10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

    For the quarterly period ended March 31, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

    For the transition period from ________________ to ________________

Commission file number: 001-35972

BRAEMAR HOTELS & RESORTS INC.

(Exact name of registrant as specified in its charter)

Maryland	46-2488594
(State or other jurisdiction of incorporation or organization)	(IRS employer identification number)
14185 Dallas Parkway
Suite 1200
Dallas
Texas	75254
(Address of principal executive offices)	(Zip code)

(972) 490-9600

(Registrant’s telephone number, including area code)

    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☑ Yes ☐ No

    Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☑ Yes ☐ No

    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “small reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☑
Non-accelerated filer	☐	Smaller reporting company	☑
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☑ No

    Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	BHR	New York Stock Exchange
Preferred Stock, Series B	BHR-PB	New York Stock Exchange
Preferred Stock, Series D	BHR-PD	New York Stock Exchange

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, $0.01 par value per share	47,891,046
(Class)	Outstanding at May 5, 2021

BRAEMAR HOTELS & RESORTS INC.

FORM 10-Q

FOR THE QUARTER ENDED March 31, 2021

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (unaudited)
Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020	2
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2021 and 2020	3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2021 and 2020	4
Condensed Consolidated Statements of Equity for the Three Months Ended March 31, 2021 and 2020	5
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2021 and 2020	6
Notes to Condensed Consolidated Financial Statements	8
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	27
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	46
ITEM 4. CONTROLS AND PROCEDURES	46
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS	47
ITEM 1A. RISK FACTORS	48
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	48
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	48
ITEM 4. MINE SAFETY DISCLOSURES	48
ITEM 5. OTHER INFORMATION	48
ITEM 6. EXHIBITS	49
SIGNATURES	51

PART I. FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS (unaudited)

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited, in thousands, except share and per share amounts)

	March 31, 2021		December 31, 2020
ASSETS
Investments in hotel properties, gross	$	1,782,753	$	1,784,849
Accumulated depreciation	(376,243)		(360,259)
Investments in hotel properties, net	1,406,510		1,424,590
Cash and cash equivalents	85,684		78,606
Restricted cash	39,322		34,544
Accounts receivable, net of allowance of $275 and $227, respectively	17,583		13,557
Inventories	2,383		2,551
Prepaid expenses	6,830		4,405
Investment in unconsolidated entity	1,644		1,708
Operating lease right-of-use assets	80,985		81,260
Other assets	15,646		14,898
Intangible assets, net	4,546		4,640
Due from related parties, net	1,052		991
Due from third-party hotel managers	18,565		12,271
Total assets	$	1,680,750	$	1,674,021
LIABILITIES AND EQUITY
Liabilities:
Indebtedness, net	$	1,118,824	$	1,130,594
Accounts payable and accrued expenses	74,098		61,758
Dividends and distributions payable	2,569		2,736
Due to Ashford Inc.	2,115		2,772
Due to third-party hotel managers	1,725		1,393
Operating lease liabilities	60,857		60,917
Other liabilities	18,833		18,077
Total liabilities	1,279,021		1,278,247
Commitments and contingencies (note 15)
5.50% Series B cumulative convertible preferred stock, $0.01 par value, 4,545,016 and 5,031,473 shares issued and outstanding at March 31, 2021 and December 31, 2020	96,609		106,949
Redeemable noncontrolling interests in operating partnership	28,162		27,655
Equity:
Preferred stock, $0.01 value, 80,000,000 shares authorized:
8.25% Series D cumulative preferred stock, 1,600,000 shares issued and outstanding at March 31, 2021 and December 31, 2020	16		16
Common stock, $0.01 par value, 250,000,000 shares authorized, 43,465,880 and 38,274,770 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	434		382
Additional paid-in capital	571,288		541,870
Accumulated deficit	(278,445)		(266,010)
Total stockholders’ equity of the Company	293,293		276,258
Noncontrolling interest in consolidated entities	(16,335)		(15,088)
Total equity	276,958		261,170
Total liabilities and equity	$	1,680,750	$	1,674,021

See Notes to Condensed Consolidated Financial Statements.

2

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share amounts)

	Three Months Ended March 31,
	2021		2020
REVENUE
Rooms	$	54,323	$	70,468
Food and beverage	16,629		28,803
Other	12,896		18,249
Total hotel revenue	83,848		117,520
EXPENSES
Hotel operating expenses:
Rooms	11,015		17,880
Food and beverage	13,952		23,901
Other expenses	28,543		42,090
Management fees	2,532		3,877
Total hotel operating expenses	56,042		87,748
Property taxes, insurance and other	7,264		7,660
Depreciation and amortization	18,353		18,338
Advisory services fee	4,795		5,069
Corporate general and administrative	1,600		1,932
Total expenses	88,054		120,747
Gain (loss) on insurance settlement and disposition of assets	499		—
OPERATING INCOME (LOSS)	(3,707)		(3,227)
Equity in earnings (loss) of unconsolidated entity	(64)		(40)
Interest income	9		129
Other income (expense)	—		(138)
Interest expense and amortization of loan costs	(6,756)		(11,897)
Write-off of loan costs and exit fees	(351)		—
Unrealized gain (loss) on derivatives	(20)		1,156
INCOME (LOSS) BEFORE INCOME TAXES	(10,889)		(14,017)
Income tax (expense) benefit	(145)		(1,370)
NET INCOME (LOSS)	(11,034)		(15,387)
(Income) loss attributable to noncontrolling interest in consolidated entities	1,247		572
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	1,079		1,885
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	(8,708)		(12,930)
Preferred dividends	(2,388)		(2,555)
Gain (loss) on extinguishment of preferred stock	(73)		—
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(11,169)	$	(15,485)
INCOME (LOSS) PER SHARE - BASIC:
Net income (loss) attributable to common stockholders	$	(0.28)	$	(0.48)
Weighted average common shares outstanding – basic	39,605		32,474
INCOME (LOSS) PER SHARE - DILUTED:
Net income (loss) attributable to common stockholders	$	(0.28)	$	(0.48)
Weighted average common shares outstanding – diluted	39,605		32,474

See Notes to Condensed Consolidated Financial Statements.

3

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited, in thousands)

	Three Months Ended March 31,
	2021		2020
NET INCOME (LOSS)	$	(11,034)	$	(15,387)
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Total other comprehensive income (loss)	—		—
TOTAL COMPREHENSIVE INCOME (LOSS)	(11,034)		(15,387)
Comprehensive (income) loss attributable to noncontrolling interest in consolidated entities	1,247		572
Comprehensive (income) loss attributable to redeemable noncontrolling interests in operating partnership	1,079		1,885
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	$	(8,708)	$	(12,930)

See Notes to Condensed Consolidated Financial Statements.

4

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(unaudited, in thousands except per share amounts)

	8.25% Series D Cumulative Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Noncontrolling Interest in Consolidated Entities		Total		5.50% Series B Cumulative Convertible Preferred Stock			Redeemable Noncontrolling Interests in Operating Partnership
	Shares	Amount		Shares	Amount										Shares	Amount
Balance at December 31, 2020	1,600	$	16	38,275	$	382	$	541,870	$	(266,010)	$	(15,088)	$	261,170	5,031	$	106,949	$	27,655
Purchase of common stock	—	—		(50)	—		(348)		—		—		(348)		—	—		—
Equity-based compensation	—	—		—	—		1,096		—		—		1,096		—	—		320
Issuance of common stock	—	—		3,205	32		18,277		—				18,309		—	—		—
Issuance of restricted shares/units	—	—		504	5		(5)		—		—		—		—	—		—
Forfeiture of restricted common shares	—	—		(3)	—		—		—		—		—		—	—		—
Dividends declared – preferred stock - Series B ($0.34/share)	—	—		—	—		—		(1,563)		—		(1,563)		—	—		—
Dividends declared – preferred stock - Series D ($0.52/share)	—	—		—	—		—		(825)		—		(825)		—	—		—
Net income (loss)	—	—		—	—		—		(8,708)		(1,247)		(9,955)		—	—		(1,079)
Extinguishment of preferred stock	—	—		1,535	15		10,398		(73)		—		10,340		(486)	(10,340)		—
Redemption value adjustment	—	—		—	—		—		(1,266)		—		(1,266)		—	—		1,266
Balance at March 31, 2021	1,600	$	16	43,466	$	434	$	571,288	$	(278,445)	$	(16,335)	$	276,958	4,545	$	96,609	$	28,162

	8.25% Series D Cumulative Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Noncontrolling Interest in Consolidated Entities		Total		5.50% Series B Cumulative Convertible Preferred Stock			Redeemable Noncontrolling Interests in Operating Partnership
	Shares	Amount		Shares	Amount										Shares	Amount
Balance at December 31, 2019	1,600	$	16	32,885	$	329	$	519,551	$	(150,629)	$	(6,013)	$	363,254	5,008	$	106,920	$	41,570
Purchase of common stock	—	—		(20)	—		(82)		—		—		(82)		—	—		—
Equity-based compensation	—	—		—	—		1,424		—		—		1,424		—	—		561
Issuance of restricted shares/units	—	—		311	3		(3)		—		—		—		—	—		—
Forfeiture of restricted common shares	—	—		(4)	—		—		—		—		—		—	—		—
Issuance of preferred stock	—	—		—	—		—		—		—		—		23	432		—
Dividends declared – preferred stock - Series B ($0.34/share)	—	—		—	—		—		(1,730)		—		(1,730)		—	—		—
Dividends declared – preferred stock-Series D ($0.52/share)	—	—		—	—		—		(825)		—		(825)		—	—		—
Distributions to noncontrolling interests	—	—		—	—		—		—		(2,639)		(2,639)		—	—		—
Redemption/conversion of operating partnership units	—	—		339	3		3,451		—		—		3,454		—	—		(3,454)
Net income (loss)	—	—		—	—		—		(12,930)		(572)		(13,502)		—	—		(1,885)
Redemption value adjustment	—	—		—	—		—		6		—		6		—	—		(6)
Balance at March 31, 2020	1,600	$	16	33,511	$	335	$	524,341	$	(166,108)	$	(9,224)	$	349,360	5,031	$	107,352	$	36,786

See Notes to Condensed Consolidated Financial Statements.

5

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

	Three Months Ended March 31,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(11,034)	$	(15,387)
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities:
Depreciation and amortization	18,353		18,338
Equity-based compensation	1,416		1,985
Bad debt expense	70		269
Amortization of loan costs and capitalized default interest	(583)		1,071
Write-off of loan costs and exit fees	351		—
Amortization of intangibles	138		207
Amortization of non-refundable membership initiation fees	(194)		(82)
Interest expense accretion on refundable membership club deposits	202		213
(Gain) loss on insurance settlement and disposition of assets	(499)		—
Realized and unrealized (gain) loss on derivatives	20		(1,081)
Net settlement of trading derivatives	—		1,330
Equity in (earnings) loss of unconsolidated entity	64		40
Deferred income tax expense (benefit)	(174)		(5)
Changes in operating assets and liabilities:
Accounts receivable and inventories	(3,699)		4,003
Prepaid expenses and other assets	(3,514)		(2,719)
Accounts payable and accrued expenses	16,129		(8,315)
Operating lease right-of-use assets	137		134
Due to/from related parties, net	(61)		(303)
Due to/from third-party hotel managers	(5,480)		(337)
Due to/from Ashford Inc.	(363)		(439)
Operating lease liabilities	(60)		(54)
Other liabilities	748		267
Net cash provided by (used in) operating activities	11,967		(865)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from property insurance	—		948
Net proceeds from disposition of assets	200		—
Investment in unconsolidated entity	—		(26)
Improvements and additions to hotel properties	(4,692)		(7,509)
Net cash provided by (used in) investing activities	(4,492)		(6,587)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on indebtedness	—		75,000
Repayments of indebtedness	(10,832)		—
Payments of loan costs and exit fees	(365)		—
Payments for derivatives	(20)		(37)
Purchase of common stock	(28)		(28)
Payments for dividends and distributions	(2,555)		(8,490)
Proceeds from issuance of preferred stock	—		474
Proceeds from issuance of common stock	18,181		—
Distributions to noncontrolling interest in consolidated entities	—		(2,639)
Net cash provided by (used in) financing activities	4,381		64,280
Net change in cash, cash equivalents and restricted cash	11,856		56,828
Cash, cash equivalents and restricted cash at beginning of period	113,150		130,383
Cash, cash equivalents and restricted cash at end of period	$	125,006	$	187,211
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid	$	6,892	$	10,601
Income taxes paid (refunded)	(41)		690

6

	Three Months Ended March 31,
	2021		2020
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Dividends and distributions declared but not paid	$	2,569	$	3,208
Common stock purchases accrued but not paid	348		82
Capital expenditures accrued but not paid	4,628		17,040
Accrued but unpaid financing costs	—		1,364
Accrued common stock offering expense	101		—
Unsettled common stock offering proceeds	297		—
Accrued preferred stock offering expenses	—		25
SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents at beginning of period	$	78,606	$	71,995
Restricted cash at beginning of period	34,544		58,388
Cash, cash equivalents and restricted cash at beginning of period	$	113,150	$	130,383
Cash and cash equivalents at end of period	$	85,684	$	141,793
Restricted cash at end of period	39,322		45,418
Cash, cash equivalents and restricted cash at end of period	$	125,006	$	187,211

See Notes to Condensed Consolidated Financial Statements.

7

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Organization and Description of Business

Braemar Hotels & Resorts Inc., together with its subsidiaries (“Braemar”), is a Maryland corporation that invests primarily in high revenue per available room (“RevPAR”) luxury hotels and resorts. High RevPAR, for purposes of our investment strategy, means RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined by Smith Travel Research. Braemar has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). Braemar conducts its business and owns substantially all of its assets through its operating partnership, Braemar Hospitality Limited Partnership (“Braemar OP”). In this report, the terms the “Company,” “we,” “us” or “our” refers to Braemar Hotels & Resorts Inc. and, as the context may require, all entities included in its condensed consolidated financial statements.

We are advised by Ashford Hospitality Advisors LLC (“Ashford LLC” or the “Advisor”) through an advisory agreement. Ashford LLC is a subsidiary of Ashford Inc. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC.

We do not operate any of our hotel properties directly; instead we employ hotel management companies to operate them for us under management contracts. Remington Hotels, a subsidiary of Ashford Inc., manages three of our thirteen hotel properties. Third-party management companies manage the remaining hotel properties.

Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest. These products and services include, but are not limited to project management services, debt placement and related services, broker-dealer and distribution services, audio visual services, real estate advisory services, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and mobile key technology.

The accompanying condensed consolidated financial statements include the accounts of wholly-owned and majority-owned subsidiaries of Braemar OP that as of March 31, 2021, own thirteen hotel properties in six states, the District of Columbia and the U.S. Virgin Islands (“USVI”). The portfolio includes eleven wholly-owned hotel properties and two hotel properties that are owned through a partnership in which Braemar OP has a controlling interest. These hotel properties represent 3,722 total rooms, or 3,487 net rooms, excluding those attributable to our partner. As a REIT, Braemar is required to comply with limitations imposed by the Internal Revenue Code related to operating hotels. As of March 31, 2021, twelve of our thirteen hotel properties were leased by wholly-owned or majority-owned subsidiaries that are treated as taxable REIT subsidiaries (“TRS”) for federal income tax purposes (collectively the TRS entities are referred to as “Braemar TRS”). One hotel property, located in the USVI, is owned by our USVI TRS. Braemar TRS then engages third-party or affiliated hotel management companies to operate the hotel properties under management contracts. Hotel operating results related to the hotel properties are included in the condensed consolidated statements of operations.

As of March 31, 2021, ten of the thirteen hotel properties were leased by Braemar’s wholly-owned TRS and the two hotel properties majority-owned through a consolidated partnership were leased to a TRS wholly-owned by such consolidated partnership. Each leased hotel is leased under a percentage lease that provides for each lessee to pay in each calendar month the base rent plus, in each calendar quarter, percentage rent, if any, based on hotel revenues. Lease revenue from Braemar TRS is eliminated in consolidation. The hotel properties are operated under management contracts with Marriott Hotel Services, Inc. (“Marriott”), Hilton Management LLC (“Hilton”), Accor Management US Inc. (“Accor”), Hyatt Corporation (“Hyatt”), Ritz-Carlton (Virgin Islands), Inc. and The Ritz-Carlton Hotel Company, L.L.C., each of which are affiliates of Marriott (“Ritz-Carlton”) and Remington Hotels, which are eligible independent contractors under the Internal Revenue Code.

COVID-19, Management’s Plans and Liquidity

In December 2019, COVID-19 was identified in Wuhan, China, subsequently spread to other regions of the world, and has resulted in significant travel restrictions and extended shutdown of numerous businesses in every state in the United States. In March 2020, the World Health Organization declared COVID-19 to be a global pandemic. Beginning in late February 2020, we experienced a significant decline in occupancy and RevPAR associated with COVID-19 as we experienced significant reservation cancellations as well as a significant reduction in new reservations. The prolonged presence of the virus has resulted in health and other government authorities imposing widespread restrictions on travel and other businesses. The hotel industry and our portfolio have experienced the postponement or cancellation of a significant number of business conferences and similar events. Following the government mandates and health official orders in March 2020, the Company temporarily

8

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

suspended operations at 11 of its 13 hotels and dramatically reduced staffing and expenses at its hotels that remained operational. COVID-19 has had a significant negative impact on the Company’s operations and financial results to date. The full financial impact of the reduction in hotel demand caused by the pandemic and suspension of operations at the Company’s hotels cannot be reasonably estimated at this time due to uncertainty as to its severity and duration. In addition, one or more possible recurrences of COVID-19 cases could result in further reductions in business and personal travel and could cause state and local governments to reinstate travel restrictions. The Company expects that the COVID-19 pandemic will continue to have a negative impact on the Company’s results of operations, financial position and cash flow in 2021 and potentially much longer. As a result, in March 2020, the Company fully drew down its $75 million secured revolving credit facility, which was later converted into a term loan, suspended the quarterly cash dividend on its common stock, reduced planned capital expenditures, and, working closely with its hotel managers, significantly reduced its hotels’ operating expenses. See note 6 for term loan details.

All of the Company’s property-level debt is non-recourse. Beginning on April 1, 2020, we did not make at least one interest payment under nearly all of our loan agreements, which constituted an “Event of Default” as such term is defined under the applicable loan documents. Further, the Company triggered an “Event of Default,” as defined under the secured revolving credit facility agreement as a result of the Company being in default on mortgage and mezzanine loans with an aggregate principal amount in excess of $200 million. Pursuant to the terms of the applicable loan documents, such an Event of Default caused an automatic increase in the interest rate on our outstanding loan balance for the period such Event of Default remains outstanding. Following an Event of Default, our lenders can generally elect to accelerate all principal and accrued interest payments that remain outstanding under the applicable loan agreement and foreclose on the applicable hotel properties that are security for such loans. Such Event of Default under the secured revolving credit facility agreement was eliminated by the First Amendment to the Second Amended and Restated Credit Agreement, dated June 8, 2020, which provides that defaults under mortgage and mezzanine loans with an aggregate principal amount in excess of $200 million do not trigger a default under the secured revolving credit agreement unless such mortgage or mezzanine loans are also accelerated, and excluding from the $200 million threshold, any default and acceleration under those certain mortgage and mezzanine loans having an aggregate principal amount of $435 million and secured by the Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, The Notary Hotel and The Clancy. During the second and third quarters of 2020, we reached forbearance and other agreements with our lenders relating to loans secured by the Pier House Resort & Spa, The Ritz-Carlton Sarasota, The Ritz-Carlton Lake Tahoe, Hotel Yountville, Bardessono Hotel and Spa, Sofitel Chicago Magnificent Mile, The Notary Hotel, The Clancy, Marriott Seattle Waterfront, Capital Hilton and Hilton La Jolla Torrey Pines. The Company also amended its secured revolving credit facility converting it into a $65 million secured term loan and changed the terms of certain financial covenants, including a waiver of the Consolidated Fixed Charge Coverage Ratio (as defined in the Amendment) through March 31, 2021, that the Company was subject to under the secured revolving credit facility. On February 22, 2021, the Company entered into the Second Amendment to Second Amended and Restated Credit Agreement. The amendment provides an extension of the waiver on the majority of the covenants through the fourth quarter of 2021 and a reduced fixed charge coverage ratio covenant through the end of 2022. The first period in which covenants will be tested is for the fiscal quarter ending March 31, 2022. The amendment also allows the Company to utilize approximately $9.3 million of cash held in FF&E reserve accounts at certain properties for discretionary capital expenditures. As of March 31, 2021, no loans are in default.

Additionally, the Company did not make rental payments under two ground leases that are paid monthly; however, the Company executed a forbearance agreement with the landlord of the Bardessono Hotel and Spa and executed a rent deferral letter with the landlord of the Hilton La Jolla Torrey Pines, each of which temporarily resolved any potential events of default arising out of such non-payments. As of March 31, 2021, the Company is current on its rental payments.

When preparing financial statements for each annual and interim reporting period management has the responsibility to evaluate whether there are conditions or events, considered in the aggregate, that create substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In applying the accounting guidance, the Company considers its current financial condition and liquidity sources, including current funds available, forecasted future cash flows and its unconditional obligations due over the next 12 months.

As of March 31, 2021, the Company maintained unrestricted cash of $85.7 million and restricted cash of $39.3 million. The vast majority of the restricted cash is comprised of lender and manager held reserves. For the three months ended March 31, 2021, cash flows provided by operating activities was approximately $12.0 million. The Company worked with its property managers and lenders in order to utilize lender and manager held reserves to fund operating shortfalls. As of March 31, 2021, there was also $18.6 million due to the Company from third-party hotel managers, which is primarily the Company’s cash held by one of its property managers which is also available to fund hotel operating costs.

9

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

We cannot predict when hotel operating levels will return to normalized levels after the effects of the pandemic fully subside, whether our hotels will be forced to shut down operations or whether one or more governmental entities may impose additional travel restrictions due to a resurgence of COVID-19 cases in the future. As a result of these factors resulting from the impact of the pandemic, we are unable to estimate future financial performance with certainty. However, based on our completed term loan amendment and forbearance and other agreements, our current unrestricted and restricted cash on hand, our current cash utilization and forecast of future operating results for the next 12 months from the date of this report, and the actions we have taken to improve our liquidity, the Company has concluded that management’s current plan alleviates the substantial doubt about its ability to continue as a going concern. Facts and circumstances could change in the future that are outside of management’s control, such as additional government mandates, health official orders, travel restrictions and extended business shutdowns due to COVID-19.

2. Significant Accounting Policies

Basis of Presentation and Principles of Consolidation—The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These condensed consolidated financial statements include the accounts of Braemar Hotels & Resorts Inc., its majority-owned subsidiaries, and its majority-owned entities in which it has a controlling interest. All significant intercompany accounts and transactions between consolidated entities have been eliminated in these condensed consolidated financial statements. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP in the accompanying unaudited condensed consolidated financial statements. We believe the disclosures made herein are adequate to prevent the information presented from being misleading. However, the financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2020 Annual Report on Form 10-K, as originally filed with the Securities and Exchange Commission (“SEC”) on March 5, 2021.

Braemar OP is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance. A VIE must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. All major decisions related to Braemar OP that most significantly impact its economic performance, including but not limited to operating procedures with respect to business affairs and any acquisitions, dispositions, financings, restructurings or other transactions with sellers, purchasers, lenders, brokers, agents and other applicable representatives, are subject to the approval of our wholly-owned subsidiary, Braemar OP General Partner LLC, its general partner. As such, we consolidate Braemar OP.

The following items affect reporting comparability of our historical condensed consolidated financial statements:

•historical seasonality patterns at some of our hotel properties cause fluctuations in our overall operating results. Consequently, operating results for the three months ended March 31, 2021, are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

Use of Estimates—The preparation of these condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Recently Adopted Accounting Standards—In January 2020, the Financial Accounting Standards Board’s (“FASB”) issued Accounting Standards Update (“ASU”) 2020-01, Investments – Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) (“ASU 2020-01”), which clarifies the interaction between the accounting for equity securities, equity method investments, and certain derivative instruments. The ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years and should be applied prospectively. Early adoption is permitted. We adopted the standard effective January 1, 2021 and the adoption of this standard did not have a material impact on our consolidated financial statements.

10

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Recently Issued Accounting Standards—In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”) to provide guidance and relief for transitioning to alternative reference rates. ASU 2021-01 is effective immediately for all entities. The Company continues to evaluate the impact of the guidance and may apply the elections as applicable as changes in the market occur.

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in Accounting Standards Codification (“ASC”) 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies, this ASU is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. We are currently evaluating the impact that ASU 2020-06 may have on our consolidated financial statements and related disclosures.

3. Revenue

The following tables present our revenue disaggregated by geographical areas (in thousands):

	Three Months Ended March 31, 2021
Primary Geographical Market	Number of Hotels	Rooms		Food and Beverage		Other Hotel		Total
California	5	$	12,745	$	4,232	$	2,261	$	19,238
Colorado	1	6,380		2,978		2,393		11,751
Florida	2	16,351		5,640		5,177		27,168
Illinois	1	1,420		236		132		1,788
Pennsylvania	1	1,241		5		119		1,365
Washington	1	898		10		117		1,025
Washington, D.C.	1	2,031		132		246		2,409
USVI	1	13,257		3,396		2,451		19,104
Total	13	$	54,323	$	16,629	$	12,896	$	83,848

	Three Months Ended March 31, 2020
Primary Geographical Market	Number of Hotels	Rooms		Food and Beverage		Other Hotel		Total
California	5	$	23,987	$	7,771	$	4,418	$	36,176
Colorado	1	8,151		4,255		2,905		15,311
Florida	2	13,989		7,743		4,694		26,426
Illinois	1	2,621		852		296		3,769
Pennsylvania	1	4,466		1,206		236		5,908
Washington	1	3,698		791		358		4,847
Washington, D.C.	1	6,535		3,491		506		10,532
USVI	1	7,021		2,694		4,836		14,551
Total	13	$	70,468	$	28,803	$	18,249	$	117,520

11

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

For the three months ended March 31, 2020 the Company recorded revenue from business interruption losses associated with lost profits from Hurricane Irma of $3.6 million. This revenue is included in “other” hotel revenue in our condensed consolidated statement of operations. There was no such revenue recorded for the three months ended March 31, 2021 as the insurance claim was fully settled in 2020.

4. Investments in Hotel Properties, net

Investments in hotel properties, net consisted of the following (in thousands):

	March 31, 2021		December 31, 2020
Land	$	455,298	$	455,298
Buildings and improvements	1,190,169		1,190,437
Furniture, fixtures and equipment	127,896		127,692
Construction in progress	9,390		11,422
Total cost	1,782,753		1,784,849
Accumulated depreciation	(376,243)		(360,259)
Investments in hotel properties, net	$	1,406,510	$	1,424,590

Impairment Charges and Insurance Recoveries

For the three months ended March 31, 2021, we recognized a $481,000 gain associated with proceeds received from an insurance claim.

For the three months ended March 31, 2020, the Company received proceeds of $2.0 million from our insurance carriers for property damage and business interruption from Hurricane Irma. There were no proceeds for the three months ended March 31, 2021 as the claim was fully settled in September 2020.

During the three months ended March 31, 2021 and 2020, no impairment charges were recorded.

In September 2020, the Company reached a final settlement with its insurance carriers related to Hurricane Irma. Upon settlement, the Company recorded a gain of $10.1 million as the proceeds received exceeded the carrying value of the hotel property at the time of the loss.

5. Investment in Unconsolidated Entity

OpenKey is a hospitality-focused mobile key platform that provides a universal smart phone app and related hardware and software for keyless entry into hotel guest rooms. In 2018, the Company made an initial $2.0 million investment in OpenKey, which is controlled and consolidated by Ashford Inc., for an initial 8.2% ownership interest. An additional investment of $26,000 was made during the three months ended March 31, 2020. All investments were recommended by our Related Party Transactions Committee and unanimously approved by the independent members of our board of directors. As of March 31, 2021, the Company has made investments in OpenKey totaling $2.4 million.

Our investment is recorded as “investment in unconsolidated entity” in our condensed consolidated balance sheets and is accounted for under the equity method of accounting as we have been deemed to have significant influence over the entity under the applicable accounting guidance. We review our investment in OpenKey for impairment in each reporting period pursuant to the applicable authoritative accounting guidance. An investment is impaired when its estimated fair value is less than the carrying amount of the investment. Any impairment is recorded in equity in earnings (loss) of unconsolidated entity. No such impairment was recorded for three months ended March 31, 2021 and 2020.

The following table summarizes our carrying value and ownership interest in OpenKey:

	March 31, 2021			December 31, 2020
Carrying value of the investment in OpenKey (in thousands)	$	1,644		$	1,708
Ownership interest in OpenKey	8.0		%	8.2		%

12

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following table summarizes our equity in earnings (loss) in OpenKey (in thousands):

	Three Months Ended March 31,
Line Item	2021		2020
Equity in earnings (loss) of unconsolidated entity	$	(64)	$	(40)

6. Indebtedness, net

Indebtedness, net consisted of the following (dollars in thousands):

Indebtedness	Collateral	Current Maturity	Final Maturity (9)	Interest Rate	March 31, 2021		December 31, 2020
Mortgage loan (3)	The Notary Hotel	June 2021	June 2025	LIBOR (1) + 2.16%	$	435,000	$	435,000
	The Clancy
	Sofitel Chicago Magnificent Mile
	Marriott Seattle Waterfront
Mortgage loan (4)	The Ritz-Carlton St. Thomas	August 2021	August 2024	LIBOR (1) + 3.95%	42,500		42,500
Mortgage loan (5)	Park Hyatt Beaver Creek Resort & Spa	April 2022	April 2022	LIBOR (1) + 2.75%	67,500		67,500
Mortgage loan (7)	Hotel Yountville	May 2022	May 2022	LIBOR (1) + 2.55%	51,000		51,000
Mortgage loan (7)	Bardessono Hotel and Spa	August 2022	August 2022	LIBOR (1) + 2.55%	40,000		40,000
Term loan (6)	Equity	October 2022	October 2022	Base Rate (2) + 1.25% to 2.65% or LIBOR (1) + 2.25% to 3.65%	51,221		61,495
Mortgage loan (7)	The Ritz-Carlton Sarasota	April 2023	April 2023	LIBOR (1) + 2.65%	100,000		100,000
Mortgage loan (7)	The Ritz-Carlton Lake Tahoe	January 2024	January 2024	LIBOR (1) + 2.10%	54,000		54,000
Mortgage loan (8)	Capital Hilton	February 2024	February 2024	LIBOR (1) + 1.70%	196,671		197,229
	Hilton La Jolla Torrey Pines
Mortgage loan (7)	Pier House Resort & Spa	September 2024	September 2024	LIBOR (1) + 1.85%	80,000		80,000
					1,117,892		1,128,724
Capitalized default interest and late charges					5,994		7,304
Deferred loan costs, net					(5,062)		(5,434)
Indebtedness, net					$	1,118,824	$	1,130,594

__________________

(1)LIBOR rates were 0.111% and 0.144% at March 31, 2021 and December 31, 2020, respectively.

(2)Base Rate, as defined in the secured term loan agreement, is the greater of (i) the prime rate set by Bank of America, or (ii) federal funds rate + 0.5%, or (iii) LIBOR + 1.0%.

(3)This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions, of which the first was exercised in June 2020.

(4)This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions.

(5)Effective January 9, 2021, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits being waived from January 2021 through June 2021. This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the third was exercised in April 2021.

(6)Effective February 22, 2021, we amended this term loan. In conjunction with the amendment, the interest rate spread increased from a rate of Base Rate + 1.25% - 2.50% or LIBOR + 2.25% - 3.50%, with Base Rate + 1.25% - 2.65% or LIBOR + 2.25% - 3.65%, with a LIBOR floor of 0.50%.

(7)Effective December 31, 2020, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits being waived from January 2021 through December 2021.

(8)Effective March 5, 2021, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits waived through July 1, 2021.

(9)The final maturity date assumes all available extensions options will be exercised.

On June 8, 2020, the Company entered into the First Amendment to the Second Amended and Restated Credit Agreement (the “Amendment”). The Amendment converted the $75 million Second Amended and Restated Credit Agreement, dated October 25, 2019 (the “Credit Facility”), which was a secured revolving credit facility, into a $65 million secured term loan. The Company had borrowed the full borrowing capacity of $75 million under the Credit Facility and repaid $10 million on June 8, 2020, in connection with the signing of the Amendment. The Amendment also added principal amortization of $5 million per quarter commencing on March 31, 2021. The Amendment changes the terms of certain financial covenants that the Company was subject to under the Credit Facility. The Amendment had the same maturity date of October 25, 2022 but removed the two one-year extension options and also removed the Company’s ability to reborrow amounts that have been repaid.

13

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

On February 22, 2021, the Company entered into the Second Amendment to the Second Amended and Restated Credit Agreement. The amendment provides an extension of the waiver on the majority of the covenants through the fourth quarter of 2021 and a reduced fixed charge coverage ratio covenant through the end of 2022. The first period in which covenants will be tested is for the fiscal quarter ending March 31, 2022. The amendment also allows the Company to utilize approximately $9.3 million of cash held in FF&E reserve accounts at certain properties for discretionary capital expenditures.

During the second and third quarters of 2020, we reached forbearance and other agreements with our lenders relating to loans secured by the Pier House Resort & Spa, The Ritz-Carlton Sarasota, The Ritz-Carlton Lake Tahoe, Hotel Yountville, Bardessono Hotel and Spa, Sofitel Chicago Magnificent Mile, The Notary Hotel, The Clancy, Marriott Seattle Waterfront, Capital Hilton and Hilton La Jolla Torrey Pines. As of March 31, 2021, no loans are in default. See note 14 for discussion of the loan modification agreement with Lismore Capital LLC (“Lismore”). The Company determined that all of the forbearance and other agreements evaluated were considered troubled debt restructurings due to terms that allowed for deferred interest and the forgiveness of default interest and late charges. No gain or loss was recognized during 2020, as the carrying amount of the original loans was not greater than the undiscounted cash flows of the modified loans. Additionally, as a result of the troubled debt restructurings all accrued default interest and late charges were capitalized into the applicable loan balances and are being amortized over the remaining term of the loans using the effective interest method. The amount of principal amortization associated with the default interest and late charges during three months ended March 31, 2021 was approximately $1.3 million.

We are required to maintain certain financial ratios under our secured term loan. If we violate covenants in any debt agreement, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. The assets of certain of our subsidiaries are pledged under non-recourse indebtedness and are not available to satisfy the debts and other obligations of the consolidated group. As of March 31, 2021, we were in compliance with all covenants.

7. Derivative Instruments

Interest Rate Derivatives—We are exposed to risks arising from our business operations, economic conditions and financial markets. To manage these risks, we primarily use interest rate derivatives to hedge our debt and our cash flows. The interest rate derivatives include interest rate caps and interest rate floors, which are subject to master netting settlement arrangements. All derivatives are recorded at fair value.

The following table summarizes the interest rate derivatives we entered into over the applicable periods:

	Three Months Ended March 31,
Interest rate caps:(1)	2021			2020
Notional amount (in thousands)	$	192,500		$	167,500
Strike rate low end of range	0.75		%	3.00		%
Strike rate high end of range	3.00		%	3.50		%
Effective date range	January 2021- March 2021			March 2020
Termination date range	September 2021- April 2022			April 2021
Total cost of interest rate caps (in thousands)	$	20		$	38

_______________

(1)    No instruments were designated as cash flow hedges.

Interest rate derivatives consisted of the following:

Interest rate caps: (1)	March 31, 2021			December 31, 2020
Notional amount (in thousands)	$	917,500		$	779,000
Strike rate low end of range	0.75		%	3.00		%
Strike rate high end of range	4.00		%	4.00		%
Termination date range	April 2021 - April 2022			February 2021 - October 2021
Aggregate principal balance on corresponding mortgage loans (in thousands)	$	725,000		$	779,000

_______________

(1)No instruments were designated as cash flow hedges.

14

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

8. Fair Value Measurements

Fair Value Hierarchy—Our financial instruments measured at fair value either on a recurring or a non-recurring basis are classified in a hierarchy for disclosure purposes consisting of three levels based on the observability of inputs in the market place as discussed below:

•Level 1: Fair value measurements that are quoted prices (unadjusted) in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets.

•Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

•Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability.

Fair value of interest rate caps is determined using the net present value of expected cash flows of each derivative based on the market-based interest rate curve and adjusted for credit spreads of us and our counterparties. Fair value of credit default swaps is obtained from a third party who publishes various information including the index composition and price data (Level 2 inputs). The fair value of credit default swaps does not contain credit-risk-related adjustments as the change in fair value is settled net through posting cash collateral or reclaiming cash collateral between us and our counterparty. Fair value of interest rate floors is calculated using a third-party discounted cash flow model based on future cash flows that are expected to be received over the remaining life of the floor.

When a majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. However, when the valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparties, which we consider significant (10% or more) to the overall valuation of our derivatives, the derivative valuations in their entirety are classified in Level 3 of the fair value hierarchy. Transfers of inputs between levels are determined at the end of each reporting period. In determining the fair values of our derivatives at March 31, 2021, the LIBOR interest rate forward curve (Level 2 inputs) assumed an uptrend from 0.111% to 0.168% for the remaining term of our derivatives. Credit spreads (Level 3 inputs) used in determining the fair values derivatives assumed an uptrend in nonperformance risk for us and all of our counterparties through the maturity dates.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The fair value of interest rate caps as of March 31, 2021 and December 31, 2020 was immaterial.

15

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Effect of Fair Value Measured Assets and Liabilities on Condensed Consolidated Statements of Operations

The following table summarizes the effect of fair value measured assets and liabilities on our condensed consolidated statements of operations (in thousands):

	Gain (Loss) Recognized in Income
	Three Months Ended March 31,
	2021			2020
Assets
Derivative assets:
Interest rate derivatives - caps	(20)			(19)
Credit default swaps	—		(1)	1,100		(1)
Total derivative assets	$	(20)		$	1,081
Total	$	(20)		$	1,081
Total combined
Interest rate derivatives - floors	$	—		$	75
Interest rate derivatives - caps	(20)			(19)
Credit default swaps	—			1,100
Unrealized gain (loss) on derivatives	(20)			1,156
Realized gain (loss) on interest rate floors	—		(2)	(75)		(2)
Net	$	(20)		$	1,081

_______________

(1)Excludes costs associated with credit default swaps of $0 and $63 for the three months ended March 31, 2021 and 2020, respectively, which is included in “other income (expense)” in our condensed consolidated statements of operations.

(2)Included in “other income (expense)” in our condensed consolidated statements of operations.

9. Summary of Fair Value of Financial Instruments

Determining the estimated fair values of certain financial instruments such as indebtedness requires considerable judgment to interpret market data. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Accordingly, the estimates presented are not necessarily indicative of the amounts at which these instruments could be purchased, sold or settled.

The carrying amounts and estimated fair values of financial instruments were as follows (in thousands):

	March 31, 2021				December 31, 2020
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial assets not measured at fair value:
Cash and cash equivalents	$	85,684	$	85,684	$	78,606	$	78,606
Restricted cash	39,322		39,322		34,544		34,544
Accounts receivable, net	17,583		17,583		13,557		13,557
Due from related parties, net	1,052		1,052		991		991
Due from third-party hotel managers	18,565		18,565		12,271		12,271
Financial liabilities not measured at fair value:
Indebtedness	$	1,117,892	$904,887 to $1,000,138		$	1,128,724	$884,325 to $977,411
Accounts payable and accrued expenses	74,098		74,098		61,758		61,758
Dividends and distributions payable	2,569		2,569		2,736		2,736
Due to Ashford Inc.	2,115		2,115		2,772		2,772
Due to third-party hotel managers	1,725		1,725		1,393		1,393

Cash, cash equivalents and restricted cash. These financial assets have maturities of less than 90 days and most bear interest at market rates. The carrying value approximates fair value due to their short-term nature. This is considered a Level 1 valuation technique.

Accounts receivable, net, due from related parties, net, accounts payable and accrued expenses, dividends and distributions payable, due to Ashford Inc. and due to/from third-party hotel managers. The carrying values of these financial

16

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

instruments approximate their fair values due to the short-term nature of these financial instruments. This is considered a Level 1 valuation technique.

Derivative assets. See notes 7 and 8 for a complete description of the methodology and assumptions utilized in determining fair values.

Indebtedness, net. Fair value of indebtedness is determined using future cash flows discounted at current replacement rates for these instruments. Cash flows are determined using a forward interest rate yield curve. The current replacement rates are determined by using the U.S. Treasury yield curve or the index to which these financial instruments are tied, and adjusted for the credit spreads. Credit spreads take into consideration general market conditions, maturity and collateral. We estimated the fair value of the total indebtedness to be approximately 80.9% to 89.5% of the carrying value of $1.1 billion at March 31, 2021, and approximately 78.3% to 86.6% of the carrying value of $1.1 billion at December 31, 2020. These fair value estimates are considered a Level 2 valuation technique.

10. Income (Loss) Per Share

The following table reconciles the amounts used in calculating basic and diluted income (loss) per share (in thousands, except per share amounts):

	Three Months Ended March 31,
	2021		2020
Net income (loss) attributable to common stockholders - basic and diluted:
Net income (loss) attributable to the Company	$	(8,708)	$	(12,930)
Less: Dividends on preferred stock	(2,388)		(2,555)
Less: Loss on extinguishment of preferred stock - Series B	(73)		—
Undistributed net income (loss) allocated to common stockholders	(11,169)		(15,485)
Distributed and undistributed net income (loss) - basic and diluted	$	(11,169)	$	(15,485)
Weighted average common shares outstanding:
Weighted average common shares outstanding – basic and diluted	39,605		32,474
Income (loss) per share - basic:
Net income (loss) allocated to common stockholders per share	$	(0.28)	$	(0.48)
Income (loss) per share - diluted:
Net income (loss) allocated to common stockholders per share	$	(0.28)	$	(0.48)

Due to their anti-dilutive effect, the computation of diluted income (loss) per share does not reflect the adjustments for the following items (in thousands):

	Three Months Ended March 31,
	2021		2020
Net income (loss) allocated to common stockholders is not adjusted for:
Income (loss) attributable to redeemable noncontrolling interests in operating partnership	(1,079)		(1,885)
Dividends on preferred stock - Series B	1,563		1,730
Loss on extinguishment of preferred stock - Series B	73		—
Total	$	557	$	(155)
Weighted average diluted shares are not adjusted for:
Effect of unvested restricted shares	83		76
Effect of assumed conversion of operating partnership units	4,006		4,112
Effect of assumed conversion of preferred stock - Series B	6,078		6,728
Effect of assumed conversion of exchanged preferred stock - Series B	551		361
Total	10,718		11,277

17

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

11. Redeemable Noncontrolling Interests in Operating Partnership

Redeemable noncontrolling interests in the operating partnership represents the limited partners’ proportionate share of equity and their allocable share of equity in earnings/losses of Braemar OP, which is an allocation of net income/loss attributable to the common unitholders based on the weighted average ownership percentage of these limited partners’ common units of limited partnership interest in the operating partnership (the “common units”) and units issued under our Long-Term Incentive Plan (the “LTIP” units) that are vested. Each common unit may be redeemed, by the holder, for either cash or, at our sole discretion, up to one share of our REIT common stock, which is either: (i) issued pursuant to an effective registration statement; (ii) included in an effective registration statement providing for the resale of such common stock; or (iii) issued subject to a registration rights agreement.

LTIP units, which are issued to certain executives and employees of Ashford LLC as compensation, generally have vesting periods of three years. Additionally, certain independent members of the board of directors have elected to receive LTIP units as part of their compensation, which are fully vested upon grant. Upon reaching economic parity with common units, each vested LTIP unit can be converted by the holder into one common unit which can then be redeemed for cash or, at our election, settled in our common stock. An LTIP unit will achieve parity with the common units upon the sale or deemed sale of all or substantially all of the assets of our operating partnership at a time when our stock is trading at a level in excess of the price it was trading on the date of the LTIP issuance. More specifically, LTIP units will achieve full economic parity with common units in connection with (i) the actual sale of all or substantially all of the assets of our operating partnership or (ii) the hypothetical sale of such assets, which results from a capital account revaluation, as defined in the partnership agreement, for our operating partnership. In March 2021, approximately 244,000 LTIP units with a fair value of approximately $1.7 million and a vesting period of three years were granted.

The compensation committee of the board of directors of the Company may authorize the issuance of Performance LTIP units to certain executive officers and directors from time to time. The award agreements provide for the grant of a target number of Performance LTIP units that will be settled in common units of Braemar OP, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period, which is generally three years from the grant date. The number of Performance LTIP units actually earned may range from 0% to 200% of target based on achievement of a specified relative total stockholder return based on the formula determined by the Company’s compensation committee on the grant date. As of March 31, 2021, there were approximately 220,000 Performance LTIP units, representing 200% of the target, outstanding. The performance criteria for the Performance LTIP units are based on market conditions under the relevant literature, and the Performance LTIP units were granted to non-employees.

The Company issued equity awards in the first quarter of 2021, a substantial majority of which were issued subject to stockholder approval of an increase in the number of shares available for issuance under the Company’s 2013 Equity Incentive Plan. Under the applicable accounting literature, these awards are not accounted for until shareholder approval is obtained.

As of March 31, 2021, we have issued a total of approximately 1.3 million LTIP units (including Performance LTIP units), net of cancellations, all of which, other than approximately 344,000 LTIP units and 60,000 Performance LTIP units issued from March 2015 to March 2021, had reached full economic parity with, and are convertible into, common units.

The following table presents the redeemable noncontrolling interests in Braemar OP (in thousands) and the corresponding approximate ownership percentage of our operating partnership:

	March 31, 2021			December 31, 2020
Redeemable noncontrolling interests in Braemar OP	$	28,162		$	27,655
Adjustments to redeemable noncontrolling interests (1)	$	1,433		$	167
Ownership percentage of operating partnership	8.87		%	9.43		%

____________________________________

(1)    Reflects the excess of the redemption value over the accumulated historical cost.

We allocated net income (loss) to the redeemable noncontrolling interests as illustrated in the table below (in thousands):

	Three Months Ended March 31,
	2021		2020
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	$	1,079	$	1,885

18

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The following table presents the common units redeemed and the fair value at redemption (in thousands):

	Three Months Ended March 31,
	2021		2020
Common units converted to common stock	—		339
Fair value of common units converted	$	—	$	390	(1)

____________________________________

(1)    The redemption value is the greater of historical cost or fair value. The historical cost of the converted units was $3.5 million.

12. Equity and Stock-Based Compensation

Common Stock Dividends—The board of directors did not declare a quarterly common stock dividend for the three months ended March 31, 2021 and 2020.

Restricted Stock Units—We incur stock-based compensation expense in connection with restricted stock units awarded to certain employees of Ashford LLC and its affiliates. We also issue common stock to certain of our independent directors, which vests immediately upon issuance. In March 2021, approximately 504,000 restricted stock units with a fair value of approximately $3.5 million and a vesting period of three years were granted.

The Company issued equity awards in the first quarter of 2021, a substantial majority of which were issued subject to stockholder approval of an increase in the number of shares available for issuance under the Company’s 2013 Equity Incentive Plan. Under the applicable accounting literature, these awards are not accounted for until shareholder approval is obtained.

Performance Stock Units—The compensation committee of the board of directors of the Company may authorize the issuance of grants of PSUs to certain executive officers and directors from time to time. The award agreements provide for the grant of a target number of PSUs that will be settled in shares of common stock of the Company, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period, which is generally three years from the grant date. The number of PSUs actually earned may range from 0% to 200% of target based on achievement of a specified relative total stockholder return based on the formula determined by the Company’s compensation committee on the grant date. The performance criteria for the PSUs are based on market conditions under the relevant literature, and the PSUs were granted to non-employees. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, regardless of the actual outcome of the market condition as opposed to being accounted for at fair value based on the market price of the shares at each quarterly measurement date.

The Company issued equity awards in the first quarter of 2021, a substantial majority of which were issued subject to stockholder approval of an increase in the number of shares available for issuance under the Company’s 2013 Equity Incentive Plan. Under the applicable accounting literature, these awards are not accounted for until shareholder approval is obtained.

8.25% Series D Cumulative Preferred Stock—The Series D Cumulative Preferred Stock dividend for all issued and outstanding shares is set at $2.0625 per annum per share.

The following table summarizes dividends declared (in thousands):

	Three Months Ended March 31,
	2021		2020
Series D Cumulative Preferred Stock	$	825	$	825

Stock Repurchases—On December 5, 2017, our board of directors reapproved the stock repurchase program pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share having an aggregate value of up to $50 million. The board of directors’ authorization replaced any previous repurchase authorizations. No shares were repurchased during three months ended March 31, 2021 and 2020. As of March 31, 2021, $50 million remains authorized by the board of directors pursuant to the December 5, 2017 approval.

At-the-Market Common Stock Equity Distribution Program—On December 11, 2017, the Company established an “at-the-market” equity distribution program pursuant to which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $50 million. As of March 31, 2021, the Company has sold approximately 6.7 million shares of common stock and received net proceeds of approximately $26.2 million under this program.

19

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The issuance activity is summarized below (in thousands):

	Three Months Ended March 31,
	2021		2020
Common shares issued	2,005		—
Gross proceeds received	$	11,827	$	—
Commissions and other expenses	148		—
Net proceeds	$	11,679	$	—

Standby Equity Distribution Agreement—On February 4, 2021, the Company entered into a Standby Equity Distribution Agreement (the “SEDA”) with YA II PN, Ltd. (“YA”), pursuant to which the Company will be able to sell up to 7,780,786 shares of its common stock (the “Commitment Amount”) at the Company’s request any time during the commitment period commencing on February 4, 2021, and terminating on the earliest of (i) the first day of the month next following the 36-month anniversary of the SEDA or (ii) the date on which YA shall have made payment of Advances (as defined in the SEDA) pursuant to the SEDA for shares of the Company’s common stock equal to the Commitment Amount (the “Commitment Period”). Other than with respect to the Initial Advance (as defined below) the shares sold to YA pursuant to the SEDA would be purchased at 95% of the Market Price (as defined below) and would be subject to certain limitations, including that YA could not purchase any shares that would result in it owning more than 4.99% of the Company’s common stock. “Market Price” shall mean the lowest daily VWAP (as defined below) of the Company’s common stock during the 5 consecutive trading days commencing on the trading day following the date the Company submits an advance notice to YA. “VWAP” means, for any trading day, the daily volume weighted average price of the Company’s common stock for such date on the principal market as reported by Bloomberg L.P. during regular trading hours.

At any time during the Commitment Period the Company may require YA to purchase shares of the Company’s common stock by delivering a written notice to YA setting forth the Advance Shares (as defined in the SEDA) that the Company desires to issue and sell to YA (the “Advance Notice”). The Company may deliver an Advance Notice for an initial Advance for up to 1,200,000 Advance Shares (the “Initial Advance”). The preliminary purchase price per share for such shares shall be 100% of the average daily VWAP for the 5 consecutive trading days immediately prior to the date of the Advance Notice (the “Preliminary Purchase Price”).

Pursuant to the SEDA, we currently intend to use the net proceeds from any sale of the shares for working capital purposes, including the repayment of outstanding debt. There are no other restrictions on future financing transactions. The SEDA does not contain any right of first refusal, participation rights, penalties or liquidated damages. We are not required to pay any additional amounts to reimburse or otherwise compensate YA in connection with the transaction except for a $10,000 structuring fee.

As of March 31, 2021, the Company has sold approximately 1.2 million shares of common stock and received proceeds of approximately $7.0 million under the SEDA.

13. 5.50% Series B Cumulative Convertible Preferred Stock

Each share of our 5.50% Series B Cumulative Convertible Preferred Stock (the “Series B Convertible Preferred Stock”) is convertible at any time, at the option of the holder, into a number of whole shares of common stock at a conversion price of $18.70 (which represents a conversion rate of 1.3372 shares of our common stock, subject to certain adjustments). The Series B Convertible Preferred Stock is also subject to conversion upon certain events constituting a change of control. Holders of the Series B Convertible Preferred Stock have no voting rights, subject to certain exceptions. The Series B Convertible Preferred Stock dividend for all issued and outstanding shares is set at $1.375 per annum per share.

The Company may, at its option, cause the Series B Convertible Preferred Stock to be converted in whole or in part, on a pro-rata basis, into fully paid and nonassessable shares of the Company’s common stock at the conversion price, provided that the “Closing Bid Price” (as defined in the Articles Supplementary) of the Company’s common stock shall have equaled or exceeded 110% of the conversion price for the immediately preceding 45 consecutive trading days ending three days prior to the date of notice of conversion.

Additionally, the Series B Convertible Preferred Stock contains cash redemption features that consist of: 1) an optional redemption in which on or after June 11, 2020, the Company may redeem shares of the Series B Convertible Preferred Stock, in whole or in part, for cash at a redemption price of $25.00 per share, plus any accumulated, accrued and unpaid dividends; 2) a special optional redemption, in which on or prior to the occurrence of a Change of Control (as defined), the Company may

20

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

redeem shares of the Series B Convertible Preferred Stock, in whole or in part, for cash at a redemption price of $25.00 per share; and 3) a REIT Termination Event and Listing Event Redemption, in which at any time (i) a REIT Termination Event (defined below) occurs or (ii) the Company’s common stock fails to be listed on the NYSE, NYSE American, or NASDAQ, or listed or quoted on an exchange or quotation system that is a successor thereto (each a “National Exchange”), the holder of Series B Convertible Preferred Stock shall have the right to require the Company to redeem any or all shares of Series B Convertible Preferred Stock at 103% of the liquidation preference ($25.00 per share, plus any accumulated, accrued, and unpaid dividends) in cash.

A REIT Termination Event, shall mean the earliest of:

(i)    filing of income tax return where the Company does not compute its income as a REIT;

(ii)    stockholders’ approval on ceasing to be qualified as a REIT;

(iii)    board of directors’ approval on ceasing to be qualified as a REIT;

(iv)    board’s determination based on advise of the counsel to cease to be qualified as a REIT; or

(v)    determination within the meaning of Section 1313(a) of IRC to cease to be qualified as a REIT.

On December 4, 2019, we entered into equity distribution agreements with certain sales agents to sell from time to time shares of our Series B Convertible Preferred Stock having an aggregate offering price of up to $40.0 million. Sales of shares of our Series B Convertible Preferred Stock may be made in negotiated transactions or transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 of the Securities Act, including sales made directly on the NYSE, the existing trading market for our Series B Convertible Preferred Stock, or sales made to or through a market maker other than on an exchange or through an electronic communications network. We will pay each of the sales agents a commission, which in each case shall not be more than 2.0% of the gross sales price of the shares of our Series B Convertible Preferred Stock sold through such sales agents. As of March 31, 2021, we have sold approximately 65,000 shares of our Series B Convertible Preferred Stock and received proceeds of approximately $1.2 million under this program.

The issuance activity is summarized below (in thousands):

	Three Months Ended March 31,
	2021		2020
Series B Convertible Preferred Stock shares issued	—		23
Gross proceeds received	$	—	$	439
Commissions and other expenses	—		7
Net proceeds	$	—	$	432

Series B Convertible Preferred Stock does not meet the requirements for permanent equity classification prescribed by the authoritative guidance because of certain cash redemption features that are outside our control. As such, the Series B Convertible Preferred Stock is classified outside of permanent equity.

The following table summarizes dividends declared (in thousands):

	Three Months Ended March 31,
	2021		2020
Series B Convertible Preferred Stock	$	1,563	$	1,730

During the three months ended March 31, 2021, Braemar entered into privately negotiated exchange agreements with certain holders of its 5.50% Series B Cumulative Convertible Preferred Stock, par value $0.01 per share in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended. The table below summarizes the activity (in thousands):

	Three Months Ended March 31, 2021
	Preferred Shares Tendered	Common Shares Issued
Series B Convertible Preferred Stock	486	1,535

21

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

14. Related Party Transactions

Ashford Inc.

Advisory Agreement

Ashford LLC, a subsidiary of Ashford Inc., acts as our advisor. Our chairman Mr. Monty Bennett, also serves as chairman of the board of directors and chief executive officer of Ashford Inc. Under our advisory agreement, we pay advisory fees to Ashford LLC. We pay a monthly base fee equal to 1/12th of the sum of (i) 0.70% of the total market capitalization of our company for the prior month, plus (ii) the Net Asset Fee Adjustment (as defined in our advisory agreement), if any, on the last day of the prior month during which our advisory agreement was in effect; provided, however in no event shall the base fee for any month be less than the minimum base fee as provided by our advisory agreement. The base fee is payable on the 5th business day of each month.

The minimum base fee for Braemar for each month will be equal to the greater of:

▪90% of the base fee paid for the same month in the prior year; and

▪1/12th of the G&A Ratio (as defined) multiplied by the total market capitalization of Braemar.

We are also required to pay Ashford LLC an incentive fee that is measured annually (or for a stub period if the advisory agreement is terminated at other than year-end). Each year that our annual total stockholder return exceeds the average annual total stockholder return for our peer group we pay Ashford LLC an incentive fee over the following three years, subject to the Fixed Charge Coverage Ratio (“FCCR”) Condition, as defined in the advisory agreement, which relates to the ratio of adjusted EBITDA to fixed charges. We also reimburse Ashford LLC for certain reimbursable overhead and internal audit, risk management advisory and asset management services, as specified in the advisory agreement. We also recorded equity-based compensation expense for equity grants of common stock and LTIP units awarded to officers and employees of Ashford LLC in connection with providing advisory services.

The following table summarizes the advisory services fees incurred (in thousands):

	Three Months Ended March 31,
	2021		2020
Advisory services fee
Base advisory fee	$	2,545	$	2,621
Reimbursable expenses (1)	492		544
Equity-based compensation (2)	1,387		1,904
Incentive fee	371		—
Total	$	4,795	$	5,069

________

(1)Reimbursable expenses include overhead, internal audit, risk management advisory and asset management services.

(2)    Equity-based compensation is associated with equity grants of Braemar’s common stock, PSUs, LTIP units and Performance LTIP units awarded to officers and employees of Ashford LLC.

Pursuant to the Company's hotel management agreements with each hotel management company, the Company bears the economic burden for casualty insurance coverage. Under the advisory agreement, Ashford Inc. secures casualty insurance policies to cover Braemar, Ashford Trust, their hotel managers, as needed, and Ashford Inc. The total loss estimates included in such policies are based on the collective pool of risk exposures from each party. Ashford Inc.'s risk management department manages the casualty insurance program. At the beginning of each year, Ashford Inc.'s risk management department collects funds from Braemar, Ashford Trust and their respective hotel management companies, to fund the casualty insurance program as needed, on an allocated basis.

Lismore Advisory Fee

On March 20, 2020, the Company entered into an agreement with Lismore, a subsidiary of Ashford Inc., to engage Lismore to seek modifications, forbearances or refinancings of the Company’s loans (the “Lismore Agreement”). The Lismore Agreement was terminated effective March 20, 2021.

22

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Upon entering into the agreement with Lismore, the Company made an initial payment of approximately $1.4 million. The Company paid approximately $1.4 million related to periodic installments of which $683,000 was expensed in accordance with the agreement. The remaining $681,000 was set off against the cash payment of the base advisory fee per the agreement upon contract termination in March 2021. Further, the Company paid approximately $1.4 million in success fees in connection with signed forbearance or other agreements. In total the Company paid approximately $4.1 million under the Lismore Agreement.

For the three months ended March 31, 2021 and 2020, the Company has recognized expense of $341,000 and $0, respectively, which is included in “write-off of loan costs and exit fees” in our condensed consolidated statements of operations.

Ashford Securities

On September 25, 2019, Ashford Inc. announced the formation of Ashford Securities LLC (“Ashford Securities”) to raise retail capital in order to grow its existing and future platforms. In conjunction with the formation of Ashford Securities, Braemar has entered into a contribution agreement with Ashford Inc. pursuant to which Braemar has agreed to contribute, with Ashford Hospitality Trust, Inc. (“Ashford Trust”), up to $15.0 million to fund the operations of Ashford Securities. Costs for all operating expenses of Ashford Securities that were contributed by Ashford Trust and Braemar will be expensed as incurred. These costs were allocated initially to Ashford Trust and Braemar based on an allocation percentage of 75% to Ashford Trust and 25% Braemar. Upon reaching the earlier of $400 million in aggregate non-listed preferred equity offerings raised or June 10, 2023, there will be a true up (the “Initial True-up Date”) between Ashford Trust and Braemar whereby the actual capital contributions contributed by each company will be based on the actual amount of capital raised by Ashford Trust and Braemar, respectively. After the Initial True-Up Date, the capital contributions will be allocated between Ashford Trust and Braemar quarterly based on the actual capital raised through Ashford Securities.

On December 31, 2020, an Amended and Restated Contribution Agreement was entered into by Ashford Inc., Ashford Trust and Braemar with respect to expenses to be reimbursed by Ashford Securities. The Initial True-Up Date did not occur, and beginning on the effective date of the Amended and Restated Contribution Agreement, costs will be allocated based upon an allocation percentage of 50% to Ashford Inc., 50% to Braemar and 0% to Ashford Trust. Upon reaching the earlier of $400 million in aggregate non-listed preferred equity offerings raised, or June 10, 2023, there will be an Amended and Restated true up (the “Amended and Restated True-up Date”) among Ashford Inc., Ashford Trust and Braemar whereby the actual expense reimbursement paid by each company will be based on the actual amount of capital raised by Ashford Inc., Ashford Trust and Braemar, respectively. After the Amended and Restated True-Up Date, the expense reimbursements will be allocated among Ashford Inc., Ashford Trust and Braemar quarterly based on the actual capital raised through Ashford Securities. Additionally, Braemar’s aggregate Capital Contributions under the Initial Contribution Agreement and the Amended and Restated Contribution Agreement shall not exceed $3.75 million unless otherwise agreed to in writing by Braemar.

As of March 31, 2021, Braemar has funded approximately $1.3 million. Additionally, as of March 31, 2021, the Company has a payable of $114,000, included in “due to Ashford Inc.” on our condensed consolidated balance sheet that represents unfunded reimbursable expenses.

The table below summarizes the amount Braemar has expensed related to reimbursed operating expenses of Ashford Securities (in thousands):

	Three Months Ended March 31,
Line Item	2021		2020
Corporate, general and administrative	$	340	$	233

Enhanced Return Funding Program

Concurrent with the Amendment No. 1, on January 15, 2019, the Company also entered into the Enhanced Return Funding Program Agreement (the “ERFP Agreement”) with Ashford Inc. The “key money investments” concept previously contemplated by our advisory agreement was replaced with the ERFP Agreement. The Fifth Amended and Restated Advisory Agreement was also amended to name Ashford Inc. and its subsidiaries as the Company’s sole and exclusive provider of asset management, project management and other services offered by Ashford Inc. or any of its subsidiaries. The independent members of our board of directors and the independent members of the board of directors of Ashford Inc., with the assistance of separate and independent legal counsel, engaged to negotiate the ERFP Agreement on behalf of Ashford Inc. and Braemar, respectively.

23

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The ERFP Agreement generally provides that Ashford LLC will provide funding to facilitate the acquisition of properties by Braemar OP that are recommended by Ashford LLC, in an aggregate amount of up to $50 million (subject to increase to up to $100 million by mutual agreement). Each funding will equal 10% of the property acquisition price and will be made either at the time of the property acquisition or at any time generally within the two-year period following the date of such acquisition, in exchange for FF&E for use at the acquired property or any other property owned by Braemar OP.

The initial term of the ERFP Agreement was two years (the “Initial Term”). At the end of the Initial Term, the ERFP Agreement automatically renewed for one year and shall automatically renew for successive one-year periods (each such period a “Renewal Term”) unless either Ashford Inc. or Braemar provides written notice to the other at least sixty days in advance of the expiration of the Initial Term or Renewal Term, as applicable, that such notifying party intends not to renew the ERFP Agreement.

Project Management Agreement

In connection with Ashford Inc.’s August 8, 2018 acquisition of Remington Lodging’s project management business, we entered into a project management agreement with Ashford Inc.’s subsidiary, Premier Project Management LLC (“Premier”), pursuant to which Premier provides project management services to our hotels, including construction management, interior design, architectural services, and the purchasing, freight management, and supervision of installation of FF&E and related services. Pursuant to the project management agreement, we pay Premier: (a) project management fees of up to 4% of project costs; and (b) for the following services as follows: (i) architectural (6.5% of total construction costs); (ii) construction management for projects without a general contractor (10% of total construction costs); (iii) interior design (6% of the purchase price of the FF&E designed or selected by Premier); and (iv) FF&E purchasing (8% of the purchase price of FF&E purchased by Premier; provided that if the purchase price exceeds $2.0 million for a single hotel in a calendar year, then the purchasing fee is reduced to 6% of the FF&E purchase price in excess of $2.0 million for such hotel in such calendar year). On March 20, 2020, we amended the project management agreement to provide that Premier’s fees shall be paid by the Company to Premier upon the completion of any work provided by third party vendors to the Company.

Hotel Management Agreement

On November 6, 2019, Ashford Inc. completed the acquisition of Remington Lodging’s hotel management business. Following the acquisition, hotel management services are provided by Remington Hotels, a subsidiary of Ashford Inc., under the respective hotel management agreement with each customer, including Ashford Trust and Braemar.

At March 31, 2021, Remington Hotels managed three of our thirteen hotel properties.

We pay monthly hotel management fees equal to the greater of approximately $14,000 per hotel (increased annually based on consumer price index adjustments) or 3% of gross revenues as well as annual incentive management fees, if certain operational criteria were met and other general and administrative expense reimbursements primarily related to accounting services.

Pursuant to the terms of the Letter Agreement dated March 13, 2020 (the “Hotel Management Letter Agreement”), in order to allow Remington Hotels to better manage its corporate working capital and to ensure the continued efficient operation of our hotels, we agreed to pay the base fee and to reimburse all expenses on a weekly basis for the preceding week, rather than on a monthly basis. The Hotel Management Letter Agreement went into effect on March 13, 2020 and will continue until terminated by us.

We also have a mutual exclusivity agreement with Remington Hotels, pursuant to which: (i) we have agreed to engage Remington Hotels to provide management services with respect to any hotel we acquire or invest in, to the extent we have the right and/or control the right to direct the management of such hotel; and (ii) Remington Hotels has agreed to grant us a right of first refusal to purchase any opportunity to develop or construct a hotel that it identifies that meets our initial investment guidelines. We are not, however, obligated to engage Remington Hotels if our independent directors either: (i) unanimously vote to hire a different manager or developer; or (ii) by a majority vote elect not to engage such related party because either special circumstances exist such that it would be in the best interest of our Company not to engage such related party, or, based on related party’s prior performance, it is believed that another manager could perform the management or other duties materially better.

24

BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

15. Commitments and Contingencies

Restricted Cash—Under certain management and debt agreements for our hotel properties existing at March 31, 2021, escrow payments are required for insurance, real estate taxes and debt service. In addition, for certain properties based on the terms of the underlying debt and management agreements, we escrow 4% to 5% of gross revenues for capital improvements.

Management Fees—Under hotel management agreements for our hotel properties existing at March 31, 2021, we pay a monthly hotel management fee equal to the greater of approximately $14,000 per hotel (increased annually based on consumer price index adjustments) or 3% of gross revenues, or in some cases 2.5% to 5.0% of gross revenues, as well as annual incentive management fees, if applicable. These management agreements expire from December 2023 through December 2065, with renewal options. If we terminate a management agreement prior to its expiration, we may be liable for estimated management fees through the remaining term, liquidated damages or, in certain circumstances, we may substitute a new management agreement.

Income Taxes—We and our subsidiaries file income tax returns in the federal jurisdiction and various states. Tax years 2016 through 2020 remain subject to potential examination by certain federal and state taxing authorities.

Litigation—On October 24, 2019, the Company provided notice to Accor of the material breach of its responsibilities under the Accor management agreement for the Sofitel Chicago Magnificent Mile at 20 East Chestnut Street in Chicago, Illinois. On November 7, 2019, Accor filed a complaint against Ashford TRS Chicago II in the Supreme Court of the State of New York, New York County, seeking a declaratory judgment that no breach has occurred. Accor’s complaint was dismissed on or about February 27, 2020. On January 6, 2020, Ashford TRS Chicago II filed a complaint against Accor in the Supreme Court of the State of New York, New York County, alleging breach of the Accor management agreement and seeking declaration of its right to terminate the Accor management agreement. On July 20, 2020, Accor filed an Amended Answer and Counterclaims against Ashford TRS Chicago II. Accor asserts two causes of action: First, Accor asserts a counterclaim for declaratory judgment that Accor correctly calculated the amount payable to Ashford TRS Chicago II under the management agreement to “cure” Accor’s performance test failure (the “Cure Amount”). Second, Accor asserts a counterclaim for breach of contract on the basis that Ashford TRS Chicago II breached the management agreement by wrongfully maintaining that the Cure Amount for the 2018 and 2019 Performance Test failure is $1,031,549 instead of $535,120. As of March 31, 2021, no amounts have been accrued.

One of the Company’s hotel management companies is currently involved in litigation regarding its employment policies and practices at multiple California hotels, including one of the Company’s hotels. The Company believes it is probable that the litigation will result in a loss due to a potential pre-trial settlement, in which case the Company estimates its potential loss will be approximately $500,000; however, it is entitled to indemnification for a portion of such loss. As of March 31, 2021, approximately $500,000 has been accrued.

In June 2020, each of the Company, Ashford Trust, Ashford Inc., and Lismore, a subsidiary of Ashford Inc. (collectively with the Company, Ashford Trust, Ashford Inc. and Lismore, the “Ashford Companies”), received an administrative subpoena from the SEC. The Company’s administrative subpoena requires the production of documents and other information since January 1, 2018 relating to, among other things, (1) related party transactions among the Ashford Companies (including the Lismore Agreement between the Company and Lismore pursuant to which the Company engaged Lismore to negotiate the refinancing, modification or forbearance of certain mortgage debt) or between any of the Ashford Companies and any officer, director or owner of the Ashford Companies or any entity controlled by any such person, and (2) the Company’s accounting policies, procedures, and internal controls related to such related party transactions. In addition, in October 2020, Mr. Monty J. Bennett, chairman of our board of directors, received an administrative subpoena from the SEC requiring testimony and the production of documents and other information substantially similar to the requests in the subpoenas received by the Ashford Companies. The Company and Mr. Monty J. Bennett are responding to the administrative subpoenas.

A class action lawsuit has been filed against one of the Company’s hotel management companies alleging violations of certain California employment laws, which class action affects two hotels owned by subsidiaries of the Company. The court has entered an order granting class certification with respect to: (1) a statewide class of non-exempt employees of our manager who were allegedly deprived of rest breaks as a result of our manager’s previous written policy requiring its employees to stay on premises during rest breaks; and (2) a derivative class of non-exempt former employees of our manager who were not paid for allegedly missed breaks upon separation from employment. Notices to potential class members were sent out on February 2, 2021. Potential class members had until April 4, 2021 to opt out of the class, however, the total number of employees in the class has not been definitively determined and is the subject of continuing discovery. While we believe it is reasonably possible that we may incur a loss associated with this litigation, because there remains uncertainty under California law with respect to a

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BRAEMAR HOTELS & RESORTS INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

significant legal issue, discovery relating to class members continues, and the trial judge retains discretion to award lower penalties than set forth in the applicable California employment laws, we do not believe any potential loss to the Company is reasonably estimable at this time. As of March 31, 2021, no amounts have been accrued.

We are also engaged in other legal proceedings that have arisen but have not been fully adjudicated. To the extent the claims giving rise to these legal proceedings are not covered by insurance, they relate to the following general types of claims: employment matters, tax matters and matters relating to compliance with applicable law (for example, the ADA and similar state laws). The likelihood of loss from these legal proceedings is based on the definitions within contingency accounting literature. We recognize a loss when we believe the loss is both probable and reasonably estimable. Based on the information available to us relating to these legal proceedings and/or our experience in similar legal proceedings, we do not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial position, results of operations, or cash flow. However, our assessment may change depending upon the development of these legal proceedings, and the final results of these legal proceedings cannot be predicted with certainty. If we do not prevail in one or more of these legal matters, and the associated realized losses exceed our current estimates of the range of potential losses, our consolidated financial position, results of operations, or cash flows could be materially adversely affected in future periods.

16. Segment Reporting

We operate in one business segment within the hotel lodging industry: direct hotel investments. Direct hotel investments refers to owning hotel properties through either acquisition or new development. We report operating results of direct hotel investments on an aggregate basis as substantially all of our hotel investments have similar economic characteristics and exhibit similar long-term financial performance. As of March 31, 2021 and December 31, 2020, all of our hotel properties were in the U.S. and its territories.

17. Subsequent Events

From April 1, 2021 through May 5, 2021, Braemar entered into privately negotiated exchange agreements with certain holders of its Series B Convertible Preferred Stock in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended. The Company agreed to exchange a total of approximately 2.9 million shares of its common stock for approximately 751,000 shares of its Series B Convertible Preferred Stock.

On April 2, 2021, the Company filed with the State Department of Assessments and Taxation of the State of Maryland articles supplementary to the Company’s Articles of Amendment and Restatement that provided for: (i) reclassifying the existing 28,000,000 shares of Series E Redeemable Preferred Stock (the “Series E Preferred Stock”) and 28,000,000 shares of Series M Redeemable Preferred Stock (the “Series M Preferred Stock”) as unissued shares of preferred stock; (ii) reclassifying and designating 28,000,000 shares of the Company’s authorized capital stock as shares of the Series E Preferred Stock (the “Series E Articles Supplementary”); and (iii) reclassifying and designating 28,000,000 shares of the Company’s authorized capital stock as shares of the Series M Preferred Stock (the “Series M Articles Supplementary”). These new Series E Articles Supplementary and Series M Articles Supplementary were filed to revise the preferred stock terms related to the dividend rate, the Company’s optional redemption right and certain other voting rights. The Company also caused its operating partnership to execute Amendment No. 5 to the Third Amended and Restated Agreement of Limited Partnership to amend the terms of its operating partnership to conform to the terms of its Series E Articles Supplementary and Series M Articles Supplementary. As of May 5, 2021, no shares of Series E Preferred Stock or Series M Preferred Stock have been issued.

On April 21, 2021, Braemar and Lincoln Park Capital Fund, LLC (“Lincoln Park”), entered into a purchase agreement, pursuant to which the Company may sell to Lincoln Park up to $35 million of shares of its common stock, from time to time during the term of the purchase agreement. The issuance of the shares of common stock pursuant to the purchase agreement has been registered pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-254588) (the “Registration Statement”), and the related base prospectus included in the Registration Statement, as supplemented by a prospectus supplement filed with the SEC on April 21, 2021. Braemar and Lincoln Park also entered into a registration rights agreement, pursuant to which the Company agreed to maintain the effectiveness of the Registration Statement. On April 21, 2021, we issued 280,957 shares of our common stock for gross proceeds of approximately $1.5 million.

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used in this Quarterly Report on Form 10-Q, unless the context otherwise indicates, the references to “we,” “us,” “our,” the “Company” or “Braemar” refer to Braemar Hotels & Resorts Inc., a Maryland corporation, and, as the context may require, its consolidated subsidiaries, including Braemar Hospitality Limited Partnership, a Delaware limited partnership, which we refer to as “our operating partnership” or “Braemar OP.” “Our TRSs” refers to our taxable REIT subsidiaries, including Braemar TRS Corporation, a Delaware corporation, which we refer to as “Braemar TRS,” and its subsidiaries, together with the two taxable REIT subsidiaries that lease our two hotels held in a consolidated joint venture and are wholly-owned by the joint venture and the U.S. Virgin Islands’ (“USVI”) taxable REIT subsidiary that owns The Ritz-Carlton St. Thomas hotel. “Ashford Trust” refers to Ashford Hospitality Trust, Inc., a Maryland corporation, and, as the context may require, its consolidated subsidiaries, including Ashford Hospitality Limited Partnership, a Delaware limited partnership and Ashford Trust’s operating partnership, which we refer to as “Ashford Trust OP.” “Ashford Inc.” refers to Ashford Inc., a Nevada corporation and, as the context may require, its consolidated subsidiaries. “Ashford LLC” or our “advisor” refers to Ashford Hospitality Advisors LLC, a Delaware limited liability company and a subsidiary of Ashford Inc. “Premier” refers to Premier Project Management LLC, a Maryland limited liability company and a subsidiary of Ashford LLC. “Remington Lodging” refers to Remington Lodging & Hospitality, LLC, a Delaware limited liability company and a hotel management company that was owned by Mr. Monty J. Bennett, chairman of our board of directors, and his father, Mr. Archie Bennett, Jr., chairman emeritus of Ashford Trust before its acquisition by Ashford Inc. on November 6, 2019. “Remington Hotels” refers to the same entity after the acquisition was completed resulting in Remington Lodging & Hospitality, LLC becoming a subsidiary of Ashford Inc.

This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains registered trademarks that are the exclusive property of their respective owners, which are companies other than us, including Marriott International®, Hilton Worldwide®, Sofitel®, Hyatt® and Accor®.

FORWARD-LOOKING STATEMENTS

Throughout this Form 10-Q, we make forward-looking statements that are subject to risks and uncertainties. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “anticipate,” “estimate,” “approximately,” “believe,” “could,” “project,” “predict,” or other similar words or expressions. Additionally, statements regarding the following subjects are forward-looking by their nature:

•the impact of COVID-19 and numerous governmental travel restrictions and other orders on our business, including one or more possible recurrences of COVID-19 cases causing state and local governments to reinstate travel restrictions;

•our business and investment strategy;

•our projected operating results and dividend rates;

•our ability to obtain future financing arrangements or restructure existing indebtedness;

•our understanding of our competition;

•market trends;

•projected capital expenditures;

•anticipated acquisitions or dispositions; and

•the impact of technology on our operations and business.

Such forward-looking statements are based on our beliefs, assumptions and expectations of our future performance taking into account all information currently known to us. These beliefs, assumptions, and expectations can change as a result of many potential events or factors, not all of which are known to us. If a change occurs, our business, financial condition, liquidity, results of operations, plans, and other objectives may vary materially from those expressed in our forward-looking statements. You should carefully consider this risk when you make an investment decision concerning our securities. Additionally, the following factors could cause actual results to vary from our forward-looking statements:

•the factors discussed in our Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission (the “SEC”) on March 5, 2021 (the “2020 10-K”), including those set forth under the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” and “Properties;” and other filings under the Exchange Act;

•adverse effects of the COVID-19 pandemic, including a significant reduction in business and personal travel and travel restrictions in regions where our hotels are located, and one or more possible recurrences of COVID-19 cases causing

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a further reduction in business and personal travel and potential reinstatement of travel restrictions by state or local governments;

•our ability to raise sufficient capital and/or take other actions to improve our liquidity position or otherwise meet our liquidity requirements;

•actions by our lenders to accelerate loan balances and foreclose on the hotel properties that are security for our loans if we are unable to make debt service payments or satisfy our other obligations under the forbearance agreements;

•general volatility of the capital markets and the market price of our common and preferred stock;

•general business and economic conditions affecting the lodging and travel industry;

•changes in our business or investment strategy;

•availability, terms and deployment of capital;

•unanticipated increases in financing and other costs, including a rise in interest rates;

•changes in our industry and the markets in which we operate, interest rates, or local economic conditions;

•the degree and nature of our competition;

•actual and potential conflicts of interest with Ashford Trust, Ashford Inc. and its subsidiaries (including Ashford LLC, Remington Hotels and Premier) and our executive officers and our non-independent director;

•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;

•our ability to implement effective internal controls to address the material weakness identified in this report;

•the timing or outcome of the SEC investigation;

•legislative and regulatory changes, including changes to the Internal Revenue Code of 1986, as amended (the “Code”) and related rules, regulations and interpretations governing the taxation of REITs;

•limitations 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, and

•future sales and issuances of our common stock or other securities might result in dilution and could cause the price of our common stock to decline.

When considering forward-looking statements, you should keep in mind the matters summarized under “Item 1A. Risk Factors” in Part I of our 2020 10-K and this Form 10-Q, and the discussion in this Management’s Discussion and Analysis of Financial Condition and Results of Operations, could cause our actual results and performance to differ significantly from those contained in our forward-looking statements. Additionally, many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 outbreak and the numerous government travel restrictions imposed in response thereto. The extent to which COVID-19 impacts us will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Accordingly, we cannot guarantee future results or performance. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect our views as of the date of this Form 10-Q. Furthermore, we do not intend to update any of our forward-looking statements after the date of this Form 10-Q to conform these statements to actual results and performance, except as may be required by applicable law.

Overview

We are a Maryland corporation formed in April 2013 that invests primarily in high revenue per available room (“RevPAR”), luxury hotels and resorts. High RevPAR, for purposes of our investment strategy, means RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined by Smith Travel Research. Two times the U.S. national average was $91 for the year ended December 31, 2020. We have elected to be taxed as a REIT under the Code. We conduct our business and own substantially all of our assets through our operating partnership, Braemar OP.

We operate in the direct hotel investment segment of the hotel lodging industry. As of March 31, 2021, we owned interests in thirteen hotel properties in six states, the District of Columbia and St. Thomas, U.S. Virgin Islands with 3,722 total rooms, or 3,487 net rooms, excluding those attributable to our joint venture partner. The hotel properties in our current portfolio are predominantly located in U.S. urban markets and resort locations with favorable growth characteristics resulting from multiple demand generators. We own eleven of our hotel properties directly, and the remaining two hotel properties through an investment in a majority-owned consolidated entity.

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We are advised by Ashford LLC, a subsidiary of Ashford Inc., through an advisory agreement. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC.

We do not operate any of our hotel properties directly; instead we employ hotel management companies to operate them for us under management contracts. As of March 31, 2021, Remington Hotels, a subsidiary of Ashford Inc., managed three of our thirteen hotel properties. Third-party management companies managed the remaining hotel properties.

Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest. These products and services include, but are not limited to project management services, debt placement and related services, broker-dealer and distribution services, audio visual services, real estate advisory services, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and mobile key technology.

Mr. Monty J. Bennett is chairman and chief executive officer of Ashford Inc. and, together with Mr. Archie Bennett, Jr., as of March 31, 2021, owned approximately 607,743 shares of Ashford Inc. common stock, which represented an approximate 20.2% ownership interest in Ashford Inc., and owned 18,758,600 shares of Ashford Inc. Series D Convertible Preferred Stock, which was exercisable (at an exercise price of $117.50 per share) into an additional approximate 3,991,191 shares of Ashford Inc. common stock, which if exercised as of March 31, 2021 would have increased the Bennetts’ ownership interest in Ashford Inc. to 65.7%, provided that prior to August 8, 2023, the voting power of the holders of the Ashford Inc. Series D Convertible Preferred Stock is limited to 40% of the combined voting power of all of the outstanding voting securities of the Ashford Inc. entitled to vote on any given matter. The 18,758,600 shares of Series D Convertible Preferred Stock owned by Mr. Monty J. Bennett and Mr. Archie Bennett, Jr. include 360,000 shares owned by trusts.

As of March 31, 2021, Mr. Monty J. Bennett, chairman of our board of directors and his father, Mr. Archie Bennett, Jr., together owned approximately 3,504,370 shares of our common stock (including common units, long-term incentive plan (“LTIP”) units and performance LTIP units), which represented an approximate 7.3% ownership in the Company.

Pursuant to the provisions of the Fifth Amended and Restated Advisory Agreement with Ashford LLC, as amended on January 15, 2019, the revenues and expenses used to calculate Net Earnings (as defined) for the twelve months ended March 31, 2021, are as follows (in thousands):

Revenues	$	24,005
Expenses	10,565
Net earnings	$	13,440

COVID-19, Management’s Plans and Liquidity

In December 2019, COVID-19 was identified in Wuhan, China, subsequently spread to other regions of the world, and has resulted in significant travel restrictions and extended shutdown of numerous businesses in every state in the United States. In March 2020, the World Health Organization declared COVID-19 to be a global pandemic. Beginning in late February 2020, we have experienced a significant decline in occupancy and RevPAR associated with COVID-19 as we experienced significant reservation cancellations as well as a significant reduction in new reservations. The prolonged presence of the virus has resulted in health and other government authorities imposing widespread restrictions on travel and other businesses. The hotel industry and our portfolio have experienced the postponement or cancellation of a significant number of business conferences and similar events. Following the government mandates and health official orders in March 2020, the Company temporarily suspended operations at 11 of its 13 hotels and dramatically reduced staffing and expenses at its hotels that remained operational. COVID-19 has had a significant negative impact on the Company’s operations and financial results to date. The full financial impact of the reduction in hotel demand caused by the pandemic and suspension of operations at the Company’s hotels cannot be reasonably estimated at this time due to uncertainty as to its severity and duration. In addition, one or more possible recurrences of COVID-19 cases could result in further reductions in business and personal travel and could cause state and local governments to reinstate travel restrictions. The Company expects that the COVID-19 pandemic will continue to have a negative impact on the Company’s results of operations, financial position and cash flow in 2021 and potentially much longer. As a result, in March 2020, the Company fully drew down its $75 million secured revolving credit facility, which was later converted into a term loan, suspended the quarterly cash dividend on its common stock, reduced planned capital expenditures, and, working closely with its hotel managers, significantly reduced its hotels’ operating expenses. See note 6 to our condensed consolidated financial statements.

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All of the Company’s property-level debt is non-recourse. Beginning on April 1, 2020, we did not make at least one interest payment under nearly all of our loan agreements, which constituted an “Event of Default” as such term is defined under the applicable loan documents. Further, the Company triggered an “Event of Default,” as defined under the secured revolving credit facility agreement as a result of the Company being in default on mortgage and mezzanine loans with an aggregate principal amount in excess of $200 million. Pursuant to the terms of the applicable loan documents, such an Event of Default caused an automatic increase in the interest rate on our outstanding loan balance for the period such Event of Default remains outstanding. Following an Event of Default, our lenders can generally elect to accelerate all principal and accrued interest payments that remain outstanding under the applicable loan agreement and foreclose on the applicable hotel properties that are security for such loans. Such Event of Default under the secured revolving credit facility agreement was eliminated by the First Amendment to Second Amended and Restated Credit Agreement, dated June 8, 2020, which provides that defaults under mortgage and mezzanine loans with an aggregate principal amount in excess of $200 million do not trigger a default under the secured revolving credit agreement unless such mortgage or mezzanine loans are also accelerated, and excluding from the $200 million threshold, any default and acceleration under those certain mortgage and mezzanine loans having an aggregate principal amount of $435 million and secured by the Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, The Notary Hotel and The Clancy. During the second and third quarters of 2020, we reached forbearance and other agreements with our lenders relating to loans secured by the Pier House Resort & Spa, The Ritz-Carlton Sarasota, The Ritz-Carlton Lake Tahoe, Hotel Yountville, Bardessono Hotel and Spa, Sofitel Chicago Magnificent Mile, The Notary Hotel, The Clancy, Marriott Seattle Waterfront, Capital Hilton and Hilton La Jolla Torrey Pines. On June 8, 2020, the Company amended its secured revolving credit facility converting it into a $65 million secured term loan and changed the terms of certain financial covenants, including a waiver of the Consolidated Fixed Charge Coverage Ratio (as defined in the Amendment) through March 31, 2021, that the Company was subject to under the secured revolving credit facility. On February 22, 2021, the Company further amended the term loan providing an extension of the waiver on the majority of the covenants through the fourth quarter of 2021 and a reduced fixed charge coverage ratio covenant through the end of 2022. The first period in which covenants will be tested is for the fiscal quarter ending March 31, 2022. As of March 31, 2021, no loans are in default.

Additionally, the Company did not make rental payments under two ground leases that are paid monthly; however, the Company executed a forbearance agreement with the landlord of the Bardessono Hotel and Spa and executed a rent deferral letter (consistent with the terms of Ordinance Number O-21177, passed by the Council of the City of San Diego on March 25, 2020) with the landlord of the Hilton La Jolla Torrey Pines, each of which temporarily resolved any potential events of default arising out of such non-payments. As of March 31, 2021, the Company is current on its rental payments.

The Company has taken proactive and aggressive actions to protect liquidity and reduce corporate expenses. The Company has also significantly reduced its planned spending for capital expenditures for fiscal year 2021 to approximately $20 million to $30 million and suspended its common stock dividends conserving approximately $6 million per quarter.

When preparing financial statements for each annual and interim reporting period management has the responsibility to evaluate whether there are conditions or events, considered in the aggregate, that create substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In applying the accounting guidance, the Company considers its current financial condition and liquidity sources, including current funds available, forecasted future cash flows and its unconditional obligations due over the next 12 months.

As of March 31, 2021, the Company maintained unrestricted cash of $85.7 million and restricted cash of $39.3 million. For the three months ended March 31, 2021, cash flows provided by operating activities was approximately $12.0 million. During the three months ended March 31, 2021, cash, cash equivalents and restricted cash increased $11.9 million. The vast majority of the restricted cash is comprised of lender and manager held reserves. The Company worked with its property managers and lenders in order to utilize lender and manager held reserves to fund operating shortfalls. At the end of the quarter, there was also $18.6 million due to the Company from third-party hotel managers, which is primarily the Company’s cash held by one of its property managers which is also available to fund hotel operating costs.

We cannot predict when hotel operating levels will return to normalized levels after the effects of the pandemic fully subside, whether our hotels will be forced to shut down operations or whether one or more governmental entities may impose additional travel restrictions due to a resurgence of COVID-19 cases in the future. As a result of these factors resulting from the impact of the pandemic, we are unable to estimate future financial performance with certainty. However, based on our completed term loan amendment and forbearance and other agreements, our current unrestricted and restricted cash on hand, our current cash utilization and forecast of future operating results for the next 12 months from the date of this report, and the actions we have taken to improve our liquidity, the Company has concluded that management’s current plan alleviates the substantial doubt about its ability to continue as a going concern. Facts and circumstances could change in the future that are outside of management’s control, such as additional government mandates, health official orders, travel restrictions and extended business shutdowns due to COVID-19.

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Recent Developments

On February 4, 2021, the Company entered into a Standby Equity Distribution Agreement (the “SEDA”) with YA II PN, Ltd. (“YA”), pursuant to which the Company will be able to sell up to 7,780,786 shares of its common stock (the “Commitment Amount”) at the Company’s request any time during the commitment period commencing on February 4, 2021, and terminating on the earliest of (i) the first day of the month next following the 36-month anniversary of the SEDA or (ii) the date on which YA shall have made payment of Advances (as defined in the SEDA) pursuant to the SEDA for shares of the Company’s common stock equal to the Commitment Amount (the “Commitment Period”). Other than with respect to the Initial Advance (as defined below) the shares sold to YA pursuant to the SEDA would be purchased at 95% of the Market Price (as defined below) and would be subject to certain limitations, including that YA could not purchase any shares that would result in it owning more than 4.99% of the Company’s common stock. “Market Price” shall mean the lowest daily VWAP (as defined below) of the Company’s common stock during the 5 consecutive trading days commencing on the trading day following the date the Company submits an advance notice to YA. “VWAP” means, for any trading day, the daily volume weighted average price of the Company’s common stock for such date on the principal market as reported by Bloomberg L.P. during regular trading hours.

At any time during the Commitment Period the Company may require YA to purchase shares of the Company’s common stock by delivering a written notice to YA setting forth the Advance Shares (as defined in the SEDA) that the Company desires to issue and sell to YA (the “Advance Notice”). The Company may deliver an Advance Notice for an initial Advance for up to 1,200,000 Advance Shares (the “Initial Advance”). The preliminary purchase price per share for such shares shall be 100% of the average daily VWAP for the 5 consecutive trading days immediately prior to the date of the Advance Notice (the “Preliminary Purchase Price”).

Pursuant to the SEDA, we currently intend to use the net proceeds from any sale of the shares for working capital purposes, including the repayment of outstanding debt. There are no other restrictions on future financing transactions. The SEDA does not contain any right of first refusal, participation rights, penalties or liquidated damages. We are not required to pay any additional amounts to reimburse or otherwise compensate YA in connection with the transaction except for a $10,000 structuring fee. As of May 2, 2021, the Company has sold approximately 1.45 million shares of common stock and received proceeds of approximately $8.4 million under the SEDA.

On February 22, 2021, the Company entered into the Second Amendment to the Second Amended and Restated Credit Agreement on its term loan. The amendment provides an extension of the waiver on the majority of the covenants through the fourth quarter of 2021 and a reduced fixed charge coverage ratio covenant through the end of 2022. The first period in which covenants will be tested is for the fiscal quarter ending March 31, 2022. The amendment also allows the Company to utilize approximately $9.3 million of cash held in FF&E reserve accounts at certain properties for discretionary capital expenditures.

From March 16, 2021 through May 5, 2021, Braemar entered into privately negotiated exchange agreements with certain holders of its Series B Convertible Preferred Stock in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended. The Company agreed to exchange a total of approximately 4.5 million shares of its common stock for approximately 1.2 million shares of its Series B Convertible Preferred Stock.

On April 21, 2021, Braemar and Lincoln Park, entered into a purchase agreement, pursuant to which the Company may sell to Lincoln Park up to $35 million of shares of its common stock, par value $0.01 per share of the Company, from time to time during the term of the purchase agreement. The issuance of the shares of common stock pursuant to the purchase agreement has been registered pursuant to the Company’s Registration Statement, and the related base prospectus included in the Registration Statement, as supplemented by a prospectus supplement filed with the SEC on April 21, 2021. Braemar and Lincoln Park also entered into a registration rights agreement, pursuant to which the Company agreed to maintain the effectiveness of the Registration Statement. On April 21, 2021, we issued 280,957 shares of our common stock for gross proceeds of approximately $1.5 million.

Key Indicators of Operating Performance

We use a variety of operating and other information to evaluate the operating performance of our business. These key indicators include financial information that is prepared in accordance with GAAP as well as other financial measures that are non-GAAP measures. In addition, we use other information that may not be financial in nature, including statistical information and comparative data. We use this information to measure the operating performance of our individual hotels, groups of hotels and/or business as a whole. We also use these metrics to evaluate the hotels in our portfolio and potential acquisitions to

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determine each hotel’s contribution to cash flow and its potential to provide attractive long-term total returns. These key indicators include:

•Occupancy. Occupancy means the total number of hotel rooms sold in a given period divided by the total number of rooms available. Occupancy measures the utilization of our hotels’ available capacity. We use occupancy to measure demand at a specific hotel or group of hotels in a given period.

•ADR. ADR means average daily rate and is calculated by dividing total hotel rooms revenues by total number of rooms sold in a given period. ADR measures average room price attained by a hotel and ADR trends provide useful information concerning the pricing environment and the nature of the customer base of a hotel or group of hotels. We use ADR to assess the pricing levels that we are able to generate.

•RevPAR. RevPAR means revenue per available room and is calculated by multiplying ADR by the average daily occupancy. RevPAR is one of the commonly used measures within the hotel industry to evaluate hotel operations. RevPAR does not include revenues from food and beverage sales or parking, telephone or other non-rooms revenues generated by the property. Although RevPAR does not include these ancillary revenues, it is generally considered the leading indicator of core revenues for many hotels. We also use RevPAR to compare the results of our hotels between periods and to analyze results of our comparable hotels (comparable hotels represent hotels we have owned for the entire period). RevPAR improvements attributable to increases in occupancy are generally accompanied by increases in most categories of variable operating costs. RevPAR improvements attributable to increases in ADR are generally accompanied by increases in limited categories of operating costs, such as management fees and franchise fees.

RevPAR changes that are primarily driven by changes in occupancy have different implications for overall revenues and profitability than changes that are driven primarily by changes in ADR. For example, an increase in occupancy at a hotel would lead to additional variable operating costs (including housekeeping services, utilities and room supplies) and could also result in increased other operating department revenue and expense. Changes in ADR typically have a greater impact on operating margins and profitability as they do not have a substantial effect on variable operating costs.

Occupancy, ADR and RevPAR are commonly used measures within the lodging industry to evaluate operating performance. RevPAR is an important statistic for monitoring operating performance at the individual hotel level and across our entire business. We evaluate individual hotel RevPAR performance on an absolute basis with comparisons to budget and prior periods, as well as on a regional and company-wide basis. ADR and RevPAR include only rooms revenue. Rooms revenue is dictated by demand (as measured by occupancy), pricing (as measured by ADR) and our available supply of hotel rooms.

We also use funds from operations (“FFO”), Adjusted FFO, earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) and Adjusted EBITDAre as measures of the operating performance of our business. See “Non-GAAP Financial Measures.”

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RESULTS OF OPERATIONS

Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020

The following table summarizes changes in key line items from our condensed consolidated statements of operations for the three months ended March 31, 2021 and 2020 (in thousands except percentages):

	Three Months Ended March 31,				Favorable (Unfavorable)
	2021		2020		$ Change		% Change
Revenue
Rooms	$	54,323	$	70,468	$	(16,145)	(22.9)	%
Food and beverage	16,629		28,803		(12,174)		(42.3)
Other	12,896		18,249		(5,353)		(29.3)
Total hotel revenue	83,848		117,520		(33,672)		(28.7)
Expenses
Hotel operating expenses:
Rooms	11,015		17,880		6,865		38.4
Food and beverage	13,952		23,901		9,949		41.6
Other expenses	28,543		42,090		13,547		32.2
Management fees	2,532		3,877		1,345		34.7
Total hotel operating expenses	56,042		87,748		31,706		36.1
Property taxes, insurance and other	7,264		7,660		396		5.2
Depreciation and amortization	18,353		18,338		(15)		(0.1)
Advisory services fee	4,795		5,069		274		5.4
Corporate general and administrative	1,600		1,932		332		17.2
Total expenses	88,054		120,747		32,693		27.1
Gain (loss) on insurance settlement and disposition of assets	499		—		499
Operating income (loss)	(3,707)		(3,227)		(480)		(14.9)
Equity in earnings (loss) of unconsolidated entity	(64)		(40)		(24)		(60.0)
Interest income	9		129		(120)		(93.0)
Other income (expense)	—		(138)		138		100.0
Interest expense and amortization of loan costs	(6,756)		(11,897)		5,141		43.2
Write-off of loan costs and exit fees	(351)		—		(351)
Unrealized gain (loss) on derivatives	(20)		1,156		(1,176)		(101.7)
Income (loss) before income taxes	(10,889)		(14,017)		3,128		22.3
Income tax (expense) benefit	(145)		(1,370)		1,225		89.4
Net income (loss)	(11,034)		(15,387)		4,353		28.3
(Income) loss attributable to noncontrolling interest in consolidated entities	1,247		572		(675)		(118.0)
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	1,079		1,885		806		42.8
Net income (loss) attributable to the Company	$	(8,708)	$	(12,930)	$	4,222	32.7	%

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The following table illustrates the key performance indicators of all hotel properties for the periods indicated:

	Three Months Ended March 31,
	2021			2020
Occupancy	37.01		%	59.77		%
ADR (average daily rate)	$	436.98		$	348.16
RevPAR (revenue per available room)	$	161.73		$	208.10
Rooms revenue (in thousands)	$	54,323		$	70,468
Total hotel revenue (in thousands)	$	83,848		$	117,520

Net Income (Loss) Attributable to the Company. Net loss attributable to the Company decreased $4.2 million, from $12.9 million for the three months ended March 31, 2020 (the “2020 quarter”), to $8.7 million for the three months ended March 31, 2021 (the “2021 quarter”), as a result of the factors discussed below.

Rooms Revenue. Rooms revenue decreased $16.1 million, or 22.9%, to $54.3 million during the 2021 quarter compared to the 2020 quarter. During the 2021 quarter, we experienced a 2,276 basis point decrease in occupancy and a 25.5% increase in room rates compared to the 2020 quarter. The decrease in rooms revenue is due to the COVID-19 pandemic.

Fluctuations in rooms revenue is a result of the changes in occupancy and ADR as reflected in the table below (dollars in thousands):

Hotel Property	Favorable (Unfavorable)
	Rooms revenue		Occupancy (change in bps)	ADR (change in %)
Comparable
Capital Hilton	$	(4,504)	(3,172)	(32.7)	%
Marriott Seattle Waterfront	(2,800)		(3,497)	(24.6)	%
The Notary Hotel	(3,225)		(3,701)	(19.0)	%
The Clancy (1)	(6,368)		(4,194)	(56.3)	%
Sofitel Chicago Magnificent Mile	(1,201)		(2,781)	19.3	%
Pier House Resort & Spa	34		667	(6.3)	%
The Ritz-Carlton St. Thomas	6,236		2,089	31.8	%
Park Hyatt Beaver Creek Resort & Spa	(1,771)		184	(23.1)	%
Hotel Yountville	(374)		(1,368)	5.0	%
The Ritz-Carlton Sarasota	2,327		427	21.7	%
Hilton La Jolla Torrey Pines	(3,504)		(3,070)	(37.9)	%
Bardessono Hotel and Spa	(216)		(1,104)	13.1	%
The Ritz-Carlton Lake Tahoe	(779)		39	(9.3)	%
Total	$	(16,145)	(2,276)	25.5	%

_______________

(1) The hotel was being renovated through September 30, 2020.

Food and Beverage Revenue. Food and beverage revenue decreased $12.2 million, or 42.3%, to $16.6 million during the 2021 quarter compared to the 2020 quarter. This decrease is primarily attributable to the impact of the COVID-19 pandemic. We experienced an aggregate decrease in food and beverage revenue of $12.9 million at twelve hotel properties, partially offset by an increase of $702,000 at The Ritz-Carlton St. Thomas.

Other Hotel Revenue. Other hotel revenue, which consists mainly of condo management fees, health center fees, resort fees, golf, telecommunications, parking, rentals and business interruption revenue, decreased $5.4 million, or 29.3%, to $12.9 million during the 2021 quarter compared to the 2020 quarter. The decrease is attributable to $3.6 million of business interruption revenue recorded in the 2020 quarter, an aggregate decrease in other hotel revenue of $3.5 million at ten hotel properties, partially offset by higher other hotel revenue of $1.7 million at The Ritz-Carlton Sarasota, The Ritz-Carlton St. Thomas and Pier House Resort & Spa.

During the 2020 quarter, we recognized business interruption revenue of $3.6 million at The Ritz-Carlton St. Thomas as a result of Hurricane Irma. There was no such revenue recorded in the 2021 quarter as the insurance claim was fully settled in 2020.

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Rooms Expense. Rooms expense decreased $6.9 million, or 38.4%, to $11.0 million in the 2021 quarter compared to the 2020 quarter. The decrease is attributable to an aggregate decrease in rooms expense of $6.9 million at eleven hotel properties, partially offset by an increase of $54,000 at The Ritz-Carlton St. Thomas and Pier House Resort & Spa.

Food and Beverage Expense. Food and beverage expense decreased $9.9 million, or 41.6%, to $14.0 million during the 2021 quarter compared to the 2020 quarter. The decrease is attributable to an aggregate decrease of $10.0 million at twelve hotel properties, partially offset by an increase of $54,000 at The Ritz-Carlton St. Thomas.

Other Operating Expenses. Other operating expenses decreased $13.5 million, or 32.2%, to $28.5 million in the 2021 quarter compared to the 2020 quarter. Hotel operating expenses consist of direct expenses from departments associated with revenue streams and indirect expenses associated with support departments and incentive management fees. We experienced a decrease of $704,000 in direct expenses and $12.8 million in indirect expenses and incentive management fees in the 2021 quarter compared to the 2020 quarter. Direct expenses were 5.9% of total hotel revenue in the 2021 quarter and 4.8% in the 2020 quarter.

The decrease in direct expenses is attributable to the COVID-19 pandemic.

The decrease in indirect expenses is attributable to decreases in (i) marketing costs of $3.3 million; (ii) general and administrative costs of $8.9 million; (iii) repairs and maintenance of $810,000; (v) energy costs of $96,000 and (vi) lease expense of $261,000. The decreases are partially offset by an increase of $532,000 in incentive management fee.

Management Fees. Base management fees decreased $1.3 million, or 34.7%, to $2.5 million in the 2021 quarter compared to the 2020 quarter. Management fees decreased $1.5 million at ten hotel properties, partially offset be an aggregate increase of $156,000 at The Ritz-Carlton St. Thomas, Pier House Resort & Spa and The Ritz-Carlton Sarasota.

Property Taxes, Insurance and Other. Property taxes, insurance and other decreased $396,000, or 5.2%, to $7.3 million in the 2021 quarter compared to the 2020 quarter.

Depreciation and Amortization. Depreciation and amortization increased $15,000, or 0.1%, to $18.4 million for the 2021 quarter compared to the 2020 quarter.

Advisory Services Fee. Advisory services fee decreased $274,000, or 5.4%, to $4.8 million in the 2021 quarter compared to the 2020 quarter due to decreases in the base advisory fee of $76,000, reimbursable expenses of $52,000, and equity-based compensation of $517,000, partially offset by an increase in incentive fee of $371,000. In the 2021 quarter, we recorded an advisory services fee of $4.8 million, which included a base advisory fee of $2.5 million, reimbursable expenses of $492,000, $1.4 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc. and an incentive fee of $371,000. In the 2020 quarter, we recorded an advisory services fee of $5.1 million, which included a base advisory fee of $2.6 million, reimbursable expenses of $544,000 and $1.9 million associated with equity grants of our common stock and LTIP units awarded to the officers and employees of Ashford Inc.

Corporate General and Administrative. Corporate general and administrative expense was $1.6 million in the 2021 quarter and $1.9 million in the 2020 quarter. The decrease in corporate general and administrative expenses is primarily due to lower professional fees of $427,000, lower miscellaneous expenses of $80,000, partially offset by higher reimbursed operating expenses of Ashford Securities of $108,000 and higher public company costs of $67,000.

Gain (loss) on insurance settlement and disposition of assets. In the 2021 quarter, we recognized a gain of $481,000 associated with proceeds received from an insurance claim and a gain of $18,000 upon disposition of certain fixed assets.

Equity in Earnings (Loss) of Unconsolidated Entity. In the 2021 quarter and the 2020 quarter, we recorded equity in loss of unconsolidated entity of $64,000 and $40,000, respectively, related to our investment in OpenKey.

Interest Income. Interest income decreased $120,000, or 93.0%, to $9,000 for the 2021 quarter compared to the 2020 quarter.

Other Income (Expense). Other expense decreased $138,000, or 100.0% to $0 in the 2021 quarter compared to the 2020 quarter. In the 2020 quarter, we recorded expense of $63,000 related to CMBX premiums and interest paid on collateral and a realized loss of $75,000 on interest rate floors. There was no such expenses in the 2021 quarter.

Interest Expense and Amortization of Loan Costs. Interest expense and amortization of loan costs decreased $5.1 million, or 43.2%, to $6.8 million for the 2021 quarter compared to the 2020 quarter. The decrease is primarily due to a lower average LIBOR rate and the amortization of default interest and late charges recorded on loans that were previously in default, partially

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offset by higher interest expense associated with our corporate term loan. The average LIBOR rates for the 2021 quarter and the 2020 quarter were 0.12% and 1.40%, respectively.

Write-off of Loan Costs and Exit Fees. Write-off of loan costs and exit fees was $351,000 in the 2021 quarter, resulting from several amendments executed with various lenders, which included deferral of debt service payments and allowed the use of reserves for property-level operating shortfalls and/or to cover debt service payments. Third-party fees incurred in conjunction with these amendments, totaling $351,000, were expensed in accordance with applicable accounting guidance. There was no write-off of loan costs and exit fees during the 2020 quarter.

Unrealized Gain (Loss) on Derivatives. Unrealized loss on derivatives of $20,000 for the 2021 quarter consisted of a $20,000 unrealized loss on interest rate caps. Unrealized gain on derivatives of $1.2 million in the 2020 quarter consisted of a $1.1 million unrealized gain on CMBX credit default swaps and a $75,000 unrealized gain on interest rate floors associated with the recognition of a realized loss from the termination of interest rate floors, partially offset by a $19,000 unrealized loss on interest rate caps.

Income Tax (Expense) Benefit. Income tax expense decreased $1.2 million, from $1.4 million in the 2020 quarter to $145,000 in the 2021 quarter. This change was primarily due to a decrease in the profitability of our TRS entities in the 2021 quarter compared to the 2020 quarter.

(Income) Loss Attributable to Noncontrolling Interest in Consolidated Entities. Our noncontrolling interest partner in consolidated entities was allocated a loss of $1.2 million and $572,000 for the 2021 quarter and the 2020 quarter, respectively. At both March 31, 2021 and 2020, noncontrolling interest in consolidated entities represented an ownership interest of 25% in two hotel properties held by one entity.

Net (Income) Loss Attributable to Redeemable Noncontrolling Interests in Operating Partnership. Noncontrolling interests in operating partnership were allocated a net loss of $1.1 million and $1.9 million for the 2021 quarter and the 2020 quarter, respectively. Redeemable noncontrolling interests represented ownership interests in Braemar OP of approximately 8.87% and 10.85% as of March 31, 2021 and 2020, respectively.

LIQUIDITY AND CAPITAL RESOURCES

COVID-19, Management’s Plans and Liquidity

In December 2019, COVID-19 was identified in Wuhan, China, subsequently spread to other regions of the world, and has resulted in significant travel restrictions and extended shutdown of numerous businesses in every state in the United States. In March 2020, the World Health Organization declared COVID-19 to be a global pandemic. Beginning in late February 2020, we experienced a significant decline in occupancy and RevPAR associated with COVID-19 as we experienced significant reservation cancellations as well as a significant reduction in new reservations. The prolonged presence of the virus has resulted in health and other government authorities imposing widespread restrictions on travel and other businesses. The hotel industry and our portfolio have experienced the postponement or cancellation of a significant number of business conferences and similar events. Following the government mandates and health official orders in March 2020, the Company temporarily suspended operations at 11 of its 13 hotels and dramatically reduced staffing and expenses at its hotels that remained operational. COVID-19 has had a significant negative impact on the Company’s operations and financial results to date. The full financial impact of the reduction in hotel demand caused by the pandemic and suspension of operations at the Company’s hotels cannot be reasonably estimated at this time due to uncertainty as to its severity and duration. In addition, one or more possible recurrences of COVID-19 cases could result in further reductions in business and personal travel and could cause state and local governments to reinstate travel restrictions. The Company expects that the COVID-19 pandemic will continue to have a negative impact on the Company’s results of operations, financial position and cash flow in 2021 and potentially much longer. As a result, in March 2020, the Company fully drew down its $75 million secured revolving credit facility, which was later converted into a term loan, suspended the quarterly cash dividend on its common stock, reduced planned capital expenditures, and, working closely with its hotel managers, significantly reduced its hotels’ operating expenses. See note 6 to our condensed consolidated financial statements for term loan details.

All of the Company’s property-level debt is non-recourse. Beginning on April 1, 2020, we did not make at least one interest payment under nearly all of our loan agreements, which constituted an “Event of Default” as such term is defined under the applicable loan documents. Further, the Company triggered an “Event of Default,” as defined under the secured revolving credit facility agreement as a result of the Company being in default on mortgage and mezzanine loans with an aggregate principal amount in excess of $200 million. Pursuant to the terms of the applicable loan documents, such an Event of Default caused an automatic increase in the interest rate on our outstanding loan balance for the period such Event of Default remains outstanding. Following an Event of Default, our lenders can generally elect to accelerate all principal and accrued interest

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payments that remain outstanding under the applicable loan agreement and foreclose on the applicable hotel properties that are security for such loans. Such Event of Default under the secured revolving credit facility agreement was eliminated by the First Amendment to Second Amended and Restated Credit Agreement, dated June 8, 2020, which provides that defaults under mortgage and mezzanine loans with an aggregate principal amount in excess of $200 million do not trigger a default under the secured revolving credit agreement unless such mortgage or mezzanine loans are also accelerated, and excluding from the $200 million threshold, any default and acceleration under those certain mortgage and mezzanine loans having an aggregate principal amount of $435 million and secured by the Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, The Notary Hotel and The Clancy. During the second and third quarters of 2020, we reached forbearance and other agreements with our lenders relating to loans secured by the Pier House Resort & Spa, The Ritz-Carlton Sarasota, The Ritz-Carlton Lake Tahoe, Hotel Yountville, Bardessono Hotel and Spa, Sofitel Chicago Magnificent Mile, The Notary Hotel, The Clancy, Marriott Seattle Waterfront, Capital Hilton and Hilton La Jolla Torrey Pines. The Company amended its secured revolving credit facility converting it into a $65 million secured term loan and changed the terms of certain financial covenants, including a waiver of the Consolidated Fixed Charge Coverage Ratio (as defined in the Amendment) through March 31, 2021, that the Company was subject to under the secured revolving credit facility. On February 22, 2021, the Company further amended the term loan providing an extension of the waiver on the majority of the covenants continuing through the fourth quarter of 2021 and a reduced fixed charge coverage ratio covenant through the end of 2022. The first period in which covenants will be tested is for the fiscal quarter ending March 31, 2022. As of March 31, 2021, no loans are in default.

Additionally, the Company did not make rental payments under two ground leases that are paid monthly; however, the Company executed a forbearance agreement with the landlord of the Bardessono Hotel and Spa and executed a rent deferral letter (consistent with the terms of Ordinance Number O-21177, passed by the Council of the City of San Diego on March 25, 2020) with the landlord of the Hilton La Jolla Torrey Pines, each of which temporarily resolved any potential events of default arising out of such non-payments. As of March 31, 2021, the Company is current on its rental payments.

The Company has taken proactive and aggressive actions to protect liquidity and reduce corporate expenses. The Company has also significantly reduced its planned spending for capital expenditures for fiscal year 2021 to approximately $20 million to $30 million and suspended its common stock dividends conserving approximately $6 million per quarter.

When preparing financial statements for each annual and interim reporting period management has the responsibility to evaluate whether there are conditions or events, considered in the aggregate, that create substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In applying the accounting guidance, the Company considers its current financial condition and liquidity sources, including current funds available, forecasted future cash flows and its unconditional obligations due over the next 12 months.

As of March 31, 2021, the Company maintained unrestricted cash of $85.7 million and restricted cash of $39.3 million. For the three months ended March 31, 2021, cash flows provided by operating activities was approximately $12.0 million. The vast majority of the restricted cash is comprised of lender and manager held reserves. The Company worked with its property managers and lenders in order to utilize lender and manager held reserves to fund operating shortfalls. At the end of the quarter, there was also $18.6 million due to the Company from third-party hotel managers, which is primarily the Company’s cash held by one of its property managers which is also available to fund hotel operating costs.

We cannot predict when hotel operating levels will return to normalized levels after the effects of the pandemic fully subside, whether our hotels will be forced to shut down operations or whether one or more governmental entities may impose additional travel restrictions due to a resurgence of COVID-19 cases in the future. As a result of these factors resulting from the impact of the pandemic, we are unable to estimate future financial performance with certainty. However, based on our completed term loan amendment and forbearance and other agreements, our current unrestricted and restricted cash on hand, our current cash utilization and forecast of future operating results for the next 12 months from the date of this report, and the actions we have taken to improve our liquidity, the Company has concluded that management’s current plan alleviates the substantial doubt about its ability to continue as a going concern. Facts and circumstances could change in the future that are outside of management’s control, such as additional government mandates, health official orders, travel restrictions and extended business shutdowns due to COVID-19.

Our short-term liquidity requirements consist primarily of funds necessary to pay for operating expenses and other expenditures directly associated with our hotel properties, including:

•advisory fees payable to Ashford LLC;

•recurring maintenance necessary to maintain our hotel properties in accordance with brand standards;

•interest expense and scheduled principal payments on outstanding indebtedness, including our secured term loan (see “Contractual Obligations and Commitments”);

•distributions, if any, in the form of dividends on our common stock, necessary to qualify for taxation as a REIT;

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•dividends on our preferred stock; and

•capital expenditures to improve our hotel properties.

We expect to meet our short-term liquidity requirements generally through net cash provided by operations, capital market activities and existing cash balances.

Pursuant to the advisory agreement between us and our advisor, we must pay our advisor on a monthly basis a base advisory fee, subject to a minimum base advisory fee. The minimum base advisory fee is equal to the greater of: (i) 90% of the base fee paid for the same month in the prior fiscal year; and (ii) 1/12th of the “G&A Ratio” for the most recently completed fiscal quarter multiplied by our total market capitalization on the last balance sheet date included in the most recent quarterly report on Form 10-Q or annual report on Form 10-K that we file with the SEC. Thus, even if our total market capitalization and performance decline, we will still be required to make payments to our advisor equal to the minimum base advisory fee, which could adversely impact our liquidity and financial condition.

Our long-term liquidity requirements consist primarily of funds necessary to pay for the costs of acquiring additional hotel properties and redevelopments, renovations, expansions and other capital expenditures that need to be made periodically with respect to our hotel properties and scheduled debt payments. We expect to meet our long-term liquidity requirements through various sources of capital, including future common and preferred equity issuances, existing working capital, net cash provided by operations, hotel mortgage indebtedness and other secured and unsecured borrowings. However, there are a number of factors that may have a material adverse effect on our ability to access these capital sources, including the current and ongoing effects of COVID-19 on our business and the hotel industry, the state of overall equity and credit markets, our degree of leverage, our unencumbered asset base and borrowing restrictions imposed by lenders (including as a result of any failure to comply with financial covenants in our existing and future indebtedness), general market conditions for REITs, our operating performance and liquidity and market perceptions about us. The success of our business strategy will depend, in part, on our ability to access these various capital sources. While management cannot provide any assurances, management believes that our cash flow from operations and our existing cash balances will be adequate to meet upcoming anticipated requirements for interest and principal payments on debt (excluding any potential final maturity principal payments), working capital, and capital expenditures for the next 12 months and dividends required to maintain our status as a REIT for U.S. federal income tax purposes.

Our hotel properties will require periodic capital expenditures and renovation to remain competitive. In addition, acquisitions, redevelopments or expansions of hotel properties may require significant capital outlays. We may not be able to fund such capital improvements solely from net cash provided by operations because we must distribute annually at least 90% of our REIT taxable income, determined without regard to the deductions for dividends paid and excluding net capital gains, to qualify and maintain our qualification as a REIT, and we are subject to tax on any retained income and gains. As a result, our ability to fund capital expenditures, acquisitions or hotel redevelopment through retained earnings is very limited. Consequently, we expect to rely heavily upon the availability of debt or equity capital for these purposes. If we are unable to obtain the necessary capital on favorable terms, or at all, our financial condition, liquidity, results of operations and prospects could be materially and adversely affected.

Certain of our loan agreements contain cash trap provisions that may be triggered if the performance of our hotel properties decline. When these provisions are triggered, substantially all of the profit generated by the hotel properties securing such loan is deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of our various lenders. This could affect our liquidity and our ability to make distributions to our stockholders until such time that a cash trap is no longer in effect for such loan. These cash trap provisions have been triggered on some of our mortgage loans.

Equity Transactions

On December 5, 2017, our board of directors approved the stock repurchase program pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share and preferred stock having an aggregate value of up to $50 million. The board of directors’ authorization replaced any previous repurchase authorizations. No shares were repurchased during the three months ended March 31, 2021, pursuant to this authorization.

On December 11, 2017, we entered into equity distribution agreements with certain sales agents to sell from time to time shares of our common stock having an aggregate offering price of up to $50.0 million. Sales of shares of our common stock, if any, may be made in negotiated transactions or transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 of the Securities Act, including sales made directly on the NYSE, the existing trading market for our common stock, or sales made to or through a market maker other than on an exchange or through an electronic communications network. We will pay each of the sales agents a commission, which in each case shall not be more than 2.0% of the gross sales price of the shares

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of our common stock sold through such sales agent. On July 7, 2020, we entered into a side letter (the “Side Letter”) with the sales agents pursuant to which we agreed to pay all reasonable documented out-of-pocket expenses, including the reasonable fees and disbursements of counsel incurred by the sales agents, in connection with the ongoing services contemplated by the equity distribution agreements (subject to a $75,000 cap on certain expenses incurred in June 2020). Pursuant to the Side Letter, the sales agents have agreed to reimburse us for up to $50,000 of such expenses, if the sales agents offer and sell an amount of our common stock with an aggregate offering price of $15,000,000, and have agreed to reimburse us for up to an additional $50,000 of such expenses, provided the sales agents offer and sell an amount of our common stock with an aggregate offering price of $30,000,000. As of May 5, 2021, the Company has sold approximately 7.4 million shares of common stock and received gross proceeds of approximately $30.8 million under this program.

On November 13, 2019, we filed an initial registration statement with the SEC, as amended on January 24, 2020, for shares of our non-traded Series E Preferred Stock and our non-traded Series M Preferred Stock. The registration statement became effective on February 21, 2020, and contemplates the issuance and sale of up to 20,000,000 shares of Series E Preferred Stock or Series M Preferred Stock in a primary offering and up to 8,000,000 shares of Series E Preferred Stock or Series M Preferred Stock offered pursuant to a dividend reinvestment plan. On February 25, 2020, we filed our prospectus with the SEC. Ashford Securities, a subsidiary of Ashford Inc. serves as the dealer manager and wholesaler of our Series E Preferred Stock and Series M Preferred Stock. On April 2, 2021, the Company filed with the State Department of Assessments and Taxation of the State of Maryland articles supplementary to the Company’s Articles of Amendment and Restatement that provided for: (i) reclassifying the existing 28,000,000 shares of Series E Preferred Stock and 28,000,000 shares of Series M Preferred Stock as unissued shares of preferred stock; (ii) reclassifying and designating 28,000,000 shares of the Company’s authorized capital stock as shares of the Series E Preferred Stock; and (iii) reclassifying and designating 28,000,000 shares of the Company’s authorized capital stock as shares of the Series M Preferred Stock. These new Series E Articles Supplementary and Series M Articles Supplementary were filed to revise the preferred stock terms related to the dividend rate, the Company’s optional redemption right and certain other voting rights. The Company also caused its operating partnership to execute Amendment No. 5 to the Third Amended and Restated Agreement of Limited Partnership to amend the terms of its operating partnership to conform to the terms of its Series E Articles Supplementary and Series M Articles Supplementary. As of May 5, 2021, no shares of Series E Preferred Stock or Series M Preferred Stock have been issued.

On December 4, 2019, we entered into equity distribution agreements with certain sales agents to sell from time to time shares of our Series B Convertible Preferred Stock having an aggregate offering price of up to $40.0 million. Sales of shares of our Series B Convertible Preferred Stock may be made in negotiated transactions or transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 of the Securities Act, including sales made directly on the NYSE, the existing trading market for our Series B Convertible Preferred Stock, or sales made to or through a market maker other than on an exchange or through an electronic communications network. We will pay each of the sales agents a commission, which in each case shall not be more than 2.0% of the gross sales price of the shares of our Series B Convertible Preferred Stock sold through such sales agents. Since the inception of the program, we issued approximately 63,000 shares of our Series B Convertible Preferred Stock through our “at-the-market” equity offering program resulting in gross proceeds of approximately $1.0 million before discounts and commissions to the selling agents of approximately $19,000.

On February 4, 2021, the Company entered into the SEDA, pursuant to which the Company will be able to sell the Commitment Amount at the Company’s request any time during the commitment period commencing on February 4, 2021, and terminating at the end of the Commitment Period. Other than with respect to the Initial Advance the shares sold to YA pursuant to the SEDA would be purchased at 95% of the Market Price and would be subject to certain limitations, including that YA could not purchase any shares that would result in it owning more than 4.99% of the Company’s common stock.

At any time during the Commitment Period the Company may require YA to purchase shares of the Company’s common stock by delivering an Advance Notice. The Company may deliver an Initial Advance for up to 1,200,000 Advance Shares. The Preliminary Purchase Price per share for such shares shall be 100% of the average daily VWAP for the 5 consecutive trading days immediately prior to the date of the Advance Notice.

Pursuant to the SEDA, we currently intend to use the net proceeds from any sale of the shares for working capital purposes, including the repayment of outstanding debt. There are no other restrictions on future financing transactions. The SEDA does not contain any right of first refusal, participation rights, penalties or liquidated damages. We are not required to pay any additional amounts to reimburse or otherwise compensate YA in connection with the transaction except for a $10,000 structuring fee. As of May 2, 2021, the Company has sold approximately 1.45 million shares of common stock and received proceeds of approximately $8.4 million under the SEDA.

From March 16, 2021 through May 5, 2021, Braemar entered into privately negotiated exchange agreements with certain holders of its Series B Convertible Preferred Stock in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended. The Company agreed to exchange a total of approximately 4.5 million shares of its common stock for approximately 1.2 million shares of its Series B Convertible Preferred Stock.

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On April 21, 2021, Braemar and Lincoln Park, entered into a purchase agreement, pursuant to which the Company may sell to Lincoln Park up to $35 million of shares of its common stock, par value $0.01 per share of the Company, from time to time during the term of the purchase agreement. The issuance of the common shares pursuant to the purchase agreement has been registered pursuant to the Company’s Registration Statement, and the related base prospectus included in the Registration Statement, as supplemented by a prospectus supplement filed with the SEC on April 21, 2021. Braemar and Lincoln Park also entered into a registration rights agreement, pursuant to which the Company agreed to maintain the effectiveness of the Registration Statement. On April 21, 2021, we issued 280,957 shares of our common stock for gross proceeds of approximately $1.5 million.

Debt Transactions

Secured Revolving Credit Facility and Secured Term Loan

Prior to June 8, 2020, we had a senior secured revolving credit facility in the amount of $75.0 million, including $15 million available in letters of credit and $15 million available in swingline loans.

The secured revolving credit facility also contained customary terms, covenants, negative covenants, events of default, limitations and other conditions for credit facilities of this type. Subject to certain exceptions, we are subject to restrictions on incurring additional indebtedness, mergers and fundamental changes, sales or other dispositions of property, changes in the nature of our business, investments and capital expenditures.

We also were subject to certain financial covenants, as set forth below, which were tested by the borrower on a consolidated basis (net of the amounts attributable to the non-controlling interest held by our partner in a majority-owned consolidated entity) and include, but are not limited to, the following:

•consolidated indebtedness (less cash and cash equivalents in excess of $10,000,000) to total asset value not to exceed 65%.

•consolidated recourse indebtedness other than the secured revolving credit facility not to exceed $50,000,000.

•consolidated fixed charge coverage ratio not less than 1.40x initially, with such ratio being increased beginning July 1, 2020 to 1.50x.

•indebtedness of the consolidated parties that accrues interest at a variable rate (other than the secured revolving credit facility) that is not subject to a “cap,” “collar,” or other similar arrangement not to exceed 25% of consolidated indebtedness.

•consolidated tangible net worth not less than 75% of the consolidated tangible net worth on June 30, 2019, plus 75% of the net proceeds of any future equity issuances.

•secured debt that is secured by real property not to exceed 70% of the as-is appraised value of such real property.

All financial covenants were tested and certified by the borrower on a quarterly basis. Beginning April 1, 2020, the Company did not make at least one interest payment on nearly all of its mortgage and mezzanine loans, which constituted an “Event of Default” as such term is defined under the applicable loan documents. Further, the Company triggered an “Event of Default,” as defined under the secured revolving credit facility agreement as a result of the Company being in default on mortgage and mezzanine loans with an aggregate principal amount in excess of $200 million. Such Event of Default under the secured revolving credit facility agreement was eliminated by the First Amendment to Second Amended and Restated Credit Agreement, dated June 8, 2020, which provides that defaults under mortgage and mezzanine loans with an aggregate principal amount in excess of $200 million do not trigger a default under the secured revolving credit agreement unless such mortgage or mezzanine loans are also accelerated, and excluding from the $200 million threshold, any default and acceleration under those certain mortgage and mezzanine loans having an aggregate principal amount of $435 million and secured by the Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, The Notary Hotel and The Clancy.

The secured revolving credit facility included customary events of default, and the occurrence of an event of default will permit the lenders to terminate commitments to lend under the secured revolving credit facility and accelerate payment of all amounts outstanding thereunder. If a default occurs and is continuing, we will be precluded from making distributions on our shares of common stock (other than those required to allow us to qualify and maintain our status as a REIT, so long as such default does not arise from a payment default or event of insolvency).

Borrowings under the secured revolving credit facility bore interest, at our option, at either LIBOR for a designated interest period plus an applicable margin, or the Base Rate (as defined in the credit agreement) plus an applicable margin. The applicable margin for borrowings under the secured revolving credit facility for base rate loans range from 1.25% to 2.50% per annum and the applicable margin for borrowings under the secured revolving credit facility for LIBOR loans range from 2.25%

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to 3.50% per annum, depending on the ratio of consolidated indebtedness to EBITDA, with the lowest rate applying if such ratio is less than 4.0x and the highest rate applying if such ratio is greater than 6.0x.

The First Amendment to the Second Amended and Restated Credit Agreement (the “Amendment”) 

On June 8, 2020, we entered into an Amendment which converted the $75 million secured revolving credit facility into a $65 million secured term loan. We had borrowed the full borrowing capacity of $75 million under the Credit Facility and repaid $10 million on June 8, 2020, in connection with the signing of the Amendment. Pursuant to the terms of the Amendment, borrowings will bear interest at a rate of LIBOR plus 3.50% or Base Rate plus 2.50% until June 30, 2021. After such date, the pricing will revert to the original terms of the Credit Facility. The Amendment also added amortization of $5 million per quarter commencing on March 31, 2021. The Amendment has the same maturity date of October 25, 2022 but removes the two one-year extension options and also removes the Company’s ability to reborrow amounts that have been repaid.

The Amendment changed the terms of certain financial covenants that the Company was subject to under the Credit Facility, which are summarized as follows:

•The requirement that the Consolidated Fixed Charge Coverage Ratio (as defined in the Amendment) be not less than 1.40 has been waived through March 31, 2021 (the “Covenant Waiver Period”). At the end of the Covenant Waiver Period, the Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Facility) becomes 1.0 for the second quarter of 2021, 1.10 for the third and fourth quarters of 2021, 1.20 for the first quarter of 2022, and then returns to 1.40 thereafter.

•The covenant that required the Company’s consolidated recourse indebtedness (other than the Credit Facility) not exceed $50 million was permanently reduced to zero ($0) and a new covenant was also added that requires the Company to have minimum liquidity (comprised of unrestricted cash) of $20 million through June 30, 2021, which shall be tested monthly. Our cash and cash equivalents were $85.7 million at March 31, 2021.

The Amendment added limitations on the Company’s ability prior to June 30, 2021, to incur or guaranty additional indebtedness, grant liens, make restricted payments (with the exception of existing preferred dividend payments) or engage in asset sales, discretionary capital expenditures or additional investments. The Amendment also added mandatory prepayments that require the Company to prepay and reduce the balance of the term loan by an amount equal to 50% of net proceeds from any asset sales, equity offerings (including the offering of Series E, Series M and other preferred equity offerings) or incurrence of indebtedness (including refinancings), except that the first $50 million of any common equity offering (including sales of shares of common stock under the Company’s “at-the-market” equity distribution program) is subject to a mandatory prepayment in an amount equal to 25% of net proceeds. The Company was in compliance with all covenants as of March 31, 2021.

The Second Amendment to the Second Amended and Restated Credit Agreement (the “Second Amendment”)

On February 22, 2021, the Company entered into the Second Amendment to Second Amended and Restated Credit Agreement. The Second Amendment waives certain covenants through the fourth quarter of 2021 and amends certain other terms, as described further below. The first period in which covenants will be tested is for the fiscal quarter ending March 31, 2022.

Pursuant to the terms of the Second Amendment, borrowings will bear interest at a rate of LIBOR plus 3.65% or Base Rate plus 2.65% until the Company provides a compliance certificate for the quarter ending March 31, 2022. After such date, the pricing will revert to the original terms of the Credit Facility.

The Second Amendment changes the terms of certain financial covenants that the Company was subject to under the Credit Facility. The requirement that the Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Facility) be not less than 1.40 has been waived through December 31, 2021 (the “Covenant Waiver Period”). At the end of the Covenant Waiver Period, the Consolidated Fixed Charge Coverage Ratio becomes 1.0 for the first quarter of 2022, 1.10 for the second and third quarters of 2022, 1.20 for the fourth quarter of 2022, and then returns to 1.40 thereafter.

The Second Amendment permits funding of select renovation projects from existing furniture, fixtures and equipment (FF&E) reserves at the Ritz-Carlton Sarasota, the Ritz-Carlton Lake Tahoe, Park Hyatt Beaver Creek Resort & Spa, Hilton La Jolla Torrey Pines, and Marriott Seattle Waterfront, subject to a cap on amounts to be spent consistent with the forecasted spend information provided pursuant to the Second Amendment. The Credit Facility includes mandatory prepayments that require the Company to prepay and reduce the balance of the Credit Facility by an amount equal to 50% of net proceeds from any asset sales, equity offerings (including the offering of Series E, Series M and other preferred equity offerings) or incurrence of indebtedness (including refinancings), except that the first $50 million of any common equity offering (including sales of shares

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of common stock under the Company’s “at-the-market” equity distribution program) is subject to a mandatory prepayment amount, which was increased from 25% of net proceeds to 35% of net proceeds in the Second Amendment.

Sources and Uses of Cash

We had approximately $85.7 million and $78.6 million of cash and cash equivalents at March 31, 2021 and December 31, 2020, respectively.

We anticipate that our principal sources of funds to meet our cash requirements will include cash on hand, positive cash flow from operations and capital market activities.

Net Cash Flows Provided by (Used in) Operating Activities. Net cash flows provided by (used in) operating activities were $12.0 million and $(865,000) for the three months ended March 31, 2021 and 2020, respectively. Cash flows from operations were impacted by the COVID-19 pandemic and changes in hotel operations of our thirteen hotel properties. Cash flows from operations are also impacted by the timing of working capital cash flows such as collecting receivables from hotel guests, paying vendors, settling with derivative counterparties, settling with related parties, settling with hotel managers and timing differences between the receipt of proceeds from business interruption insurance claims and the recognition of the related revenue.

Net Cash Flows Provided by (Used in) Investing Activities. For the three months ended March 31, 2021, net cash flows used in investing activities were $4.5 million. These cash outflows were primarily attributable to $4.7 million of capital improvements made to various hotel properties, partially offset by proceeds of $200,000 from the disposition of assets.

For the three months ended March 31, 2020, net cash flows used in investing activities were $6.6 million. These cash outflows were primarily attributable to $7.5 million of capital improvements made to various hotel properties offset by $948,000 of insurance proceeds received related to the hurricanes.

Net Cash Flows Provided by (Used in) Financing Activities. For the three months ended March 31, 2021, net cash flows provided by financing activities were $4.4 million. Cash inflows primarily consisted of net proceeds of $18.2 million from the issuance of common stock, partially offset by repayments of indebtedness of $10.8 million, $2.6 million of dividend and distribution payments and $365,000 of payments for loan costs and fees associated with loan forbearance.

For the three months ended March 31, 2020, net cash flows provided by financing activities were $64.3 million. Cash inflows primarily consisted of borrowings on indebtedness of $75.0 million and net proceeds of $474,000 from the issuance of preferred stock, partially offset by $8.5 million of dividend and distribution payments and distributions of $2.6 million to a noncontrolling interest in consolidated entities.

Dividend Policy. In December 2019, the board of directors approved our dividend policy for 2020, which stated our then-expectation to pay a quarterly dividend of $0.16 per share during 2020. As previously disclosed, the approval of our dividend policy did not commit our board of directors to declare future dividends with respect to any quantity or the amount thereof. On March 16, 2020, the Company and its board of directors announced a suspension of its previously disclosed 2020 common stock dividend policy. The Company did not pay a dividend on its common stock during any quarter of 2020. On December 10, 2020, the Company announced that it plans to continue its suspension of the common stock dividend into 2021 to protect liquidity and will evaluate future dividend declarations on a quarterly basis going forward. The board of directors will continue to review our dividend policy and make announcements with respect thereto.

Seasonality

Our properties’ operations historically have been seasonal as certain properties maintain higher occupancy rates during the summer months and some during the winter months. This seasonality pattern can cause fluctuations in our quarterly lease revenue under our percentage leases. Quarterly revenue also may be adversely affected by renovations and repositionings, our managers’ effectiveness in generating business and by events beyond our control, such as the COVID-19 pandemic and government-issued travel restrictions in response, extreme weather conditions, natural disasters, terrorist attacks or alerts, civil unrest, government shutdowns, airline strikes or reduced airline capacity, economic factors and other considerations affecting travel. To the extent that cash flows from operations and cash on hand are insufficient during any quarter due to temporary or seasonal fluctuations in lease revenue, we expect to utilize borrowings to fund distributions required to maintain our REIT status. However, we cannot make any assurances that we will make distributions in the future.

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Contractual Obligations and Commitments

There have been no material changes, outside of the ordinary course of business, as of March 31, 2021 to contractual obligations specified in the table of contractual obligations included in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2020 Form 10-K.

Off-Balance Sheet Arrangements

In the normal course of business, we may form or invest in partnerships or joint ventures. We evaluate each partnership and joint venture to determine whether the entity is a variable interest entity. If the entity is determined to be a VIE we assess whether we are the primary beneficiary and need to consolidate the entity. For further discussion see note 2 to our consolidated financial statements. We have no other off-balance sheet arrangements.

Critical Accounting Policies

The preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Our accounting policies that are critical or most important to understanding our financial condition and results of operations and that require management to make the most difficult judgments are described in the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2020 Form 10-K. There have been no material changes in these critical accounting policies.

Non-GAAP Financial Measures

The following non-GAAP presentations of EBITDA, EBITDAre, Adjusted EBITDAre, Funds From Operations (“FFO”) and Adjusted FFO are presented to help our investors evaluate our operating performance.

EBITDA is defined as net income (loss) before interest expense and amortization of loan costs, depreciation and amortization, income taxes, equity in (earnings) loss of unconsolidated entity and after the Company’s portion of EBITDA of OpenKey. In addition, we excluded impairment on real estate, (gain) loss on insurance settlement and disposition of assets and Company’s portion of EBITDAre of OpenKey from EBITDA to calculate EBITDA for real estate, or EBITDAre, as defined by NAREIT.

We then further adjust EBITDAre to exclude certain additional items such as amortization of favorable (unfavorable) contract assets (liabilities), transaction and conversion costs, write-off of loan costs and exit fees, legal, advisory and settlement costs, advisory services incentive fee, other/income expense, Company’s portion of adjustments to EBITDAre of OpenKey and non-cash items such as unrealized gain/ loss on derivatives and stock/unit-based compensation.

We present EBITDA, EBITDAre and Adjusted EBITDAre because we believe they reflect more accurately the ongoing performance of our hotel assets and other investments and provide more useful information to investors as they are indicators of our ability to meet our future debt payment requirements, working capital requirements and they provide an overall evaluation of our financial condition. EBITDA, EBITDAre and Adjusted EBITDAre as calculated by us may not be comparable to EBITDA, EBITDAre and Adjusted EBITDAre reported by other companies that do not define EBITDA, EBITDAre and Adjusted EBITDAre exactly as we define the terms. EBITDA, EBITDAre and Adjusted EBITDAre do not represent cash generated from operating activities determined in accordance with GAAP, and should not be considered as an alternative to operating income or net income determined in accordance with GAAP as an indicator of performance or as an alternative to cash flows from operating activities as determined by GAAP as an indicator of liquidity.

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The following table reconciles net income (loss) to EBITDA, EBITDAre and Adjusted EBITDAre (in thousands) (unaudited):

	Three Months Ended March 31,
	2021		2020
Net income (loss)	$	(11,034)	$	(15,387)
Interest expense and amortization of loan costs	6,756		11,897
Depreciation and amortization	18,353		18,338
Income tax expense (benefit)	145		1,370
Equity in (earnings) loss of unconsolidated entity	64		40
Company’s portion of EBITDA of OpenKey	(63)		(39)
EBITDA	14,221		16,219
(Gain) loss on insurance settlement and disposition of assets	(499)		—
EBITDAre	13,722		16,219
Amortization of favorable (unfavorable) contract assets (liabilities)	138		207
Transaction and conversion costs	340		491
Other (income) expense	—		138
Write-off of loan costs and exit fees	351		—
Unrealized (gain) loss on derivatives	20		(1,156)
Non-cash stock/unit-based compensation	1,416		1,985
Legal, advisory and settlement costs	205		613
Advisory services incentive fee	371		—
Company’s portion of adjustments to EBITDAre of OpenKey	5		3
Adjusted EBITDAre	$	16,568	$	18,500

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FFO is calculated on the basis defined by NAREIT, which is net income (loss) attributable to common stockholders, computed in accordance with GAAP, excluding gains or losses on insurance settlement and disposition of assets, plus impairment charges on real estate, depreciation and amortization of real estate assets, and after redeemable noncontrolling interests in the operating partnership and adjustments for unconsolidated entities. NAREIT developed FFO as a relative measure of performance of an equity REIT to recognize that income-producing real estate historically has not depreciated on the basis determined by GAAP. Our calculation of Adjusted FFO excludes dividends on convertible preferred stock, gain/loss on extinguishment of preferred stock, transaction and conversion costs, write-off of loan costs and exit fees, legal, advisory and settlement costs, advisory services incentive fee, other income/expense and non-cash items such as interest expense accretion on refundable membership club deposits, amortization of loan costs, unrealized gain/loss on derivatives, stock/unit-based compensation and the Company’s portion of adjustments to FFO of OpenKey. FFO and Adjusted FFO exclude amounts attributable to the portion of a partnership owned by the third party. We consider FFO and Adjusted FFO to be appropriate measures of our ongoing normalized operating performance as a REIT. We compute FFO in accordance with our interpretation of standards established by NAREIT, which may not be comparable to FFO reported by other REITs that either do not define the term in accordance with the current NAREIT definition or interpret the NAREIT definition differently than us. FFO and Adjusted FFO do not represent cash generated from operating activities as determined by GAAP and should not be considered as an alternative to GAAP net income or loss as an indication of our financial performance or GAAP cash flows from operating activities as a measure of our liquidity. FFO and Adjusted FFO are also not indicative of funds available to satisfy our cash needs, including our ability to make cash distributions. However, to facilitate a clear understanding of our historical operating results, we believe that FFO and Adjusted FFO should be considered along with our net income or loss and cash flows reported in our condensed consolidated financial statements.

The following table reconciles net income (loss) to FFO and Adjusted FFO (in thousands) (unaudited):

	Three Months Ended March 31,
	2021		2020
Net income (loss)	$	(11,034)	$	(15,387)
(Income) loss attributable to noncontrolling interest in consolidated entities	1,247		572
Net (Income) loss attributable to redeemable noncontrolling interests in operating partnership	1,079		1,885
Preferred dividends	(2,388)		(2,555)
Gain (loss) on extinguishment of preferred stock	(73)		—
Net income (loss) attributable to common stockholders	(11,169)		(15,485)
Depreciation and amortization on real estate (1)	17,659		17,559
Net income (loss) attributable to redeemable noncontrolling interests in operating partnership	(1,079)		(1,885)
Equity in (earnings) loss of unconsolidated entity	64		40
(Gain) loss on insurance settlement and disposition of assets	(499)		—
Company’s portion of FFO of OpenKey	(64)		(40)
FFO available to common stockholders and OP unitholders	4,912		189
Series B Cumulative Convertible Preferred Stock dividends	1,563		1,730
(Gain) loss on extinguishment of preferred stock	73		—
Transaction and conversion costs	340		491
Other (income) expense	—		138
Interest expense accretion on refundable membership club benefits	202		213
Write-off of loan costs and exit fees	351		—
Amortization of loan costs (1)	706		1,053
Unrealized (gain) loss on derivatives	20		(1,156)
Non-cash stock/unit-based compensation	1,416		1,985
Legal, advisory and settlement costs	205		613
Advisory services incentive fee	371		—
Company’s portion of adjustments to FFO of OpenKey	5		3
Adjusted FFO available to common stockholders, OP unitholders and Series B Cumulative Convertible preferred stockholders on an “as converted” basis	$	10,164	$	5,259

____________________

(1)Net of adjustment for noncontrolling interest in consolidated entities. The following table presents the amounts of the adjustments for noncontrolling interests for each line item:

	Three Months Ended March 31,
	2021		2020
Depreciation and amortization on real estate	$	(694)	$	(779)
Amortization of loan costs	(21)		(18)

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Hotel Properties

The following table presents certain information related to our hotel properties:

Hotel Property	Location	Total Rooms	% Owned		Owned Rooms
Fee Simple Properties
Capital Hilton	Washington D.C.	550	75	%	413
Marriott Seattle Waterfront	Seattle, WA	361	100	%	361
The Notary Hotel	Philadelphia, PA	499	100	%	499
The Clancy	San Francisco, CA	410	100	%	410
Sofitel Chicago Magnificent Mile	Chicago, IL	415	100	%	415
Pier House Resort & Spa	Key West, FL	142	100	%	142
The Ritz-Carlton St. Thomas	St. Thomas, USVI	180	100	%	180
Park Hyatt Beaver Creek Resort & Spa	Beaver Creek, CO	190	100	%	190
Hotel Yountville	Yountville, CA	80	100	%	80
The Ritz-Carlton Sarasota	Sarasota, FL	266	100	%	266
The Ritz-Carlton Lake Tahoe (1)	Truckee, CA	170	100	%	170
Ground Lease Properties (2)
Hilton La Jolla Torrey Pines (3)	La Jolla, CA	394	75	%	296
Bardessono Hotel and Spa (4)	Yountville, CA	65	100	%	65
Total		3,722			3,487

________

(1)    The above information does not include the operations of ten condominium units not owned by The Ritz-Carlton Lake Tahoe.

(2)     Some of our hotel properties are on land subject to ground leases, two of which cover the entire property.

(3)     The ground lease expires in 2067. The ground lease contains one extension option of either 10 or 20 years dependent upon capital investment spend during the lease term.

(4)    The initial ground lease expires in 2065. The ground lease contains two 25-year extension options, at our election.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Our primary market risk exposure consists of changes in interest rates on borrowings under our debt instruments that bear interest at variable rates that fluctuate with market interest rates. To the extent that we acquire assets or conduct operations in an international jurisdiction, we will also have currency exchange risk. We may enter into certain hedging arrangements in order to manage interest rate and currency fluctuations. The analysis below presents the sensitivity of the market value of our financial instruments to selected changes in market interest rates.

At March 31, 2021, our total indebtedness of $1.1 billion was comprised of 100% variable-rate debt. The impact on the results of operations of a 25-basis point change in the interest rate on the outstanding balance of variable-rate debt at March 31, 2021, would be approximately $2.8 million per year.

The above amounts were determined based on the impact of hypothetical interest rates on our borrowings and assume no changes in our capital structure. The information presented above includes those exposures that existed at March 31, 2021, but it does not consider exposures or positions that could arise after that date. Accordingly, the information presented herein has limited predictive value. As a result, the ultimate realized gain or loss with respect to interest rate fluctuations will depend on exposures that arise during the period, the hedging strategies at the time, and the related interest rates.

ITEM 4.CONTROLS AND PROCEDURES

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, our management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of March 31, 2021. Based upon that evaluation, as a result of the material weakness in our internal control over financial reporting related to the accounting for troubled debt restructurings that was identified in the third quarter of 2020 and for which the Company has not yet remediated, our disclosure controls and procedures were not effective to ensure that (i) information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

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Notwithstanding the material weakness described above, management has concluded that our consolidated financial statements included in this Quarterly Report on Form 10-Q are fairly stated in all material respects in accordance with GAAP.

There were no changes in our internal controls over financial reporting during our most recent fiscal quarter ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II. OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

On October 24, 2019, the Company provided notice to Accor of the material breach of its responsibilities under the Accor management agreement for the Sofitel Chicago Magnificent Mile at 20 East Chestnut Street in Chicago, Illinois. On November 7, 2019, Accor filed a complaint against Ashford TRS Chicago II in the Supreme Court of the State of New York, New York County, seeking a declaratory judgment that no breach has occurred. Accor’s complaint was dismissed on or about February 27, 2020. On January 6, 2020, Ashford TRS Chicago II filed a complaint against Accor in the Supreme Court of the State of New York, New York County, alleging breach of the Accor management agreement and seeking declaration of its right to terminate the Accor management agreement. On July 20, 2020, Accor filed an Amended Answer and Counterclaims against Ashford TRS Chicago II, Accor asserts two causes of action: First, Accor asserts a counterclaim for declaratory judgment that Accor correctly calculated the amount payable to Ashford TRS Chicago II under the management agreement to “cure” Accor’s performance test failure (the “Cure Amount”). Second, Accor asserts a counterclaim for breach of contract on the basis that Ashford TRS Chicago II breached the management agreement by wrongfully maintaining that the Cure Amount for the 2018 and 2019 Performance Test failure is $1,031,549 instead of $535,120. As of March 31, 2021, no amounts have been accrued.

One of the Company’s hotel management companies is currently involved in litigation regarding its employment policies and practices at multiple California hotels, including one of the Company’s hotels. The Company believes it is probable that the litigation will result in a loss due to a potential pre-trial settlement, in which case the Company estimates its potential loss will be approximately $500,000; however, it is entitled to indemnification for a portion of such loss. As of March 31, 2021, approximately $500,000 has been accrued.

In June 2020, each of the Company, Ashford Trust, Ashford Inc., and Lismore, a subsidiary of Ashford Inc. (collectively with the Company, Ashford Trust, Ashford Inc. and Lismore, the “Ashford Companies”), received an administrative subpoena from the SEC. The Company’s administrative subpoena requires the production of documents and other information since January 1, 2018 relating to, among other things, (1) related party transactions among the Ashford Companies (including the Lismore Agreement between the Company and Lismore pursuant to which the Company engaged Lismore to negotiate the refinancing, modification or forbearance of certain mortgage debt) or between any of the Ashford Companies and any officer, director or owner of the Ashford Companies or any entity controlled by any such person, and (2) the Company’s accounting policies, procedures, and internal controls related to such related party transactions. In addition, in October 2020, Mr. Monty J. Bennett, chairman of our board of directors, received an administrative subpoena from the SEC requiring testimony and the production of documents and other information substantially similar to the requests in the subpoenas received by the Ashford Companies. The Company and Mr. Monty J. Bennett are responding to the administrative subpoenas.

A class action lawsuit has been filed against one of the Company’s hotel management companies alleging violations of certain California employment laws, which class action affects two hotels owned by subsidiaries of the Company. The court has entered an order granting class certification with respect to: (1) a statewide class of non-exempt employees of our manager who were allegedly deprived of rest breaks as a result of our manager’s previous written policy requiring its employees to stay on premises during rest breaks; and (2) a derivative class of non-exempt former employees of our manager who were not paid for allegedly missed breaks upon separation from employment. Notices to potential class members were sent out on February 2, 2021. Potential class members had until April 4, 2021 to opt out of the class, however, the total number of employees in the class has not been definitively determined and is the subject of continuing discovery. While we believe it is reasonably possible that we may incur a loss associated with this litigation, because there remains uncertainty under California law with respect to a significant legal issue, discovery relating to class members continues, and the trial judge retains discretion to award lower penalties than set forth in the applicable California employment laws, we do not believe any potential loss to the Company is reasonably estimable at this time. As of March 31, 2021, no amounts have been accrued.

We are also engaged in other legal proceedings that have arisen but have not been fully adjudicated. To the extent the claims giving rise to these legal proceedings are not covered by insurance, they relate to the following general types of claims: employment matters, tax matters and matters relating to compliance with applicable law (for example, the ADA and similar state laws). The likelihood of loss from these legal proceedings is based on the definitions within contingency accounting literature. We recognize a loss when we believe the loss is both probable and reasonably estimable. Based on the information

47

available to us relating to these legal proceedings and/or our experience in similar legal proceedings, we do not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial position, results of operations, or cash flow. However, our assessment may change depending upon the development of these legal proceedings, and the final results of these legal proceedings cannot be predicted with certainty. If we do not prevail in one or more of these legal matters, and the associated realized losses exceed our current estimates of the range of potential losses, our consolidated financial position, results of operations, or cash flows could be materially adversely affected in future periods.

ITEM 1A.RISK FACTORS

The discussion of our business and operations should be read together with the risk factors contained in Item 1A to Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC, which describe various risks and uncertainties to which we are or may become subject. These risks and uncertainties have the potential to affect our business, financial condition, results of operations, cash flows, strategies, or prospects in a material and adverse manner. The risk factors set forth below update, and should be read together with, the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2020.

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Equity Securities by the Issuer

On December 5, 2017, our board of directors reapproved the stock repurchase program pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share having an aggregate value of up to $50 million. The board of director’s authorization replaced any previous repurchase authorizations. No shares were repurchased during the three months ended March 31, 2021, pursuant to this authorization.

The following table provides the information with respect to purchases and forfeitures of our common stock during each of the months in the first quarter of 2021:

Period	Total Number of Shares Purchased		Average Price Paid Per Share			Total Number of Shares Purchased as Part of a Publicly Announced Plan	Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plan
Common stock:
January 1 to January 31	2,674	(1)	$	4.93	(2)	—	$	50,000,000
February 1 to February 28	83		$	—	(2)	—	$	50,000,000
March 1 to March 31	50,149	(1)	$	6.93	(2)	—	$	50,000,000
Total	52,906		$	6.93		—

__________________

(1)Includes 125 and 50,132 shares in January and March, respectively, that were withheld to cover tax-withholding requirements related to the vesting of restricted shares of our common stock issued to employees of our advisor pursuant to the Company’s stockholder-approved stock incentive plan.

(2)There is no cost associated with the forfeiture of 2,549, 83 and 17 restricted shares of our common stock in January, February and March, respectively.

ITEM 3.DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.MINE SAFETY DISCLOSURES

None.

ITEM 5.OTHER INFORMATION

None.

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ITEM 6.EXHIBITS

Exhibit	Description
3.1	Articles of Amendment and Restatement of Braemar Hotels & Resorts Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 29, 2016)
3.2	Articles Supplementary of Braemar Hotels & Resorts Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on May 18, 2015)
3.3	Articles of Amendment of Braemar Hotels & Resorts Inc. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on April 29, 2016)
3.4	Amendment Number One to the Articles of Amendment and Restatement of Braemar Hotels & Resorts Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on December 8, 2017)
3.5	Amendment Number Two to Articles of Amendment and Restatement of Braemar Hotels & Resorts Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 23, 2018)
3.6	Articles of Amendment of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on January 23, 2020 (incorporated by reference to Exhibit 3.13 to Amendment No. 1 to the Registration Statement on Form S-3 (File No. 333-234663) filed with the SEC on January 24, 2020)
3.7	Articles Supplementary Establishing the Series E Redeemable Preferred Stock of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on April 2, 2021 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 2, 2021)
3.8	Articles Supplementary Establishing the Series M Redeemable Preferred Stock of Braemar Hotels & Resorts Inc., accepted for record and certified by the SDAT on April 2, 2021 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed on April 2, 2021)
3.9	Fourth Amended and Restated Bylaws of Braemar Hotels & Resorts Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on August 20, 2018)
10.1	Second Amendment to Second Amended and Restated Credit Agreement, dated February 22, 2021 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on February 22, 2021)
10.2	Amendment No. 5 to the Third Amended and Restated Agreement of Limited Partnership of Braemar Hospitality Limited Partnership (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 2, 2021)
10.3	Standby Equity Distribution Agreement, dated as of February 4, 2021, by and between Braemar Hotels & Resorts Inc. and YA II PN, Ltd. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on February 4, 2021)
10.4	Purchase Agreement, dated as of April 21, 2021, by and between the Company and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on April 21, 2021)
10.5	Registration Rights Agreement, dated as of April 21, 2021, by and between the Company and Lincoln Park Capital Fund, LLC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on April 21, 2021)
10.6*†	Form of 2021 Performance Stock Unit Award Agreement
10.7*†	Form of 2021 Performance LTIP Unit Award Agreement
31.1*	Certifications of Chief Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of Securities Exchange Act of 1934, as amended
31.2*	Certifications of Chief Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of Securities Exchange Act of 1934, as amended
32.1**	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 are formatted in XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements Comprehensive Income; (iii) Consolidated Statements of Equity; (iv) Consolidated Statements of Cash Flows; and (v) Notes to the Consolidated Financial Statements. In accordance with Rule 402 of Regulation S-T, the XBRL related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act of 1933, as amended or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document	Submitted electronically with this report.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document	Submitted electronically with this report.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	Submitted electronically with this report.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.	Submitted electronically with this report.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.	Submitted electronically with this report.
104	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

___________________________________

* Filed herewith.

** Furnished herewith.

† Management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

    BRAEMAR HOTELS & RESORTS INC.

Date:	May 7, 2021	By:	/s/ RICHARD J. STOCKTON
			Richard J. Stockton
			President and Chief Executive Officer
Date:	May 7, 2021	By:	/s/ DERIC S. EUBANKS
			Deric S. Eubanks
			Chief Financial Officer

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EX-10.6

EXHIBIT 10.6

Form of Performance Stock Unit Award Agreement

This Performance Stock Unit (“PSU”) Award Agreement (the “Award Agreement”) is made and entered into as of [ ], 2021 by and between Braemar Hotels & Resorts Inc., a Maryland corporation (the “Company”) and [NAME] (the “Participant”). All capitalized terms in this Award Agreement shall have the meanings assigned to them herein or, if not so defined, as assigned to them in the Company’s Second Amended and Restated 2013 Equity Incentive Plan, as the same may be amended from time to time (the “Plan”).

Grant Date: [ ], 2021

Target Number of PSUs: [ ]

Performance Period: January 1, 2021– December 31, 2023, unless shortened to a Shortened Performance Period as defined in Section 5.1

1.Grant. Pursuant to the terms and conditions of this Award Agreement and the terms and conditions of the Plan, the Company hereby grants the Participant an Award entitling the Participant to receive (i) a number of shares of Common Stock in respect of any PSUs that vest in accordance with Section 2 (or in accordance with Section 5) and (ii) an amount equal to the dividends and other distributions paid prior to the settlement, cancellation or forfeiture of this Award with respect to a number of shares of Common Stock equal to the number of PSUs vesting hereunder (the right to receive such amount, “dividend equivalent rights” or “DERs”). This grant of PSUs and DERs is made in consideration of the services to be rendered by the Participant to the Company and is subject to the terms and conditions of the Plan.

Notwithstanding the foregoing or anything to the contrary set forth in this Award Agreement or in the Plan, the Participant hereby expressly acknowledges and agrees that this grant of PSUs (and associated DERs) has been approved and granted by the Committee subject to and conditioned upon the approval by the Company’s stockholders at the Company’s 2021 Annual Meeting of Stockholders of an amendment to the Plan to increase the numbers of shares of Common Stock reserved for issuance thereunder. If such stockholder approval is not obtained, the Participant further acknowledges and agrees that the PSUs (and associated DERs) shall be forfeited by the Participant without consideration immediately following such 2021 Annual Meeting of Stockholders.

2.Vesting; Performance Goals. Except as otherwise set forth in Section 5 below, the number of PSUs that vest and the actual number of shares of Common Stock, if any, to be issued to the Participant hereunder (not including shares of Common Stock that may be issued pursuant to Section 3 below with respect to DERs) shall be calculated as follows:

(i) Subject to the Participant not experiencing a Termination of Service through the last day of the Performance Period or Shortened Performance Period, as applicable, the

HOU:3658717.9

Participant shall be eligible to vest in a number of PSUs equal to the product of (x) the Target Number of PSUs multiplied by (y) the applicable Performance Multiplier.

(ii) Any PSUs that fail to vest upon the completion of the Performance Period (or in accordance with Section 5) shall be automatically forfeited for no consideration. DERs shall be subject to the same vesting and forfeiture restrictions as the PSUs to which they are attributable. For the purposes of this Award Agreement, “Termination of Service” shall mean the Participant’s termination of service or employment with the Company for any reason in a manner that constitutes a “separation from service” with the Company pursuant to the regulations under Section 409A of the Code.

a.Performance Multiplier.

(i)General. The “Performance Multiplier” shall equal the sum of (x) the Revenue Multiplier plus (y) the Adjusted EBITDAre Margin Multiplier plus (z) the Ending Net Debt/Gross Assets Ratio Multiplier, as defined in Section 2.1(b), (c), and (d) below, respectively.

(ii)Revenue Multiplier. The “Revenue Multiplier” shall equal the product of (x) one-third (1/3), multiplied by (y) the Base Revenue Multiplier. The “Base Revenue Multiplier” shall be determined in accordance with the table below:

If the Company’s Total Revenue Is…	The Base Revenue Multiplier Is…
Less than $243,800,000	0
$243,800,000 (“Threshold Revenue”)	0.5
$341,300,000 (“Target Revenue”)	1.00
$438,800,000 (“Maximum Revenue”) or greater	2.00

The Threshold Revenue, Target Revenue, and Maximum Revenue will be reduced by any portion of Total Revenue (as defined below, but calculated with respect to the corresponding figures reported in the Company’s consolidated financial statements reported on Form 10-K for the fiscal year ending December 31, 2019) that is attributable to any hotel assets disposed of by the Company during the Performance Period or Shortened Performance Period, as applicable, as identified and calculated by the Committee. The Base Revenue Multiplier shall be interpolated on a linear basis for achievement of Total Revenue between the Threshold Revenue and Target Revenue, or Target Revenue and Maximum Revenue, levels. For purposes of this Award Agreement, “Total Revenue” means the Company’s “Total revenue” as reported in the Company’s consolidated financial statements reported on Form 10-K for the fiscal year ending December 31, 2023.

(iii)Adjusted EBITDAre Margin Multiplier. The “Adjusted EBITDAre Margin Multiplier” shall equal the product of (x) one-third (1/3), multiplied by (y) the

2

Base Adjusted EBITDAre Margin Multiplier. The “Base Adjusted EBITDAre Margin Multiplier” shall be determined in accordance with the table below:

If the Company’s Adjusted EBITDAre Margin Is…	The Base Adjusted EBITDAre Margin Multiplier Is…
Less than 12.0%	0
12.0% (“Threshold Margin”)	0.5
17.0% (“Target Margin”)	1.00
22.0% (“Maximum Margin”) or greater	2.00

The Base Adjusted EBITDAre Margin Multiplier shall be interpolated on a linear basis for achievement of an Adjusted EBITDAre Margin between the Threshold Margin and Target Margin, or Target Margin and Maximum Margin, levels. For purposes of this Award Agreement, “Adjusted EBITDAre Margin” means the Company’s “adjusted EBITDAre” divided by the Company’s “total revenue,” each as reported in the Company’s annual report on Form 10-K for the fiscal year ending December 31, 2023.

(iv)Ending Net Debt/Gross Assets Ratio Multiplier. The “Ending Net Debt/Gross Assets Ratio Multiplier” shall equal the product of (x) one-third (1/3), multiplied by (y) the Base Ending Net Debt/Gross Assets Ratio Multiplier. The “Base Ending Net Debt/Gross Assets Ratio Multiplier” shall be determined in accordance with the table below:

If the Company’s Ending Net Debt/Gross Assets Ratio Is…	The Base Ending Net Debt/Gross Assets Ratio Multiplier Is…
60.0% or greater	0
60.0% (“Threshold Ratio”)	0.5
55.0% (“Target Ratio”)	1.00
50.0% (“Maximum Ratio”) or lesser	2.00

The Base Ending Net Debt/Gross Assets Ratio Multiplier shall be interpolated on a linear basis for achievement of an Ending Net Debt/Gross Assets Ratio between the Threshold Ratio and Target Ratio, or Target Ratio and Maximum Ratio, levels. For purposes of this Award Agreement, “Ending Net Debt/Gross Assets Ratio” means the quotient of Net Debt (as defined below) divided by “investments in hotel properties, gross,” as reported in the Company’s consolidated financial statements reported on Form 10-K for the fiscal year ending December 31, 2023. “Net Debt” is defined as “indebtedness” less (w) “cash and cash equivalents,” (x) “restricted cash,” (y) financial assets “due from third-party hotel managers,” and (z) “marketable securities,” each as

3

reported in the Company’s consolidated financial statements reported on Form 10-K for the fiscal year ending December 31, 2023.

b.Calculations; Adjustments. The Committee shall have the full and plenary authority to interpret this Award Agreement, and to calculate the achievement of the performance metrics described herein. The Committee’s determinations with respect to any such interpretations or calculations shall be final and binding upon the Participant. The Committee shall have the authority to make appropriate adjustments to the definitions of Total Revenue, Adjusted EBITDAre Margin, and Ending Net Debt/Gross Assets Ratio, or the calculation of any of the foregoing, to the extent that the Committee deems necessary.

3.DERs. Except as otherwise set forth in Section 5 below, in the event that any dividend or other distribution is declared and paid on shares of Common Stock after the Grant Date, but prior to the settlement, cancellation or forfeiture of this Award, the Participant shall be entitled to receive, upon the settlement of this Award or any portion thereof, an amount equal to the dividends or other distributions that would have been paid or issued on the number of shares of Common Stock underlying the number of PSUs that have vested in accordance with Section 2 or Section 5 and are then being settled. Such DERs shall be settled in the form of vested shares of Common Stock valued based on the volume weighted average price for the 20 trading days immediately preceding the applicable date of vesting, rounded up to the nearest whole share (as calculated by the Company). The Committee shall have the sole discretion to determine the dollar value of any DER paid other than in the form of cash, and its determination shall be controlling.

4.Settlement; Issuance of Shares. The actual number of shares of Common Stock earned hereunder shall be issued or paid to the Participant as soon as reasonably practicable following the calculation of the Performance Multiplier (or, if applicable, as soon as reasonably practicable following the vesting date pursuant to Section 5 below), but in no event later than 2-1/2 months following the calendar year in which the Award or applicable portion thereof has vested. The Participant shall not be entitled to any payment in respect of PSUs (and associated DERs) that vest under Section 2 or Section 5 unless and until the Performance Multiplier is calculated. The Company shall issue such shares of Common Stock registered in the name of the Participant, the Participant’s authorized assignee, or the Participant’s legal representative, which shall be evidenced by stock certificates representing the shares with the appropriate legends affixed thereto, appropriate entry on the books of the Company or of a duly authorized transfer agent, or other appropriate means as determined by the Company.

5.Acceleration of Vesting.

a.Definitions.

(i)    For the purposes of this Section 5, “Involuntary Termination” means (A) at a time that the Participant is otherwise willing and able to continue providing services, a Termination of Service by the Company without Cause and without the

4

consent of Ashford Inc. (“Advisor”) (including in connection with the Participant’s termination as an officer of the Company or the termination of the Fifth Amended and Restated Advisory Agreement between the Company and Advisor, as may be amended from time to time (the “Advisory Agreement”), other than a termination by the Company for the reasons described in Section 12.3(a) – (d) of the Advisory Agreement, as may be amended from time to time) or (B) a Termination of Service by Participant for Good Reason.

(ii)    The “Shortened Performance Period” means the beginning of the Performance Period through the date immediately prior to the earliest to occur of (A) a Change of Control of the Company (as defined in the Plan), (B) a change of control of Advisor (as defined in any employment or other written agreement between the Participant and Advisor (the “Employment Agreement”)) if such change of control of Advisor results in the vesting of this Award under the terms of the Employment Agreement, (C) Participant’s Involuntary Termination, death or Disability or (D) Participant’s involuntary termination of employment from Advisor if such involuntary termination results in the vesting of this Award under the terms of the Employment Agreement.

b.Change of Control. In the event of a Change of Control of the Company prior to the end of the Performance Period, (i) the Performance Multiplier shall be determined in accordance with Section 2 calculated based on actual performance during the Shortened Performance Period and (ii) the number of PSUs that vest in accordance with Section 2 using the Performance Multiplier for the Shortened Performance Period shall vest immediately prior to the closing of such Change of Control. If a change of control of Advisor (as defined in the Employment Agreement) causes vesting of this Award under the Employment Agreement prior to the end of the Performance Period, this Award shall vest in accordance with the Employment Agreement and, to the extent not specifically addressed in the Employment Agreement, the number of PSUs that vest shall be the number of PSUs that vest in accordance with Section 2 using the Performance Multiplier for the Shortened Performance Period (which shall be determined in accordance with Section 2 calculated based on actual performance during the Shortened Performance Period).

c.Termination of Service. In the event of the Participant’s (i) Involuntary Termination or (ii) death or Disability prior to the end of the Performance Period, a number of PSUs shall vest on the date of such event equal to the greater of (A) the Target Number of PSUs and (B) the number of PSUs that vest in accordance with Section 2 using the Performance Multiplier for the Shortened Performance Period (which shall be determined in accordance with Section 2 calculated based on actual performance during the Shortened Performance Period). If an involuntary termination of employment from Advisor causes vesting of this Award under the Employment Agreement prior to the end of the Performance Period, this Award shall vest in accordance with the Employment Agreement and, to the extent not specifically addressed in the Employment Agreement, the number of PSUs that shall vest shall be the greater of (A) the Target Number of PSUs

5

and (B) the number of PSUs that vest in accordance with Section 2 using the Performance Multiplier for the Shortened Performance Period (which shall be determined in accordance with Section 2 calculated based on actual performance during the Shortened Performance Period).

6.Withholding. If the Company determines that it is obligated to withhold any tax in connection with the grant, vesting or settlement of PSUs or DERs hereunder, the Participant must make arrangements satisfactory to the Company to pay or provide for any applicable federal, state, local and other withholding obligations. The Participant may satisfy any federal, state, local or other tax withholding obligation relating to the vesting or settlement of PSUs or DERs hereunder by tendering cash payment to the Company or by any of the following means: (i) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant in settlement of PSUs or DERs; provided, however, that no shares of Common Stock are withheld with a value exceeding the maximum amount of tax required to be withheld by law; or (ii) delivering to the Company previously owned and unencumbered shares of Common Stock. The Company also has the right to withhold from any other compensation payable to the Participant.

7.Tax Liability. Notwithstanding any action the Company takes with respect to any or all tax or other tax-related withholding with respect to PSUs or DERs (“Tax-Related Items”), the ultimate liability for all Tax-Related Items (and any associated penalties and interest) is and remains the Participant’s responsibility, and the Company (i) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting or settlement of PSUs or DERs, dividends or other distributions with respect to shares of Common Stock received in settlement of PSUs or DERs, or the subsequent sale or other disposition of any such shares acquired hereunder; and (ii) does not commit to structure the Awards to reduce or eliminate the Participant’s liability for Tax-Related Items.

8.No Right to Continued Service; No Rights as Shareholder. Neither the Plan nor this Award Agreement shall confer upon the Participant any right to be retained in any capacity as a service provider to the Company, Advisor or any of their respective Affiliates. Further, nothing in the Plan or this Award Agreement shall be construed to limit the discretion of the Company, Advisor or any of their respective Affiliates to terminate the Participant’s service at any time, with or without Cause. The Participant shall not have any rights as a shareholder with respect to any shares of Common Stock subject to the Award unless and until certificates representing the shares have been issued by the Company to the holder of such shares, or the shares have otherwise been recorded on the books of the Company or of a duly authorized transfer agent as owned by such holder.

9.Transferability. The Award is not transferable by the Participant other than by will or by the laws of descent and distribution or, for estate planning purposes, to one or more immediate family members or related family trusts or partnerships or similar

6

entities. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the PSUs, the DERs or any rights relating to any of the foregoing shall be wholly ineffective and, if any such attempt is made, the PSUs and DERs will be automatically forfeited by the Participant and all of the Participant’s rights to such PSUs and DERs shall immediately terminate without any payment or consideration by the Company or any Affiliate thereof.

10.Compliance with Law. The issuance of shares of Common Stock in settlement of this Award shall be subject to compliance by the Company and the Participant with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s shares of Common Stock may be listed. No shares of Common Stock shall be issued pursuant to this Award unless and until any then applicable requirements of state or federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. The Participant understands that the Company is under no obligation to register any shares with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance.

11.Notices. Any notice required to be delivered to the Company under this Award Agreement shall be in writing and addressed to the General Counsel of the Company at the Company’s principal corporate offices. Any notice required to be delivered to the Participant under this Award Agreement shall be in writing and addressed to the Participant at the Participant’s address as shown in the records of the Company at the time such notice is to be delivered. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.

12.Governing Law. This Award Agreement will be construed and interpreted in accordance with the laws of the State of Maryland without regard to conflict of law principles.

13.Interpretation. Any dispute regarding the interpretation of this Award Agreement shall be submitted by the Participant or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Participant and the Company.

14.Award Subject to Plan. This Award Agreement is subject to the Plan as approved by the Company’s shareholders. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.

15.Successors and Assigns. The Company may assign any of its rights under this Award Agreement. This Award Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Award Agreement will be binding upon the Participant and the

7

Participant’s beneficiaries, executors, administrators and the person(s) to whom this Award Agreement may be transferred in accordance with Section 9.

16.Severability. The invalidity or unenforceability of any provision of the Plan or this Award Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Award Agreement, and each provision of the Plan and this Award Agreement shall be severable and enforceable to the extent permitted by law.

17.Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of PSUs under this Award Agreement does not create any contractual right or other right to receive any PSUs, DERs or other awards in the future. Future awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Participant’s service with the Company, Advisor and/or their respective Affiliates.

18.No Guarantee of Tax Consequences. The Company, its Affiliates, the Board and the Committee make no commitment or guarantee to the Participant (or to any other person claiming through or on behalf of the Participant) that any federal, state, local or other tax treatment will (or will not) apply or be available to any person eligible for benefits under this Award Agreement and assume no liability or responsibility whatsoever for the tax consequences to the Participant (or to any other person claiming through or on behalf of the Participant).

19.Section 409A. This Award Agreement is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A of the Code. In the event that the Participant is a “specified employee” (as defined under Section 409A of the Code) becomes entitled to a payment hereunder that is not otherwise exempt from Section 409A of the Code and is payable on account of a “separation from service” (as defined under Section 409A of the Code), such payment shall not occur until the earlier of (x) the date that is six months plus one day from the date of such “separation from service,” or (y) the date of the Participant’s death.

20.Claw-back Policy. This Award (including any proceeds, gains or other economic benefit actually or constructively received by the Participant upon any receipt or exercise of any Award or upon the receipt or resale of any shares of Common Stock underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, Advisor or any of their respective Affiliates, as applicable, including, without limitation, any claw-back policy adopted to comply with the requirements of any federal or state laws and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy.

21.Amendment. The Committee has the right, without the consent of the Participant, to amend, modify or terminate the Award, prospectively or retroactively; provided, that, such amendment, modification or termination shall not, without the Participant’s consent,

8

materially reduce or diminish the value of the Award determined as if the Award had been vested and settled on the date of such amendment or termination.

22.No Impact on Other Benefits. The value of the Participant’s Award is not part of his or her normal or expected compensation for purposes of calculating any severance, bonus, retirement, welfare, insurance or similar benefit, as applicable, except as otherwise provided in any employment agreement, service agreement or similar agreement in effect between the Company, Advisor or any of their respective Affiliates and the Participant.

23.Counterparts. This Award Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Award Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

24.Headings. The headings in this Award Agreement are for purposes of convenience only and are not intended to define or limit the construction of the provisions hereof.

25.Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan and this Award Agreement. The Participant has read and understands the terms and provisions thereof, and accepts the Award subject to all of the terms and conditions of the Plan and this Award Agreement.

[SIGNATURE PAGE FOLLOWS]

9

IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement as of the date first written above.

BRAEMAR HOTELS & RESORTS INC.

By: _____________________

Name: Robert G. Haiman

Title: Executive Vice President,

          General Counsel & Secretary

                        PARTICIPANT

By:_____________________

Name: [ ]

10

EX-10.7

EXHIBIT 10.7

Form of Performance LTIP Unit Award Agreement

This Performance LTIP Unit Award Agreement (this “Award Agreement”) is made and entered into as of March [__], 2021 by and between Braemar Hotels & Resorts Inc., a Maryland corporation (the “Company”), Braemar Hospitality Limited Partnership, a Delaware limited partnership (the “Partnership”) and [_______________] (the “Participant”). All capitalized terms in this Award Agreement shall have the meanings assigned to them herein, or, if not so defined, as assigned to them in the Company’s Second Amended and Restated 2013 Equity Incentive Plan, as the same may be amended from time to time (the “Plan”), or the Third Amended and Restated Agreement of Limited Partnership of the Partnership, as the same may be amended from time to time (the “OperatingAgreement”), as applicable.

Grant Date: March [__], 2021

Total Number of LTIP Units: [insert MAXIMUM – for BHR PLTIPs, this is 200% of target] of which the “Target Number of LTIP Units” shall be equal to: [insert TARGET]

Performance Period: January 1, 2021 – December 31, 2023, unless shortened to a Shortened Performance Period as defined in Section 5.1

1.Grant. Pursuant to the terms and conditions of this Award Agreement and the terms and conditions of the Plan and the Operating Agreement, the Company hereby grants the Participant all rights, title and interest in the record and beneficial ownership of the Total Number of LTIP Units set forth above which shall remain subject to forfeiture to the extent the performance goals described in Section 2 (or as calculated pursuant to Section 5) are not achieved. This grant of LTIP Units is made in consideration of the services to be rendered by the Participant to the Company, Ashford Inc. (“Advisor”) and/or their respective Affiliates and is subject to the terms and conditions of the Plan and the Operating Agreement. It is intended that the LTIP Units granted hereunder will constitute “profits interests” for all U.S. federal tax purposes and as specifically described in Rev. Proc. 93-27, 1993-2 C.B. 343 and Rev. Proc. 2001-43, 2001-2 C.B. 191.

Notwithstanding the foregoing or anything to the contrary set forth in this Agreement or in the Plan, the Participant hereby expressly acknowledges and agrees that this grant of LTIP Units (and any rights associated therewith) has been approved and granted by the Committee subject to and conditioned upon the approval by the Company’s stockholders at the Company’s 2021 Annual Meeting of Stockholders of an amendment to the Plan to increase the numbers of shares of Common Stock reserved for issuance thereunder. If such stockholder approval is not obtained, the Participant further acknowledges and agrees that the LTIP Units (and any rights associated therewith) shall be forfeited by the Participant without consideration immediately following such 2021 Annual Meeting of Stockholders.

2.Vesting; Performance Goals. Except as otherwise set forth in Section 5 below, the number of LTIP Units that vest shall be calculated as follows:

(i) Subject to the Participant not experiencing a Termination of Service through the last day of the Performance Period or Shortened Performance Period, as applicable, the Participant shall be eligible to vest in a number of LTIP Units equal to the product of (x) the Target Number of LTIP Units multiplied by (y) the applicable Performance Multiplier.

(ii) Any LTIP Units that fail to vest upon the completion of the Performance Period (or in accordance with Section 5) shall be automatically forfeited for no consideration. For the purposes of this Award Agreement, “Termination of Service” shall mean the Participant’s termination of service or employment with the Company for any reason in a manner that constitutes a “separation from service” with the Company pursuant to the regulations under Section 409A of the Code.

a.Performance Multiplier.

(i)General. The “Performance Multiplier” shall equal the sum of (x) the Revenue Multiplier plus (y) the Adjusted EBITDAre Margin Multiplier plus (z) the Ending Net Debt/Gross Assets Ratio Multiplier, as defined in Section 2.1(b), (c), and (d) below, respectively.

(ii)Revenue Multiplier. The “Revenue Multiplier” shall equal the product of (x) one-third (1/3), multiplied by (y) the Base Revenue Multiplier. The “Base Revenue Multiplier” shall be determined in accordance with the table below:

If the Company’s Total Revenue Is…	The Base Revenue Multiplier Is…
Less than $243,800,000	0
$243,800,000 (“Threshold Revenue”)	0.5
$341,300,000 (“Target Revenue”)	1.00
$438,800,000 (“Maximum Revenue”) or greater	2.00

The Threshold Revenue, Target Revenue, and Maximum Revenue will be reduced by any portion of Total Revenue (as defined below, but calculated with respect to the corresponding figures reported in the Company’s consolidated financial statements reported on Form 10-K for the fiscal year ending December 31, 2019) that is attributable to any hotel assets disposed of by the Company during the Performance Period or Shortened Performance Period, as applicable, as identified and calculated by the Committee. The Base Revenue Multiplier shall be interpolated on a linear basis for achievement of Total Revenue between the Threshold Revenue and Target Revenue, or Target Revenue and Maximum Revenue, levels. For purposes of this Award Agreement,

“Total Revenue” means the Company’s “Total revenue” as reported in the Company’s consolidated financial statements reported on Form 10-K for the fiscal year ending December 31, 2023.

(iii)Adjusted EBITDAre Margin Multiplier. The “Adjusted EBITDAre Margin Multiplier” shall equal the product of (x) one-third (1/3), multiplied by (y) the Base Adjusted EBITDAre Margin Multiplier. The “Base Adjusted EBITDAre Margin Multiplier” shall be determined in accordance with the table below:

If the Company’s Adjusted EBITDAre Margin Is…	The Base Adjusted EBITDAre Margin Multiplier Is…
Less than 12.0%	0
12.0% (“Threshold Margin”)	0.5
17.0% (“Target Margin”)	1.00
22.0% (“Maximum Margin”) or greater	2.00

The Base Adjusted EBITDAre Margin Multiplier shall be interpolated on a linear basis for achievement of an Adjusted EBITDAre Margin between the Threshold Margin and Target Margin, or Target Margin and Maximum Margin, levels. For purposes of this Award Agreement, “Adjusted EBITDAre Margin” means the Company’s “adjusted EBITDAre” divided by the Company’s “total revenue,” each as reported in the Company’s annual report on Form 10-K for the fiscal year ending December 31, 2023.

(iv)Ending Net Debt/Gross Assets Ratio Multiplier. The “Ending Net Debt/Gross Assets Ratio Multiplier” shall equal the product of (x) one-third (1/3), multiplied by (y) the Base Ending Net Debt/Gross Assets Ratio Multiplier. The “Base Ending Net Debt/Gross Assets Ratio Multiplier” shall be determined in accordance with the table below:

If the Company’s Ending Net Debt/Gross Assets Ratio Is…	The Base Ending Net Debt/Gross Assets Ratio Multiplier Is…
60.0% or greater	0
60.0% (“Threshold Ratio”)	0.5
55.0% (“Target Ratio”)	1.00
50.0% (“Maximum Ratio”) or lesser	2.00

The Base Ending Net Debt/Gross Assets Ratio Multiplier shall be interpolated on a linear basis for achievement of an Ending Net Debt/Gross Assets Ratio between the Threshold Ratio and Target Ratio, or Target Ratio and Maximum Ratio, levels. For purposes of this Award Agreement, “Ending Net Debt/Gross Assets Ratio” means the

quotient of Net Debt (as defined below) divided by “investments in hotel properties, gross,” as reported in the Company’s consolidated financial statements reported on Form 10-K for the fiscal year ending December 31, 2023. “Net Debt” is defined as “indebtedness” less (w) “cash and cash equivalents,” (x) “restricted cash,” (y) financial assets “due from third-party hotel managers,” and (z) “marketable securities,” each as reported in the Company’s consolidated financial statements reported on Form 10-K for the fiscal year ending December 31, 2023.

b.Calculations; Adjustments. The Committee shall have the full and plenary authority to interpret this Award Agreement, and to calculate the achievement of the performance metrics described herein. The Committee’s determinations with respect to any such interpretations or calculations shall be final and binding upon the Participant. The Committee shall have the authority to make appropriate adjustments to the definitions of Total Revenue, Adjusted EBITDAre Margin, and Ending Net Debt/Gross Assets Ratio, or the calculation of any of the foregoing, to the extent that the Committee deems necessary.

3.Distributions. Prior to vesting of LTIP Units, all distributions with respect to LTIP Units shall be held back by the Partnership and shall be subject to the same vesting requirements and forfeiture restrictions as the underlying LTIP Units. In the event that the underlying LTIP Units (or any portion thereof) vest, accumulated distributions thereon shall be deemed distributed to Participant in cash and such cash used by Participant immediately thereafter to purchase such number of Common Partnership Units (as defined in the Operating Agreement) with an aggregate fair market value as of the date of vesting of the underlying LTIP Units equal to the amount of cash deemed distributed. For the purposes of the forgoing sentence, the Common Partnership Units shall be valued using the volume weighted average price of the Company’s Common Stock for the twenty (20) consecutive trading days immediately preceding the applicable date of vesting determined in accordance with the Operating Agreement.

4.Operating Agreement; Rights as LTIP Unitholder. Participant acknowledges and agrees that Participant’s LTIP Units acquired pursuant to this Award Agreement shall be subject to this Award Agreement, the Plan and the Operating Agreement (a copy of which has been provided to Participant as of the Grant Date). Participant acknowledges having received a copy of the Operating Agreement and having read the Operating Agreement in its entirety. Upon acceptance of Participant’s LTIP Units and execution of this Award Agreement, Participant will automatically become a party to the Operating Agreement as an LTIP Unitholder (as defined in the Operating Agreement) and will be bound by all of the terms and conditions of the Operating Agreement. Participant agrees to execute, in connection with the LTIP Units granted hereunder, such further documentation as reasonably requested by the Company or by the Partnership (or its general partner) to evidence the admission of Participant to the Partnership as an LTIP Unitholder. Participant shall have all the rights of an LTIP Unitholder with respect to Participant’s LTIP Units upon the Grant Date, provided that all other conditions to the issuance, including the forfeiture provisions contained herein and in the Operating Agreement have been satisfied.

5.Acceleration of Vesting.

a.Definitions.

(i)    For the purposes of this Section 5, “Involuntary Termination” means (A) at a time that the Participant is otherwise willing and able to continue providing services, a Termination of Service by the Company without Cause and without the consent of Advisor (including in connection with the Participant’s termination as an officer of the Company or the termination of the Fifth Amended and Restated Advisory Agreement between the Company and Advisor, as may be amended from time to time (the “Advisory Agreement”), other than a termination by the Company for the reasons described in Section 12.3(a)-(d) of the Advisory Agreement, as may be amended from time to time) or (B) a Termination of Service by Participant for Good Reason.

(ii)    The “Shortened Performance Period” means the beginning of the Performance Period through the date immediately prior to the earliest to occur of (A) a Change of Control of the Company (as defined in the Plan), (B) a change of control of Advisor (as defined in any employment or other written agreement between the Participant and Advisor (the “Employment Agreement”)) if such change of control of Advisor results in the vesting of the LTIP Units under the terms of the Employment Agreement, (C) Participant’s Involuntary Termination, death or Disability or (D) Participant’s involuntary termination of employment from Advisor if such involuntary termination results in the vesting of the LTIP Units under the terms of the Employment Agreement.

b.Change of Control. In the event of a Change of Control of the Company prior to the end of the Performance Period, (i) the Performance Multiplier shall be determined in accordance with Section 2 calculated based on actual performance during the Shortened Performance Period and (ii) the number of LTIP Units that vest in accordance with Section 2 using the Performance Multiplier for the Shortened Performance Period shall vest immediately prior to the closing of such Change of Control. If a change of control of Advisor (as defined in the Employment Agreement) causes vesting of the LTIP Units under the Employment Agreement prior to the end of the Performance Period, the LTIP Units shall vest in accordance with the Employment Agreement and, to the extent not specifically addressed in the Employment Agreement, the number of LTIP Units that vest shall be the number of LTIP Units that vest in accordance with Section 2 using the Performance Multiplier for the Shortened Performance Period (which shall be determined in accordance with Section 2 calculated based on actual performance during the Shortened Performance Period).

c.Termination of Service. In the event of the Participant’s (i) Involuntary Termination or (ii) death or Disability prior to the end of the Performance Period, a number of LTIP Units shall vest on the date of such event equal to the greater of (A) the Target Number of LTIP Units and (B) the number of LTIP Units that vest in accordance with Section 2 using the Performance Multiplier for the Shortened Performance Period

(which shall be determined in accordance with Section 2 calculated based on actual performance during the Shortened Performance Period). If an involuntary termination of employment from Advisor causes vesting of the LTIP Units under the Employment Agreement prior to the end of the Performance Period, the LTIP Units shall vest in accordance with the Employment Agreement and, to the extent not specifically addressed in the Employment Agreement, the number of LTIP Units that shall vest shall be the greater of (A) the Target Number of LTIP Units and (B) the number of LTIP Units that vest in accordance with Section 2 using the Performance Multiplier for the Shortened Performance Period (which shall be determined in accordance with Section 2 calculated based on actual performance during the Shortened Performance Period).

6.Withholding. If the Company determines that it is obligated to withhold any tax in connection with the grant, vesting or settlement of the LTIP Units, the Participant must make arrangements satisfactory to the Company to pay or provide for any applicable federal, state, local and other withholding obligations. The Participant may satisfy any federal, state, local or other tax withholding obligation relating to the LTIP Units hereunder by tendering cash payment to the Company or by any of the following means: (i) authorizing the Company to withhold LTIP Units from the LTIP Units otherwise retained by the Participant hereunder; provided, however, that no LTIP Units are withheld with a value exceeding the maximum amount of tax required to be withheld by law; or (ii) delivering to the Company previously owned and unencumbered LTIP Units. The Company also has the right to withhold from any other compensation payable to the Participant.

7.Tax Liability. Notwithstanding any action the Company takes with respect to any or all tax or other tax-related withholding with respect to LTIP Units (“Tax-Related Items”), the ultimate liability for all Tax-Related Items (and any associated penalties and interest) is and remains the Participant’s responsibility, and the Company (i) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant, vesting or settlement of LTIP Units, distributions with respect to LTIP Units, or the subsequent sale or other disposition of any such LTIP Units acquired hereunder; and (ii) does not commit to structure the LTIP Units to reduce or eliminate the Participant’s liability for Tax-Related Items.

8.No Right to Continued Service. Neither the Plan nor this Award Agreement shall confer upon the Participant any right to be retained in any capacity as a service provider to the Company, Advisor or any of their respective Affiliates. Further, nothing in the Plan or this Award Agreement shall be construed to limit the discretion of the Company, Advisor or any of their respective Affiliates to terminate the Participant’s service at any time, with or without Cause.

9.Transferability. The Award and the LTIP Units may not be transferred otherwise than as permitted under the Operating Agreement.

10.Compliance with Law. The grant and any forfeiture of LTIP Units hereunder shall be subject to compliance by the Company and the Participant with all applicable

requirements of federal and state securities laws. No LTIP Units shall be issued pursuant to this Award unless and until any then applicable requirements of state or federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. The Participant understands that the Company is under no obligation to register any units with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance.

11.Notices. Any notice required to be delivered to the Company under this Award Agreement shall be in writing and addressed to the General Counsel of the Company at the Company’s principal corporate offices. Any notice required to be delivered to the Participant under this Award Agreement shall be in writing and addressed to the Participant at the Participant’s address as shown in the records of the Company at the time such notice is to be delivered. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.

12.Governing Law. This Award Agreement will be construed and interpreted in accordance with the laws of the State of Delaware without regard to conflict of law principles.

13.Interpretation. Any dispute regarding the interpretation of this Award Agreement shall be submitted by the Participant or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Participant and the Company.

14.Award Subject to Plan and Operating Agreement. This Award Agreement is subject to the Plan as approved by the Company’s shareholders and the Operating Agreement. The terms and provisions of the Plan and the Operating Agreement as each may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan or a term or provision of the Operating Agreement, the applicable terms and provisions of the Plan or the Operating Agreement will govern and prevail.

15.Successors and Assigns. The Company may assign any of its rights under this Award Agreement. This Award Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Award Agreement will be binding upon the Participant and the Participant’s beneficiaries, executors, administrators and the person(s) to whom this Award Agreement may be transferred in accordance with Section 9.

16.Severability. The invalidity or unenforceability of any provision of the Plan, the Operating Agreement or this Award Agreement shall not affect the validity or enforceability of any other provision of the Plan, Operating Agreement or this Award Agreement, and each provision of the Plan, Operating Agreement and this Award Agreement shall be severable and enforceable to the extent permitted by law.

17.Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of LTIP Units under this Award Agreement does not create any contractual right or other right to receive any LTIP Units or other awards in the future. Future awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan or Operating Agreement shall not constitute a change or impairment of the terms and conditions of the Participant’s service with the Company, Advisor and/or their respective Affiliates.

18.No Guarantee of Tax Consequences. The Company, its Affiliates, the Board and the Committee make no commitment or guarantee to the Participant (or to any other person claiming through or on behalf of the Participant) that any federal, state, local or other tax treatment will (or will not) apply or be available to any person eligible for benefits under this Award Agreement and assume no liability or responsibility whatsoever for the tax consequences to the Participant (or to any other person claiming through or on behalf of the Participant). Notwithstanding anything herein to the contrary, the Company does not guarantee that any LTIP Unit intended to be a “profits interest” shall be treated as such for tax purposes, and none of the Company, any Affiliate thereof, the Board or the Committee shall indemnify any individual with respect to the tax consequences if they are not so treated.

19.Section 83(b) Election. It shall be a condition subsequent to the grant of LTIP Units hereunder that the Participant makes a timely election under Section 83(b) of the Code within thirty (30) days following the Grant Date in substantially the form attached hereto as Exhibit A with respect to the LTIP Units and to consult with the Participant’s tax advisor to determine the tax consequences of filing such an election under Section 83(b) of the Code. The Participant acknowledges that it is the Participant’s sole responsibility, and not the responsibility of the Company or any of its Affiliates, to timely file the election under Section 83(b) of the Code even if the Participant requests the Company or any of its Affiliates or any of their respective managers, directors, officers, employees and authorized representatives (including attorneys, accountants, consultants, bankers, lenders, prospective lenders or financial representatives) to assist in making such filing. The Participant agrees to provide the Company, on or before the due date for filing such election, proof that such election has been timely filed.

20.Claw-back Policy. This Award (including any proceeds, gains or other economic benefit actually or constructively received by the Participant upon any receipt or exercise of any Award or upon the receipt or resale of any LTIP Units) shall be subject to the provisions of any claw-back policy implemented by the Company, Advisor or any of their respective Affiliates, as applicable, including, without limitation, any claw-back policy adopted to comply with the requirements of any federal or state laws and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy.

21.Amendment. The Committee has the right, without the consent of the Participant, to amend, modify or terminate the Award, prospectively or retroactively; provided, that,

such amendment, modification or termination shall not, without the Participant’s consent, materially reduce or diminish the value of the Award as of the date of such amendment or termination.

22.No Impact on Other Benefits. The value of the Participant’s Award is not part of his or her normal or expected compensation for purposes of calculating any severance, bonus, retirement, welfare, insurance or similar benefit, as applicable, except as otherwise provided in any employment agreement, service agreement or similar agreement in effect between the Company, Advisor or any of their respective Affiliates and the Participant.

23.Counterparts. This Award Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Award Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

24.Headings. The headings in this Award Agreement are for purposes of convenience only and are not intended to define or limit the construction of the provisions hereof.

25.Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan, the Operating Agreement and this Award Agreement. The Participant has read and understands the terms and provisions thereof, and accepts the Award subject to all of the terms and conditions of the Plan, the Operating Agreement and this Award Agreement.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement as of the date first written above.

BRAEMAR HOTELS & RESORTS INC.

By: __________________________________

Name: Robert G. Haiman

Title: Executive Vice President,

          General Counsel & Secretary

BRAEMAR OP GENERAL PARTNER LLC, as general partner of Braemar Hospitality Limited Partnership

By: __________________________________

Name: Robert G. Haiman

Title: Executive Vice President,

          General Counsel & Secretary

PARTICIPANT

By: __________________________________

Name: [___________________]

Exhibit A

HOW TO MAKE A SECTION 83(b) ELECTION

    The attached Section 83(b) election form was prepared pursuant to Section 1.83-2 of the Treasury Regulations. If you decide to make an election, you must do the following:

i.Fully complete, date and sign the election form as indicated. Type or print your name under the signature line on the form.

ii.Within 20 days of the issuance of LTIP Units to you, file the executed form with the Internal Revenue Service Center where you file your federal income tax returns. You are strongly urged to use certified mail, return receipt requested. You may enclose a copy of the completed form with your filing and ask the IRS to file-stamp the copy and to return it to you. You should enclose a self-addressed envelope for this purpose.

iii.Forward a copy of the completed election form to the Company’s offices.

iv.Keep a copy of the completed form for your files.

v.Timely file any forms or documents (if any) that may be necessary for state tax purposes.

Note that if you fail to file the completed election form with the IRS within 30 days following the issuance of the LTIP Units to you, the election will be invalid, and the tax consequences will be determined as if no elections were made. There is no grace period for making the election. None of the Company, the Partnership or the affiliate of either of the foregoing is responsible for the filing of your election.

SECTION 83(b) ELECTION

The undersigned taxpayer makes this election pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”) and Treasury Regulations Section 1.83-2 promulgated thereunder:

1.    Taxpayer’s general information:

    *Name:

    *Address:

*Social Security #/Taxpayer ID#:

2.    Description of property with respect to which the election is being made:

    *    [_________] LTIP Units (as defined in the Third Amended and Restated Agreement of Limited Partnership, as amended from time to time (the “Partnership Agreement”) of Braemar Hospitality Limited Partnership, a Delaware limited partnership (the “Partnership”)) granted pursuant to the Partnership Agreement.

3.    Date on which the property was transferred: March [__], 2021

4.    Taxable year for which the election is being made: 2021

5.    Nature of restriction or restrictions to which the property is subject: the LTIP Units are subject to forfeiture and vesting based on achievement or certain financial metrics and the taxpayer’s continued employment or service relationship.

6.    The fair market value of the property at time of transfer (determined without regard to any restriction other than a restriction which by its terms will never lapse): $0.

7.    The amount (if any) paid for the property: $0.

8.    The amount to include in gross income is $0. (The result of the amount reported in Item 6 minus the amount reported in Item 7.)

The undersigned taxpayer will file this election with the Internal Revenue Service office with which the taxpayer files his or her annual income tax return not later than 30 days after the date of the transfer of the property. A copy of the election also will be furnished to the Company. The undersigned is the person performing the services in connection with which the property was transferred.

The undersigned understands that the foregoing election may not be revoked except with the consent of the Internal Revenue Commissioner.

Dated:    

Signature:___________________________

Print Taxpayer Name:___________________________

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, Richard J. Stockton, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Braemar Hotels & Resorts Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2021

/s/ RICHARD J. STOCKTON

Richard J. Stockton

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, Deric S. Eubanks, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Braemar Hotels & Resorts Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 7, 2021

/s/ DERIC S. EUBANKS

Deric S. Eubanks

Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Braemar Hotels & Resorts Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard J. Stockton, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 7, 2021

/s/ RICHARD J. STOCKTON

Richard J. Stockton

President and Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Braemar Hotels & Resorts Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2021, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Deric S. Eubanks, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 7, 2021

/s/ DERIC S. EUBANKS

Deric S. Eubanks

Chief Financial Officer

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2021	May 05, 2021
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	001-35972
Entity Registrant Name	BRAEMAR HOTELS & RESORTS INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	46-2488594
Entity Address, Address Line One	14185 Dallas Parkway
Entity Address, Address Line Two	Suite 1200
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75254
City Area Code	972
Local Phone Number	490-9600
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		47,891,046
Entity Central Index Key	0001574085
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Amendment Flag	false
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common Stock
Trading Symbol	BHR
Security Exchange Name	NYSE
Preferred Stock, Series B
Document Information [Line Items]
Title of 12(b) Security	Preferred Stock, Series B
Trading Symbol	BHR-PB
Security Exchange Name	NYSE
Preferred Stock, Series D
Document Information [Line Items]
Title of 12(b) Security	Preferred Stock, Series D
Trading Symbol	BHR-PD
Security Exchange Name	NYSE

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
ASSETS
Investments in hotel properties, gross	$ 1,782,753	$ 1,784,849
Accumulated depreciation	(376,243)	(360,259)
Investments in hotel properties, net	1,406,510	1,424,590
Cash and cash equivalents	85,684	78,606
Restricted cash	39,322	34,544
Accounts receivable, net of allowance of $275 and $227, respectively	17,583	13,557
Inventories	2,383	2,551
Prepaid expenses	6,830	4,405
Investment in unconsolidated entity	1,644	1,708
Operating lease right-of-use assets	80,985	81,260
Other assets	15,646	14,898
Intangible assets, net	4,546	4,640
Due from related parties, net	1,052	991
Due from third-party hotel managers	18,565	12,271
Total assets	1,680,750	1,674,021
Liabilities:
Indebtedness, net	1,118,824	1,130,594
Accounts payable and accrued expenses	74,098	61,758
Dividends and distributions payable	2,569	2,736
Due to Ashford Inc.	2,115	2,772
Due to third-party hotel managers	1,725	1,393
Operating lease liabilities	60,857	60,917
Other liabilities	18,833	18,077
Total liabilities	1,279,021	1,278,247
Commitments and contingencies (note 15)
5.50% Series B cumulative convertible preferred stock, $0.01 par value, 4,545,016 and 5,031,473 shares issued and outstanding at March 31, 2021 and December 31, 2020	96,609	106,949
Redeemable noncontrolling interests in operating partnership	28,162	27,655
Preferred stock, $0.01 value, 80,000,000 shares authorized:
8.25% Series D cumulative preferred stock, 1,600,000 shares issued and outstanding at March 31, 2021 and December 31, 2020	16	16
Common stock, $0.01 par value, 250,000,000 shares authorized, 43,465,880 and 38,274,770 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	434	382
Additional paid-in capital	571,288	541,870
Accumulated deficit	(278,445)	(266,010)
Total stockholders’ equity of the Company	293,293	276,258
Noncontrolling interest in consolidated entities	(16,335)	(15,088)
Total equity	276,958	261,170
Total liabilities and equity	$ 1,680,750	$ 1,674,021

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
ASSETS
Allowance for doubtful notes receivable	$ 275	$ 227
Preferred stock, $0.01 value, 80,000,000 shares authorized:
Preferred stock par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	80,000,000	80,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, shares issued (in shares)	43,465,880	38,274,770
Common stock, shares outstanding (in shares)	43,465,880	38,274,770
Series B Preferred Stock
Liabilities [Abstract]
Preferred stock dividend rate	5.50%	5.50%
Series B preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Series B preferred stock, shares issued (in shares)	4,545,016	5,031,473
Series B preferred stock, shares outstanding (in shares)	4,545,016	5,031,473
Series D Preferred Stock
Liabilities [Abstract]
Preferred stock dividend rate	8.25%	8.25%
Preferred stock, $0.01 value, 80,000,000 shares authorized:
Preferred stock, shares issued (in shares)	1,600,000	1,600,000
Preferred stock, shares outstanding (in shares)	1,600,000	1,600,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
REVENUE
Total revenue	$ 83,848	$ 117,520
Hotel operating expenses:
Total hotel operating expenses	56,042	87,748
Property taxes, insurance and other	7,264	7,660
Depreciation and amortization	18,353	18,338
Advisory services fee	4,795	5,069
Corporate general and administrative	1,600	1,932
Total expenses	88,054	120,747
Gain (loss) on insurance settlement and disposition of assets	499	0
OPERATING INCOME (LOSS)	(3,707)	(3,227)
Equity in earnings (loss) of unconsolidated entity	(64)	(40)
Interest income	9	129
Other income (expense)	0	(138)
Interest expense and amortization of loan costs	(6,756)	(11,897)
Write-off of loan costs and exit fees	(351)	0
Unrealized gain (loss) on derivatives	(20)	1,156
INCOME (LOSS) BEFORE INCOME TAXES	(10,889)	(14,017)
Income tax (expense) benefit	(145)	(1,370)
NET INCOME (LOSS)	(11,034)	(15,387)
(Income) loss attributable to noncontrolling interest in consolidated entities	1,247	572
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	1,079	1,885
NET INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	(8,708)	(12,930)
Preferred dividends	(2,388)	(2,555)
Gain (loss) on extinguishment of preferred stock	(73)	0
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ (11,169)	$ (15,485)
INCOME (LOSS) PER SHARE - BASIC:
Net income (loss) attributable to common stockholders (in dollars per share)	$ (0.28)	$ (0.48)
Weighted average common shares outstanding – basic (in shares)	39,605	32,474
INCOME (LOSS) PER SHARE - DILUTED:
Net income (loss) attributable to common stockholders (in dollars per share)	$ (0.28)	$ (0.48)
Weighted average common shares outstanding – diluted (in shares)	39,605	32,474
Total hotel revenue
REVENUE
Total revenue	$ 83,848	$ 117,520
Rooms
REVENUE
Total revenue	54,323	70,468
Hotel operating expenses:
Total hotel operating expenses	11,015	17,880
Food and beverage
REVENUE
Total revenue	16,629	28,803
Hotel operating expenses:
Total hotel operating expenses	13,952	23,901
Other hotel
REVENUE
Total revenue	12,896	18,249
Hotel operating expenses:
Total hotel operating expenses	28,543	42,090
Management fees
Hotel operating expenses:
Total hotel operating expenses	$ 2,532	$ 3,877

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Statement of Comprehensive Income [Abstract]
NET INCOME (LOSS)	$ (11,034)	$ (15,387)
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
Total other comprehensive income (loss)	0	0
TOTAL COMPREHENSIVE INCOME (LOSS)	(11,034)	(15,387)
Comprehensive (income) loss attributable to noncontrolling interest in consolidated entities	1,247	572
Comprehensive (income) loss attributable to redeemable noncontrolling interests in operating partnership	1,079	1,885
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE COMPANY	$ (8,708)	$ (12,930)

XML

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - USD ($)	Total	Series D Preferred Stock	Series B Preferred Stock	Preferred Stock Series D Preferred Stock	Preferred Stock Series B Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Deficit Series D Preferred Stock	Accumulated Deficit Series B Preferred Stock	Noncontrolling Interest in Consolidated Entities	Redeemable Noncontrolling Interests in Operating Partnership
Increase (Decrease) in Temporary Equity [Roll Forward]
Units outstanding at beginning of year					5,008,000
Beginning balance (in shares) at Dec. 31, 2019				1,600,000		32,885,000
Beginning balance at Dec. 31, 2019	$ 363,254,000			$ 16,000		$ 329,000	$ 519,551,000	$ (150,629,000)			$ (6,013,000)	$ 41,570,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Purchase of common stock (in shares)						(20,000)
Purchase of common stock	(82,000)						(82,000)
Equity-based compensation	1,424,000						1,424,000					561,000
Issuance of restricted shares/units (in shares)						311,000
Issuance of restricted shares/units	0					$ 3,000	(3,000)
Forfeiture of restricted common shares (in shares)						(4,000)
Stock Issued During Period, Value, Restricted Stock Award, Forfeitures	0
Dividends declared – preferred stock		$ (825,000)	$ (1,730,000)						$ (825,000)	$ (1,730,000)
Distributions to noncontrolling interests	(2,639,000)										(2,639,000)
Redemption/conversion of operating partnership units (in shares)						339,000
Redemption/conversion of operating partnership units	3,454,000					$ 3,000	3,451,000					(3,454,000)
Net income (loss)	(13,502,000)							(12,930,000)			(572,000)	(1,885,000)
Redemption value adjustment	6,000							6,000				(6,000)
Ending balance (in shares) at Mar. 31, 2020				1,600,000		33,511,000
Ending balance at Mar. 31, 2020	349,360,000			$ 16,000		$ 335,000	524,341,000	(166,108,000)			(9,224,000)	36,786,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Units outstanding at beginning of year					5,031,000
Beginning balance, temporary equity at Dec. 31, 2019					$ 106,920,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Issuance of preferred stock (in shares)					23,000
Issuance of preferred stock					$ 432,000
Units outstanding at end of year (in shares) at Mar. 31, 2020					5,031,000
Ending balance, temporary equity at Mar. 31, 2020					$ 107,352,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Units outstanding at beginning of year					5,031,000
Units outstanding at beginning of year			5,031,473		5,031,000
Beginning balance (in shares) at Dec. 31, 2020				1,600,000		38,275,000
Beginning balance at Dec. 31, 2020	261,170,000			$ 16,000		$ 382,000	541,870,000	(266,010,000)			(15,088,000)	27,655,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Purchase of common stock (in shares)						(50,000)
Purchase of common stock	(348,000)						(348,000)
Equity-based compensation	1,096,000						1,096,000					320,000
Issuance of stock (in shares)						3,205,000
Issuance of stock	18,309,000					$ 32,000	18,277,000
Issuance of restricted shares/units (in shares)						504,000
Issuance of restricted shares/units	0					$ 5,000	(5,000)
Forfeiture of restricted common shares (in shares)						(3,000)
Stock Issued During Period, Value, Restricted Stock Award, Forfeitures	0
Dividends declared – preferred stock		$ (825,000)	$ (1,563,000)						$ (825,000)	$ (1,563,000)
Net income (loss)	(9,955,000)							(8,708,000)			(1,247,000)	(1,079,000)
Extinguishment of preferred stock (in shares)						1,535,000
Extinguishment of preferred stock	10,340,000					$ 15,000	10,398,000	(73,000)
Redemption value adjustment	(1,266,000)							(1,266,000)				1,266,000
Ending balance (in shares) at Mar. 31, 2021				1,600,000		43,466,000
Ending balance at Mar. 31, 2021	276,958,000			$ 16,000		$ 434,000	$ 571,288,000	$ (278,445,000)			$ (16,335,000)	$ 28,162,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Units outstanding at beginning of year			4,545,016		4,545,000
Beginning balance, temporary equity at Dec. 31, 2020	106,949,000				$ 106,949,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Extinguishment of preferred stock (in shares)					(486,000)
Extinguishment of preferred stock					$ (10,340,000)
Units outstanding at end of year (in shares) at Mar. 31, 2021			4,545,016		4,545,000
Ending balance, temporary equity at Mar. 31, 2021	$ 96,609,000				$ 96,609,000
Increase (Decrease) in Temporary Equity [Roll Forward]
Units outstanding at beginning of year			4,545,016		4,545,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Series D Preferred Stock
Dividends declared per preferred share (in dollars per share)	$ 0.52	$ 0.52
Preferred stock dividend rate	8.25%	8.25%
Series B Preferred Stock
Dividends declared per preferred share (in dollars per share)	$ 0.34	$ 0.34
Preferred stock dividend rate	5.50%	5.50%

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ (11,034)	$ (15,387)
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities:
Depreciation and amortization	18,353	18,338
Equity-based compensation	1,416	1,985
Bad debt expense	70	269
Amortization of loan costs and capitalized default interest	(583)	1,071
Write-off of loan costs and exit fees	351	0
Amortization of intangibles	138	207
Amortization of non-refundable membership initiation fees	(194)	(82)
Interest expense accretion on refundable membership club deposits	202	213
(Gain) loss on insurance settlement and disposition of assets	(499)	0
Realized and unrealized (gain) loss on derivatives	20	(1,081)
Net settlement of trading derivatives	0	1,330
Equity in (earnings) loss of unconsolidated entity	64	40
Deferred income tax expense (benefit)	(174)	(5)
Changes in operating assets and liabilities:
Accounts receivable and inventories	(3,699)	4,003
Prepaid expenses and other assets	(3,514)	(2,719)
Accounts payable and accrued expenses	16,129	(8,315)
Operating lease right-of-use assets	137	134
Due to/from related parties, net	(61)	(303)
Due to/from third-party hotel managers	(5,480)	(337)
Operating lease liabilities	(60)	(54)
Other liabilities	748	267
Net cash provided by (used in) operating activities	11,967	(865)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from property insurance	0	948
Net proceeds from disposition of assets	200	0
Investment in unconsolidated entity	0	(26)
Improvements and additions to hotel properties	(4,692)	(7,509)
Net cash provided by (used in) investing activities	(4,492)	(6,587)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on indebtedness	0	75,000
Repayments of indebtedness	(10,832)	0
Payments of loan costs and exit fees	(365)	0
Payments for derivatives	(20)	(37)
Purchase of common stock	(28)	(28)
Payments for dividends and distributions	(2,555)	(8,490)
Proceeds from issuance of preferred stock	0	474
Proceeds from issuance of common stock	18,181	0
Distributions to noncontrolling interest in consolidated entities	0	(2,639)
Net cash provided by (used in) financing activities	4,381	64,280
Net change in cash, cash equivalents and restricted cash	11,856	56,828
Cash, cash equivalents and restricted cash at beginning of period	113,150	130,383
Cash, cash equivalents and restricted cash at end of period	125,006	187,211
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid	6,892	10,601
Income taxes paid (refunded)	(41)	690
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Dividends and distributions declared but not paid	2,569	3,208
Common stock purchases accrued but not paid	348	82
Capital expenditures accrued but not paid	4,628	17,040
Accrued but unpaid financing costs	0	1,364
Accrued common stock offering expense	101	0
Unsettled common stock offering proceeds	297	0
Accrued preferred stock offering expenses	0	25
SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash, cash equivalents and restricted cash	125,006	187,211
Ashford Inc.
Changes in operating assets and liabilities:
Due to affiliate	$ (363)	$ (439)

XML

Organization and Description of Business

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of Business

Organization and Description of Business

Braemar Hotels & Resorts Inc., together with its subsidiaries (“Braemar”), is a Maryland corporation that invests primarily in high revenue per available room (“RevPAR”) luxury hotels and resorts. High RevPAR, for purposes of our investment strategy, means RevPAR of at least twice the then-current U.S. national average RevPAR for all hotels as determined by Smith Travel Research. Braemar has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). Braemar conducts its business and owns substantially all of its assets through its operating partnership, Braemar Hospitality Limited Partnership (“Braemar OP”). In this report, the terms the “Company,” “we,” “us” or “our” refers to Braemar Hotels & Resorts Inc. and, as the context may require, all entities included in its condensed consolidated financial statements.

We are advised by Ashford Hospitality Advisors LLC (“Ashford LLC” or the “Advisor”) through an advisory agreement. Ashford LLC is a subsidiary of Ashford Inc. All of the hotel properties in our portfolio are currently asset-managed by Ashford LLC. We do not have any employees. All of the services that might be provided by employees are provided to us by Ashford LLC.

We do not operate any of our hotel properties directly; instead we employ hotel management companies to operate them for us under management contracts. Remington Hotels, a subsidiary of Ashford Inc., manages three of our thirteen hotel properties. Third-party management companies manage the remaining hotel properties.

Ashford Inc. also provides other products and services to us or our hotel properties through certain entities in which Ashford Inc. has an ownership interest. These products and services include, but are not limited to project management services, debt placement and related services, broker-dealer and distribution services, audio visual services, real estate advisory services, insurance claims services, hypoallergenic premium rooms, watersport activities, travel/transportation services and mobile key technology.

The accompanying condensed consolidated financial statements include the accounts of wholly-owned and majority-owned subsidiaries of Braemar OP that as of March 31, 2021, own thirteen hotel properties in six states, the District of Columbia and the U.S. Virgin Islands (“USVI”). The portfolio includes eleven wholly-owned hotel properties and two hotel properties that are owned through a partnership in which Braemar OP has a controlling interest. These hotel properties represent 3,722 total rooms, or 3,487 net rooms, excluding those attributable to our partner. As a REIT, Braemar is required to comply with limitations imposed by the Internal Revenue Code related to operating hotels. As of March 31, 2021, twelve of our thirteen hotel properties were leased by wholly-owned or majority-owned subsidiaries that are treated as taxable REIT subsidiaries (“TRS”) for federal income tax purposes (collectively the TRS entities are referred to as “Braemar TRS”). One hotel property, located in the USVI, is owned by our USVI TRS. Braemar TRS then engages third-party or affiliated hotel management companies to operate the hotel properties under management contracts. Hotel operating results related to the hotel properties are included in the condensed consolidated statements of operations.

As of March 31, 2021, ten of the thirteen hotel properties were leased by Braemar’s wholly-owned TRS and the two hotel properties majority-owned through a consolidated partnership were leased to a TRS wholly-owned by such consolidated partnership. Each leased hotel is leased under a percentage lease that provides for each lessee to pay in each calendar month the base rent plus, in each calendar quarter, percentage rent, if any, based on hotel revenues. Lease revenue from Braemar TRS is eliminated in consolidation. The hotel properties are operated under management contracts with Marriott Hotel Services, Inc. (“Marriott”), Hilton Management LLC (“Hilton”), Accor Management US Inc. (“Accor”), Hyatt Corporation (“Hyatt”), Ritz-Carlton (Virgin Islands), Inc. and The Ritz-Carlton Hotel Company, L.L.C., each of which are affiliates of Marriott (“Ritz-Carlton”) and Remington Hotels, which are eligible independent contractors under the Internal Revenue Code.

COVID-19, Management’s Plans and Liquidity

In December 2019, COVID-19 was identified in Wuhan, China, subsequently spread to other regions of the world, and has resulted in significant travel restrictions and extended shutdown of numerous businesses in every state in the United States. In March 2020, the World Health Organization declared COVID-19 to be a global pandemic. Beginning in late February 2020, we experienced a significant decline in occupancy and RevPAR associated with COVID-19 as we experienced significant reservation cancellations as well as a significant reduction in new reservations. The prolonged presence of the virus has resulted in health and other government authorities imposing widespread restrictions on travel and other businesses. The hotel industry and our portfolio have experienced the postponement or cancellation of a significant number of business conferences and similar events. Following the government mandates and health official orders in March 2020, the Company temporarily

suspended operations at 11 of its 13 hotels and dramatically reduced staffing and expenses at its hotels that remained operational. COVID-19 has had a significant negative impact on the Company’s operations and financial results to date. The full financial impact of the reduction in hotel demand caused by the pandemic and suspension of operations at the Company’s hotels cannot be reasonably estimated at this time due to uncertainty as to its severity and duration. In addition, one or more possible recurrences of COVID-19 cases could result in further reductions in business and personal travel and could cause state and local governments to reinstate travel restrictions. The Company expects that the COVID-19 pandemic will continue to have a negative impact on the Company’s results of operations, financial position and cash flow in 2021 and potentially much longer. As a result, in March 2020, the Company fully drew down its $75 million secured revolving credit facility, which was later converted into a term loan, suspended the quarterly cash dividend on its common stock, reduced planned capital expenditures, and, working closely with its hotel managers, significantly reduced its hotels’ operating expenses. See note 6 for term loan details.

All of the Company’s property-level debt is non-recourse. Beginning on April 1, 2020, we did not make at least one interest payment under nearly all of our loan agreements, which constituted an “Event of Default” as such term is defined under the applicable loan documents. Further, the Company triggered an “Event of Default,” as defined under the secured revolving credit facility agreement as a result of the Company being in default on mortgage and mezzanine loans with an aggregate principal amount in excess of $200 million. Pursuant to the terms of the applicable loan documents, such an Event of Default caused an automatic increase in the interest rate on our outstanding loan balance for the period such Event of Default remains outstanding. Following an Event of Default, our lenders can generally elect to accelerate all principal and accrued interest payments that remain outstanding under the applicable loan agreement and foreclose on the applicable hotel properties that are security for such loans. Such Event of Default under the secured revolving credit facility agreement was eliminated by the First Amendment to the Second Amended and Restated Credit Agreement, dated June 8, 2020, which provides that defaults under mortgage and mezzanine loans with an aggregate principal amount in excess of $200 million do not trigger a default under the secured revolving credit agreement unless such mortgage or mezzanine loans are also accelerated, and excluding from the $200 million threshold, any default and acceleration under those certain mortgage and mezzanine loans having an aggregate principal amount of $435 million and secured by the Marriott Seattle Waterfront, Sofitel Chicago Magnificent Mile, The Notary Hotel and The Clancy. During the second and third quarters of 2020, we reached forbearance and other agreements with our lenders relating to loans secured by the Pier House Resort & Spa, The Ritz-Carlton Sarasota, The Ritz-Carlton Lake Tahoe, Hotel Yountville, Bardessono Hotel and Spa, Sofitel Chicago Magnificent Mile, The Notary Hotel, The Clancy, Marriott Seattle Waterfront, Capital Hilton and Hilton La Jolla Torrey Pines. The Company also amended its secured revolving credit facility converting it into a $65 million secured term loan and changed the terms of certain financial covenants, including a waiver of the Consolidated Fixed Charge Coverage Ratio (as defined in the Amendment) through March 31, 2021, that the Company was subject to under the secured revolving credit facility. On February 22, 2021, the Company entered into the Second Amendment to Second Amended and Restated Credit Agreement. The amendment provides an extension of the waiver on the majority of the covenants through the fourth quarter of 2021 and a reduced fixed charge coverage ratio covenant through the end of 2022. The first period in which covenants will be tested is for the fiscal quarter ending March 31, 2022. The amendment also allows the Company to utilize approximately $9.3 million of cash held in FF&E reserve accounts at certain properties for discretionary capital expenditures. As of March 31, 2021, no loans are in default.

Additionally, the Company did not make rental payments under two ground leases that are paid monthly; however, the Company executed a forbearance agreement with the landlord of the Bardessono Hotel and Spa and executed a rent deferral letter with the landlord of the Hilton La Jolla Torrey Pines, each of which temporarily resolved any potential events of default arising out of such non-payments. As of March 31, 2021, the Company is current on its rental payments.

When preparing financial statements for each annual and interim reporting period management has the responsibility to evaluate whether there are conditions or events, considered in the aggregate, that create substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. In applying the accounting guidance, the Company considers its current financial condition and liquidity sources, including current funds available, forecasted future cash flows and its unconditional obligations due over the next 12 months.

As of March 31, 2021, the Company maintained unrestricted cash of $85.7 million and restricted cash of $39.3 million. The vast majority of the restricted cash is comprised of lender and manager held reserves. For the three months ended March 31, 2021, cash flows provided by operating activities was approximately $12.0 million. The Company worked with its property managers and lenders in order to utilize lender and manager held reserves to fund operating shortfalls. As of March 31, 2021, there was also $18.6 million due to the Company from third-party hotel managers, which is primarily the Company’s cash held by one of its property managers which is also available to fund hotel operating costs.

We cannot predict when hotel operating levels will return to normalized levels after the effects of the pandemic fully subside, whether our hotels will be forced to shut down operations or whether one or more governmental entities may impose additional travel restrictions due to a resurgence of COVID-19 cases in the future. As a result of these factors resulting from the impact of the pandemic, we are unable to estimate future financial performance with certainty. However, based on our completed term loan amendment and forbearance and other agreements, our current unrestricted and restricted cash on hand, our current cash utilization and forecast of future operating results for the next 12 months from the date of this report, and the actions we have taken to improve our liquidity, the Company has concluded that management’s current plan alleviates the substantial doubt about its ability to continue as a going concern. Facts and circumstances could change in the future that are outside of management’s control, such as additional government mandates, health official orders, travel restrictions and extended business shutdowns due to COVID-19.

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Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

Basis of Presentation and Principles of Consolidation—The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These condensed consolidated financial statements include the accounts of Braemar Hotels & Resorts Inc., its majority-owned subsidiaries, and its majority-owned entities in which it has a controlling interest. All significant intercompany accounts and transactions between consolidated entities have been eliminated in these condensed consolidated financial statements. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP in the accompanying unaudited condensed consolidated financial statements. We believe the disclosures made herein are adequate to prevent the information presented from being misleading. However, the financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2020 Annual Report on Form 10-K, as originally filed with the Securities and Exchange Commission (“SEC”) on March 5, 2021.

Braemar OP is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance. A VIE must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. All major decisions related to Braemar OP that most significantly impact its economic performance, including but not limited to operating procedures with respect to business affairs and any acquisitions, dispositions, financings, restructurings or other transactions with sellers, purchasers, lenders, brokers, agents and other applicable representatives, are subject to the approval of our wholly-owned subsidiary, Braemar OP General Partner LLC, its general partner. As such, we consolidate Braemar OP.

The following items affect reporting comparability of our historical condensed consolidated financial statements:

•historical seasonality patterns at some of our hotel properties cause fluctuations in our overall operating results. Consequently, operating results for the three months ended March 31, 2021, are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

Use of Estimates—The preparation of these condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Recently Adopted Accounting Standards—In January 2020, the Financial Accounting Standards Board’s (“FASB”) issued Accounting Standards Update (“ASU”) 2020-01, Investments – Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) (“ASU 2020-01”), which clarifies the interaction between the accounting for equity securities, equity method investments, and certain derivative instruments. The ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years and should be applied prospectively. Early adoption is permitted. We adopted the standard effective January 1, 2021 and the adoption of this standard did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Standards—In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”) to provide guidance and relief for transitioning to alternative reference rates. ASU 2021-01 is effective immediately for all entities. The Company continues to evaluate the impact of the guidance and may apply the elections as applicable as changes in the market occur.

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in Accounting Standards Codification (“ASC”) 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies, this ASU is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. We are currently evaluating the impact that ASU 2020-06 may have on our consolidated financial statements and related disclosures.

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Revenue

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue

RevenueThe following tables present our revenue disaggregated by geographical areas (in thousands):

	Three Months Ended March 31, 2021
Primary Geographical Market	Number of Hotels	Rooms		Food and Beverage		Other Hotel		Total
California	5	$	12,745	$	4,232	$	2,261	$	19,238
Colorado	1	6,380		2,978		2,393		11,751
Florida	2	16,351		5,640		5,177		27,168
Illinois	1	1,420		236		132		1,788
Pennsylvania	1	1,241		5		119		1,365
Washington	1	898		10		117		1,025
Washington, D.C.	1	2,031		132		246		2,409
USVI	1	13,257		3,396		2,451		19,104
Total	13	$	54,323	$	16,629	$	12,896	$	83,848

	Three Months Ended March 31, 2020
Primary Geographical Market	Number of Hotels	Rooms		Food and Beverage		Other Hotel		Total
California	5	$	23,987	$	7,771	$	4,418	$	36,176
Colorado	1	8,151		4,255		2,905		15,311
Florida	2	13,989		7,743		4,694		26,426
Illinois	1	2,621		852		296		3,769
Pennsylvania	1	4,466		1,206		236		5,908
Washington	1	3,698		791		358		4,847
Washington, D.C.	1	6,535		3,491		506		10,532
USVI	1	7,021		2,694		4,836		14,551
Total	13	$	70,468	$	28,803	$	18,249	$	117,520

For the three months ended March 31, 2020 the Company recorded revenue from business interruption losses associated with lost profits from Hurricane Irma of $3.6 million. This revenue is included in “other” hotel revenue in our condensed consolidated statement of operations. There was no such revenue recorded for the three months ended March 31, 2021 as the insurance claim was fully settled in 2020.

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Investments in Hotel Properties, net

3 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

Investments in Hotel Properties, net

Investments in Hotel Properties, net

Investments in hotel properties, net consisted of the following (in thousands):

	March 31, 2021		December 31, 2020
Land	$	455,298	$	455,298
Buildings and improvements	1,190,169		1,190,437
Furniture, fixtures and equipment	127,896		127,692
Construction in progress	9,390		11,422
Total cost	1,782,753		1,784,849
Accumulated depreciation	(376,243)		(360,259)
Investments in hotel properties, net	$	1,406,510	$	1,424,590

Impairment Charges and Insurance Recoveries

For the three months ended March 31, 2021, we recognized a $481,000 gain associated with proceeds received from an insurance claim.

For the three months ended March 31, 2020, the Company received proceeds of $2.0 million from our insurance carriers for property damage and business interruption from Hurricane Irma. There were no proceeds for the three months ended March 31, 2021 as the claim was fully settled in September 2020.

During the three months ended March 31, 2021 and 2020, no impairment charges were recorded.

In September 2020, the Company reached a final settlement with its insurance carriers related to Hurricane Irma. Upon settlement, the Company recorded a gain of $10.1 million as the proceeds received exceeded the carrying value of the hotel property at the time of the loss.

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Investment in Unconsolidated Entity

3 Months Ended

Mar. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Investment in Unconsolidated Entity

Investment in Unconsolidated Entity

OpenKey is a hospitality-focused mobile key platform that provides a universal smart phone app and related hardware and software for keyless entry into hotel guest rooms. In 2018, the Company made an initial $2.0 million investment in OpenKey, which is controlled and consolidated by Ashford Inc., for an initial 8.2% ownership interest. An additional investment of $26,000 was made during the three months ended March 31, 2020. All investments were recommended by our Related Party Transactions Committee and unanimously approved by the independent members of our board of directors. As of March 31, 2021, the Company has made investments in OpenKey totaling $2.4 million.

Our investment is recorded as “investment in unconsolidated entity” in our condensed consolidated balance sheets and is accounted for under the equity method of accounting as we have been deemed to have significant influence over the entity under the applicable accounting guidance. We review our investment in OpenKey for impairment in each reporting period pursuant to the applicable authoritative accounting guidance. An investment is impaired when its estimated fair value is less than the carrying amount of the investment. Any impairment is recorded in equity in earnings (loss) of unconsolidated entity. No such impairment was recorded for three months ended March 31, 2021 and 2020.

The following table summarizes our carrying value and ownership interest in OpenKey:

	March 31, 2021			December 31, 2020
Carrying value of the investment in OpenKey (in thousands)	$	1,644		$	1,708
Ownership interest in OpenKey	8.0		%	8.2		%

The following table summarizes our equity in earnings (loss) in OpenKey (in thousands):

	Three Months Ended March 31,
Line Item	2021		2020
Equity in earnings (loss) of unconsolidated entity	$	(64)	$	(40)

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Indebtedness, net

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Indebtedness, net

Indebtedness, net

Indebtedness, net consisted of the following (dollars in thousands):

Indebtedness	Collateral	Current Maturity	Final Maturity (9)	Interest Rate	March 31, 2021		December 31, 2020
Mortgage loan (3)	The Notary Hotel	June 2021	June 2025	LIBOR (1) + 2.16%	$	435,000	$	435,000
	The Clancy
	Sofitel Chicago Magnificent Mile
	Marriott Seattle Waterfront
Mortgage loan (4)	The Ritz-Carlton St. Thomas	August 2021	August 2024	LIBOR (1) + 3.95%	42,500		42,500
Mortgage loan (5)	Park Hyatt Beaver Creek Resort & Spa	April 2022	April 2022	LIBOR (1) + 2.75%	67,500		67,500
Mortgage loan (7)	Hotel Yountville	May 2022	May 2022	LIBOR (1) + 2.55%	51,000		51,000
Mortgage loan (7)	Bardessono Hotel and Spa	August 2022	August 2022	LIBOR (1) + 2.55%	40,000		40,000
Term loan (6)	Equity	October 2022	October 2022	Base Rate (2) + 1.25% to 2.65% or LIBOR (1) + 2.25% to 3.65%	51,221		61,495
Mortgage loan (7)	The Ritz-Carlton Sarasota	April 2023	April 2023	LIBOR (1) + 2.65%	100,000		100,000
Mortgage loan (7)	The Ritz-Carlton Lake Tahoe	January 2024	January 2024	LIBOR (1) + 2.10%	54,000		54,000
Mortgage loan (8)	Capital Hilton	February 2024	February 2024	LIBOR (1) + 1.70%	196,671		197,229
	Hilton La Jolla Torrey Pines
Mortgage loan (7)	Pier House Resort & Spa	September 2024	September 2024	LIBOR (1) + 1.85%	80,000		80,000
					1,117,892		1,128,724
Capitalized default interest and late charges					5,994		7,304
Deferred loan costs, net					(5,062)		(5,434)
Indebtedness, net					$	1,118,824	$	1,130,594

__________________

(1)LIBOR rates were 0.111% and 0.144% at March 31, 2021 and December 31, 2020, respectively.

(2)Base Rate, as defined in the secured term loan agreement, is the greater of (i) the prime rate set by Bank of America, or (ii) federal funds rate + 0.5%, or (iii) LIBOR + 1.0%.

(3)This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions, of which the first was exercised in June 2020.

(4)This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions.

(5)Effective January 9, 2021, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits being waived from January 2021 through June 2021. This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the third was exercised in April 2021.

(6)Effective February 22, 2021, we amended this term loan. In conjunction with the amendment, the interest rate spread increased from a rate of Base Rate + 1.25% - 2.50% or LIBOR + 2.25% - 3.50%, with Base Rate + 1.25% - 2.65% or LIBOR + 2.25% - 3.65%, with a LIBOR floor of 0.50%.

(7)Effective December 31, 2020, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits being waived from January 2021 through December 2021.

(8)Effective March 5, 2021, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits waived through July 1, 2021.

(9)The final maturity date assumes all available extensions options will be exercised.

On June 8, 2020, the Company entered into the First Amendment to the Second Amended and Restated Credit Agreement (the “Amendment”). The Amendment converted the $75 million Second Amended and Restated Credit Agreement, dated October 25, 2019 (the “Credit Facility”), which was a secured revolving credit facility, into a $65 million secured term loan. The Company had borrowed the full borrowing capacity of $75 million under the Credit Facility and repaid $10 million on June 8, 2020, in connection with the signing of the Amendment. The Amendment also added principal amortization of $5 million per quarter commencing on March 31, 2021. The Amendment changes the terms of certain financial covenants that the Company was subject to under the Credit Facility. The Amendment had the same maturity date of October 25, 2022 but removed the two one-year extension options and also removed the Company’s ability to reborrow amounts that have been repaid.

On February 22, 2021, the Company entered into the Second Amendment to the Second Amended and Restated Credit Agreement. The amendment provides an extension of the waiver on the majority of the covenants through the fourth quarter of 2021 and a reduced fixed charge coverage ratio covenant through the end of 2022. The first period in which covenants will be tested is for the fiscal quarter ending March 31, 2022. The amendment also allows the Company to utilize approximately $9.3 million of cash held in FF&E reserve accounts at certain properties for discretionary capital expenditures.

During the second and third quarters of 2020, we reached forbearance and other agreements with our lenders relating to loans secured by the Pier House Resort & Spa, The Ritz-Carlton Sarasota, The Ritz-Carlton Lake Tahoe, Hotel Yountville, Bardessono Hotel and Spa, Sofitel Chicago Magnificent Mile, The Notary Hotel, The Clancy, Marriott Seattle Waterfront, Capital Hilton and Hilton La Jolla Torrey Pines. As of March 31, 2021, no loans are in default. See note 14 for discussion of the loan modification agreement with Lismore Capital LLC (“Lismore”). The Company determined that all of the forbearance and other agreements evaluated were considered troubled debt restructurings due to terms that allowed for deferred interest and the forgiveness of default interest and late charges. No gain or loss was recognized during 2020, as the carrying amount of the original loans was not greater than the undiscounted cash flows of the modified loans. Additionally, as a result of the troubled debt restructurings all accrued default interest and late charges were capitalized into the applicable loan balances and are being amortized over the remaining term of the loans using the effective interest method. The amount of principal amortization associated with the default interest and late charges during three months ended March 31, 2021 was approximately $1.3 million.

We are required to maintain certain financial ratios under our secured term loan. If we violate covenants in any debt agreement, we could be required to repay all or a portion of our indebtedness before maturity at a time when we might be unable to arrange financing for such repayment on attractive terms, if at all. The assets of certain of our subsidiaries are pledged under non-recourse indebtedness and are not available to satisfy the debts and other obligations of the consolidated group. As of March 31, 2021, we were in compliance with all covenants.

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Derivative Instruments

3 Months Ended

Mar. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

Interest Rate Derivatives—We are exposed to risks arising from our business operations, economic conditions and financial markets. To manage these risks, we primarily use interest rate derivatives to hedge our debt and our cash flows. The interest rate derivatives include interest rate caps and interest rate floors, which are subject to master netting settlement arrangements. All derivatives are recorded at fair value.

The following table summarizes the interest rate derivatives we entered into over the applicable periods:

	Three Months Ended March 31,
Interest rate caps:(1)	2021			2020
Notional amount (in thousands)	$	192,500		$	167,500
Strike rate low end of range	0.75		%	3.00		%
Strike rate high end of range	3.00		%	3.50		%
Effective date range	January 2021- March 2021			March 2020
Termination date range	September 2021- April 2022			April 2021
Total cost of interest rate caps (in thousands)	$	20		$	38

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(1)    No instruments were designated as cash flow hedges.

Interest rate derivatives consisted of the following:

Interest rate caps: (1)	March 31, 2021			December 31, 2020
Notional amount (in thousands)	$	917,500		$	779,000
Strike rate low end of range	0.75		%	3.00		%
Strike rate high end of range	4.00		%	4.00		%
Termination date range	April 2021 - April 2022			February 2021 - October 2021
Aggregate principal balance on corresponding mortgage loans (in thousands)	$	725,000		$	779,000

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(1)No instruments were designated as cash flow hedges.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Fair Value Hierarchy—Our financial instruments measured at fair value either on a recurring or a non-recurring basis are classified in a hierarchy for disclosure purposes consisting of three levels based on the observability of inputs in the market place as discussed below:

•Level 1: Fair value measurements that are quoted prices (unadjusted) in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets.

•Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

•Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability.

Fair value of interest rate caps is determined using the net present value of expected cash flows of each derivative based on the market-based interest rate curve and adjusted for credit spreads of us and our counterparties. Fair value of credit default swaps is obtained from a third party who publishes various information including the index composition and price data (Level 2 inputs). The fair value of credit default swaps does not contain credit-risk-related adjustments as the change in fair value is settled net through posting cash collateral or reclaiming cash collateral between us and our counterparty. Fair value of interest rate floors is calculated using a third-party discounted cash flow model based on future cash flows that are expected to be received over the remaining life of the floor.

When a majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. However, when the valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by us and our counterparties, which we consider significant (10% or more) to the overall valuation of our derivatives, the derivative valuations in their entirety are classified in Level 3 of the fair value hierarchy. Transfers of inputs between levels are determined at the end of each reporting period. In determining the fair values of our derivatives at March 31, 2021, the LIBOR interest rate forward curve (Level 2 inputs) assumed an uptrend from 0.111% to 0.168% for the remaining term of our derivatives. Credit spreads (Level 3 inputs) used in determining the fair values derivatives assumed an uptrend in nonperformance risk for us and all of our counterparties through the maturity dates.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The fair value of interest rate caps as of March 31, 2021 and December 31, 2020 was immaterial.

Effect of Fair Value Measured Assets and Liabilities on Condensed Consolidated Statements of Operations

The following table summarizes the effect of fair value measured assets and liabilities on our condensed consolidated statements of operations (in thousands):

	Gain (Loss) Recognized in Income
	Three Months Ended March 31,
	2021			2020
Assets
Derivative assets:
Interest rate derivatives - caps	(20)			(19)
Credit default swaps	—		(1)	1,100		(1)
Total derivative assets	$	(20)		$	1,081
Total	$	(20)		$	1,081
Total combined
Interest rate derivatives - floors	$	—		$	75
Interest rate derivatives - caps	(20)			(19)
Credit default swaps	—			1,100
Unrealized gain (loss) on derivatives	(20)			1,156
Realized gain (loss) on interest rate floors	—		(2)	(75)		(2)
Net	$	(20)		$	1,081

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(1)Excludes costs associated with credit default swaps of $0 and $63 for the three months ended March 31, 2021 and 2020, respectively, which is included in “other income (expense)” in our condensed consolidated statements of operations.

(2)Included in “other income (expense)” in our condensed consolidated statements of operations.

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Summary of Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2021

Investments, All Other Investments [Abstract]

Summary of Fair Value of Financial Instruments

Summary of Fair Value of Financial Instruments

Determining the estimated fair values of certain financial instruments such as indebtedness requires considerable judgment to interpret market data. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Accordingly, the estimates presented are not necessarily indicative of the amounts at which these instruments could be purchased, sold or settled.

The carrying amounts and estimated fair values of financial instruments were as follows (in thousands):

	March 31, 2021				December 31, 2020
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial assets not measured at fair value:
Cash and cash equivalents	$	85,684	$	85,684	$	78,606	$	78,606
Restricted cash	39,322		39,322		34,544		34,544
Accounts receivable, net	17,583		17,583		13,557		13,557
Due from related parties, net	1,052		1,052		991		991
Due from third-party hotel managers	18,565		18,565		12,271		12,271
Financial liabilities not measured at fair value:
Indebtedness	$	1,117,892	$904,887 to $1,000,138		$	1,128,724	$884,325 to $977,411
Accounts payable and accrued expenses	74,098		74,098		61,758		61,758
Dividends and distributions payable	2,569		2,569		2,736		2,736
Due to Ashford Inc.	2,115		2,115		2,772		2,772
Due to third-party hotel managers	1,725		1,725		1,393		1,393

Cash, cash equivalents and restricted cash. These financial assets have maturities of less than 90 days and most bear interest at market rates. The carrying value approximates fair value due to their short-term nature. This is considered a Level 1 valuation technique.

Accounts receivable, net, due from related parties, net, accounts payable and accrued expenses, dividends and distributions payable, due to Ashford Inc. and due to/from third-party hotel managers. The carrying values of these financial

instruments approximate their fair values due to the short-term nature of these financial instruments. This is considered a Level 1 valuation technique.

Derivative assets. See notes 7 and 8 for a complete description of the methodology and assumptions utilized in determining fair values.

Indebtedness, net. Fair value of indebtedness is determined using future cash flows discounted at current replacement rates for these instruments. Cash flows are determined using a forward interest rate yield curve. The current replacement rates are determined by using the U.S. Treasury yield curve or the index to which these financial instruments are tied, and adjusted for the credit spreads. Credit spreads take into consideration general market conditions, maturity and collateral. We estimated the fair value of the total indebtedness to be approximately 80.9% to 89.5% of the carrying value of $1.1 billion at March 31, 2021, and approximately 78.3% to 86.6% of the carrying value of $1.1 billion at December 31, 2020. These fair value estimates are considered a Level 2 valuation technique.

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Income (Loss) Per Share

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Income (Loss) Per Share

Income (Loss) Per Share

The following table reconciles the amounts used in calculating basic and diluted income (loss) per share (in thousands, except per share amounts):

	Three Months Ended March 31,
	2021		2020
Net income (loss) attributable to common stockholders - basic and diluted:
Net income (loss) attributable to the Company	$	(8,708)	$	(12,930)
Less: Dividends on preferred stock	(2,388)		(2,555)
Less: Loss on extinguishment of preferred stock - Series B	(73)		—
Undistributed net income (loss) allocated to common stockholders	(11,169)		(15,485)
Distributed and undistributed net income (loss) - basic and diluted	$	(11,169)	$	(15,485)
Weighted average common shares outstanding:
Weighted average common shares outstanding – basic and diluted	39,605		32,474
Income (loss) per share - basic:
Net income (loss) allocated to common stockholders per share	$	(0.28)	$	(0.48)
Income (loss) per share - diluted:
Net income (loss) allocated to common stockholders per share	$	(0.28)	$	(0.48)

Due to their anti-dilutive effect, the computation of diluted income (loss) per share does not reflect the adjustments for the following items (in thousands):

	Three Months Ended March 31,
	2021		2020
Net income (loss) allocated to common stockholders is not adjusted for:
Income (loss) attributable to redeemable noncontrolling interests in operating partnership	(1,079)		(1,885)
Dividends on preferred stock - Series B	1,563		1,730
Loss on extinguishment of preferred stock - Series B	73		—
Total	$	557	$	(155)
Weighted average diluted shares are not adjusted for:
Effect of unvested restricted shares	83		76
Effect of assumed conversion of operating partnership units	4,006		4,112
Effect of assumed conversion of preferred stock - Series B	6,078		6,728
Effect of assumed conversion of exchanged preferred stock - Series B	551		361
Total	10,718		11,277

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Redeemable Noncontrolling Interests in Operating Partnership

3 Months Ended

Mar. 31, 2021

Noncontrolling Interest [Abstract]

Redeemable Noncontrolling Interests in Operating Partnership

Redeemable Noncontrolling Interests in Operating Partnership

Redeemable noncontrolling interests in the operating partnership represents the limited partners’ proportionate share of equity and their allocable share of equity in earnings/losses of Braemar OP, which is an allocation of net income/loss attributable to the common unitholders based on the weighted average ownership percentage of these limited partners’ common units of limited partnership interest in the operating partnership (the “common units”) and units issued under our Long-Term Incentive Plan (the “LTIP” units) that are vested. Each common unit may be redeemed, by the holder, for either cash or, at our sole discretion, up to one share of our REIT common stock, which is either: (i) issued pursuant to an effective registration statement; (ii) included in an effective registration statement providing for the resale of such common stock; or (iii) issued subject to a registration rights agreement.

LTIP units, which are issued to certain executives and employees of Ashford LLC as compensation, generally have vesting periods of three years. Additionally, certain independent members of the board of directors have elected to receive LTIP units as part of their compensation, which are fully vested upon grant. Upon reaching economic parity with common units, each vested LTIP unit can be converted by the holder into one common unit which can then be redeemed for cash or, at our election, settled in our common stock. An LTIP unit will achieve parity with the common units upon the sale or deemed sale of all or substantially all of the assets of our operating partnership at a time when our stock is trading at a level in excess of the price it was trading on the date of the LTIP issuance. More specifically, LTIP units will achieve full economic parity with common units in connection with (i) the actual sale of all or substantially all of the assets of our operating partnership or (ii) the hypothetical sale of such assets, which results from a capital account revaluation, as defined in the partnership agreement, for our operating partnership. In March 2021, approximately 244,000 LTIP units with a fair value of approximately $1.7 million and a vesting period of three years were granted.

The compensation committee of the board of directors of the Company may authorize the issuance of Performance LTIP units to certain executive officers and directors from time to time. The award agreements provide for the grant of a target number of Performance LTIP units that will be settled in common units of Braemar OP, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period, which is generally three years from the grant date. The number of Performance LTIP units actually earned may range from 0% to 200% of target based on achievement of a specified relative total stockholder return based on the formula determined by the Company’s compensation committee on the grant date. As of March 31, 2021, there were approximately 220,000 Performance LTIP units, representing 200% of the target, outstanding. The performance criteria for the Performance LTIP units are based on market conditions under the relevant literature, and the Performance LTIP units were granted to non-employees.

The Company issued equity awards in the first quarter of 2021, a substantial majority of which were issued subject to stockholder approval of an increase in the number of shares available for issuance under the Company’s 2013 Equity Incentive Plan. Under the applicable accounting literature, these awards are not accounted for until shareholder approval is obtained.

As of March 31, 2021, we have issued a total of approximately 1.3 million LTIP units (including Performance LTIP units), net of cancellations, all of which, other than approximately 344,000 LTIP units and 60,000 Performance LTIP units issued from March 2015 to March 2021, had reached full economic parity with, and are convertible into, common units.

The following table presents the redeemable noncontrolling interests in Braemar OP (in thousands) and the corresponding approximate ownership percentage of our operating partnership:

	March 31, 2021			December 31, 2020
Redeemable noncontrolling interests in Braemar OP	$	28,162		$	27,655
Adjustments to redeemable noncontrolling interests (1)	$	1,433		$	167
Ownership percentage of operating partnership	8.87		%	9.43		%

____________________________________

(1)    Reflects the excess of the redemption value over the accumulated historical cost.

We allocated net income (loss) to the redeemable noncontrolling interests as illustrated in the table below (in thousands):

	Three Months Ended March 31,
	2021		2020
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	$	1,079	$	1,885

The following table presents the common units redeemed and the fair value at redemption (in thousands):

	Three Months Ended March 31,
	2021		2020
Common units converted to common stock	—		339
Fair value of common units converted	$	—	$	390	(1)

____________________________________

(1)    The redemption value is the greater of historical cost or fair value. The historical cost of the converted units was $3.5 million.

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Equity and Stock-Based Compensation

3 Months Ended

Mar. 31, 2021

Equity [Abstract]

Equity and Stock-Based Compensation

Equity and Stock-Based CompensationCommon Stock Dividends—The board of directors did not declare a quarterly common stock dividend for the three months ended March 31, 2021 and 2020

Restricted Stock Units—We incur stock-based compensation expense in connection with restricted stock units awarded to certain employees of Ashford LLC and its affiliates. We also issue common stock to certain of our independent directors, which vests immediately upon issuance. In March 2021, approximately 504,000 restricted stock units with a fair value of approximately $3.5 million and a vesting period of three years were granted.

The Company issued equity awards in the first quarter of 2021, a substantial majority of which were issued subject to stockholder approval of an increase in the number of shares available for issuance under the Company’s 2013 Equity Incentive Plan. Under the applicable accounting literature, these awards are not accounted for until shareholder approval is obtained.

Performance Stock Units—The compensation committee of the board of directors of the Company may authorize the issuance of grants of PSUs to certain executive officers and directors from time to time. The award agreements provide for the grant of a target number of PSUs that will be settled in shares of common stock of the Company, if, when and to the extent the applicable vesting criteria have been achieved following the end of the performance and service period, which is generally three years from the grant date. The number of PSUs actually earned may range from 0% to 200% of target based on achievement of a specified relative total stockholder return based on the formula determined by the Company’s compensation committee on the grant date. The performance criteria for the PSUs are based on market conditions under the relevant literature, and the PSUs were granted to non-employees. The corresponding compensation cost is recognized ratably over the service period for the award as the service is rendered, based on the grant date fair value of the award, regardless of the actual outcome of the market condition as opposed to being accounted for at fair value based on the market price of the shares at each quarterly measurement date.

The Company issued equity awards in the first quarter of 2021, a substantial majority of which were issued subject to stockholder approval of an increase in the number of shares available for issuance under the Company’s 2013 Equity Incentive Plan. Under the applicable accounting literature, these awards are not accounted for until shareholder approval is obtained.

8.25% Series D Cumulative Preferred Stock—The Series D Cumulative Preferred Stock dividend for all issued and outstanding shares is set at $2.0625 per annum per share.

The following table summarizes dividends declared (in thousands):

	Three Months Ended March 31,
	2021		2020
Series D Cumulative Preferred Stock	$	825	$	825

Stock Repurchases—On December 5, 2017, our board of directors reapproved the stock repurchase program pursuant to which the board of directors granted a repurchase authorization to acquire shares of the Company’s common stock, par value $0.01 per share having an aggregate value of up to $50 million. The board of directors’ authorization replaced any previous repurchase authorizations. No shares were repurchased during three months ended March 31, 2021 and 2020. As of March 31, 2021, $50 million remains authorized by the board of directors pursuant to the December 5, 2017 approval.At-the-Market Common Stock Equity Distribution Program—On December 11, 2017, the Company established an “at-the-market” equity distribution program pursuant to which it may, from time to time, sell shares of its common stock having an aggregate offering price of up to $50 million. As of March 31, 2021, the Company has sold approximately 6.7 million shares of common stock and received net proceeds of approximately $26.2 million under this program.

The issuance activity is summarized below (in thousands):

	Three Months Ended March 31,
	2021		2020
Common shares issued	2,005		—
Gross proceeds received	$	11,827	$	—
Commissions and other expenses	148		—
Net proceeds	$	11,679	$	—

Standby Equity Distribution Agreement—On February 4, 2021, the Company entered into a Standby Equity Distribution Agreement (the “SEDA”) with YA II PN, Ltd. (“YA”), pursuant to which the Company will be able to sell up to 7,780,786 shares of its common stock (the “Commitment Amount”) at the Company’s request any time during the commitment period commencing on February 4, 2021, and terminating on the earliest of (i) the first day of the month next following the 36-month anniversary of the SEDA or (ii) the date on which YA shall have made payment of Advances (as defined in the SEDA) pursuant to the SEDA for shares of the Company’s common stock equal to the Commitment Amount (the “Commitment Period”). Other than with respect to the Initial Advance (as defined below) the shares sold to YA pursuant to the SEDA would be purchased at 95% of the Market Price (as defined below) and would be subject to certain limitations, including that YA could not purchase any shares that would result in it owning more than 4.99% of the Company’s common stock. “Market Price” shall mean the lowest daily VWAP (as defined below) of the Company’s common stock during the 5 consecutive trading days commencing on the trading day following the date the Company submits an advance notice to YA. “VWAP” means, for any trading day, the daily volume weighted average price of the Company’s common stock for such date on the principal market as reported by Bloomberg L.P. during regular trading hours.

At any time during the Commitment Period the Company may require YA to purchase shares of the Company’s common stock by delivering a written notice to YA setting forth the Advance Shares (as defined in the SEDA) that the Company desires to issue and sell to YA (the “Advance Notice”). The Company may deliver an Advance Notice for an initial Advance for up to 1,200,000 Advance Shares (the “Initial Advance”). The preliminary purchase price per share for such shares shall be 100% of the average daily VWAP for the 5 consecutive trading days immediately prior to the date of the Advance Notice (the “Preliminary Purchase Price”).

Pursuant to the SEDA, we currently intend to use the net proceeds from any sale of the shares for working capital purposes, including the repayment of outstanding debt. There are no other restrictions on future financing transactions. The SEDA does not contain any right of first refusal, participation rights, penalties or liquidated damages. We are not required to pay any additional amounts to reimburse or otherwise compensate YA in connection with the transaction except for a $10,000 structuring fee.

As of March 31, 2021, the Company has sold approximately 1.2 million shares of common stock and received proceeds of approximately $7.0 million under the SEDA.

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5.50% Series B Cumulative Convertible Preferred Stock

3 Months Ended

Mar. 31, 2021

Temporary Equity Disclosure [Abstract]

5.50% Series B Cumulative Convertible Preferred Stock

5.50% Series B Cumulative Convertible Preferred Stock

Each share of our 5.50% Series B Cumulative Convertible Preferred Stock (the “Series B Convertible Preferred Stock”) is convertible at any time, at the option of the holder, into a number of whole shares of common stock at a conversion price of $18.70 (which represents a conversion rate of 1.3372 shares of our common stock, subject to certain adjustments). The Series B Convertible Preferred Stock is also subject to conversion upon certain events constituting a change of control. Holders of the Series B Convertible Preferred Stock have no voting rights, subject to certain exceptions. The Series B Convertible Preferred Stock dividend for all issued and outstanding shares is set at $1.375 per annum per share.

The Company may, at its option, cause the Series B Convertible Preferred Stock to be converted in whole or in part, on a pro-rata basis, into fully paid and nonassessable shares of the Company’s common stock at the conversion price, provided that the “Closing Bid Price” (as defined in the Articles Supplementary) of the Company’s common stock shall have equaled or exceeded 110% of the conversion price for the immediately preceding 45 consecutive trading days ending three days prior to the date of notice of conversion.

Additionally, the Series B Convertible Preferred Stock contains cash redemption features that consist of: 1) an optional redemption in which on or after June 11, 2020, the Company may redeem shares of the Series B Convertible Preferred Stock, in whole or in part, for cash at a redemption price of $25.00 per share, plus any accumulated, accrued and unpaid dividends; 2) a special optional redemption, in which on or prior to the occurrence of a Change of Control (as defined), the Company may

redeem shares of the Series B Convertible Preferred Stock, in whole or in part, for cash at a redemption price of $25.00 per share; and 3) a REIT Termination Event and Listing Event Redemption, in which at any time (i) a REIT Termination Event (defined below) occurs or (ii) the Company’s common stock fails to be listed on the NYSE, NYSE American, or NASDAQ, or listed or quoted on an exchange or quotation system that is a successor thereto (each a “National Exchange”), the holder of Series B Convertible Preferred Stock shall have the right to require the Company to redeem any or all shares of Series B Convertible Preferred Stock at 103% of the liquidation preference ($25.00 per share, plus any accumulated, accrued, and unpaid dividends) in cash.

A REIT Termination Event, shall mean the earliest of:

(i)    filing of income tax return where the Company does not compute its income as a REIT;

(ii)    stockholders’ approval on ceasing to be qualified as a REIT;

(iii)    board of directors’ approval on ceasing to be qualified as a REIT;

(iv)    board’s determination based on advise of the counsel to cease to be qualified as a REIT; or

(v)    determination within the meaning of Section 1313(a) of IRC to cease to be qualified as a REIT.

On December 4, 2019, we entered into equity distribution agreements with certain sales agents to sell from time to time shares of our Series B Convertible Preferred Stock having an aggregate offering price of up to $40.0 million. Sales of shares of our Series B Convertible Preferred Stock may be made in negotiated transactions or transactions that are deemed to be “at-the-market” offerings as defined in Rule 415 of the Securities Act, including sales made directly on the NYSE, the existing trading market for our Series B Convertible Preferred Stock, or sales made to or through a market maker other than on an exchange or through an electronic communications network. We will pay each of the sales agents a commission, which in each case shall not be more than 2.0% of the gross sales price of the shares of our Series B Convertible Preferred Stock sold through such sales agents. As of March 31, 2021, we have sold approximately 65,000 shares of our Series B Convertible Preferred Stock and received proceeds of approximately $1.2 million under this program.

The issuance activity is summarized below (in thousands):

	Three Months Ended March 31,
	2021		2020
Series B Convertible Preferred Stock shares issued	—		23
Gross proceeds received	$	—	$	439
Commissions and other expenses	—		7
Net proceeds	$	—	$	432

Series B Convertible Preferred Stock does not meet the requirements for permanent equity classification prescribed by the authoritative guidance because of certain cash redemption features that are outside our control. As such, the Series B Convertible Preferred Stock is classified outside of permanent equity.

The following table summarizes dividends declared (in thousands):

	Three Months Ended March 31,
	2021		2020
Series B Convertible Preferred Stock	$	1,563	$	1,730

, Braemar entered into privately negotiated exchange agreements with certain holders of its 5.50% Series B Cumulative Convertible Preferred Stock, par value $0.01 per share in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended. The table below summarizes the activity (in thousands):

	Three Months Ended March 31, 2021
	Preferred Shares Tendered	Common Shares Issued
Series B Convertible Preferred Stock	486	1,535

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Related Party Transactions

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Ashford Inc.

Advisory Agreement

Ashford LLC, a subsidiary of Ashford Inc., acts as our advisor. Our chairman Mr. Monty Bennett, also serves as chairman of the board of directors and chief executive officer of Ashford Inc. Under our advisory agreement, we pay advisory fees to Ashford LLC. We pay a monthly base fee equal to 1/12th of the sum of (i) 0.70% of the total market capitalization of our company for the prior month, plus (ii) the Net Asset Fee Adjustment (as defined in our advisory agreement), if any, on the last day of the prior month during which our advisory agreement was in effect; provided, however in no event shall the base fee for any month be less than the minimum base fee as provided by our advisory agreement. The base fee is payable on the 5th business day of each month.

The minimum base fee for Braemar for each month will be equal to the greater of:

▪90% of the base fee paid for the same month in the prior year; and

▪1/12th of the G&A Ratio (as defined) multiplied by the total market capitalization of Braemar.

We are also required to pay Ashford LLC an incentive fee that is measured annually (or for a stub period if the advisory agreement is terminated at other than year-end). Each year that our annual total stockholder return exceeds the average annual total stockholder return for our peer group we pay Ashford LLC an incentive fee over the following three years, subject to the Fixed Charge Coverage Ratio (“FCCR”) Condition, as defined in the advisory agreement, which relates to the ratio of adjusted EBITDA to fixed charges. We also reimburse Ashford LLC for certain reimbursable overhead and internal audit, risk management advisory and asset management services, as specified in the advisory agreement. We also recorded equity-based compensation expense for equity grants of common stock and LTIP units awarded to officers and employees of Ashford LLC in connection with providing advisory services.

The following table summarizes the advisory services fees incurred (in thousands):

	Three Months Ended March 31,
	2021		2020
Advisory services fee
Base advisory fee	$	2,545	$	2,621
Reimbursable expenses (1)	492		544
Equity-based compensation (2)	1,387		1,904
Incentive fee	371		—
Total	$	4,795	$	5,069

________

(1)Reimbursable expenses include overhead, internal audit, risk management advisory and asset management services.

(2)    Equity-based compensation is associated with equity grants of Braemar’s common stock, PSUs, LTIP units and Performance LTIP units awarded to officers and employees of Ashford LLC.

Pursuant to the Company's hotel management agreements with each hotel management company, the Company bears the economic burden for casualty insurance coverage. Under the advisory agreement, Ashford Inc. secures casualty insurance policies to cover Braemar, Ashford Trust, their hotel managers, as needed, and Ashford Inc. The total loss estimates included in such policies are based on the collective pool of risk exposures from each party. Ashford Inc.'s risk management department manages the casualty insurance program. At the beginning of each year, Ashford Inc.'s risk management department collects funds from Braemar, Ashford Trust and their respective hotel management companies, to fund the casualty insurance program as needed, on an allocated basis.

Lismore Advisory Fee

On March 20, 2020, the Company entered into an agreement with Lismore, a subsidiary of Ashford Inc., to engage Lismore to seek modifications, forbearances or refinancings of the Company’s loans (the “Lismore Agreement”). The Lismore Agreement was terminated effective March 20, 2021.

Upon entering into the agreement with Lismore, the Company made an initial payment of approximately $1.4 million. The Company paid approximately $1.4 million related to periodic installments of which $683,000 was expensed in accordance with the agreement. The remaining $681,000 was set off against the cash payment of the base advisory fee per the agreement upon contract termination in March 2021. Further, the Company paid approximately $1.4 million in success fees in connection with signed forbearance or other agreements. In total the Company paid approximately $4.1 million under the Lismore Agreement.

For the three months ended March 31, 2021 and 2020, the Company has recognized expense of $341,000 and $0, respectively, which is included in “write-off of loan costs and exit fees” in our condensed consolidated statements of operations.

Ashford Securities

On September 25, 2019, Ashford Inc. announced the formation of Ashford Securities LLC (“Ashford Securities”) to raise retail capital in order to grow its existing and future platforms. In conjunction with the formation of Ashford Securities, Braemar has entered into a contribution agreement with Ashford Inc. pursuant to which Braemar has agreed to contribute, with Ashford Hospitality Trust, Inc. (“Ashford Trust”), up to $15.0 million to fund the operations of Ashford Securities. Costs for all operating expenses of Ashford Securities that were contributed by Ashford Trust and Braemar will be expensed as incurred. These costs were allocated initially to Ashford Trust and Braemar based on an allocation percentage of 75% to Ashford Trust and 25% Braemar. Upon reaching the earlier of $400 million in aggregate non-listed preferred equity offerings raised or June 10, 2023, there will be a true up (the “Initial True-up Date”) between Ashford Trust and Braemar whereby the actual capital contributions contributed by each company will be based on the actual amount of capital raised by Ashford Trust and Braemar, respectively. After the Initial True-Up Date, the capital contributions will be allocated between Ashford Trust and Braemar quarterly based on the actual capital raised through Ashford Securities.

On December 31, 2020, an Amended and Restated Contribution Agreement was entered into by Ashford Inc., Ashford Trust and Braemar with respect to expenses to be reimbursed by Ashford Securities. The Initial True-Up Date did not occur, and beginning on the effective date of the Amended and Restated Contribution Agreement, costs will be allocated based upon an allocation percentage of 50% to Ashford Inc., 50% to Braemar and 0% to Ashford Trust. Upon reaching the earlier of $400 million in aggregate non-listed preferred equity offerings raised, or June 10, 2023, there will be an Amended and Restated true up (the “Amended and Restated True-up Date”) among Ashford Inc., Ashford Trust and Braemar whereby the actual expense reimbursement paid by each company will be based on the actual amount of capital raised by Ashford Inc., Ashford Trust and Braemar, respectively. After the Amended and Restated True-Up Date, the expense reimbursements will be allocated among Ashford Inc., Ashford Trust and Braemar quarterly based on the actual capital raised through Ashford Securities. Additionally, Braemar’s aggregate Capital Contributions under the Initial Contribution Agreement and the Amended and Restated Contribution Agreement shall not exceed $3.75 million unless otherwise agreed to in writing by Braemar.

As of March 31, 2021, Braemar has funded approximately $1.3 million. Additionally, as of March 31, 2021, the Company has a payable of $114,000, included in “due to Ashford Inc.” on our condensed consolidated balance sheet that represents unfunded reimbursable expenses.

The table below summarizes the amount Braemar has expensed related to reimbursed operating expenses of Ashford Securities (in thousands):

	Three Months Ended March 31,
Line Item	2021		2020
Corporate, general and administrative	$	340	$	233

Enhanced Return Funding Program

Concurrent with the Amendment No. 1, on January 15, 2019, the Company also entered into the Enhanced Return Funding Program Agreement (the “ERFP Agreement”) with Ashford Inc. The “key money investments” concept previously contemplated by our advisory agreement was replaced with the ERFP Agreement. The Fifth Amended and Restated Advisory Agreement was also amended to name Ashford Inc. and its subsidiaries as the Company’s sole and exclusive provider of asset management, project management and other services offered by Ashford Inc. or any of its subsidiaries. The independent members of our board of directors and the independent members of the board of directors of Ashford Inc., with the assistance of separate and independent legal counsel, engaged to negotiate the ERFP Agreement on behalf of Ashford Inc. and Braemar, respectively.

The ERFP Agreement generally provides that Ashford LLC will provide funding to facilitate the acquisition of properties by Braemar OP that are recommended by Ashford LLC, in an aggregate amount of up to $50 million (subject to increase to up to $100 million by mutual agreement). Each funding will equal 10% of the property acquisition price and will be made either at the time of the property acquisition or at any time generally within the two-year period following the date of such acquisition, in exchange for FF&E for use at the acquired property or any other property owned by Braemar OP.

The initial term of the ERFP Agreement was two years (the “Initial Term”). At the end of the Initial Term, the ERFP Agreement automatically renewed for one year and shall automatically renew for successive one-year periods (each such period a “Renewal Term”) unless either Ashford Inc. or Braemar provides written notice to the other at least sixty days in advance of the expiration of the Initial Term or Renewal Term, as applicable, that such notifying party intends not to renew the ERFP Agreement.

Project Management Agreement

In connection with Ashford Inc.’s August 8, 2018 acquisition of Remington Lodging’s project management business, we entered into a project management agreement with Ashford Inc.’s subsidiary, Premier Project Management LLC (“Premier”), pursuant to which Premier provides project management services to our hotels, including construction management, interior design, architectural services, and the purchasing, freight management, and supervision of installation of FF&E and related services. Pursuant to the project management agreement, we pay Premier: (a) project management fees of up to 4% of project costs; and (b) for the following services as follows: (i) architectural (6.5% of total construction costs); (ii) construction management for projects without a general contractor (10% of total construction costs); (iii) interior design (6% of the purchase price of the FF&E designed or selected by Premier); and (iv) FF&E purchasing (8% of the purchase price of FF&E purchased by Premier; provided that if the purchase price exceeds $2.0 million for a single hotel in a calendar year, then the purchasing fee is reduced to 6% of the FF&E purchase price in excess of $2.0 million for such hotel in such calendar year). On March 20, 2020, we amended the project management agreement to provide that Premier’s fees shall be paid by the Company to Premier upon the completion of any work provided by third party vendors to the Company.

Hotel Management Agreement

On November 6, 2019, Ashford Inc. completed the acquisition of Remington Lodging’s hotel management business. Following the acquisition, hotel management services are provided by Remington Hotels, a subsidiary of Ashford Inc., under the respective hotel management agreement with each customer, including Ashford Trust and Braemar.

At March 31, 2021, Remington Hotels managed three of our thirteen hotel properties.

We pay monthly hotel management fees equal to the greater of approximately $14,000 per hotel (increased annually based on consumer price index adjustments) or 3% of gross revenues as well as annual incentive management fees, if certain operational criteria were met and other general and administrative expense reimbursements primarily related to accounting services.

Pursuant to the terms of the Letter Agreement dated March 13, 2020 (the “Hotel Management Letter Agreement”), in order to allow Remington Hotels to better manage its corporate working capital and to ensure the continued efficient operation of our hotels, we agreed to pay the base fee and to reimburse all expenses on a weekly basis for the preceding week, rather than on a monthly basis. The Hotel Management Letter Agreement went into effect on March 13, 2020 and will continue until terminated by us.

We also have a mutual exclusivity agreement with Remington Hotels, pursuant to which: (i) we have agreed to engage Remington Hotels to provide management services with respect to any hotel we acquire or invest in, to the extent we have the right and/or control the right to direct the management of such hotel; and (ii) Remington Hotels has agreed to grant us a right of first refusal to purchase any opportunity to develop or construct a hotel that it identifies that meets our initial investment guidelines. We are not, however, obligated to engage Remington Hotels if our independent directors either: (i) unanimously vote to hire a different manager or developer; or (ii) by a majority vote elect not to engage such related party because either special circumstances exist such that it would be in the best interest of our Company not to engage such related party, or, based on related party’s prior performance, it is believed that another manager could perform the management or other duties materially better.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Restricted Cash—Under certain management and debt agreements for our hotel properties existing at March 31, 2021, escrow payments are required for insurance, real estate taxes and debt service. In addition, for certain properties based on the terms of the underlying debt and management agreements, we escrow 4% to 5% of gross revenues for capital improvements.

Management Fees—Under hotel management agreements for our hotel properties existing at March 31, 2021, we pay a monthly hotel management fee equal to the greater of approximately $14,000 per hotel (increased annually based on consumer price index adjustments) or 3% of gross revenues, or in some cases 2.5% to 5.0% of gross revenues, as well as annual incentive management fees, if applicable. These management agreements expire from December 2023 through December 2065, with renewal options. If we terminate a management agreement prior to its expiration, we may be liable for estimated management fees through the remaining term, liquidated damages or, in certain circumstances, we may substitute a new management agreement.

Income Taxes—We and our subsidiaries file income tax returns in the federal jurisdiction and various states. Tax years 2016 through 2020 remain subject to potential examination by certain federal and state taxing authorities.

Litigation—On October 24, 2019, the Company provided notice to Accor of the material breach of its responsibilities under the Accor management agreement for the Sofitel Chicago Magnificent Mile at 20 East Chestnut Street in Chicago, Illinois. On November 7, 2019, Accor filed a complaint against Ashford TRS Chicago II in the Supreme Court of the State of New York, New York County, seeking a declaratory judgment that no breach has occurred. Accor’s complaint was dismissed on or about February 27, 2020. On January 6, 2020, Ashford TRS Chicago II filed a complaint against Accor in the Supreme Court of the State of New York, New York County, alleging breach of the Accor management agreement and seeking declaration of its right to terminate the Accor management agreement. On July 20, 2020, Accor filed an Amended Answer and Counterclaims against Ashford TRS Chicago II. Accor asserts two causes of action: First, Accor asserts a counterclaim for declaratory judgment that Accor correctly calculated the amount payable to Ashford TRS Chicago II under the management agreement to “cure” Accor’s performance test failure (the “Cure Amount”). Second, Accor asserts a counterclaim for breach of contract on the basis that Ashford TRS Chicago II breached the management agreement by wrongfully maintaining that the Cure Amount for the 2018 and 2019 Performance Test failure is $1,031,549 instead of $535,120. As of March 31, 2021, no amounts have been accrued.

One of the Company’s hotel management companies is currently involved in litigation regarding its employment policies and practices at multiple California hotels, including one of the Company’s hotels. The Company believes it is probable that the litigation will result in a loss due to a potential pre-trial settlement, in which case the Company estimates its potential loss will be approximately $500,000; however, it is entitled to indemnification for a portion of such loss. As of March 31, 2021, approximately $500,000 has been accrued.

In June 2020, each of the Company, Ashford Trust, Ashford Inc., and Lismore, a subsidiary of Ashford Inc. (collectively with the Company, Ashford Trust, Ashford Inc. and Lismore, the “Ashford Companies”), received an administrative subpoena from the SEC. The Company’s administrative subpoena requires the production of documents and other information since January 1, 2018 relating to, among other things, (1) related party transactions among the Ashford Companies (including the Lismore Agreement between the Company and Lismore pursuant to which the Company engaged Lismore to negotiate the refinancing, modification or forbearance of certain mortgage debt) or between any of the Ashford Companies and any officer, director or owner of the Ashford Companies or any entity controlled by any such person, and (2) the Company’s accounting policies, procedures, and internal controls related to such related party transactions. In addition, in October 2020, Mr. Monty J. Bennett, chairman of our board of directors, received an administrative subpoena from the SEC requiring testimony and the production of documents and other information substantially similar to the requests in the subpoenas received by the Ashford Companies. The Company and Mr. Monty J. Bennett are responding to the administrative subpoenas.

A class action lawsuit has been filed against one of the Company’s hotel management companies alleging violations of certain California employment laws, which class action affects two hotels owned by subsidiaries of the Company. The court has entered an order granting class certification with respect to: (1) a statewide class of non-exempt employees of our manager who were allegedly deprived of rest breaks as a result of our manager’s previous written policy requiring its employees to stay on premises during rest breaks; and (2) a derivative class of non-exempt former employees of our manager who were not paid for allegedly missed breaks upon separation from employment. Notices to potential class members were sent out on February 2, 2021. Potential class members had until April 4, 2021 to opt out of the class, however, the total number of employees in the class has not been definitively determined and is the subject of continuing discovery. While we believe it is reasonably possible that we may incur a loss associated with this litigation, because there remains uncertainty under California law with respect to a

significant legal issue, discovery relating to class members continues, and the trial judge retains discretion to award lower penalties than set forth in the applicable California employment laws, we do not believe any potential loss to the Company is reasonably estimable at this time. As of March 31, 2021, no amounts have been accrued.

We are also engaged in other legal proceedings that have arisen but have not been fully adjudicated. To the extent the claims giving rise to these legal proceedings are not covered by insurance, they relate to the following general types of claims: employment matters, tax matters and matters relating to compliance with applicable law (for example, the ADA and similar state laws). The likelihood of loss from these legal proceedings is based on the definitions within contingency accounting literature. We recognize a loss when we believe the loss is both probable and reasonably estimable. Based on the information available to us relating to these legal proceedings and/or our experience in similar legal proceedings, we do not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect on our consolidated financial position, results of operations, or cash flow. However, our assessment may change depending upon the development of these legal proceedings, and the final results of these legal proceedings cannot be predicted with certainty. If we do not prevail in one or more of these legal matters, and the associated realized losses exceed our current estimates of the range of potential losses, our consolidated financial position, results of operations, or cash flows could be materially adversely affected in future periods.

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Segment Reporting	3 Months Ended
	Mar. 31, 2021
Segment Reporting [Abstract]
Segment Reporting	Segment ReportingWe operate in one business segment within the hotel lodging industry: direct hotel investments. Direct hotel investments refers to owning hotel properties through either acquisition or new development. We report operating results of direct hotel investments on an aggregate basis as substantially all of our hotel investments have similar economic characteristics and exhibit similar long-term financial performance. As of March 31, 2021 and December 31, 2020, all of our hotel properties were in the U.S. and its territories.

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Subsequent Events

3 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

From April 1, 2021 through May 5, 2021, Braemar entered into privately negotiated exchange agreements with certain holders of its Series B Convertible Preferred Stock in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended. The Company agreed to exchange a total of approximately 2.9 million shares of its common stock for approximately 751,000 shares of its Series B Convertible Preferred Stock.

On April 2, 2021, the Company filed with the State Department of Assessments and Taxation of the State of Maryland articles supplementary to the Company’s Articles of Amendment and Restatement that provided for: (i) reclassifying the existing 28,000,000 shares of Series E Redeemable Preferred Stock (the “Series E Preferred Stock”) and 28,000,000 shares of Series M Redeemable Preferred Stock (the “Series M Preferred Stock”) as unissued shares of preferred stock; (ii) reclassifying and designating 28,000,000 shares of the Company’s authorized capital stock as shares of the Series E Preferred Stock (the “Series E Articles Supplementary”); and (iii) reclassifying and designating 28,000,000 shares of the Company’s authorized capital stock as shares of the Series M Preferred Stock (the “Series M Articles Supplementary”). These new Series E Articles Supplementary and Series M Articles Supplementary were filed to revise the preferred stock terms related to the dividend rate, the Company’s optional redemption right and certain other voting rights. The Company also caused its operating partnership to execute Amendment No. 5 to the Third Amended and Restated Agreement of Limited Partnership to amend the terms of its operating partnership to conform to the terms of its Series E Articles Supplementary and Series M Articles Supplementary. As of May 5, 2021, no shares of Series E Preferred Stock or Series M Preferred Stock have been issued.

On April 21, 2021, Braemar and Lincoln Park Capital Fund, LLC (“Lincoln Park”), entered into a purchase agreement, pursuant to which the Company may sell to Lincoln Park up to $35 million of shares of its common stock, from time to time during the term of the purchase agreement. The issuance of the shares of common stock pursuant to the purchase agreement has been registered pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-254588) (the “Registration Statement”), and the related base prospectus included in the Registration Statement, as supplemented by a prospectus supplement filed with the SEC on April 21, 2021. Braemar and Lincoln Park also entered into a registration rights agreement, pursuant to which the Company agreed to maintain the effectiveness of the Registration Statement. On April 21, 2021, we issued 280,957 shares of our common stock for gross proceeds of approximately $1.5 million.

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation—The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. These condensed consolidated financial statements include the accounts of Braemar Hotels & Resorts Inc., its majority-owned subsidiaries, and its majority-owned entities in which it has a controlling interest. All significant intercompany accounts and transactions between consolidated entities have been eliminated in these condensed consolidated financial statements. We have condensed or omitted certain information and footnote disclosures normally included in financial statements presented in accordance with GAAP in the accompanying unaudited condensed consolidated financial statements. We believe the disclosures made herein are adequate to prevent the information presented from being misleading. However, the financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2020 Annual Report on Form 10-K, as originally filed with the Securities and Exchange Commission (“SEC”) on March 5, 2021.

Braemar OP is considered to be a variable interest entity (“VIE”), as defined by authoritative accounting guidance. A VIE must be consolidated by a reporting entity if the reporting entity is the primary beneficiary because it has (i) the power to direct the VIE’s activities that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE. All major decisions related to Braemar OP that most significantly impact its economic performance, including but not limited to operating procedures with respect to business affairs and any acquisitions, dispositions, financings, restructurings or other transactions with sellers, purchasers, lenders, brokers, agents and other applicable representatives, are subject to the approval of our wholly-owned subsidiary, Braemar OP General Partner LLC, its general partner. As such, we consolidate Braemar OP.

The following items affect reporting comparability of our historical condensed consolidated financial statements:

•historical seasonality patterns at some of our hotel properties cause fluctuations in our overall operating results. Consequently, operating results for the three months ended March 31, 2021, are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

Use of Estimates

Use of Estimates—The preparation of these condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Recently Adopted and Issued Accounting Standards

Recently Adopted Accounting Standards—In January 2020, the Financial Accounting Standards Board’s (“FASB”) issued Accounting Standards Update (“ASU”) 2020-01, Investments – Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force) (“ASU 2020-01”), which clarifies the interaction between the accounting for equity securities, equity method investments, and certain derivative instruments. The ASU, among other things, clarifies that a company should consider observable transactions that require a company to either apply or discontinue the equity method of accounting under Topic 323, Investments—Equity Method and Joint Ventures, for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. ASU 2020-01 is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years and should be applied prospectively. Early adoption is permitted. We adopted the standard effective January 1, 2021 and the adoption of this standard did not have a material impact on our consolidated financial statements.

Recently Issued Accounting Standards—In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”) to provide guidance and relief for transitioning to alternative reference rates. ASU 2021-01 is effective immediately for all entities. The Company continues to evaluate the impact of the guidance and may apply the elections as applicable as changes in the market occur.

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in Accounting Standards Codification (“ASC”) 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies, this ASU is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. We are currently evaluating the impact that ASU 2020-06 may have on our consolidated financial statements and related disclosures.

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Revenue (Tables)

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following tables present our revenue disaggregated by geographical areas (in thousands):

	Three Months Ended March 31, 2021
Primary Geographical Market	Number of Hotels	Rooms		Food and Beverage		Other Hotel		Total
California	5	$	12,745	$	4,232	$	2,261	$	19,238
Colorado	1	6,380		2,978		2,393		11,751
Florida	2	16,351		5,640		5,177		27,168
Illinois	1	1,420		236		132		1,788
Pennsylvania	1	1,241		5		119		1,365
Washington	1	898		10		117		1,025
Washington, D.C.	1	2,031		132		246		2,409
USVI	1	13,257		3,396		2,451		19,104
Total	13	$	54,323	$	16,629	$	12,896	$	83,848

	Three Months Ended March 31, 2020
Primary Geographical Market	Number of Hotels	Rooms		Food and Beverage		Other Hotel		Total
California	5	$	23,987	$	7,771	$	4,418	$	36,176
Colorado	1	8,151		4,255		2,905		15,311
Florida	2	13,989		7,743		4,694		26,426
Illinois	1	2,621		852		296		3,769
Pennsylvania	1	4,466		1,206		236		5,908
Washington	1	3,698		791		358		4,847
Washington, D.C.	1	6,535		3,491		506		10,532
USVI	1	7,021		2,694		4,836		14,551
Total	13	$	70,468	$	28,803	$	18,249	$	117,520

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Investments in Hotel Properties, net (Tables)

3 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

Schedule of Investment in Hotel Properties

Investments in hotel properties, net consisted of the following (in thousands):

	March 31, 2021		December 31, 2020
Land	$	455,298	$	455,298
Buildings and improvements	1,190,169		1,190,437
Furniture, fixtures and equipment	127,896		127,692
Construction in progress	9,390		11,422
Total cost	1,782,753		1,784,849
Accumulated depreciation	(376,243)		(360,259)
Investments in hotel properties, net	$	1,406,510	$	1,424,590

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Investment in Unconsolidated Entity (Tables)

3 Months Ended

Mar. 31, 2021

Equity Method Investments and Joint Ventures [Abstract]

Summarized Financial Information

The following table summarizes our carrying value and ownership interest in OpenKey:

	March 31, 2021			December 31, 2020
Carrying value of the investment in OpenKey (in thousands)	$	1,644		$	1,708
Ownership interest in OpenKey	8.0		%	8.2		%

The following table summarizes our equity in earnings (loss) in OpenKey (in thousands):

	Three Months Ended March 31,
Line Item	2021		2020
Equity in earnings (loss) of unconsolidated entity	$	(64)	$	(40)

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Indebtedness, net (Tables)

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of Indebtedness, net

Indebtedness, net consisted of the following (dollars in thousands):

Indebtedness	Collateral	Current Maturity	Final Maturity (9)	Interest Rate	March 31, 2021		December 31, 2020
Mortgage loan (3)	The Notary Hotel	June 2021	June 2025	LIBOR (1) + 2.16%	$	435,000	$	435,000
	The Clancy
	Sofitel Chicago Magnificent Mile
	Marriott Seattle Waterfront
Mortgage loan (4)	The Ritz-Carlton St. Thomas	August 2021	August 2024	LIBOR (1) + 3.95%	42,500		42,500
Mortgage loan (5)	Park Hyatt Beaver Creek Resort & Spa	April 2022	April 2022	LIBOR (1) + 2.75%	67,500		67,500
Mortgage loan (7)	Hotel Yountville	May 2022	May 2022	LIBOR (1) + 2.55%	51,000		51,000
Mortgage loan (7)	Bardessono Hotel and Spa	August 2022	August 2022	LIBOR (1) + 2.55%	40,000		40,000
Term loan (6)	Equity	October 2022	October 2022	Base Rate (2) + 1.25% to 2.65% or LIBOR (1) + 2.25% to 3.65%	51,221		61,495
Mortgage loan (7)	The Ritz-Carlton Sarasota	April 2023	April 2023	LIBOR (1) + 2.65%	100,000		100,000
Mortgage loan (7)	The Ritz-Carlton Lake Tahoe	January 2024	January 2024	LIBOR (1) + 2.10%	54,000		54,000
Mortgage loan (8)	Capital Hilton	February 2024	February 2024	LIBOR (1) + 1.70%	196,671		197,229
	Hilton La Jolla Torrey Pines
Mortgage loan (7)	Pier House Resort & Spa	September 2024	September 2024	LIBOR (1) + 1.85%	80,000		80,000
					1,117,892		1,128,724
Capitalized default interest and late charges					5,994		7,304
Deferred loan costs, net					(5,062)		(5,434)
Indebtedness, net					$	1,118,824	$	1,130,594

__________________

(1)LIBOR rates were 0.111% and 0.144% at March 31, 2021 and December 31, 2020, respectively.

(2)Base Rate, as defined in the secured term loan agreement, is the greater of (i) the prime rate set by Bank of America, or (ii) federal funds rate + 0.5%, or (iii) LIBOR + 1.0%.

(3)This mortgage loan has five one-year extension options, subject to satisfaction of certain conditions, of which the first was exercised in June 2020.

(4)This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions.

(5)Effective January 9, 2021, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits being waived from January 2021 through June 2021. This mortgage loan has three one-year extension options, subject to satisfaction of certain conditions, of which the third was exercised in April 2021.

(6)Effective February 22, 2021, we amended this term loan. In conjunction with the amendment, the interest rate spread increased from a rate of Base Rate + 1.25% - 2.50% or LIBOR + 2.25% - 3.50%, with Base Rate + 1.25% - 2.65% or LIBOR + 2.25% - 3.65%, with a LIBOR floor of 0.50%.

(7)Effective December 31, 2020, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits being waived from January 2021 through December 2021.

(8)Effective March 5, 2021, we amended this mortgage loan. Terms of the agreement included monthly FF&E escrow deposits waived through July 1, 2021.

(9)The final maturity date assumes all available extensions options will be exercised.

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Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The following table summarizes the interest rate derivatives we entered into over the applicable periods:

	Three Months Ended March 31,
Interest rate caps:(1)	2021			2020
Notional amount (in thousands)	$	192,500		$	167,500
Strike rate low end of range	0.75		%	3.00		%
Strike rate high end of range	3.00		%	3.50		%
Effective date range	January 2021- March 2021			March 2020
Termination date range	September 2021- April 2022			April 2021
Total cost of interest rate caps (in thousands)	$	20		$	38

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(1)    No instruments were designated as cash flow hedges.

Interest rate derivatives consisted of the following:

Interest rate caps: (1)	March 31, 2021			December 31, 2020
Notional amount (in thousands)	$	917,500		$	779,000
Strike rate low end of range	0.75		%	3.00		%
Strike rate high end of range	4.00		%	4.00		%
Termination date range	April 2021 - April 2022			February 2021 - October 2021
Aggregate principal balance on corresponding mortgage loans (in thousands)	$	725,000		$	779,000

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(1)No instruments were designated as cash flow hedges.

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Effect of Fair Value Measured Assets and Liabilities on Consolidated Statements of Operations

The following table summarizes the effect of fair value measured assets and liabilities on our condensed consolidated statements of operations (in thousands):

	Gain (Loss) Recognized in Income
	Three Months Ended March 31,
	2021			2020
Assets
Derivative assets:
Interest rate derivatives - caps	(20)			(19)
Credit default swaps	—		(1)	1,100		(1)
Total derivative assets	$	(20)		$	1,081
Total	$	(20)		$	1,081
Total combined
Interest rate derivatives - floors	$	—		$	75
Interest rate derivatives - caps	(20)			(19)
Credit default swaps	—			1,100
Unrealized gain (loss) on derivatives	(20)			1,156
Realized gain (loss) on interest rate floors	—		(2)	(75)		(2)
Net	$	(20)		$	1,081

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(1)Excludes costs associated with credit default swaps of $0 and $63 for the three months ended March 31, 2021 and 2020, respectively, which is included in “other income (expense)” in our condensed consolidated statements of operations.

(2)Included in “other income (expense)” in our condensed consolidated statements of operations

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Summary of Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2021

Investments, All Other Investments [Abstract]

Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments

The carrying amounts and estimated fair values of financial instruments were as follows (in thousands):

	March 31, 2021				December 31, 2020
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Financial assets not measured at fair value:
Cash and cash equivalents	$	85,684	$	85,684	$	78,606	$	78,606
Restricted cash	39,322		39,322		34,544		34,544
Accounts receivable, net	17,583		17,583		13,557		13,557
Due from related parties, net	1,052		1,052		991		991
Due from third-party hotel managers	18,565		18,565		12,271		12,271
Financial liabilities not measured at fair value:
Indebtedness	$	1,117,892	$904,887 to $1,000,138		$	1,128,724	$884,325 to $977,411
Accounts payable and accrued expenses	74,098		74,098		61,758		61,758
Dividends and distributions payable	2,569		2,569		2,736		2,736
Due to Ashford Inc.	2,115		2,115		2,772		2,772
Due to third-party hotel managers	1,725		1,725		1,393		1,393

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Income (Loss) Per Share (Tables)

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Summary of Amounts Used in Calculating Basic and Diluted Earnings (Loss) Per Share

The following table reconciles the amounts used in calculating basic and diluted income (loss) per share (in thousands, except per share amounts):

	Three Months Ended March 31,
	2021		2020
Net income (loss) attributable to common stockholders - basic and diluted:
Net income (loss) attributable to the Company	$	(8,708)	$	(12,930)
Less: Dividends on preferred stock	(2,388)		(2,555)
Less: Loss on extinguishment of preferred stock - Series B	(73)		—
Undistributed net income (loss) allocated to common stockholders	(11,169)		(15,485)
Distributed and undistributed net income (loss) - basic and diluted	$	(11,169)	$	(15,485)
Weighted average common shares outstanding:
Weighted average common shares outstanding – basic and diluted	39,605		32,474
Income (loss) per share - basic:
Net income (loss) allocated to common stockholders per share	$	(0.28)	$	(0.48)
Income (loss) per share - diluted:
Net income (loss) allocated to common stockholders per share	$	(0.28)	$	(0.48)

Summary of Computation of Diluted Income Per Share

Due to their anti-dilutive effect, the computation of diluted income (loss) per share does not reflect the adjustments for the following items (in thousands):

	Three Months Ended March 31,
	2021		2020
Net income (loss) allocated to common stockholders is not adjusted for:
Income (loss) attributable to redeemable noncontrolling interests in operating partnership	(1,079)		(1,885)
Dividends on preferred stock - Series B	1,563		1,730
Loss on extinguishment of preferred stock - Series B	73		—
Total	$	557	$	(155)
Weighted average diluted shares are not adjusted for:
Effect of unvested restricted shares	83		76
Effect of assumed conversion of operating partnership units	4,006		4,112
Effect of assumed conversion of preferred stock - Series B	6,078		6,728
Effect of assumed conversion of exchanged preferred stock - Series B	551		361
Total	10,718		11,277

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Redeemable Noncontrolling Interests in Operating Partnership (Tables)

3 Months Ended

Mar. 31, 2021

Noncontrolling Interest [Abstract]

Redeemable Noncontrolling Interest

The following table presents the redeemable noncontrolling interests in Braemar OP (in thousands) and the corresponding approximate ownership percentage of our operating partnership:

	March 31, 2021			December 31, 2020
Redeemable noncontrolling interests in Braemar OP	$	28,162		$	27,655
Adjustments to redeemable noncontrolling interests (1)	$	1,433		$	167
Ownership percentage of operating partnership	8.87		%	9.43		%

____________________________________

(1)    Reflects the excess of the redemption value over the accumulated historical cost.

We allocated net income (loss) to the redeemable noncontrolling interests as illustrated in the table below (in thousands):

	Three Months Ended March 31,
	2021		2020
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	$	1,079	$	1,885

The following table presents the common units redeemed and the fair value at redemption (in thousands):

	Three Months Ended March 31,
	2021		2020
Common units converted to common stock	—		339
Fair value of common units converted	$	—	$	390	(1)

____________________________________

(1)    The redemption value is the greater of historical cost or fair value. The historical cost of the converted units was $3.5 million.

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Equity and Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2021

Equity [Abstract]

Dividends Declared

The following table summarizes dividends declared (in thousands):

	Three Months Ended March 31,
	2021		2020
Series D Cumulative Preferred Stock	$	825	$	825

Schedule of Issuance Activity

The issuance activity is summarized below (in thousands):

	Three Months Ended March 31,
	2021		2020
Common shares issued	2,005		—
Gross proceeds received	$	11,827	$	—
Commissions and other expenses	148		—
Net proceeds	$	11,679	$	—

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5.50% Series B Cumulative Convertible Preferred Stock (Tables)

3 Months Ended

Mar. 31, 2021

Temporary Equity Disclosure [Abstract]

Issuance Activity

The issuance activity is summarized below (in thousands):

	Three Months Ended March 31,
	2021		2020
Series B Convertible Preferred Stock shares issued	—		23
Gross proceeds received	$	—	$	439
Commissions and other expenses	—		7
Net proceeds	$	—	$	432

Summary of the Activity of the Operating Partnership Units

The following table summarizes dividends declared (in thousands):

	Three Months Ended March 31,
	2021		2020
Series B Convertible Preferred Stock	$	1,563	$	1,730

Summary of Series B Cumulative Convertible Preferred Stock Activity

The table below summarizes the activity (in thousands):

	Three Months Ended March 31, 2021
	Preferred Shares Tendered	Common Shares Issued
Series B Convertible Preferred Stock	486	1,535

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Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

The following table summarizes the advisory services fees incurred (in thousands):

	Three Months Ended March 31,
	2021		2020
Advisory services fee
Base advisory fee	$	2,545	$	2,621
Reimbursable expenses (1)	492		544
Equity-based compensation (2)	1,387		1,904
Incentive fee	371		—
Total	$	4,795	$	5,069

________

(1)Reimbursable expenses include overhead, internal audit, risk management advisory and asset management services.

(2)    Equity-based compensation is associated with equity grants of Braemar’s common stock, PSUs, LTIP units and Performance LTIP units awarded to officers and employees of Ashford LLC.

The table below summarizes the amount Braemar has expensed related to reimbursed operating expenses of Ashford Securities (in thousands):

	Three Months Ended March 31,
Line Item	2021		2020
Corporate, general and administrative	$	340	$	233

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Organization and Description of Business (Details)		3 Months Ended
	Feb. 22, 2021 USD ($)	Mar. 31, 2021 USD ($) contract room state hotel	Mar. 31, 2020 USD ($) hotel	Dec. 31, 2020 USD ($) hotel	Aug. 25, 2020 USD ($)	Jun. 08, 2020 USD ($)	Dec. 31, 2019 USD ($)
Real Estate Properties [Line Items]
Number of hotel properties | hotel		13		13
Number of states in which entity operates | state		6
Number of rooms | room		3,722
Number of units in real estate property, net partnership interest | room		3,487
Indebtedness, gross		$ 1,118,824,000		$ 1,130,594,000
Loan amount		1,117,892,000		1,128,724,000
Cash and cash equivalents		85,684,000	$ 141,793,000	78,606,000			$ 71,995,000
Restricted cash		39,322,000	45,418,000	34,544,000			$ 58,388,000
Cash flows provided by operating activities		11,967,000	$ (865,000)
Due from third-party hotel managers		$ 18,565,000		12,271,000
Ground Lease
Real Estate Properties [Line Items]
Number of ground leases | contract		2
Line of Credit | Secured Revolving Credit Facility
Real Estate Properties [Line Items]
Indebtedness, gross						$ 75,000,000
Mortgages
Real Estate Properties [Line Items]
Loan default amount		$ 200,000,000
Cash utilized from FF&E reserves	$ 9,300,000
Mortgages | Mortgage Loan 2
Real Estate Properties [Line Items]
Loan amount		42,500,000		42,500,000	$ 435,000,000
Term Loan | Term loan
Real Estate Properties [Line Items]
Loan amount		$ 51,221,000		$ 61,495,000
Total property debt						$ 65,000,000
Subsidiaries
Real Estate Properties [Line Items]
Number of hotel properties | hotel			13
COVID-19 | Subsidiaries
Real Estate Properties [Line Items]
Number of hotels with suspended operations | hotel			11
Wholly Owned Properties
Real Estate Properties [Line Items]
Number of hotel properties | hotel		11
Consolidated Properties
Real Estate Properties [Line Items]
Number of hotel properties | hotel		2
Leased by Wholly-Owned or Majority-Owned Taxable REIT Subsidiaries
Real Estate Properties [Line Items]
Number of hotel properties | hotel		12
US Virgin Islands Taxable REIT Subsidiary
Real Estate Properties [Line Items]
Number of hotel properties | hotel		1
Leased by Ashford Prime Wholly-Owned Taxable REIT Subsidiary
Real Estate Properties [Line Items]
Number of hotel properties | hotel		10
Remington Hotels
Real Estate Properties [Line Items]
Number of hotel properties managed by related party | hotel		3

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Revenue (Details)	3 Months Ended
	Mar. 31, 2021 USD ($) hotel	Mar. 31, 2020 USD ($)	Dec. 31, 2020 hotel
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	13		13
Total revenue	$ 83,848,000	$ 117,520,000
Other Hotel Revenue
Disaggregation of Revenue [Line Items]
Revenue from business interruption losses	$ 0	3,600,000
California
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	5		5
Total revenue	$ 19,238,000	36,176,000
Colorado
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	1		1
Total revenue	$ 11,751,000	15,311,000
Florida
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	2		2
Total revenue	$ 27,168,000	26,426,000
Illinois
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	1		1
Total revenue	$ 1,788,000	3,769,000
Pennsylvania
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	1		1
Total revenue	$ 1,365,000	5,908,000
Washington
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	1		1
Total revenue	$ 1,025,000	4,847,000
Washington, D.C.
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	1		1
Total revenue	$ 2,409,000	10,532,000
USVI
Disaggregation of Revenue [Line Items]
Number of Hotels | hotel	1		1
Total revenue	$ 19,104,000	14,551,000
Rooms
Disaggregation of Revenue [Line Items]
Total revenue	54,323,000	70,468,000
Rooms | California
Disaggregation of Revenue [Line Items]
Total revenue	12,745,000	23,987,000
Rooms | Colorado
Disaggregation of Revenue [Line Items]
Total revenue	6,380,000	8,151,000
Rooms | Florida
Disaggregation of Revenue [Line Items]
Total revenue	16,351,000	13,989,000
Rooms | Illinois
Disaggregation of Revenue [Line Items]
Total revenue	1,420,000	2,621,000
Rooms | Pennsylvania
Disaggregation of Revenue [Line Items]
Total revenue	1,241,000	4,466,000
Rooms | Washington
Disaggregation of Revenue [Line Items]
Total revenue	898,000	3,698,000
Rooms | Washington, D.C.
Disaggregation of Revenue [Line Items]
Total revenue	2,031,000	6,535,000
Rooms | USVI
Disaggregation of Revenue [Line Items]
Total revenue	13,257,000	7,021,000
Food and Beverage
Disaggregation of Revenue [Line Items]
Total revenue	16,629,000	28,803,000
Food and Beverage | California
Disaggregation of Revenue [Line Items]
Total revenue	4,232,000	7,771,000
Food and Beverage | Colorado
Disaggregation of Revenue [Line Items]
Total revenue	2,978,000	4,255,000
Food and Beverage | Florida
Disaggregation of Revenue [Line Items]
Total revenue	5,640,000	7,743,000
Food and Beverage | Illinois
Disaggregation of Revenue [Line Items]
Total revenue	236,000	852,000
Food and Beverage | Pennsylvania
Disaggregation of Revenue [Line Items]
Total revenue	5,000	1,206,000
Food and Beverage | Washington
Disaggregation of Revenue [Line Items]
Total revenue	10,000	791,000
Food and Beverage | Washington, D.C.
Disaggregation of Revenue [Line Items]
Total revenue	132,000	3,491,000
Food and Beverage | USVI
Disaggregation of Revenue [Line Items]
Total revenue	3,396,000	2,694,000
Other Hotel
Disaggregation of Revenue [Line Items]
Total revenue	12,896,000	18,249,000
Other Hotel | California
Disaggregation of Revenue [Line Items]
Total revenue	2,261,000	4,418,000
Other Hotel | Colorado
Disaggregation of Revenue [Line Items]
Total revenue	2,393,000	2,905,000
Other Hotel | Florida
Disaggregation of Revenue [Line Items]
Total revenue	5,177,000	4,694,000
Other Hotel | Illinois
Disaggregation of Revenue [Line Items]
Total revenue	132,000	296,000
Other Hotel | Pennsylvania
Disaggregation of Revenue [Line Items]
Total revenue	119,000	236,000
Other Hotel | Washington
Disaggregation of Revenue [Line Items]
Total revenue	117,000	358,000
Other Hotel | Washington, D.C.
Disaggregation of Revenue [Line Items]
Total revenue	246,000	506,000
Other Hotel | USVI
Disaggregation of Revenue [Line Items]
Total revenue	$ 2,451,000	$ 4,836,000

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Investments in Hotel Properties, net (Details) - USD ($)	1 Months Ended	3 Months Ended
	Sep. 30, 2020	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Land		$ 455,298,000		$ 455,298,000
Buildings and improvements		1,190,169,000		1,190,437,000
Furniture, fixtures and equipment		127,896,000		127,692,000
Construction in progress		9,390,000		11,422,000
Total cost		1,782,753,000		1,784,849,000
Accumulated depreciation		(376,243,000)		(360,259,000)
Investments in hotel properties, net		1,406,510,000		$ 1,424,590,000
Gain associated with proceeds received from insurance	$ 10,100,000	481,000
Proceeds from insurance carriers		0	$ 2,000,000.0
Impairment charges		$ 0	$ 0

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Investment in Unconsolidated Entity (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2018	Dec. 31, 2020
Schedule of Equity Method Investments [Line Items]
Investment in unconsolidated entity	$ 0	$ 26
Carrying value of the investment in OpenKey	1,644			$ 1,708
Equity in earnings (loss) of unconsolidated entity	$ (64)	(40)
OpenKey
Schedule of Equity Method Investments [Line Items]
Investment in unconsolidated entity		$ 26	$ 2,000
Ownership interest in OpenKey (as a percent)	8.00%		8.20%	8.20%
Aggregate equity method investments	$ 2,400
Carrying value of the investment in OpenKey	$ 1,644			$ 1,708

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Indebtedness, net (Schedule of Indebtedness) (Details) $ in Thousands				3 Months Ended
	Feb. 22, 2021	Jun. 08, 2020	Oct. 25, 2019 extension	Mar. 31, 2021 USD ($) extension	Mar. 31, 2020	Dec. 31, 2020 USD ($)	Aug. 25, 2020 USD ($)
Debt Instrument [Line Items]
Indebtedness, gross				$ 1,117,892		$ 1,128,724
Capitalized default interest and late charges				5,994		7,304
Deferred loan costs, net				(5,062)		(5,434)
Indebtedness, net				$ 1,118,824		$ 1,130,594
LIBOR rate				0.111%		0.144%
Mortgages | Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate				0.50%
Mortgages | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				1.00%
Mortgages | Mortgage Loan 1
Debt Instrument [Line Items]
Indebtedness, gross				$ 435,000		$ 435,000
Number of extension options | extension				5
Term of extension options (in years)				1 year
Mortgages | Mortgage Loan 1 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				2.16%
Mortgages | Mortgage Loan 2
Debt Instrument [Line Items]
Indebtedness, gross				$ 42,500		42,500	$ 435,000
Number of extension options | extension				3
Term of extension options (in years)				1 year
Mortgages | Mortgage Loan 2 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate					3.95%
Mortgages | Mortgage Loan 3
Debt Instrument [Line Items]
Indebtedness, gross				$ 67,500		67,500
Number of extension options | extension				3
Term of extension options (in years)				1 year
Mortgages | Mortgage Loan 3 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				2.75%
Mortgages | Mortgage Loan 4
Debt Instrument [Line Items]
Indebtedness, gross				$ 51,000		51,000
Mortgages | Mortgage Loan 4 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				2.55%
Mortgages | Mortgage Loan 5
Debt Instrument [Line Items]
Indebtedness, gross				$ 40,000		40,000
Mortgages | Mortgage Loan 5 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				2.55%
Mortgages | Mortgage Loan 6
Debt Instrument [Line Items]
Indebtedness, gross				$ 100,000		100,000
Mortgages | Mortgage Loan 6 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				2.65%
Mortgages | Mortgage Loan 7
Debt Instrument [Line Items]
Indebtedness, gross				$ 54,000		54,000
Mortgages | Mortgage Loan 7 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				2.10%
Mortgages | Mortgage Loan 8
Debt Instrument [Line Items]
Indebtedness, gross				$ 196,671		197,229
Mortgages | Mortgage Loan 8 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				1.70%
Mortgages | Mortgage Loan 9
Debt Instrument [Line Items]
Indebtedness, gross				$ 80,000		80,000
Mortgages | Mortgage Loan 9 | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate				1.85%
Term Loan | LIBOR
Debt Instrument [Line Items]
LIBOR floor (as a percent)		0.50%
Term Loan | Term loan
Debt Instrument [Line Items]
Indebtedness, gross				$ 51,221		$ 61,495
Number of extension options | extension			2
Term of extension options (in years)			1 year
Term Loan | Term loan | Base Rate | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate		1.25%
Term Loan | Term loan | Base Rate | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	2.65%	2.50%
Term Loan | Term loan | LIBOR | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate		2.25%
Term Loan | Term loan | LIBOR | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate	3.65%	3.50%

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Indebtedness, net (Narrative) (Details)				3 Months Ended
	Feb. 22, 2021 USD ($)	Jun. 08, 2020 USD ($)	Oct. 25, 2019 extension	Mar. 31, 2021 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($)
Debt Instrument [Line Items]
Indebtedness, net				$ 1,118,824,000		$ 1,130,594,000
Repayments of debt				10,832,000	$ 0
Gain (loss) recognized on loans				0
Amortization of principal amortization				$ 1,300,000
Mortgages
Debt Instrument [Line Items]
Cash utilized from FF&E reserves	$ 9,300,000
Secured Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Indebtedness, net		$ 75,000,000
Repayments of debt		10,000,000
Term loan | Term Loan
Debt Instrument [Line Items]
Face amount of debt		65,000,000
Quarterly amortization		$ 5,000,000
Number of extension options | extension			2
Term of extension options (in years)			1 year

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Derivative Instruments (Details) - Not Designated as Hedging Instrument - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Interest rate derivatives - caps
Derivative [Line Items]
Notional amount (in thousands)	$ 917,500,000		$ 779,000,000
Aggregate principal balance on corresponding mortgage loans (in thousands)	$ 725,000,000		$ 779,000,000
Interest rate derivatives - caps | Minimum
Derivative [Line Items]
Strike rate	0.75%		3.00%
Interest rate derivatives - caps | Maximum
Derivative [Line Items]
Strike rate	4.00%		4.00%
Interest rate derivatives - caps
Derivative [Line Items]
Notional amount (in thousands)	$ 192,500,000	$ 167,500,000
Total cost of interest rate caps (in thousands)	$ 20,000	$ 38,000
Interest rate derivatives - caps | Minimum
Derivative [Line Items]
Strike rate	0.75%	3.00%
Interest rate derivatives - caps | Maximum
Derivative [Line Items]
Strike rate	3.00%	3.50%

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Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Apr. 01, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Significance of current credit spreads to level 3 input considerations (as a percent)	10.00%
LIBOR interest rate forward curve (as a percent)	0.111%			0.144%
Effect of Fair Value Hedges on Results of Operations [Abstract]
Unrealized gain (loss) on derivatives	$ (20)	$ 1,156
Subsequent Event
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
LIBOR interest rate forward curve (as a percent)			0.168%
Credit default swaps | Derivative assets
Effect of Fair Value Hedges on Results of Operations [Abstract]
Derivative cost	0	63
Fair Value, Recurring
Effect of Fair Value Hedges on Results of Operations [Abstract]
Gain (Loss) Recognized in Income	(20)	1,081
Fair Value, Recurring | Derivative assets
Effect of Fair Value Hedges on Results of Operations [Abstract]
Gain (Loss) Recognized in Income	(20)	1,081
Fair Value, Recurring | Non-derivative assets
Effect of Fair Value Hedges on Results of Operations [Abstract]
Gain (Loss) Recognized in Income	(20)	1,081
Fair Value, Recurring | Derivative
Effect of Fair Value Hedges on Results of Operations [Abstract]
Unrealized gain (loss) on derivatives	(20)	1,156
Fair Value, Recurring | Interest rate derivatives - caps
Effect of Fair Value Hedges on Results of Operations [Abstract]
Unrealized gain (loss) on derivatives	(20)	(19)
Fair Value, Recurring | Interest rate derivatives - caps | Derivative assets
Effect of Fair Value Hedges on Results of Operations [Abstract]
Gain (Loss) Recognized in Income	(20)	(19)
Fair Value, Recurring | Credit default swaps
Effect of Fair Value Hedges on Results of Operations [Abstract]
Unrealized gain (loss) on derivatives	0	1,100
Fair Value, Recurring | Credit default swaps | Derivative assets
Effect of Fair Value Hedges on Results of Operations [Abstract]
Gain (Loss) Recognized in Income	0	1,100
Fair Value, Recurring | Interest rate derivatives - floors
Effect of Fair Value Hedges on Results of Operations [Abstract]
Unrealized gain (loss) on derivatives	0	75
Realized gain (loss) on interest rate floors	$ 0	$ (75)

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Summary of Fair Value of Financial Instruments (Carrying Amounts and Estimated Fair Values of Financial Instruments) (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Financial assets not measured at fair value:
Cash and cash equivalents, Carrying value	$ 85,684	$ 78,606	$ 141,793	$ 71,995
Restricted cash, Carrying value	39,322	34,544	$ 45,418	$ 58,388
Accounts receivable, net, Carrying value	17,583	13,557
Due from related parties, net, Carrying value	1,052	991
Due from third-party hotel managers, Carrying value	18,565	12,271
Financial liabilities not measured at fair value:
Indebtedness, Carrying value	1,117,892	1,128,724
Accounts payable and accrued expenses, Carrying value	74,098	61,758
Dividends and distributions payable, Carrying value	2,569	2,736
Due to Ashford Inc., Carrying Value	2,115	2,772
Due to third-party hotel managers, Carrying value	1,725	1,393
Carrying Value
Financial assets not measured at fair value:
Cash and cash equivalents, Carrying value	85,684	78,606
Restricted cash, Carrying value	39,322	34,544
Accounts receivable, net, Carrying value	17,583	13,557
Due from related parties, net, Carrying value	1,052	991
Due from third-party hotel managers, Carrying value	18,565	12,271
Financial liabilities not measured at fair value:
Indebtedness, Carrying value	1,117,892	1,128,724
Accounts payable and accrued expenses, Carrying value	74,098	61,758
Dividends and distributions payable, Carrying value	2,569	2,736
Due to Ashford Inc., Carrying Value	2,115	2,772
Due to third-party hotel managers, Carrying value	1,725	1,393
Estimated Fair Value
Financial assets not measured at fair value:
Cash and cash equivalents, Estimated fair value	85,684	78,606
Restricted cash, Estimated fair value	39,322	34,544
Accounts receivable, net, Estimated fair value	17,583	13,557
Due from related parties, net, Estimated fair value	1,052	991
Due from third-party hotel managers, Estimated fair value	18,565	12,271
Financial liabilities not measured at fair value:
Accounts payable and accrued expenses, Estimated fair value	74,098	61,758
Dividends and distributions payable, Estimated fair value	2,569	2,736
Due to Ashford Inc., Fair Value Disclosure	2,115	2,772
Due to third-party hotel managers, Estimated fair value	1,725	1,393
Minimum | Estimated Fair Value
Financial liabilities not measured at fair value:
Indebtedness, Estimated fair value	904,887	884,325
Maximum | Estimated Fair Value
Financial liabilities not measured at fair value:
Indebtedness, Estimated fair value	$ 1,000,138	$ 977,411

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Summary of Fair Value of Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Maximum maturity term of financial assets (in days)	90 days
Indebtedness, Carrying value	$ 1,117,892	$ 1,128,724
Minimum
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total indebtedness fair value variance from carrying value (as a percent)	80.90%	78.30%
Maximum
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Total indebtedness fair value variance from carrying value (as a percent)	89.50%	86.60%

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Income (Loss) Per Share (Reconciliation) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Net income (loss) attributable to common stockholders - basic and diluted:
Net income (loss) attributable to the Company	$ (8,708)	$ (12,930)
Less: Dividends on preferred stock	(2,388)	(2,555)
Less: Loss on extinguishment of preferred stock - Series B	(73)	0
Undistributed net income (loss) allocated to common stockholders	(11,169)	(15,485)
Distributed and undistributed net income (loss) - basic and diluted	$ (11,169)	$ (15,485)
Weighted average common shares outstanding:
Weighted average common shares outstanding – basic (in shares)	39,605	32,474
Weighted average common shares outstanding – diluted (in shares)	39,605	32,474
Income (loss) per share - basic:
Net income (loss) allocated to common stockholders per share (in dollars per share)	$ (0.28)	$ (0.48)
Income (loss) per share - diluted:
Net income (loss) allocated to common stockholders per share (in dollars per share)	$ (0.28)	$ (0.48)

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Income (Loss) Per Share (Antidilutive) (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Net income (loss) allocated to common stockholders is not adjusted for:
Loss on extinguishment of preferred stock - Series B	$ 73	$ 0
Total	$ 557	$ (155)
Weighted average diluted shares are not adjusted for:
Antidilutive securities excluded (in shares)	10,718	11,277
Restricted Stock
Weighted average diluted shares are not adjusted for:
Antidilutive securities excluded (in shares)	83	76
Operating Partnership Units
Net income (loss) allocated to common stockholders is not adjusted for:
Income (loss) attributable to redeemable noncontrolling interests in operating partnership	$ (1,079)	$ (1,885)
Weighted average diluted shares are not adjusted for:
Antidilutive securities excluded (in shares)	4,006	4,112
Series B Preferred Stock
Net income (loss) allocated to common stockholders is not adjusted for:
Dividends on preferred stock - Series B	$ 1,563	$ 1,730
Loss on extinguishment of preferred stock - Series B	$ 73	$ 0
Weighted average diluted shares are not adjusted for:
Antidilutive securities excluded (in shares)	6,078	6,728
Exchanged Shares of Series B Preferred Stock
Weighted average diluted shares are not adjusted for:
Antidilutive securities excluded (in shares)	551	361

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Redeemable Noncontrolling Interest in Operating Partnership (Narrative) (Details) shares in Thousands, $ in Millions	1 Months Ended	3 Months Ended
	Mar. 31, 2021 USD ($) shares	Mar. 31, 2021 shares
Long Term Incentive Plan Units
Noncontrolling Interest [Line Items]
Vesting period (in years)	3 years	3 years
Units granted (in shares)	244
Fair value of units granted | $	$ 1.7
Other than options (in shares)	1,300	1,300
Units which have not reached full economic parity with the common units (in shares)	344	344
Performance Long Term Incentive Plan Units
Noncontrolling Interest [Line Items]
Vesting period (in years)		3 years
Other than options (in shares)	220	220
Units which have not reached full economic parity with the common units (in shares)	60	60
Minimum | Performance Long Term Incentive Plan Units
Noncontrolling Interest [Line Items]
Award performance target (as a percent)		0.00%
Maximum | Performance Long Term Incentive Plan Units
Noncontrolling Interest [Line Items]
Award performance target (as a percent)		200.00%

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Redeemable Noncontrolling Interests in Operating Partnership (Redeemable Noncontrolling Interests) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Noncontrolling Interest [Line Items]
Redeemable noncontrolling interests in Braemar OP	$ 28,162		$ 27,655
Adjustments to redeemable noncontrolling interests	(1,266)	$ 6
Braemar Hotels & Resorts, Inc.
Noncontrolling Interest [Line Items]
Redeemable noncontrolling interests in Braemar OP	28,162		$ 27,655
Adjustments to redeemable noncontrolling interests	$ 1,433	$ 167
Ownership percentage of operating partnership	8.87%		9.43%

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Redeemable Noncontrolling Interests in Operating Partnership (Allocated Redeemable Noncontrolling Interests) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Noncontrolling Interest [Abstract]
Net (income) loss attributable to redeemable noncontrolling interests in operating partnership	$ 1,079	$ 1,885

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Redeemable Noncontrolling Interests in Operating Partnership (Units Redeemed) (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Temporary Equity [Line Items]
Fair value of common units converted		$ (3,454)
Historical cost		$ 3,500
Operating Partnership Units
Temporary Equity [Line Items]
Common units converted to common stock (in shares)	0	339
Fair value of common units converted	$ 0	$ 390

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Equity and Stock-Based Compensation (Narrative) (Details)			1 Months Ended	3 Months Ended		12 Months Ended
	Mar. 31, 2021 USD ($) $ / shares shares	Feb. 04, 2021 USD ($) tradingDay shares	Mar. 31, 2021 USD ($) $ / shares shares	Mar. 31, 2021 USD ($) $ / shares shares	Mar. 31, 2020 USD ($) shares	Dec. 31, 2020 $ / shares	Dec. 11, 2017 USD ($)	Dec. 05, 2017 $ / shares
Class of Stock [Line Items]
Dividends declared | $				$ 0	$ 0
Common stock, par value (in dollars per share) | $ / shares	$ 0.01		$ 0.01	$ 0.01		$ 0.01
Restricted Stock Units (RSUs)
Class of Stock [Line Items]
Units granted (in shares)			504,000
Fair value of units granted | $			$ 3,500,000
Vesting period (in years)			3 years
Performance Shares
Class of Stock [Line Items]
Award service period (in years)				3 years
Performance Shares | Minimum
Class of Stock [Line Items]
Award performance target (as a percent)				0.00%
Performance Shares | Maximum
Class of Stock [Line Items]
Award performance target (as a percent)				200.00%
Private Placement
Class of Stock [Line Items]
Shares sold (in shares)	1,200,000
Shares authorized (in shares)		7,780,786
Anniversary of agreement (in months)		36 months
Percentage of the Market Price		95.00%
Ownership threshold (as a percent)		4.99%
Consecutive trading days after advance notice | tradingDay		5
Maximum advance shares (in shares)		1,200,000
Price per share percentage of average daily VWAP		100.00%
Consecutive trading days prior to advance notice | tradingDay		5
Structuring fee | $		$ 10,000
Proceeds received | $	$ 7,000,000.0
Common Stock
Class of Stock [Line Items]
Shares of stock repurchased during period (in shares)				50,000	20,000
Common Stock | At-The-Market Equity Distribution
Class of Stock [Line Items]
Shares sold (in shares)	6,700,000
Stock Repurchase Program
Class of Stock [Line Items]
Common stock, par value (in dollars per share) | $ / shares								$ 0.01
Share repurchase program authorized amount | $	$ 50,000,000		$ 50,000,000	$ 50,000,000			$ 50,000,000
Shares of stock repurchased during period (in shares)				0	0
Aggregate offering price | $	$ 26,200,000
Series D Preferred Stock
Class of Stock [Line Items]
Preferred stock dividend rate				8.25%	8.25%	8.25%
Annual preferred stock dividend (in dollars per share) | $ / shares				$ 2.0625

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Equity and Stock-Based Compensation (Preferred Stock Dividends) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Series D Preferred Stock
Class of Stock [Line Items]
Series D Cumulative Preferred Stock	$ 825,000	$ 825,000

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Equity and Stock-Based Compensation (Issuance Activity) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Class of Stock [Line Items]
Gross proceeds received	$ 18,181	$ 0
Common Stock
Class of Stock [Line Items]
Common shares issued (in shares)	2,005,000	0
Gross proceeds received	$ 11,827	$ 0
Commissions and other expenses	148	0
Net proceeds	$ 11,679	$ 0

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5.50% Series B Cumulative Convertible Preferred Stock (Details)			3 Months Ended		12 Months Ended	16 Months Ended
	Mar. 31, 2021 USD ($) $ / shares shares	Dec. 04, 2019 USD ($)	Mar. 31, 2021 USD ($) day $ / shares shares	Mar. 31, 2020 USD ($) shares	Dec. 31, 2020 $ / shares	Mar. 31, 2021 $ / shares shares
Class of Stock [Line Items]
Series B Convertible Preferred Stock			$ 2,388,000	$ 2,555,000
Common Stock
Class of Stock [Line Items]
Common Shares Issued (in shares) | shares	1,535,000		1,535,000			1,535,000
Equity Distribution Agreements With Sales Agents
Class of Stock [Line Items]
Percentage of the gross sales price		2.00%
Maximum | Equity Distribution Agreements With Sales Agents
Class of Stock [Line Items]
Aggregate offering price (up to)		$ 40,000,000.0
Series B Preferred Stock
Class of Stock [Line Items]
Preferred stock dividend rate			5.50%	5.50%	5.50%
Initial conversion price (in dollars per share) | $ / shares	$ 18.70		$ 18.70			$ 18.70
Preferred stock conversion rate			1.3372
Annual preferred stock dividend (in dollars per share) | $ / shares			$ 1.375
Consecutive trading days (in days) | day			45
Days ending prior to notice of conversion			3 days
Redemption price (in dollars per share) | $ / shares	$ 25.00		$ 25.00			$ 25.00
Redemption percent of liquidation preference	103.00%		103.00%			103.00%
Liquidation preference per share (in dollars per share) | $ / shares	$ 25.00		$ 25.00			$ 25.00
Series B Convertible Preferred Stock			$ 1,563,000	$ 1,730,000
Series B preferred stock, par value (in dollars per share) | $ / shares	$ 0.01		$ 0.01		$ 0.01	$ 0.01
Preferred Shares Tendered (in shares) | shares			486,000
Series B Preferred Stock | Preferred Stock
Class of Stock [Line Items]
Series B Convertible Preferred Stock shares issued (in shares) | shares			0	23,000
Gross proceeds received			$ 0	$ 439,000
Commissions and other expenses			0	7,000
Net proceeds			$ 0	$ 432,000
Series B Preferred Stock | Equity Distribution Agreements With Sales Agents
Class of Stock [Line Items]
Aggregate offering price (up to)	$ 1,200,000
Shares sold (in shares) | shares						65,000
Series B Preferred Stock | Minimum
Class of Stock [Line Items]
Percent of conversion price	110.00%		110.00%			110.00%

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Related Party Transactions (Narrative) (Details)					3 Months Ended		12 Months Ended
	Mar. 20, 2020 USD ($)	Sep. 25, 2019 USD ($)	Jan. 15, 2019 USD ($)	Aug. 08, 2018 USD ($)	Mar. 31, 2021 USD ($) hotel	Mar. 31, 2020 USD ($)	Dec. 31, 2020 USD ($) hotel
Related Party Transaction [Line Items]
Base fee, net asset fee adjustment (as a percent)					0.70%
Minimum base fee (as a percent)					90.00%
Term of advisory agreement (in years)					3 years
Aggregate non-listed preferred equity offerings		$ 400,000,000					$ 400,000,000
Capital contributions							3,750,000
Due to Ashford Inc.					$ 2,115,000		$ 2,772,000
Advisory agreement, percent of total construction costs				6.50%
Advisory agreement, construction management fees (as a percent)				10.00%
Advisory agreement, interior design fees (as a percent)				6.00%
Advisory agreement, FF&E purchasing fees (as a percent)				8.00%
Advisory Agreement, FF&E purchasing fees, freight and tax threshold				$ 2,000,000.0
Advisory Agreement, FF&E purchasing fees, with freight and tax threshold (as a percent)				6.00%
Number of hotel properties | hotel					13		13
Ashford Inc.
Related Party Transaction [Line Items]
Allocation percentage		25.00%					50.00%
Ashford Inc. | Ashford Trust
Related Party Transaction [Line Items]
Allocation percentage		75.00%					0.00%
Ashford Inc. | Ashford Inc.
Related Party Transaction [Line Items]
Allocation percentage							50.00%
Management fees
Related Party Transaction [Line Items]
Percentage of project costs				4.00%
Lismore Capital | Subsidiaries
Related Party Transaction [Line Items]
Advisory services, amount paid	$ 1,400,000				$ 4,100,000
Advisory services, expense included in write-off of loan costs and exit fees					341,000	$ 0
Lismore Capital | Periodic Installments | Subsidiaries
Related Party Transaction [Line Items]
Advisory services, amount paid					1,400,000
Amount expensed					683,000
Payment amount to be offset against future fees					681,000
Lismore Capital | Success fees | Subsidiaries
Related Party Transaction [Line Items]
Advisory services, amount paid					1,400,000
Ashford Inc.
Related Party Transaction [Line Items]
Amount funded					1,300,000
Due to Ashford Inc.					$ 114,000
Ashford LLC
Related Party Transaction [Line Items]
ERFP agreement, percent of property acquisition price			10.00%
ERFP agreement, funding term (in years)			2 years
ERFP agreement, initial term (in years)			2 years
ERFP agreement, renewal term (in years)			1 year
ERFP agreement, notice term (in days)			60 days
Remington Hotels
Related Party Transaction [Line Items]
Number of hotel properties managed by related party | hotel					3
Maximum | Ashford Inc.
Related Party Transaction [Line Items]
Funding amount		$ 15,000,000.0
Maximum | Ashford LLC
Related Party Transaction [Line Items]
ERFP agreement, commitment			$ 50,000,000
ERFP agreement, commitment with increase			$ 100,000,000
Minimum | Management fees
Related Party Transaction [Line Items]
Monthly property management fee					$ 14,000
Property management fee, percent					3.00%
Minimum | Remington Hotels | Management fees
Related Party Transaction [Line Items]
Monthly property management fee					$ 14,000
Property management fee, percent					3.00%

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Related Party Transactions (Schedule of Advisory Services Fee) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Related Party Transaction [Line Items]
Advisory services fee	$ 4,795	$ 5,069
Ashford LLC | Affiliated Entity
Related Party Transaction [Line Items]
Advisory services fee	4,795	5,069
Ashford LLC | Affiliated Entity | Base advisory fee
Related Party Transaction [Line Items]
Advisory services fee	2,545	2,621
Ashford LLC | Affiliated Entity | Reimbursable expenses
Related Party Transaction [Line Items]
Advisory services fee	492	544
Ashford LLC | Affiliated Entity | Equity-based compensation
Related Party Transaction [Line Items]
Advisory services fee	1,387	1,904
Ashford LLC | Affiliated Entity | Incentive fee
Related Party Transaction [Line Items]
Advisory services fee	$ 371	$ 0

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Related Party Transactions (Schedule of Reimbursed Operating Expenses) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Ashford Inc.
Related Party Transaction [Line Items]
Corporate, general and administrative	$ 340	$ 233

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Commitments and Contingencies (Details)	3 Months Ended
	Mar. 31, 2021 USD ($) hotel managementCompany	Dec. 31, 2020 hotel	Jul. 20, 2020 USD ($)
Loss Contingencies [Line Items]
Number of hotel properties | hotel	13	13
Pending Litigation | Accor
Loss Contingencies [Line Items]
Incorrect amount payable to cure performance test failure			$ 1,031,549
Correct amount payable to cure performance test failure			$ 535,120
Amounts accrued	$ 0
Pending Litigation | California Hotel Employment Policies and Practices
Loss Contingencies [Line Items]
Amounts accrued	$ 500,000
Number of hotel management companies | managementCompany	1
Number of hotel properties | hotel	1
Class Action Lawsuit, California Employment Laws
Loss Contingencies [Line Items]
Amounts accrued	$ 0
Number of hotel management companies | managementCompany	1
Number of hotel properties | hotel	2
Minimum | Management fees
Loss Contingencies [Line Items]
Monthly property management fee	$ 14,000
Property management fee, percent	3.00%
Minimum | Restricted Cash
Loss Contingencies [Line Items]
Replacement reserve escrow as percentage of property revenue	4.00%
Minimum | Management fees
Loss Contingencies [Line Items]
Property management fee, percent	2.50%
Maximum | Pending Litigation | California Hotel Employment Policies and Practices
Loss Contingencies [Line Items]
Potential loss amount	$ 500,000
Maximum | Restricted Cash
Loss Contingencies [Line Items]
Replacement reserve escrow as percentage of property revenue	5.00%
Maximum | Management fees
Loss Contingencies [Line Items]
Property management fee, percent	5.00%

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Segment Reporting (Details)	3 Months Ended
	Mar. 31, 2021 segment
Segment Reporting [Abstract]
Number of operating segments	1

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Subsequent Events (Details) - USD ($) $ in Thousands				1 Months Ended	3 Months Ended
	Apr. 21, 2021	Apr. 02, 2021	Feb. 04, 2021	May 05, 2021	Mar. 31, 2021	Mar. 31, 2020
Subsequent Event [Line Items]
Gross proceeds received					$ 18,181	$ 0
Private Placement
Subsequent Event [Line Items]
Shares authorized (in shares)			7,780,786
Common Stock
Subsequent Event [Line Items]
Issuance of stock (in shares)					2,005,000	0
Gross proceeds received					$ 11,827	$ 0
Series B Preferred Stock
Subsequent Event [Line Items]
Shares exchanged/reclassified (in shares)					486,000
Subsequent Event | Private Placement
Subsequent Event [Line Items]
Shares authorized (in shares)	35,000,000
Issuance of stock (in shares)	280,957
Gross proceeds received	$ 1,500
Subsequent Event | Common Stock
Subsequent Event [Line Items]
Shares exchanged/reclassified (in shares)				2,900,000
Subsequent Event | Series B Preferred Stock
Subsequent Event [Line Items]
Series B Convertible Preferred Stock shares issued (in shares)				751,000
Subsequent Event | Series E Preferred Stock
Subsequent Event [Line Items]
Shares exchanged/reclassified (in shares)		28,000,000
Preferred stock, shares issued (in shares)				0
Subsequent Event | Series M Preferred Stock
Subsequent Event [Line Items]
Shares exchanged/reclassified (in shares)		28,000,000
Preferred stock, shares issued (in shares)				0