Having followed Ashford Hospitality Trust (NYSE:AHT) since its 2003 IPO, and its subsequent spin-offs of Ashford Hospitality Prime (NYSE:AHP) and Ashford Inc.(NYSE:AINC), we can make some substantive observations.
First, AHT has delivered total returns of about 125% since its IPO, and that’s far ahead of its peer average total return of about 90%.
Well before AHT or AHP stock even went public, CEO Monty Bennett and his father were running Remington Hotel Corporation. Not only did they have years of management experience at Remington, but Remington bought up a bunch of hotel loans that had gone bad in the S and L crisis. Funny, isn’t it, how the Bennett family found opportunity in the S and L crisis, survived the 9/11 travel downturn, and outperformed the entire hotel industry during and after the financial crisis?
What were Sessa Capital’s principals up to during those times? Do you think they could have steered a ship this successfully?
This is a key point about AHP stock management that Sessa Capital is flat-out misrepresenting. Sessa Capital claimed that day-to-day management at the property level would not change if it took over the Board and appointed new management at the REIT level. That’s not entirely true.
It isn’t as if REIT-level management just sits in their offices all day and never communicates with property managers. Just the opposite. REIT management is constantly communicating with the properties and visiting the properties. It is critical that REIT management actually know what the heck is going on at the property level so it can advise and report back. That requires trust. That requires first-hand knowledge of who the people are at the property level. If cuts need to be made, for example, REIT management has to dictate how those cuts will be made.
If, as happened during the financial crisis, capex must be curtailed, REIT management must be able to visit properties and ascertain what capex is truly needed.
Sessa Capital has ZERO experience in hospitality. Would you trust them to manage the AHP stock properties correctly?