Braemar Hotels grows revenues 16.5% in 2022
Mar 10th 2023, 9:20 pm
Part 1: Performance Analysis Braemer Hotels & Resorts Inc. is a hotel investment and management company engaged in the acquisition and operation of luxury hotels and resorts in the United States. As of December 31, 2022, the company owns interests in 16 hotel properties in seven states, the District of Columbia, Puerto Rico, and St. Thomas, U.S. Virgin Islands with 4,181 total rooms. The company primarily invests in high-revenue-per-available-room (RevPAR) properties, which means RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels. The company has demonstrated a strong performance during the last year. In September 2022, the company began a Cash Management Strategy which allowed them to actively manage and invest the company’s excess cash in short-term U.S. Treasury securities. In December 2022, the company acquired the Four Seasons Resort Scottsdale at Troon North for $267.8 million in cash. Additionally, the company repurchased approximately 5.4 million shares of its common stock for approximately $25.0 million, and has completed the $25.0 million repurchase authorization. The gross revenues of the company increased by 16.5% in 2022 compared to the previous year. The company reported gross revenues of $399.7 million and $342.8 million for 2022 and 2021 respectively. The company's net income also showed a significant increase of 150.0% in 2022 compared to the previous year, increasing from $14.2 million in 2021 to $35.6 million in 2022. The operating income of the company stood at $76.4 million in 2022, showing a 212.0% increase compared to the previous year. Part 2: Forward Looking Analysis Looking forward, the hotel lodging industry is expected to continue its growth trajectory, with luxury hotel service expected to grow at a higher rate. As the COVID-19 pandemic subsides, there may be a surge in travel activities, which is expected to benefit the company's business. Additionally, on December 7, 2022, the company’s board of directors approved a new stock repurchase program pursuant to which the board of directors granted a repurchase authorization to acquire shares of the company’s common stock, par value $0.01 per share, having an aggregate value of up to $25 million. This may lead to a positive impact on the company's stock price. The company's competitive position may also have an impact on its future performance. The company owns interests in high RevPAR luxury hotels and resorts, which puts the company in the upper segment of the hotel lodging industry. This may position the company well when it comes to attracting high-end travelers, but also makes it vulnerable to competition from similar firms. In summary, Braemar Hotels & Resorts Inc. is a hotel investment and management company that has demonstrated strong growth in the past year. While its success has been driven by strategic acquisitions, stock repurchases, and a cash management strategy, the industry-wide trend towards luxury travel bodes well for the company's future. However, the company's competitive position and vulnerability to similar firms may impact its future performance.