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Company Presentation – May 2017
Certain statements and assumptions in this presentation contain or are based upon “forward-looking” information and are being made
pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to
risks and uncertainties. When we use the words “will likely result,” “may,” “anticipate,” “estimate,” “should,” “expect,” “be lieve,” “intend,” or
similar expressions, we intend to identify forward-looking statements. Such forward-looking statements include, but are not limited to, our
business and investment strategy, our understanding of our competition, current market trends and opportunities, and projected capital
expenditures. Such statements are subject to numerous assumptions and uncertainties, many of which are outside of our control.
These forward-looking statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ
materially from those anticipated, including, without limitation: general volatility of the capital markets, the general economy or the hospitality
industry, whether the result of market events or otherwise; our ability to deploy capital and raise additional capital at reasonable costs to repay
debts, invest in our properties and fund future acquisitions; unanticipated increases in financing and other costs, including a rise in interest
rates; the degree and nature of our competition; actual and potential conflicts of interest with Ashford Hospitality Trust, Inc., Ashford Hospitality
Advisors, LLC (“Ashford LLC”), Ashford Inc., Remington Lodging & Hospitality, LLC, our executive officers and our non-independent directors; our
ability to implement and execute on planned initiatives announced in connection with the conclusion of our independent directors’ strategic
review process; changes in personnel of Ashford LLC or the lack of availability of qualified personnel; changes in governmental regulations,
accounting rules, tax rates and similar matters; legislative and regulatory changes, including changes to the Internal Revenue Code and
related rules, regulations and interpretations governing the taxation of real estate investment trusts (“REITs”); and limitat ions imposed on our
business and our ability to satisfy complex rules in order for us to qualify as a REIT for U.S. federal income tax purposes. These and other risk
factors are more fully discussed in the section entitled “Risk Factors” in our Annual Report on Form 10-K, and from time to time, in our other filings
with the Securities and Exchange Commission (“SEC”).
The forward-looking statements included in this presentation are only made as of the date of this presentation. Investors should not place
undue reliance on these forward-looking statements. We are not obligated to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or circumstances, changes in expectations or otherwise.
EBITDA is defined as net income before interest, taxes, depreciation and amortization. EBITDA yield is defined as trailing twelve month EBITDA
divided by the purchase price. A capitalization rate is determined by dividing the property's net operating income by the purchase price. Net
operating income is the property's funds from operations minus a capital expense reserve of either 4% or 5% of gross revenues. Hotel EBITDA
flow-through is the change in Hotel EBITDA divided by the change in total revenues. EBITDA, FFO, AFFO, CAD and other terms are non-GAAP
measures, reconciliations of which have been provided in prior earnings releases and filings with the SEC.
This overview is for informational purposes only and is not an offer to sell, or a solicitation of an offer to buy or sell, any securities of Ashford Prime
or any of its respective affiliates, and may not be relied upon in connection with the purchase or sale of any such security.
2
Certain Disclosures
Strategic Overview
3
Bardessono Hotel & Spa
Yountville, CA
Pier House Resort
Key West, FL
The Ritz-Carlton St. Thomas
St. Thomas, USVI
Focused strategy of investing in luxury hotels and
resorts
Targets conservative leverage of Net Debt / Gross
Assets of 45% with non-recourse property debt
Grow organically through strong revenue and
cost control initiatives
Grow externally through accretive acquisitions of
high quality assets
Highly-aligned management team and advisory
structure
Recent Developments
4
Q1 2017 Earnings Release:
• RevPAR growth for all hotels of 2.5%
• RevPAR growth for all hotels not under renovation of 5.8%
• AFFO per share growth of 18%
• Hotel EBITDA margin for all hotels not under renovation
increased 50 bps
In March 2017, completed common equity and convertible
preferred equity raise for approximately $105 million in net proceeds
In March 2017, announced the planned acquisition of the 80-room
Hotel Yountville for $96.5 million ($1,200,000 per key)
In March 2017, completed the acquisition of the 190-room Park
Hyatt Beaver Creek for $145.5 million ($766,000 per key)
Focus on Luxury
5
The luxury hotel segment exhibits greater long term RevPAR growth trend than the
other chain scale segments
The Upper Upscale segment represents the second greatest long term RevPAR growth
trend
Source: STR
$140.20
$148.64
$171.35
$186.76
$207.30 $211.67
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
2012 2013 2014 2015 2016 TTM
6
Successfully Increasing Portfolio RevPAR...
ACCRETIVE
GROWTH OF
HOTEL
PORTFOLIO
The luxury hotel segment exhibits greater long term RevPAR growth
rates than the other chain scale segments
Acquired the Ritz-Carlton St. Thomas, Bardessono Hotel & Spa,
Sofitel Chicago Magnificent Mile, Pier House Resort, & Park Hyatt
Beaver Creek since spin-off
Increased portfolio RevPAR since spin-off by 51% to $212 as of TTM
March 2017
5.3%
5.0%
4.7% 4.8%
3.9%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
2013 2014 2015 2016 2017
7
Increased quarterly common dividend per
share by 220% since spin-off
Disciplined Capital Strategies
Weighted Average Interest Rate
Jun 2015: Raised $72mm in convertible preferred
offering at $18.90 conversion price
Jan 2017: Refinanced $365mm of debt extending debt
maturity and lowering interest cost
Mar 2017: Raised $105mm of common and convertible
preferred equity to finance $250mm of accretive
acquisitions
...While Delivering Strong Financial Results
$0.05
$0.10
$0.12
$0.16
$0.00
$0.05
$0.10
$0.15
$0.20
2013 Q2 15 2016 2017
Attractive AFFO Growth
15%
70%
18%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
FY2016 Q4 16 Q1 17
15.9%
7.6%
6.1%
3.6%
2.8% 2.5% 2.5% 2.3% 2.0% 1.7% 1.6%
1.1% 0.8% 0.5% 0.4%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
AHP HT APLE CLDT FCH REIT Avg CHSP RLJ PEB INN HST DRH SHO XHR LHO
8
HIGHLY
ALIGNED
MANAGEMENT
TEAM
Insider ownership of 15.9%, 6.3x higher than hotel REIT industry average
Management has significant personal wealth invested in the Company
Incentive fee based on AHP total return outperformance vs. its peers
Insider Equity Ownership
Highly-aligned management team with
among highest insider equity ownership
of publicly-traded Hotel REITs
Public Lodging REITs include: APLE, HT, RLJ, CLDT, FCH, CHSP, INN, HST, PEB, DRH, SHO, LHO, XHR
Source: Company filings
* Insider equity ownership for Ashford Prime includes direct & indirect interests and interests of related parties
AHP’s Management Team Is Highly Aligned
Benefits of the Ashford Structure
9
Components
• Highly transparent advisory agreement
• Base Fee based on enterprise value
(tied to share performance) rather than
book value with Incentive Fee based
on total shareholder returns
• AHP shareholders participate in upside
of manager through 9.7% direct
ownership of AINC
• Majority independent board – 10-
member Board with 9 independent
directors
Benefits
• Increased scale through Ashford’s
broad platform of managed assets
Stronger hotel brand relationships
and greater negotiating power
Platforms provide capital markets
and asset transaction market
benefits
Ability to achieve cost synergies
through best-in-class asset
management as a result of
affiliation with larger platform
• Ability to leverage key money
investments through unique relationship
with Ashford Inc.
• Total G&A costs, inclusive of Advisory
Fees, are lower than our peers
High-Quality Hotels in Leading Urban & Resort Markets
10 Ashford Prime Hotels
Marriott Seattle
Seattle, WA
Hilton Torrey Pines
La Jolla, CA
Bardessono Hotel & Spa
Yountville, CA
Pier House Resort
Key West, FL
Renaissance Tampa
Tampa, FL
Sofitel Chicago Magnificent Mile
Chicago, IL
Capital Hilton
Washington D.C.
Courtyard San Francisco
San Francisco, CA
Renaissance Tampa
Tampa, FL
Courtyard Philadelphia
Philadelphia, PA
Capital Hilton
Washington D.C.
Marriott Plano Legacy
Plano, TX
The Ritz-Carlton St. Thomas
St. Thomas, USVI
Planned Acquisitions
Hotel Yountville
Yountville, CA
Park Hyatt Beaver Creek
Beaver Creek, CO
Portfolio Overview
11
Overall Portfolio TTM ADR and RevPAR of $258 and $212, respectively
Geographically diversified portfolio located in strong markets
Opportunistic pruning of non-core assets will further enhance portfolio positioning
Core Portfolio Quality Unparalleled in the Public Lodging REIT Sector
(1) As of March 31, 2017
Note: Hotel EBITDA in thousands
Number of TTM TTM TTM TTM Hotel % of
Core Location Rooms ADR
(1) OCC(1) RevPAR(1) EBITDA(1) Total
Bardessono Napa Valley, CA 62 $743 84% $628 $5,120 3.9%
Ritz-Carlton St. Thomas St. Thomas, USVI 180 $539 78% $422 $8,250 6.3%
Pier House Key West, FL 142 $412 87% $359 $10,223 7.8%
Park Hyatt Beaver Creek Beaver Creek, CO 190 $436 63% $273 $9,951 7.6%
Marriott Seattle Waterfront Seattle, WA 358 $263 85% $223 $15,511 11.8%
Capital Hilton Washington D.C. 550 $237 90% $213 $18,812 14.3%
Sofitel Chicago Magnificent Mile Chicago, IL 415 $214 83% $177 $7,947 6.0%
Hilton Torrey Pines La Jolla, CA 394 $197 84% $166 $13,384 10.2%
Total 2,291 $290 83% $242 $89,198 67.8%
Non-Core
C urtyard San Francisco Downtown San Francisco, CA 405 $272 87% $238 $12,500 9.5%
Renaissance Tampa Tampa, FL 293 $191 80% $154 $6,287 4.8%
Courtyard Philadelphia Downtown Philadelphia, PA 499 $183 82% $149 $12,441 9.5%
Marriott Plano Legacy Dallas, TX 404 $188 71% $134 $11,100 8.4%
Total 1,601 $210 80% $169 $42,329 32.2%
Total Portfolio 3,892 $258 82% $212 $131,527 100.0%
Capital Structure and Net Working Capital
Conservative leverage in line with platform strategy
Targeted Net Debt / Gross Assets of 45%
All debt is non-recourse, property level mortgage debt
Targeted excess cash balance of 10% to 15% of gross debt
Maintain excess cash balance for both opportunistic acquisitions and hedge
against economic uncertainty
12
(1) As of March 31, 2017
(2) At market value as of April 28, 2017
Total Enterprise Value(1) Net Working Capital(1)
Figures in millions except per share values
Stock Price (As of April 28, 2017) $10.59
Fully Diluted Shares Outstanding 36.7
Equity Value $388.7
Plus: Convertible Preferred Equity 121.6
Plus: Debt 808.6
Total Market Capitalization $1,318.9
Less: Net Working Capital (181.0)
Total Enterprise Value $1,138.0
Cash & Cash Equivalents $157.9
Restricted Cash 34.2
Accounts Receivable, net 23.1
Prepaid Expenses 6.1
Due from Affiliates, net (3.0)
Due from Third-Party Hotel Managers, net 9.2
Investment in Ashford Inc.(2) 10.6
Total Current Assets $238.1
Accounts Payable, net & Accrued Expenses $49.1
Dividends Payable 8.0
Total Current Liabilities $57.1
Net Working Capital $181.0
$8.1 $80.0
$152.0
$192.1
$432.5
$0.0
$50.0
$100.0
$150.0
$200.0
$250.0
$300.0
$350.0
$400.0
$450.0
$500.0
2017 2018 2019 2020 2021 Thereafter
Fixed-Rate Floating-Rate
Debt Maturities and Leverage
Next hard debt maturity in 2019
Laddered debt maturities
Exclusive use of property-level, non-recourse debt
Net Debt / Gross Assets of 41.8%(1)
FCCR of 1.90x(1)
13
(1) As of March 31, 2017
(2) Assumes extension options are exercised
(3) All floating-rate debt has imbedded interest rate caps
Debt Maturity Schedule (mm) (1) (2) (3)
Asset Management Expertise – Bardessono
14
Acquired in July 2015
62 keys, 1,350 sq. ft. of meeting space
Located in Yountville, CA the
“Culinary Capital of Napa Valley”
High barrier to entry market
TTM RevPAR of $628*
Hotel Overview
Received $2 million of Key Money from
Ashford Inc.
Adding 3 luxury villas to attract ultra-
luxury guests
Implemented Remington cost control
and revenue initiatives
For 2016 (1st full year of ownership):
RevPAR increased 9.7%, EBITDA
Margin increased 518 bps, & EBITDA
flow-through was 242%
Investment Highlights
Bardessono – Yountville, CA
Bardessono – Yountville, CA
*As of March 31, 2017
Asset Management Expertise – Ritz St. Thomas
15
The Ritz-Carlton St. Thomas
Acquired in December 2015
180 keys, 10,000 sq. ft. of meeting space
Acquisition completed at favorable
metrics of 7.2x TTM EBITDA and 10% TTM
NOI cap rate
Located in St. Thomas in the U.S. Virgin
Islands with high barriers to entry
30 oceanfront acres along Great Bay
Recognized in the 2015 U.S. News &
World Report's Best Hotel Rankings
Hotel Overview
Prior to acquisition, extensive $22 million
renovation of guest rooms and public
space was completed
Completed pool renovation
Extended Economic Development Council
tax benefits
Gained 450 bps in market share versus its
competitors and EBITDA flow-through was
83% for 2016 (1st full year of ownership) with
no change in property manager
Investment Highlights
Great Bay View
The Ritz-Carlton St. Thomas
Asset Management Expertise – Pier House
16
Asset management performance significantly
exceeded underwriting
Eliminated $1.5mm in expenses through cost
cutting initiatives:
Right-sized staffing level
Implemented improved housekeeping
practices
Identified additional F&B efficiencies
Realized synergies with other Remington-
managed Key West assets
Saved $385,000 in insurance expense by adding to
Ashford program
Realized approximately $350,000 in annualized
incremental parking revenue
Implemented Strategies
Pier House Resort – Key West, FL
Jun-May 2013
Pre-Takeover
Jun-May 2014
Post-Takeover
Increase
(%, BPs)
RevPAR $283.94 $323.66 14.0%
Total
Revenue*
$19,196 $21,284 10.9%
RPI 97.7% 101.7% 4.09%
EBITDA* $6,031 $8,312 37.8%
EBITDA Flow 109.2%
*$ in Thousands
(1) As of March 31, 2017
Original going-in cap rate of 6.2% in May 2013 and current cap rate of 10.3%(1)
Compelling Growth Opportunity – Park Hyatt Beaver Creek
17
Acquired for $145.5 million ($766,000 / key)
190 keys, 20,000 sq. ft. of meeting space
Purchase price represents a 6.4% Forward
12-month NOI cap rate; 14.0x Forward 12-
month Hotel EBITDA
Located in Beaver Creek, CO overlooking
Beaver Creek Mountain
Ski-in / ski-out access
AAA Four Diamond Resort
TTM RevPAR of $273*
Hotel Overview
18,000sf of retail lease space provides stable
income
Opportunity to improve flow-through with
Ashford asset management
Opportunity to improve operations during
shoulder seasons
Potential to improve luxury product offering
through renovation of public space and
guestroom bathrooms
Lower insurance costs
Opportunities
Park Hyatt Beaver Creek
Lobby
*As of March 31, 2017
Compelling Growth Opportunity – Hotel Yountville
18
Pending acquisition for $96.5 million ($1.2
mn / key)
80 keys, 4,392 sq. ft. of meeting space
Purchase price represents a 6.2% TTM
NOI cap rate; 14.6x TTM EBITDA*
Located in Yountville, CA in Napa Valley
Over 450 wineries nearby as well as
boutique shopping, golf courses, and
award winning restaurants
TTM RevPAR of $469*
Hotel Overview
Significant ADR upside relative to
competitors
Second highest RevPAR asset in Ashford
Prime portfolio
Implementation of Remington revenue
and cost savings initiatives
Significant synergies with Bardessono Hotel
& Spa including shared services for general
manager, front office manager, sales, HR,
etc.
Opportunities
Hotel Yountville
*As of December 31, 2016
Recent Corporate Governance Enhancements
19
Adoption of a majority voting standard for uncontested director
elections and a plurality voting standard in contested director
elections
Separate the roles of Chairman and CEO
Prohibit share recycling with respect to share forfeitures, stock
options and stock appreciation rights under the Company’s stock
plan by executives and directors
Implementation of a mandatory equity award retention period for
executives and directors
Adoption of a proxy access resolution which would enable a
shareholder, or a group of not more than 20 shareholders, who
have continuously owned 3% or more of the Company’s common
stock for a minimum of 3 years to include nominees in its proxy
materials for the greater of two or 20% of the Board
Addition of independent directors to the Board bringing the total
number of directors to ten and the total number of independent
directors to nine
Investor feedback shared with Board at quarterly board meetings
Enhancement Completed
Fourth Amendment to Advisory Agreement
20
Removal of the tax gross-up provision and the 1.1 times multiple from the calculation of the
termination fee
The revenues and allocated expenses of Ashford Inc. used to calculate the termination fee
will be publicly disclosed on a quarterly basis
The termination provisions of the advisory agreement have been amended and,
specifically, a change in a majority of the Company’s incumbent directors no longer triggers
a termination fee
The advisor's right under the existing advisory agreement to appoint a “Designated Chief
Executive Officer” has been eliminated. The role of the recently appointed CEO of Ashford
Prime, Richard Stockton, is not impacted by the removal of this provision, and he will
continue to serve as CEO in the same capacity as he has since his appointment on
November 14, 2016
In addition to the termination fee, a payment of $45 million would be owed to Ashford Inc. in
the event the amended agreement is terminated prior to any incremental growth in the
hotel portfolio. This amount will reduce ratably to zero over time based on incremental asset
growth
At the effective date of the amended agreement, the Company will pay Ashford Inc. $5.0
million in cash
Announced January 2017
SUBJECT TO SHAREHOLDER APPROVAL
Board of Directors Diversity Matrix
Professional Experience Geography Independence
Real Estate /
Hospitality
C-Suite
Executive
Entrepreneurship Legal Public Office Southwest
West
Coast
Northeast Southeast Independent
Monty J.
Bennett
Curtis B.
McWilliams
Sarah Z.
Darrouzet
Matthew D.
Rinaldi
Stefani D.
Carter
W. Michael
Murphy
Andrew L.
Strong
Kenneth H.
Fearn
Daniel B.
Silvers
Lawrence A.
Cunningham
21
Board of Directors Diversity Matrix (cont.)
Gender Age Ethnicity
Male Female 25-40 41-55 56-75
White /
Caucasian
African
American
Hispanic
Monty J.
Bennett
Curtis B.
McWilliams
Sarah Z.
Darrouzet
Matthew D.
Rinaldi
Stefani D.
Carter
W. Michael
Murphy
Andrew L.
Strong
Kenneth H.
Fearn
Daniel B.
Silvers
Lawrence A.
Cunningham
22
Key Takeaways
23
High quality portfolio with focused strategy of investing in luxury hotels
and resorts
Announced recent corporate governance enhancements, appointment
of new independent director, and appointment of new CEO
Q1 RevPAR growth for all hotels not under renovation of 5.8% & Q1 AFFO
per share growth of 18%
Highly aligned management team
Announced strategy refinements and amended advisory agreement with
Ashford Inc.
Completed acquisition of luxury resort Park Hyatt Beaver Creek &
announced acquisition of luxury resort Hotel Yountville
Company Presentation – May 2017