LuxUrban Hotels Inc · OTC:LUXPQ
LuxUrban Hotels — Investor Day (February 2024)
42 slides from LuxUrban Hotels's investor day presentation, Feb 6, 2024
Slide 1: LuxUrban Hotels 2024 Investor Day
1 Nasdaq: LUXH; LUXHP LuxUrban Hotels, Inc. ________________ 2024 Investor Day
Slide 2: Disclaimer: Forward Looking Statements
2 DISCLAIMER Forward Looking Statements This presentation contains certain “forward - looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (set forth in Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act
Slide 3: Welcome: LuxUrban Hotels 2024 Investor Day
3 Brian Ferdinand Chairman and Co - Chief Executive Officer Washington Hotel New York City WELCOME LuxUrban Hotels 2024 Investor Day Shanoop Kothari President, Co - Chief Executive Officer, and Chief Financial Officer
Slide 4: Overview
4 Washington Hotel New York City Lafayette Hotel New Orleans, LA OVERVIEW
Slide 5: Who We Are
5 WHO WE ARE • First - mover acquirer of long - term operating rights for hotels facing looming debt maturities in destination cities • Employing an asset light business model to secure long - term cash flows at properties carrying asset vales at generational lows • Manage the business as a portfoli
Slide 6: Snapshot
6 5 U.S. cities SNAPSHOT 18 Properties currently operating Hotel Impala Miami Beach, FL ~600 Employees Current Locations : New York City Miami Los Angeles New Orleans Washington, D.C. Targeting : Boston London, UK
Slide 7: Evolution of LuxUrban
7 EVOLUTION OF LUXURBAN 2021 x Adds first operating hotel 2022 x Completes Initial Public Offering x Changes name to LuxUrban Hotels x Exits legacy apartment rental business x 8 operating hotels, including first in NYC x 840 hotel rooms available for rent 2024 Goals: x Continue to expand hotel portf
Slide 8: Our Opportunity
8 Washington Hotel New York City Lafayette Hotel New Orleans, LA OUR OPPORTUNITY
Slide 9: LuxUrban Is Playing a Critical Role in the CRE Ecosystem
9 LUXURBAN IS PLAYING A CRITICAL ROLE IN THE CRE ECOSYSTEM • After 2+ years of extensions, ~$25 BN of hotel CMBS loans are coming due in 2024 * • Loans are coming due in an increasingly risk - averse environment created by Fed - driven higher borrowing costs and more stringent credit criteria • This
Slide 10: Asset Light Growth Strategy
10 SERVICE Streamline operations Lease hotel using refundable security deposit or L etter of Credit Maximize occupancy rates and increase cash flow • Identify low - cost, long - term (target 20 - 30+ years) Triple Net Lease opportunities • Focus on turnkey hotel properties that are dislocated in the
Slide 11: Property Acquisition Math
11 Avg. acquisition cost / unit $13,465 2023 9 Mos. TRevPar $274 YTD EBITDA Margin 24% Payback period 6 months PROPERTY ACQUISITION MATH Six - month payback period on acquisition capital deployed .
Slide 12: Ecosystem Overview
12 ECOSYSTEM OVERVIEW Before LUXH Post - LUXH Asset / Hotel Professional Management Company Owner Lender Fixed $ Variable $ Variable $ Fixed $ Fixed $ Variable $ What Brands Do Collects “Toll” Hotel Franchisor • Hotel owners’ variable cash flow is no longer financeable in today’s markets • LuxUrban’
Slide 13: What Brands Do
13 Provide branding expertise and support Manage Rewards Programs Direct booking (alternative to OTAs) Website / App / IT Property level software Manage revenue Interact with guests (check in, cleaning, check - out) Maintain property Get reviewed, post - stay What Brands typically do… …and what they
Slide 14: Wyndham Relationship
14 Washington Hotel New York City Lafayette Hotel New Orleans, LA WYNDHAM RELATIONSHIP
Slide 15: Support to Accelerate the Scaling of Our Business
15 SUPPORT TO ACCELERATE THE SCALING OF OUR BUSINESS 95+ Countries ~9,100 Hotels 24 Global Brands 852,000 Rooms x Growth capital x Branding, sales, distribution x Operations platform x Credit card processing x Deal sourcing • World’s largest hotel franchisor • Industry ’s #1 hotel loyalty program wi
Slide 16: Wyndham Collaboration Benefits
16 WYNDHAM COLLABORATION BENEFITS Margin Capitalize on Wyndham’s world class operating infrastructure to realize significant primary and secondary costs savings TRevPAR Wyndham brand power, sales / distribution platform, and customer reach expected to drive revenue at each acquired property Financin
Slide 17: Development Incentive Advances
17 DEVELOPMENT INCENTIVE ADVANCES O Hotel Los Angeles, CA • Wyndham provides capital for the placement of security deposits via “Development Incentive Advances” (DIA) • DIA can, in many cases, approximate the security deposit required to secure a new hotel property under MLA • Security deposits are
Slide 18: Why Partner with LuxUrban
18 WHY PARTNER WI TH LUXURBAN 1. They recognize the generational opportunity 2. Opportunity to capitalize on current and future cash flow generation capacity of the business 3. Opportunity to align with first mover partner to help execute rapid growth plans 4. Sizable potential future upside (optimi
Slide 19: Recent Developments
19 Washington Hotel New York City Lafayette Hotel New Orleans, LA RECENT DEVELOPMENTS
Slide 20: Maturing Business Model: Largest Property MLA to Date
20 MATURING BUSINESS MODEL: LARGEST PROPERTY MLA TO DATE • 353 - room, NYC Landmark Property • Operating rights acquired from GFI Hospitality, which has completed over $4 BN in property transactions • Onsite dining and bar (third - party operated) • Indicative of the size and quality of the hotels w
Slide 21: Future Partnership Opportunities
21 FUTURE PARTNERSHIP OPPORTUNITIES • We entered into a non - binding LOI with internationally recognized hotel operator across diverse markets and asset types (>80,000 units worldwide) • LOI currently contemplates: x Operator provides LUXH with access to pipeline opportunities, not naturally availa
Slide 22: Our Numbers
22 Washington Hotel New York City Lafayette Hotel New Orleans, LA OUR NUMBERS
Slide 23: At a Glance
23 AT A GLANCE Compared to December 31, 2022 $4.8 M + $3.7 M Cash & Cash Equivalents $0.4 M ($12.5) M Net Debt $21.5 M + $24.8 M Stockholders’ Equity September 30, 2023 Net Rental Revenue $115 - $122 $265 - $270 2023 (E) 2024 (E) $44 2022 EBITDA $25 - $30 $60 - $70 2023 (E) 2024 (E) $8 2022 Margin T
Slide 24: Property Overview
24 PROPERTY OVERVIEW ▪ MLAs come with multiple layers of approval ▪ Time to transition from MLA to possession varies ▪ A complex process with an elongated sales cycle in some cases ▪ Due to complexity of the process, moving to only announce upon possession / hosting Hotel 57 3 Weeks 123 Washington 6
Slide 25: Unit Economics: TRevPAR
25 UNIT ECONOMICS: TRevPAR We Bel ie ve We Have One of the L owest P er - Night Property Level B reakeven C osts in the Markets W e Serve 2019 2020 2021 2022 9 Mo. 2023 (E) 2023 2019 2020 2021 2022 9 Mo. 2023 TRevPAR ($) Occupancy (%) 84% 61% 72% 77% 81% $103 $157 $122 $247 $250 - $280 $150 - $170/n
Slide 26: Components of TRevPAR
26 • We calculate TRevPAR inclusive of all other revenues, as well as pass through charges for which we are responsible. • Other revenues are related to room rentals such as baggage fees, parking, valet, cancelations for non - refundable, etc. • ADR does not include pass through charges and other re
Slide 27: Driving TRevPAR Growth
27 DRIVING TRevPAR GROWTH 2022 $247 2023 (E) $250 - $280 Long - term TRevPAR Drivers Travel Recovery Provides Upside Potential • Overall occupancy • ADR • 2024 U.S. leisure travel expected to exceed 2019 and 2023 levels * • 2024 U.S. business travel is expected to grow from 2023 and reach 95% of 201
Slide 28: Balance Sheet Overview
28 BALANCE SHEET OVERVIEW • Amounts did not exist in prior years • Amounts due from OTAs are related to the diversification away from our largest OTA and the associated changes in payment terms o Change from Q2 2023 to Q3 2023 was $0.8 M • Receivables from landlords was due to a lease audit in which
Slide 29: Cash Flow Reconciliation to EBITDA
29 CASH FLOW RECONCILIATION TO EBITDA ($ in thousands; unaudited) x Net Rental Revenue x EBITDA x Operating units x TRevPAR Efficiently using cash position while driving long - term growth in: Potential Net Twelve - Month Growth Rate 2 - 3x Nine Months Ended September 30, 2023 Reconciliation of Cash
Slide 30: But the Model Is Evolving
30 BUT THE MODEL IS EVOLVING - 50 100 150 200 250 300 350 400 $(1,000) $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 Deal A Deal B Deal C Deal D Net Deposit Per Unit Units • Opportunities in the pipeline have lower net deposit amounts • Some opportunities have net cash due to Lux
Slide 31: TRevPAR Breakeven Examples
31 TRevPAR BREAKEVEN EXAMPLES Property B Property A ~110 ~200 Units: $176,817 $375,000 Rent/Month $17,947 $29,795 Insurance & WC -- -- Liability $68,563 $112,000 Property Taxes $35,000 $48,000 Utilities $125,000 $520,000 Payroll $15,000 $20,000 Maintenance & Repair $50,408 $127,051 Other Taxes, OTA,
Slide 32: What Can We Do Better?
32 Washington Hotel New York City Lafayette Hotel New Orleans, LA WHAT CAN WE DO BETTER?
Slide 33: Areas for Improvement
33 AREAS FOR IMPROVEMENT • Develop greater operating efficiencies, leveraging our scale • Maximize daily room rates, especially during tight booking windows • Provide more services / drive more revenues per room outside of initial “rental rate” • Better leverage landlord relationships; our landlords
Slide 34: Value Proposition and Areas of Focus
34 VALUE PROPOSITION AND AREAS OF FOCUS • Asset light business model capitalizing on historic disruption in hotel industry valuations • Growing portfolio of hotel properties and rooms available for rent • Data - driven operating approach designed to maximize property - level profitability as quickly
Slide 35: Financial Questions
35 Washington Hotel New York City FINANCIAL QUESTIONS FINANCIAL FAQs
Slide 36: Financial FAQs
36 QUESTIONS WHAT IS A TRIPLE NET LEASE? WHO IS YOUR COMPETITION? CAN YOU EXPLAIN THE USE OF LEASE ACCOUNTING? WHY WOULD YOU PASS ON AN MLA? The Herald New York City IS YOUR GUIDANCE CONSERVATIVE? ARE YOU CASH FLOW POSITIVE? WHAT IS THE LEVEL OF INDUSTRY EXPERIENCE THROUGHOUT THE COMPANY?
Slide 37: Audience Q&A
37 The Bogart Hotel Brooklyn, NY AUDIENCE Q&A OPEN THE FLOOR TO QUESTIONS
Slide 38: Appendix
38 Washington Hotel New York City APPENDIX
Slide 39: Financial Overview as of Q3 2023
39 FINANCIAL OVERVIEW ($ in MMs ) – as of Q3 2023 Record net rental revenue and EBITDA First ever quarterly GAAP net income 1,446 units available for rent Net Rental Revenue Cash and Cash Equivalents T otal Debt Shareholders’ (Loss) Equity Net (Loss) Income EBITDA $31.2 $11.6 $4.9 $ (3.2) $8.4 $2.4
Slide 40: Financial Results Overview
40 FINANCIAL RESULTS OVERVIEW ($ in 000s; unaudited) 9 Mo. 2022 9 Mo. 2023 Q3 2022 Q3 2023 Condensed Consolidated Statements of Operations $ 30,876 $ 85,884 $ 11,575 $ 31,208 Net Rental Revenue $ 10,259 $ 23,353 $ 4,889 $ 7,812 Gross Profit $ 6,818 $ 9,297 $ 4,953 $ 1,982 General and Administrative
Slide 41: Reconciliation Tables: Net Loss to EBITDA and Cash Net Income
41 RECONCILIATION TABLES Net Loss to EBITDA and Cash Net Income
Slide 42: Reconciliation Tables: Net Loss to EBITDA and Cash Net Income
42 RECONCILIATION TABLES Net Loss to EBITDA and Cash Net Income