NEW YORK — After a slow start to 2022, Ashford Hospitality Trust is finally seeing exciting demand trends, according to President and CEO Rob Hays.
Those trends include the return of business travel, which across Ashford Trust's portfolio is back 70% to 75%. This rebound happened at a quicker-than-expected pace, Hays said during a video interview with Hotel News Now at the 2022 NYU International Hospitality Investment Conference.
While group pace remains sluggish, it's offset by leisure demand.
"Leisure is back, it's better than it's ever been," he said. "Overall, we're almost back to where we were on a total demand basis, back to 2019."
Debt Strategy
In 2021, Ashford pivoted to taking a more conservative debt approach, which was a result of lessons learned when entering the pandemic.
"Thus far, we've delevered by about $1.1 billion over the past 18 months," Hays said. "We made a lot of progress on that. We still have a little ways to go; however, the debt markets are a little choppy right now, our stock price isn't in a place where we're raising equity. So right now, it's mostly being patient."
He added that Ashford will likely be selling a few assets to further delever, but it will take two to three years for the company to fully realize the end goal of deleveraging.
This year, Hays said Ashford's portfolio management strategy will involve both capital market initiatives as well as transactions.
But as Ashford has refinancing and deleveraging on the mind, it's become more of a challenge as spreads on commercial mortgage-backed securities have widened.
"As a result, it's making it a little bit more difficult on the transactions side," he said. "I think what we're looking to do is continue to raise capital — most likely not from the common shareholder market but rather from retail holders, potentially, as well as private markets."
Hays said it's possible Ashford will consider "a deal or two" this year.
For more from Ashford Hospitality Trust President and CEO Rob Hays, watch the video above.