For most hotel real estate investment trusts, including Braemar Hotels & Resorts, 2019 was a down year for transactions. But President and CEO Richard Stockton said his company managed to make headway by taking care of its existing portfolio.
LOS ANGELES—2019 was a year of renovations and conversions for Braemar Hotels & Resorts.
Speaking to Hotel News Now during the 2020 Americas Lodging Investment Summit, President and CEO Richard Stockton said his company sunk a considerable amount of time and energy into taking its existing portfolio to the next level, converting some select-service assets to luxury, soft-brand hotels and getting through a major renovation in the Caribbean.
“Really over the past two years, we’ve invested into our own portfolio more than ever before,” he said. “We had three major capital expenditure projects that we were pursuing that were the final stages of our strategic plan that we implemented three years ago to position our portfolio exactly where we wanted it to be, which is predominantly luxury, highest (revenue per available room) in the lodging sector.”
Those projects include converting two Courtyard by Marriott properties, one in Philadelphia and the other in San Francisco, to Marriott International’s Autograph collection, and the renovation of the Ritz-Carlton property in St. Thomas, which was negatively affected by Hurricane Irma.
Stockton said he sees his company remaining a long-term investor in Caribbean properties at a time when many other hotel real estate investment trusts are de-emphasizing properties outside the continental U.S. He sees a presence in the Caribbean as a strategic advantage over other hotel REITs.
“One of the reasons is there is a fear of the risk management associated with a hurricane event,” he said. “Our experience has shown that actually we can work through it and end up in a very favorable place. We were able to fully renovate a hotel, which would have been due for renovation in the coming years anyway, without any disruption in the business because we’re recovering the business interruption from the insurance company.”
He said he hopes to expand the company’s presence in the region, although only in areas that use the U.S. dollar.
“We’re happy with owning that asset in the Caribbean, and we’ll look to acquire other ones,” he said.