of HOTELS | # of HOTELS |
39% | 36% | 14% | 11% |
of EBITDA | of EBITDA | of EBITDA | of EBITDA |
$21K | $22K | $25K | $16K |
EBITDA / KEY | EBITDA / KEY | EBITDA / KEY | EBITDA / KEY |
Based on pro forma FY 2019 EBITDA for hotels owned As of June 30, 2023 | |||
MARCH 2024 | 9 |
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 3 9 % 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 2019 EBITDA pro forma for the portfolio owned As of June 30, 2023; excludes Chateau LeMoyne which is unconsolidated
MARCH 2024 | 10 |
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Disclaimer
RLJ Lodging Trust published this content on 04 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 March 2024 14:37:06 UTC.