Ashford Hospitality Trust Stock: Buy, Sell, or Hold in 2025?

Navigating the Hospitality Industry’s Post-Pandemic Landscape

Introduction

Ashford Hospitality Trust (NYSE: AHT) is a leading hotel and resort owner and operator with a global portfolio of properties. Headquartered in Dallas, Texas, the company has a presence in over 100 cities across the United States, Europe, and the Caribbean. As the hospitality industry emerges from the challenges of the COVID-19 pandemic, investors are eager to understand the trajectory of Ashford Hospitality Trust stock in the coming years.

Industry Overview

The hospitality industry has been severely impacted by the pandemic, with travel restrictions and social distancing measures leading to a sharp decline in occupancy rates and revenue. However, as economies reopen and travel resumes, the industry is showing signs of recovery. According to the American Hotel & Lodging Association (AHLA), hotel occupancy in the United States is expected to reach 66% in 2023, up from 44% in 2022. This recovery is driven by pent-up demand for travel and the gradual return of business and leisure travelers.

Ashford Hospitality Trust’s Performance

Ashford Hospitality Trust has been actively managing its portfolio during the pandemic. The company has sold non-core assets, raised capital through debt and equity offerings, and implemented cost-cutting measures. As a result, the company’s financial position has stabilized, and it has been able to maintain its dividend.

Financial Performance

In 2022, Ashford Hospitality Trust reported revenue of $543.5 million, down 12.5% from 2021. However, the company’s net income increased by 126.8% to $153.6 million. This improvement was driven by cost-cutting measures and the sale of non-core assets.

Dividend

Ashford Hospitality Trust has a long history of paying dividends to its shareholders. In 2022, the company declared a quarterly dividend of $0.12 per share, resulting in an annual dividend yield of 6.7%.

Investment Thesis

The investment thesis for Ashford Hospitality Trust is based on the following factors:

• Recovery of the hospitality industry
• Strong brand portfolio
• Experienced management team
• Value-creating acquisitions and development projects
• Attractive dividend yield

Risks

Economic Downturn: A recession or economic slowdown could lead to a decline in travel and hotel demand, negatively impacting Ashford Hospitality Trust’s financial performance.

Competition: The hospitality industry is highly competitive, with new entrants and alternative accommodations emerging. Ashford Hospitality Trust faces competition from both traditional hotels and non-traditional players such as Airbnb.

Financial Risk: The company has a high level of debt, which could increase its financial risks if interest rates rise or revenue declines.

Valuation

Ashford Hospitality Trust stock is currently trading at a discount to its historical valuation. The company’s price-to-earnings (P/E) ratio is 5.7x, compared to an industry average of 10.5x. This discount could present an attractive entry point for investors.

Recommendation

Based on the analysis above, we believe that Ashford Hospitality Trust stock is a Buy. The company is well-positioned to benefit from the recovery of the hospitality industry, has a strong brand portfolio, and a value-creating development pipeline. The stock’s current discount to its historical valuation also presents an attractive entry point for investors.

Table 1: Key Financial Metrics

Table 2: Portfolio Overview

Table 3: Development Pipeline

Table 4: Historical Stock Performance