Greetings. And welcome to the Braemar Hotels & Resorts Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded.

I would now like to turn the call over to Jordan Jennings, Manager of Investor Relations. Thank you. You may begin..

Good morning. And welcome to today’s call to review results for Braemar Hotels & Resorts for the fourth quarter and full year 2021 and to update you on recent developments.

On the call today will be Richard Stockton, President and Chief Executive Officer; Deric Eubanks, Chief Financial Officer; and Chris Nixon, Senior Vice President and Head of Asset Management.

The results, as well as notice of the accessibility of this conference call on a listen-only basis over the Internet were distributed yesterday in a press release.

At this time, let me remind you that certain statements and assumptions in this conference call contain or are based upon forward-looking information and are being made pursuant to the Safe Harbor provisions of the federal securities regulations.

Such forward-looking statements are subject to numerous assumptions, uncertainties and known or unknown risks, which could cause actual results to differ materially from those anticipated. These factors are more fully discussed in the company’s filings with the Securities and Exchange Commission.

The forward-looking statements included in this conference call are only made as of the date of this call and the company is not obligated to publicly update or revise them. Statements made during this call do not constitute an offer to sell or a solicitation of an offer to buy any securities.

Securities will be offered only by means of a registration statement and prospectus, which can be found at www.sec.gov. In addition, certain terms used in this call are non-GAAP financial measures.

Reconciliations of which are provided in the company’s earnings release and accompanying tables or schedules, which have been filed on Form 8-K with the SEC on February 24, 2022, and may also be accessed through the company’s website at www.bhrreit.com.

Each listener is encouraged to review those reconciliations provided in the earnings release together with all other information provided in the release. I will now turn the call over to Richard Stockton. Please go ahead, Richard..

Good morning. And welcome to our fourth quarter earnings conference call. I will begin by providing an overview of our business and an update on our portfolio. After that Deric will provide a review of our financial results, and then, Chris, will provide an update on our asset management activity. Afterward we will open the call for Q&A.

We have five key themes for today’s call. First, our luxury resort portfolio continues to outperform and help drive comparable hotel EBITDA of $.35.5 million for the quarter, an increase of 12.2% versus the comparable quarter in 2019. Second, we continue to be cash flow positive at the corporate level.

Third, our portfolio is well positioned to continue to outperform with very strong forward bookings. Fourth, our balance sheet is in good shape and with our recent refinancing of the Park Hyatt Beaver Creek we have no near-term debt maturities.

And fifth, we announced the pending acquisition of the Dorado Beach, a Ritz-Carlton Reserve in Dorado, Puerto Rico one of the most iconic luxury assets in the Americas.

Our comparable hotel EBITDA of $35.5 million during the quarter was driven by strong occupancy levels at our resort properties and an 18.5% increase in ADR over the prior year quarter. Additionally, RevPAR for all hotels in the portfolio increased approximately 163% for the fourth quarter of 2021 compared to the fourth quarter of 2020.

Our portfolio RevPAR increased approximately 6.3% when compared to fourth quarter 2019 RevPAR and ADR was up over 32% compared to the fourth quarter 2019.

In fact, in the fourth quarter, we achieved the highest quarterly RevPAR in our company’s history and we are very encouraged to see our portfolio getting so close to our full year 2019 RevPAR levels.

We enter 2022 excited about our opportunities to deliver continued growth and expect to achieve full year 2019 RevPAR levels by this calendar year and also expect to meet or exceed full year 2019 hotel EBITDA by calendar year 2023.

As we have said before, we believe our portfolio will get back to 2019 levels before most of our peers given our portfolio composition and quality, but also certain factors that made 2019 not a great benchmark year for us. Specifically, we had three of our properties under major renovation, including The Notary, The Clancy and The Ritz-Carlton St.

Thomas. Several of our hotels achieved very strong hotel EBITDA margins during the quarter with Bardessono at 41%, Hotel Yountville at 46% and Pier House Resort at 57%. Our overall portfolio comparable EBITDA margin was 27.1% despite including one hotels with negative hotel EBITDA.

While leisure demand continues to be strong, particularly on weekends, any significant uptick in RevPAR performance is likely to rely on the recovery of corporate transient demand, and ultimately, corporate group demand. Overall, our resorts have started the year strongly despite industry-wide pullback associated with Omicron.

For the month of January, we finished at 44% occupancy and an ADR of $500, which equated to RevPAR exceeding 2019 levels by 2.6%. For February, we expect to exceed 55% occupancy, with continued RevPAR outperformance versus 2019. Ritz-Carlton St.

Thomas continues to be a standout performer, producing $6.6 million in hotel EBITDA during the fourth quarter. For the full year, our Ritz-Carlton St.

Thomas had approximately $28 million of hotel EBITDA, which is a phenomenal result when you consider that we acquired this hotel for $65 million in 2015 and it funded only approximately $30 million in owner funded capital expenditures over that time.

Many of our hotels are in drive-to leisure markets and have been well positioned to benefit from the resurgence of pent-up leisure demand in recent months. In total, eight of our 14 hotels are considered resort destinations.

These hotels include The Ritz-Carlton Sarasota, Bardessono, Hotel Yountville, The Ritz-Carlton Lake Tahoe, Pier House Resort, Park Hyatt Beaver Creek, Hilton La Jolla Torrey Pines and The Ritz-Carlton St. Thomas. We are pleased report that this segment delivered a combined hotel EBITDA of $31.8 million for the quarter.

I also continued to be encouraged by the advancing recovery of our urban properties. These properties include the Capital Hilton, The Marriott Seattle Waterfront, The Notary Hotel, The Clancy, Mr. C Beverly Hills and The Sofitel Chicago. For the fourth quarter five of these six properties posted positive hotel EBITDA. This is a significant turnaround.

It demonstrates that demand is quickly returning to our cities, both amongst the leisure and to a lesser extent the corporate transient segment. We expect this trend to accelerate as office reopenings continue during 2022. Additionally, we were cash flow positive again at the corporate level for the fourth consecutive quarter.

While our balance sheet is in good shape as we entered 2022, this puts us in a much stronger position financially. We are also happy to be continuing to implement our growth strategy with the announcement of the pending acquisition of the 96 room Dorado Beach, a Ritz-Carlton Reserve in Dorado, Puerto Rico for $186.6 million, an iconic luxury asset.

The Dorado Beach was the first Ritz-Carlton Reserve in the Americas and is one of only five Ritz-Carlton Reserve properties worldwide.

This premier beachfront location on the North Coast of Puerto Rico, the property is situated within Dorado Beach Resort, a 1,900 acre master planned community and one of the most sought after residential real estate markets in both Puerto Rico, as well as the United States.

The ultra luxury asset offers guests numerous world class amenities, both within the resort, as well as the surrounding development. In addition, we will also be acquiring the income stream attributable to 14 luxury residential units adjacent to the ultra luxury resort that participate in a Rental Management Program.

We believe this property will be a great addition to our portfolio and are very excited about the prospects of this acquisition as the hotel’s performance during the fourth quarter delivered RevPAR of $1,432, with 66% occupancy and an ADR of $2,165. We plan to complete the acquisition in the coming weeks.

Looking ahead, we continue to see a meaningful uptick on acquisition opportunities in the market. We will continue to be extremely disciplined in our investment approach and only focus on transactions that are accretive to total shareholder return.

On the capital markets front, we continue to raise capital via our non-traded preferred stock and subsequent to quarter end we completed the refinancing of the Park Hyatt Beaver Creek Resort & Spa on very attractive terms. Deric will provide more details on that in a moment. Importantly, our balance sheet is in good shape.

We have an attractive maturity schedule with our next card maturity not until April 2023. We have also been active on the Investor Relations front. Over the past few months we have attended several investor conferences and participated in numerous investor meetings. We also held well attended Investor Day in New York a couple of weeks ago.

In the months ahead, we will continue to get out on the road to meet with investors to communicate our strategy and the attractiveness of an investment in Braemar.

Looking ahead, our unique portfolio focused on the luxury segment with many properties in drive-to leisure markets, positions us to perform well in both the near-term and the long-term as business and group travel resumes. We continue to believe that Braemar represents a compelling opportunity in a lodging REIT space.

We are a differentiated story with the majority of our assets in very desirable resort locations, the highest quality portfolio in the public markets, a portfolio that is generating positive cash at the corporate level, and what we believe is a solid liquidity position and balance sheet with attractive debt financing in place.

I will now turn the call over to Deric..

Thanks, Richard. For the fourth quarter of 2021, we reported net loss attributable to common stockholders of $4.3 million or $0.06 per diluted share. For the full year 2021, we reported a net loss attributable to common stockholders of $40.0 million or $0.76 per diluted share.

For the quarter, we reported AFFO per diluted share of $0.23, compared to AFFO of negative $0.17 per diluted share in the prior year quarter. For the full year 2021, we reported AFFO per diluted share of $0.80. Adjusted EBITDAre for the quarter was $29.4 million and we were cash flow positive at the corporate level for the quarter.

Adjusted EBITDAre for the full year was $87.5 million. At quarter end we had total assets of $1.9 billion. We had $1.2 billion of loans, of which $49 million related to our joint venture partner share of the loan on the Capital Hilton and Hilton La Jolla Torrey Pines. Our total combined loan had a blended average interest rate of 2.7%.

As of the end of the fourth quarter, we have approximately 46% net debt to gross assets. We ended the quarter with cash and cash equivalents of $216 million and restricted cash of $47.4 million. The vast majority of that restricted cash is comprised of lender and manager held reserve accounts.

At the end of the quarter, we also had $27.5 million in due from third-party hotel managers. This primarily represents cash held by one of our brand managers, which is also available to fund hotel operating costs.

As Richard mentioned, our comparable hotel EBITDA during the quarter was $.5.5 million, after taking into account debt service, G&A costs, advisory fees and other corporate costs, preferred dividends and capital expenditures for the full year we generated over $18.4 million of positive cash flow.

Subsequent to quarter end, we completed the refinancing of the Park Hyatt Beaver Creek Resort & Spa on very attractive terms. The new non-recourse loan totaled $70.5 million have a two-year initial term with three one year extension options subject to the satisfaction of certain conditions.

The loan is interest-only and provides for a floating interest rate of SOFR + 2.86%. The financing addressed the company’s only final debt maturity in 2022 and illustrates that there is attractive financing available for high quality assets like those in our portfolio.

I am also pleased to report that since we launched the effort in July of last year, we have raised approximately $62.4 million of net proceeds from our Series E and Series M non-traded perpetual preferred stock.

We expect the proceeds from the sale of the Series E and Series M non-traded perpetual preferred stock to be our primary source of capital to facilitate our growth. This capital raising effort is just getting started and we look forward to reporting our progress in future quarters.

As Richard mentioned, subsequent to quarter end we announced the pending acquisition of the Dorado Beach, a Ritz-Carlton Reserve in Dorado Beach, Puerto Rico. Total consideration for the acquisition is $186.6 million or $1.7 million per key, inclusive of the residential units in the rental program.

The acquisition will be funded with approximately $104 million of cash, 6 million shares of common stock and the assumption of the $54 million mortgage loan. No additional equity will be issued to find the cash portion of the consideration. The cash portion of the consideration will be funded from available excess cash.

As of December 31, 2021, our portfolio consisted of 14 hotels with 3,640 net rooms. Our share count currently stands at 72.5 million fully diluted shares outstanding, which is comprised of 65.4 million shares of common stock and 7.2 million OP units.

In our financial results, we include approximately 4.1 million shares in our fully diluted share count associated with our Series B convertible preferred stock and approximately 13.6 million shares in our fully diluted share count associated with our convertible senior notes. This concludes our financial review.

I’d now like to turn it over to Chris to discuss our asset management activities for the quarter..

Thank you, Deric. Comparable RevPAR for our portfolio increased 163% during the fourth quarter relative to the same time period in 2020. This portfolio is thriving. With our fourth quarter RevPAR exceeding comparable 2019 by 6%. This outperformance is a testament to the quality of the portfolio and the efforts of our asset management team.

Our Yountville Hotels achieved a combined 43% RevPAR increase over comparable fourth quarter 2019. Bardessono Hotel and Spa generated over $2 million more in total revenue during the fourth quarter of 2021 than the comparable period in 2019, representing a 42% increase.

This revenue growth was driven by our recently developed luxury villas, the villas produce nearly $580,000 in room revenue during the fourth quarter and approximately $2 million during the full year of 2021.

Hotel Yountville also showed strong results producing nearly $900,000 more in total revenue during the fourth quarter than the comparable period in 2019. We have increased topline revenue through higher seasonal premiums and upgraded room types and by implementing more stringent seasonal blackouts to this kind of program.

Next, The Ritz-Carlton Sarasota had its best fourth quarter on record, with more than $23 million in total revenue, representing a 29% increase over the next highest comparable fourth quarter.

The hotel also recorded nearly $83 million in full year total revenue and $25.7 million in hotel EBITDA, both outperforming historical highs on record by 26% and 88%, respectively.

These results are driven by initiatives that we identified prior to the acquisition of the hotel, including selling out the hotels club membership program, which represents nearly $6 million in long-term annual revenue, optimizing the hotel’s business mix and implementing long-term labor efficiencies.

Lastly, I would like to highlight our most recent acquisition Mr. C, which realized at 3.4% RevPAR gain during the fourth quarter relative to the comparable period in 2019. The hotel has already significantly outperformed our investment underwriting.

Prior to taking over the hotel, our asset management team developed a 70-point plan to increase stabilized hotel EBITDA by more than $1 million. The plan included reducing dependency on OTAs and capitalizing on weekend demand with higher rates on premium runtimes. Additionally, we improve labor productivity by re-engineering the staffing model.

Both of these initiatives have already resulted in success, with fourth quarter ADR increasing above 2019 levels by more than 2% and fourth quarter departmental expense margin improving by nearly 450 basis points relative to 2019. The Mr. C is our only urban property to outperform its 2019 comparable quarter.

Moving on to capital investment, we have invested heavily in our portfolio over the last several years to enhance our competitive advantage. These investments, uniquely position, our portfolio to benefit from the pent-up demand that we are currently seeing in our markets.

In 2021, we were able to restart and complete a number of exciting value add projects across the portfolio. These included a new cafe at the beach club at The Ritz Carlton Sarasota and the additional 10 keys at a cost of $130,000 per key. In total, we spent approximately $26 million on capital expenditures in 2021.

Looking ahead to 2022, we anticipate spending approximately $60 million to $70 million on capital expenditures. I would like to finish by expressing how optimistic we are about the future of this portfolio. Eight of our 14 hotels are already exceeding 2019 RevPAR levels.

Those eight hotels lifted the whole portfolio to a 6% RevPAR increase during the fourth quarter relative to the comparable 2019. Nearly all of the remaining hotels are located in urban destinations, such as Chicago, Philadelphia, San Francisco, Seattle and Washington, D.C.

There is still a significant amount of additional runway and potential to unlock in this portfolio, which we believe will allow us to continue to outperform in the future. I will now turn the call back over to Richard for final remarks..

Thank you, Chris. In summary, we continue to be pleased with the recovery trends we are seeing at our hotels driven by strong leisure demand at our luxury resort properties. We see a clear path for continued strength in our future financial results. We are well positioned moving forward with a solid sheet and unique diversified portfolio.

We look forward to updating you on our progress in the quarters ahead. This concludes our prepared remarks and we will now open the call up for Q&A..

Thank you. Our first questions come from the line of Bryan Maher with B. Riley Securities. Please proceed with your questions..

Good morning. Thanks for all that commentary. Richard, when we think about the affluent traveler in 2022 and beyond. I mean, clearly there was a lot of both revenge travel and inability to go abroad for those who could afford it, driving ADR a lot of your properties.

How do you think ADR kind of unfold as we hit the back half of 2022 and 2023?.

Yeah. Bryan, thanks for that. Yeah. I’d say a couple of things. We are actually achieving ADR at some of our properties that are just setting records. I think that’s in some ways great, in some ways a concern. We -- and the concern is can we keep it up. We did an ADR for the year of $389. I think a couple of things are going to happen.

I think as business travel comes back, the people that are traveling now and have more flexibility in their schedules and are spending time in our resorts are going to be on the road and attending meetings and groups and conferences.

And it’s kind of a zero sum game, so instead of them traveling for leisure purposes, they are traveling for business purposes. So to the extent there is any air left out of that leisure bubble and we -- it gets backfills with urban demand. And that’s what’s great about the balance of our portfolio.

Our urban properties historically contributed as much EBITDA as our resort properties and there’s really a ton of upside hits that we have there. So I -- that’s how I see things evolving. So I think it’s resilient, because of that. I think the leisure rates that we have been able to achieve aren’t going to fall precipitously.

I think once your affluent traveler gets used to paying $1,000 a night for a room, they are going to continue to do so and our hotels are going to continue to earmark those rates at that level. So I am not concerned about a dramatic pullback in any way..

Is it safe to say that maybe ADR could come back on the affluent leisure travel or that occupancy upticks at a decent rate from business travel to the urban properties? And at the end of the day, the total portfolio RevPAR can hold its own or grow from current levels.

Is that a fair way to think about it?.

Yeah. That’s what I am saying. That’s how I think about it..

Yeah, Chris. The only thing I’d add, Bryan, is that, we are not seeing any signs of a slowdown in terms of leisure ADR. All forward indicators from what we are seeing are very, very positive. We have done a number of things across our portfolio to try to capitalize on that leisure demand and sustain those ADRs.

We built out the luxury villas in Bardessono, we did the key additions in Sarasota and we are looking at our residential rental programs to see where we can increase participation. Those units drive very high rates across the portfolio. But I think you have got it pegged.

If there is a leisure pullback, when that happens, we expect to see a resurgence of the urban hotels and corporate travel that we think will largely offset that..

Okay. And moving on to acquisitions, I think, and correct me, if I am wrong, I think that the appetite, Richard, was maybe two properties a year.

Can you let us know if you think that that’s changed at all? And should we expect to see some of this creative financing that you have done on your two most recent properties, which a combination of cash on hand, shares, assumption of debt, is that how we should think about financing going forward? And maybe just lastly on that, is there some kind of a dollar amount in your head that you think you would like to spend on acquisitions kind of per year?.

Yeah. Sure. Thanks for that, Bryan. Well, firstly, the acquisitions environment continues to be a very active and very interesting terms of the pipeline and deal flow things that we are seeing. There are a lot of properties available for sale. I think they are predominantly resort properties.

That said, we have done one urban acquisition, one resort acquisition. We will continue to be balanced in our view in terms of portfolio composition. In terms of quantums, yeah, I think, our range is one to three per year.

I’d like to continue to do about two acquisitions a year, about the $250 million in gross asset value that we approximately announced last year. So I don’t see that changing fundamentally. And I think for now, that’s being driven a lot by the fact that we are very, very picky, right? We use -- we look at a lot of deals.

We are very disciplined in how we underwrite our deals. And many of them are just not attractive based on where they are being offered. But that said, we have been successful in the past identifying one or two great acquisitions and I expect that to continue going forward.

In terms of the way we acquire the consideration, I do think utilizing OP units or shares of in the right amount is a very attractive way to give us the upper hand in a negotiation. We have had now two deals that we have announced where we very much had sellers who were very eager to become Braemar shareholders.

And they wanted to roll their property into the best portfolio on the street and realize the upside from that. Now we just had to be very careful, given where the share price was at the time of the deal to have that translated into the right acquisition price and I believe we have been able to do that.

So, we will continue to be very strict in the way we look at that. But it is a creative way that I think helps sellers get comfortable with us as a buyer, and in some cases, maybe even not at the highest price. I think the assumption of debt is something that we can also use when it’s appropriate, whether it’s helpful to the seller.

It’s helpful to the lender or offers us a cost of debt that we find particularly attractive. So we will always continue to look at that too. But I will say, the financing markets are pretty healthy. You saw the refinancing of our Park Hyatt Beaver Creek at levels that approximated where we finance that asset on acquisition in 2017.

So there is that available even from relationship banks who are, probably, our preferred lenders at this point. So, we think on acquisition financing, we don’t necessarily need to assume that. We can find it if we need it.

So we will assess every situation across a number of those different metrics, be creative where we can and try to get some deals done..

Okay. And just last year for me and try and be quick on this one. The Dorado RevPAR and ADR is just off the charts.

Can you give us a little color on how you can command $2,000 plus in ADR, I mean, are the room sizes huge, I mean, a lot of us have not had the opportunity to be there and how should we think about the income stream from the 14 luxury residences? How do we think about that, where’s that going to be classified, is that going to be under room for modeling purpose -- under revenue -- other revenue for modeling purposes?.

Yeah. So, first, you hit the nail on the head. The reason we are able to achieve over $2,000 a night ADR is because the rooms are the size of suites. The average room size is 1,200 square feet. Your standard king is almost a 1,000 square feet, right? So you are more than twice the typical luxury room size.

They have outdoor showers, as well as indoor showers. They have plunge pools. So they are just a very large luxury room product that’s driving it. It’s that, plus when you incorporate the villas, right? And the villas and the rental program range from 3,000 square feet to 5,000 square feet.

They command upwards of $10,000 a night in rate, you are able to really drive that ADR. So that’s what’s doing it. What we are doing with the rental management program, the rental program is incorporating net revenue into rooms revenue and incorporating that into our calculation of RevPAR. So that’s how we are treating that..

Yeah. Thank you very much..

Thank you. Our next question comes from the line of Michael Bellisario with Baird. Please proceed with your questions..

Thanks. Good morning, everyone..

Hi..

And just a quick follow up there on the economics. Any percentage you can put around relative to that stabilize multiple you guys have provided, what t sort of NOI is coming from the rental pool versus the hotel..

Well, are we -- I don’t think we are doing that segment reporting actually. It’s a little tricky to get to NOI, because you have to do allocations when you have a rental program and so that’s not anything that we will be publishing, because it’s more of a theoretical exercise, frankly..

Okay. Fair enough that I’d ask.

And then just while we are on Puerto Rico, can you help us understand how you evaluate risks there versus investing in incremental dollars stateside here in the U.S.?.

Yeah. Sure. That’s a great question. I mean, the thing that was attractive about Puerto Rico when the opportunity came up is, you are investing in a U.S. territory, right? So it’s U.S. currency, it’s U/S/ laws. Everything is very familiar. There are no friction as far as taxes are concerned. In fact, it’s the opposite.

There are very favorable tax exemptions you get by investing on the island. So when we -- given our experience in St. Thomas, I think that made it a lot easier for us to go there. Certainly, in the Caribbean, one of the risks that the people are concerned about is weather. I have talked about our experience in St. Thomas time and time again.

And our risk management program is best-in-class and I think is protects us from any sort of a weather-related event on that property. So I think that is something that is a key advantage for us that allows us to assess risks in that market and put our capital to work there in a way I think a lot of other companies just simply can’t.

We have a very favorable umbrella of policy that really came through for us on the St. Thomas rebuild and we couldn’t be more pleased with the financial results for shareholders there. So that’s how we are assessing it. I don’t know that Puerto Rico has other major risks beyond that. The airlift is literally 10 times what it is in St. Thomas.

It’s been attracting a lot of professionals from the mainland due to the tax incentives offered there. So that’s a very favorable trend. Economically doing much better, there were certainly some downturn related to the 2019 storm or 2017 storms, but they are doing much better as well. So we love Puerto Rico. It’s a beautiful place.

I’d encourage you to go there. The beaches are absolutely stunning and I think as people discover it. That asset will continue to outperform..

That’s helpful.

And then just last one on the investment side is just you look at other investment opportunities, how big is the map that you are looking at other Caribbean locations, Mexico, Central America, what would be of interest to you, what would not be?.

Yeah. That’s a good question. There does seem to be more coming to market in those markets, right, the Caribbean, Mexico, Central America. I am very reluctant to take on currency risk. So and luckily most of the Caribbean markets use the East Caribbean dollar, which is pegged to the U.S. dollar.

There are some Central American markets that are actually pegged to, like, Panama pegged to the U.S. dollar. And then Mexico and certain destinations might as well be U.S. dollar just in terms of how they operate. All that said, the other thing that we look at carefully is if there’s any friction related to taxation. So we will continue to look at that.

But we certainly haven’t ruled out the areas that you described, but it really has to be -- has to check the box of limited currency risk. Certainly, limited risk of nationalization or what I would call geopolitical risk and then limited tax friction. So we feel extraordinarily comfortable with St. Thomas in Puerto Rico.

We haven’t done anything in a non-U.S. territory yet, but we will continue to look because there have been some attractive things that have come up recently and are available for sale..

Got it. That’s helpful.

And then just last one for me on the preferred issuance, are you now opening up that offering to more brokers and then what’s the trajectory, at least your expected trajectory of getting to, I think, you probably stated maybe $300 million target, kind of how do you think about the timeline of getting there?.

Hey, Mike. This is Deric. I will take that one. Yeah. You are correct. The offering continues to sign up additional dealer agreements with additional brokers. So we would expect that sort of trajectory to continue to ramp up. Hard to know in terms of guidance of when we hit that target raised level.

But we -- it’s a continual offering that is open and we do closes every two weeks. So we would expect that progress to continue to ramp up..

Great. Thank you..

Yeah..

Thank you. Our next question comes from the line of Tyler Batory with Janney. Please proceed with your questions..

Thank you. Good morning. A few follow-up questions for me, clearly, the business moving in the right direction here.

How are you thinking about a common dividend, when potentially does that make sense? How are you thinking about potential payout ratios versus historical and also balancing your dividends versus some of the attractive acquisition opportunities you see as well?.

Yeah. Tyler, thanks for that question. I mean, we continue to assess liquidity and cash flow, and also what’s happening in the sector with our peers. We do believe that there are some funds out there that are yield focused and we would like to see at least some sort of dividend program reinstated.

All I can tell you is the Board will continue to analyze that. We are doing very well financially. You see some activity amongst our peers in terms of reinstating dividends. So that’s about all the news I have on that at this time..

Great. Great. In terms of the CapEx spend. I mean you spent $26 million roughly in 2021.

I mean apologies if I missed that, did you get a number for expected spend in 2022?.

We did. We did. We gave a range of $60 million to $70 million..

Okay.

Is there any, I guess, deferred CapEx that’s in their money would have spent in 2020 or 2021 that’s shifted and kind of how are you thinking about a normalized maintenance CapEx really into the future?.

Yeah. Tyler, about a third of that is deferred from this year into next year..

Yeah. In terms of ongoing reserves, I mean, as you know, it’s kind of an industry standard to reserve about 5% of revenues for maintenance CapEx. Obviously, if you look at hotel rates across the Board typically spend well in excess of that. So we would anticipate supplementing some of that with owner funding.

But I don’t know if we are prepared to kind of give you some guidance in terms of percent of revenue target that we are going to set to achieve going forward. But we have got guidance out there for CapEx spend for 2022. And just know that by normal course, we are reserving roughly 5% of revenues into ongoing FFO reserves..

Okay. That’s all for me. I will leave it there. Thank you..

Thank you. There are no further questions at this time. I would like to turn the call back over to management for any closing comments..

All right. Well, thanks everyone for joining us on the fourth quarter earnings call. We look forward to speaking with you again on our next call. Good-bye..

This does conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day..