EX-99.1 2 luxurbanhotels_ex99-1.htm EXHIBIT 99.1

 

 Exhibit 99.1

 

1 Investor Presentation May / June 2023 Asset Light Growth in the Short - Term Stay Hospitality Industry

 

 

2 DISCLAIMER Forward Looking Statements This presentation contains forward - looking statements, including with respect to financial and operational guidance, scheduled property openings, expected closing of noted lease transactions, continued closing on additional leases for properties in the Company’s pipeline, as well the Company’s anticipated ability to commercialize efficiently and profitably the properties it leases and will lease in the future . These forward - looking statements are subject to a number of risks, uncertainties and assumptions, including those set forth under the caption “Risk Factors” in our public filings with the SEC, including in Item 1 A of our 10 - K for the year ended December 31 , 2022 . Generally, such forward - looking information or forward - looking statements can be identified by the use of forward - looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved" . Forward - looking information may relate to anticipated events or results including, but not limited to business strategy, leasing terms, high - level occupancy rates, and sales and growth plans . The financial projections provided herein are based on certain assumptions and existing and anticipated market, travel and public health conditions, all of which may change . The forward - looking information and forward - looking statements contained in this press release are made as of the date of this presentation, and the Company does not undertake to update any forward - looking information and/or forward - looking statements that are contained or referenced herein, except in accordance with applicable securities laws . Non - GAAP Information The Company defines cash net income as net income (loss) before non - cash financing costs, non - cash stock compensation expense, non - cash stock option expense, non - cash rent amortization expense, accrued taxes, non - cash issuance of common stock for operating expenses, and depreciation . The Company believes that cash net income is useful to investors as a measure of a company's operating performance, without regard to generally non - recurring items and non - cash activity . The Company seeks to achieve profitable, long - term growth by monitoring and analyzing key operating metrics, including EBITDA . The Company defines EBITDA as net income (loss) before interest, taxes, financing costs, depreciation and amortization, stock compensation expense and stock option expense, and incremental costs associated with its exit from SoBeNY . The Company’s management uses these non - GAAP financial metrics and related computations to evaluate and manage the business and to plan and make near and long - term operating and strategic decisions . The management team believes these non - GAAP financial metrics are useful to investors to provide supplemental information in addition to the GAAP financial results . Management reviews the use of its primary key operating metrics from time - to - time . EBITDA and cash net income are not intended to be a substitute for any GAAP financial measure and as calculated, may not be comparable to similarly titled measures of performance of other companies in other industries or within the same industry . The Company’s management team believes it is useful to provide investors with the same financial information that it uses internally to make comparisons of historical operating results, identify trends in underlying operating results, and evaluate its business . For purposes of the guidance provided herein for the year ended December 31 , 2023 , however, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation could not be accomplished without unreasonable effort . Non - GAAP measures for future periods which cannot be reconciled to the most comparable GAAP financial measures are calculated in a manner which is consistent with the accounting policies applied in the Company’s consolidated financial statements . A reconciliation of net income (loss) to EBITDA and net income (loss) to CASH net income is included in the financial tables included with this press release .

 

 

3 AT A GLANCE SERVICE WHO WE ARE Provider of short - stay hotel rentals in destination locations Acquire low - cost lease rights for dislocated hotel properties (including those impacted by COVID - 19) via long - term Master Lease Agreements HOW WE ARE DIFFERENT Operate an asset light model with a lean corporate structure Proven, scalable business model Lead with technology Provide win - win solution for owners and travelers FINANCIAL CONSIDERATIONS Significant revenue and EBITDA growth (2019 - 2023 E) Enhanced cash flows offer ability to self - fund growth Substantial reduction / potential elimination of debt in 2023 August 2022 Initial Public Offering December 31 Year End 32.4 M Shares Outstanding (5/9/23) $43.8 M Net Rental Revenue (2022) $115 - $120 M Net Rental Revenue (2023 E) 1,034 Hotel Units Hosting (3/31/23) 1,807 Hotel Units Under Master Lease (5/15/23) 2,500 - 3,000 Hotel Units Available for Rent (2023 E) $3.8 M Adjusted Cash Net Income (2022) 1 $2.2 M Cash Net Income (3/31/2023) 1 $8.3 M / $12.4 M EBITDA / Adjusted EBITDA (2022) 1 $4.0 M EBITDA (3/31/2023) 1 $21 - $25 M EBITDA (2023 E) 1 (1) Non - GAAP measure.

 

 

4 ASSET LIGHT GROWTH STRATEGY SERVICE Identify low - cost, long - term lease opportunities at discloated hotel properties Apply proprietary alogorithms to determine profit and cash flow potential Market reservations on multiple partner sales channels ( future inventory produces immediate cash flow ) Utilize consumer facing LuxUrban TM brand Strict cleanliness, maintenance and repair standards Build geographic density, target new cities Evolve financial profile by increasing RevPAR to drive margin expansion, generate cash flow, and reduce debt Expand hotel property portfolio Increase RevPAR Expand margins The Washington, New York City Deliver unparalleled client service

 

 

5 GLOBAL TRAVEL MARKET 2023 Despite economic concerns, global tourism this year should improve to ~80% to 95% of pre - pandemic levels* 86% of global corporate travel suppliers expect 2023 spending by corporate customers will be much higher (26%) or somewhat higher (60%) compared to 2022 ** D emand for domestic and regional travel expected to remain strong 2023 U.S. hotel industry outlook vs. 2022***: - Occupancy of 63.6%, up from 62.7% - ADRs expected at $151.10, up 2.1% - RevPAR expected at $96.44, up 3.7% • United Nations World Tourism Organization via Bloomberg, January 2023 ** Q1 2023 Business Travel Outlook Poll (Global Business Travel Association) via Hospitalitynet , January 2023 ** STR and Tourism Economics via Hospitalitynet , January 2023 Townhouse Hotel, Miami

 

 

6 THE CHALLENGE FACING HOTEL OWNERS: Hotel CMBS Loans Maturing in a Higher Interest Rate Environment SERVICE $10+ billion of hotel - backed CMBS loans have been shifted to 2023 from prior years ( chart ) ~$31 billion of CMBS loans backed by hotel are set to mature by the end of 2024 Most of these loans were made at interest rates well below the current environment, and will need to be refinanced at higher rates Lenders are requiring hotel owners to put up more capital prior to refinancing these loans Urban hotel operators that cater to short - stay business guests are especially challenged, as revenues at many of these properties have yet to recover to pre - pandemic levels Residual dislocation challenges driven by COVID - 19 pandemic

 

 

7 THE OPPORTUNITY Multi - Year, Triple Net Master Lease Agreement SERVICE Partnering with LUXH allows property owners to: Avoid default Generate stable cash flow Improve ROI Increase occupancy Lock in occupancy rates Restructure debt

 

 

8 BUSINESS STRATEGY Property Lease Acquisiton Revenue Cycle Management Property Operations Apply proprietary data science and algorithms to manage revenue and create dynamic pricing Maximize occupancy rates and increase cash flow Pursue previously untapped, high margin revenue streams at each of our leased properties beginning in Q2 2023 Streamline operations Reduce / align staffing to operating requirements Hire General Manager Continual cost benefit analysis Lease properties with refundable security deposit or LOC, or both In most cases, we receive a period of “free rent” to make ready the property Lease entire properties, which may include food service, gyms, or store fronts. We do and plan to in most cases, sublease the food service or store fronts to generate additional income.

 

 

9 EVOLVING & GROWING SHORT - STAY PORTFOLIO Los Angeles / Miami Beach / New Orleans New York City / Washington, DC 2023 Expansion Initiatives Add density in existing US locations Target new US locations Target opening in London UK 2019 2020 2021 2022 Q1 2023 5/15/23 2023 E hosting under MLA Property Portfolio Hotel units Apartment units 330 344 118 137 839 1,034 8 8 1,807 2,500 - 3,000

 

 

10 Security Deposit or Letter of Credit Date Commenced Annual Escalation Extension Option (remaining at 3/31/23) Lease Remaining at 3/31/23 (years) Lease Term Property Type # of Units Property $250,000 $ 12/31/2016 3% None 3.8 10 - year Entire building, licensed for hotel like Rentals 24 1200 O : 1200 Ocean Dr Miami Beach, FL 33139 $1,000,000 $ 11/1/2021 3% 10 - year 13.6 15 - year Licensed hotel 117 Blakely : 136 W 55th St, New York, NY 10105 (1) $1,500,000 $ 6/2/2022 3% None 14.2 15 - year Licensed hotel 168 Herald : 71 W 35th St, New York, NY 10001 $550,000 $ 3/26/2021 3% None 3.5 5.5 - year Licensed hotel 68 Variety : 1700 Alton Rd Miami Beach, FL 33139 $515,000 $ 10/1/2021 3% 10 - year 3.5 5 - year Licensed hotel 48 Impala / Flora : 1228 Collins Ave, Miami Beach, FL 33139 $350,000 $ 4/15//2022 4% 5 - year 4.0 5 - year Licensed hotel 42 Astor : 956 Washington Ave, Miami Beach, FL 33139 $500,000 $ 8/1/2022 3% 10 - year 9.3 10 - year Licensed hotel 79 Georgetown : 1000 29th St NW, Washington, DC 20007 $300,000 $ 11/1/2022 2% None 19.0 19.4 - year Licensed hotel 60 Lafayette : 600 St Charles Ave, New Orleans, LA 70130 $50,000 $ 9/1/2022 2.5% 10 - year 9.5 10 - year Licensed hotel 16 Woodley : 2869 28th Street Northwest, Washington, DC 20008 $5,500,000 $ 9/20/2022 2% None 14.9 15.2 - year Licensed hotel 217 Washington : 8 Albany Street, New York, NY 10006 1,250,000 $ 3/1/2023 3% 10 - year 11.1 11.2 - year Licensed hotel 70 Townhouse : 150 20 th Street, Miami Beach, FL 33139 2,250,000 $ 1/1/2023 2% 10 - year 14.8 15.0 - year Licensed hotel 125 Tuscany : 120 E 39 th Street, New York, NY 10016 Weighted Avg. (3) Weighted Avg. Weighted Avg. Weighted Avg. 14,015,000 $ 2.6 16.7 12.1 13.0 1,034 Subtotal Operating Units as of 3/31/2023 (2) 2,338,395 $ Other Deposits as of 3/31/2023 16,353,395 $ Total Deposits (current $112,290, non - current $15,141,105 and $1,100,000 restricted cash) PROPERTY SUMMARY (as of March 31, 2023) 1) Recorded as restricted cash as posted by a letter of credit 2) Averages are weighted by unit count 3) The average remaining term on our properties as of March 31, 2023 was 12.1 years and inclusive of extension options was 16.7 years

 

 

11 PROPERTY SUMMARY (as of May 15, 2023) Units by location as of May 15, 2023

 

 

12 ON - LINE TRAVEL AGENT PARTNERSHIPS

 

 

13 GAINING MARKET SHARE 2020 2021 2022 Q1 2023 2023 E $103 $122 $247 RevPAR and Occupancy 61% 72% 77% RevPAR defined as: revenue per available unit (net revenue / avg. units available during the period) The Astor Hotel, Miami Beach RevPAR and Occupancy on the rise across LUXH’s property portfolio $257 $230 - $250 75%

 

 

14 INCREASING NET RENTAL REVENUE 2019 2020 2021 2022 2023 (E) $5 $8 $21 $44 $115 - $120 Net Revenue ($ in MMs) CAGR (2019 - 2022) = 101% CAGR (2019 – 2023 E * ) = 116% * Measured at midpoint of estimate The Blakely Hotel, New York City

 

 

15 EXPANDING EBITDA Initiatives Complement Anticipated Growth in Net Rental Revenue New credit card processor relationship Scale - derived benefits (i.e., geographic density) Labor contracts and scheduling Food & beverage initiatives Ancillary revenue opportunities Third - party management on select properties EBITDA / EBITDA Margin* ($ in MMs) $(0.1) $(4.0) $(0.6) $21 - $25*** 2019 2020 2021 Long term EBITDA margin goal 20 - 25% 2022 2023 (E) 19.6% * See reconciliation tables in this presentation ** 19% margin is EBITDA; Adjusted EBITDA margin = 28.3% *** Measured at the midpoint of net rental revenue estimate 19.0%** $12.4 $8.3 Adjusted EBITDA

 

 

16 ECONOMIC MODEL PER UNIT $- $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 Revenue Break-Even COGS Gross Margin G&A EBITDA $240 RevPAR: mid - point of range $150 COGS 22.5% EBITDA Margin: mid - point of range Assumed 12% G&A

 

 

17 Q1 2023 FINANCIAL RESULTS For The Three Months Ended March 31, 2022 2023 $ 9,099,425 $ 22,814,175 Net Rental Revenue 2,282,783 5,421,867 Rent Expense 255,967 1,651,669 Non - Cash Rent Expense Amortization 4,047,412 10,378,765 Other Expenses 6,586,162 17,452,301 Total Cost of Revenue 2,513,263 5,361,874 Gross Profit 979,606 3,627,402 General and Administrative Expenses - 884,816 Non - Cash Issuance of Shares for Operating Expenses - 429,996 Non - Cash Stock Compensation Expense - 167,573 Non - Cash Option Compensation Expense 979,606 4,224,971 Total Operating Expenses 1,533,657 1,136,903 Income from Operations Other Income (Expense) 449,913 39,878 Other Income (564,137) (2,130,605) Cash Interest and Financing Costs - (1,704,549) Non - Cash Financing Costs (114,224) (3,795,276) Total Other Expense 1,419,433 (2,658,373) (Loss) Income Before Provision for Income Taxes - 122,161 Provision for Income Taxes $ 1,419,433 $ (2,780,534) Net (Loss) Income $ 0.07 $ (0.10) Basic and Diluted (Loss) Income Per Common Share 21,675,001 28,659,358 Basic and Diluted Weighted Average Number of Common Shares Outstanding

 

 

18 RECONCILIATION TABLES Net Loss to EBITDA and Cash Net Income For The Three Months Ended March 31, 2022 2023 $ 1,419,433 $ (2,780,534) Net (Loss) Income -- 122,161 Provision for Income Taxes and Other Taxes 564,137 2,130,605 Cash Interest and Financing Costs -- 1,704,549 Non - Cash Financing Costs -- 429,996 Non - Cash Stock Compensation Expense -- 167,573 Non - Cash Stock Option Expense 255,967 1,651,669 Non - Cash Rent Expense Amortization -- 11,031 Depreciation Expense -- 602,726 SoBe Exit Costs $ 2,239,537 $4,039,776 EBITDA $ 1,419,433 $ (2,780,534) Net (Loss) Income -- 1,704,549 Non - Cash Financing Costs -- 429,996 Non - Cash Stock Compensation Expense -- 167,673 Non - Cash Stock Option Expense -- 1,651,669 Non - Cash Rent Amortization Expense -- 122,161 Accrued Taxes -- 884,816 Non - Cash Issuance of Common Stock for Operating Expenses -- 11,031 Depreciation Expense $ 1,419,433 $2,191,261 Cash Net Income The Company defines cash net income as net income (loss) before non - cash financing costs, non - cash stock compensation expense, n on - cash stock option expense, non - cash rent amortization expense, accrued taxes, non - cash issuance of common stock for operating expenses, and depreciation. The Company believes that cash net income is useful to investors as a measure of a company's ope rat ing performance, without regard to generally non - recurring items and non - cash activity. The Company seeks to achieve profitable, long - term growth by monitoring and analyzing key operating metrics, including EBITDA. The Company defines EBITDA as net income (loss) b efo re interest, taxes, financing costs, depreciation and amortization, stock compensation expense and stock option expense, and inc remental costs associated with its exit from SoBeNY . The Company’s management uses these non - GAAP financial metrics and related computations to evaluate and manage the business a nd to plan and make near and long - term operating and strategic decisions. The management team believes these non - GAAP financial metrics are useful to investors to provide supplemental information in addition to the G AAP financial results. Management reviews the use of its primary key operating metrics from time - to - time. EBITDA and cash net i ncome are not intended to be a substitute for any GAAP financial measure and as calculated, may not be comparable to similarly titled measu res of performance of other companies in other industries or within the same industry. The Company’s management team believes it is useful to provide investors with the same financial information that it uses internally to make comparisons of historical operating res ult s, identify trends in underlying operating results, and evaluate its business. For purposes of the guidance provided herein for the year ended December 31, 2023, however, estimating such GAAP measures with the required precision necessary to provide a meaningful reco nci liation could not be accomplished without unreasonable effort. Non - GAAP measures for future periods which cannot be reconciled t o the most comparable GAAP financial measures are calculated in a manner which is consistent with the accounting policies applied i n t he Company’s consolidated financial statements.

 

 

19 2022 FINANCIAL RESULTS & 2023 GUIDANCE FY 2023 (E) FY 2021 FY 2022 Periods Ended December 31, 2022 (in 000s) $115,000 - $120,000 $21,380 $43,825 Net Rental Revenue $19,269 $31,450 Cost of Revenue $2,111 $12,375 Gross Profit $2,845 $6,794 General & Administrative Expenses - $2,548 Non - Cash Stock Compensation Expense - $2,386 Non - Cash Lease Asset Depreciation - $4,104 Apartment Rental Exit Costs $2,845 $15,832 Total Operating Expenses $(0.7) $(3,456) Loss from Operations $(2,234) $(9,391) Net (Loss) $(2,234) $3,753 Adjusted Cash Net Income * $21,000 - $25,000 $(0.6) $12,356 Adjusted EBITDA* * Non - GAAP measure; see reconciliation tables in this presentation.

 

 

20 RECONCILIATION TABLES Net Loss to EBITDA, Adjusted EBITDA, and Adjusted Cash Net Income For The Years Ended December 31, 2021 2022 $ (2,233,384) $ (9,390,353) Net Loss - 591,968 Provision for Income Taxes and Other Taxes 1,626,565 7,518,267 Interest and Financing Costs - 2,071,054 Depreciation and Amortization Expense - 2,547,536 Stock Compensation Expense - 2,527,543 Incremental Processing and Channel Financing Fees for Credit Risk - 2,385,995 Non - Cash Lease Asset Loss Depreciation Charge $ (606,819) $ 8,252,010 EBITDA - 4,103,898 Cash Exit Apartment Rental Costs $ (606,819) $ 12,355,908 Adjusted EBITDA $ (2,233,384) $ (9,390,353) Net Loss - 2,547,536 Stock Compensation Expense - 2,071,054 Depreciation and Amortization Expense - 2,385,995 Non - Cash Lease Asset Loss Depreciation Charge - 2,034,376 Non - Financing Charges $ (2,233,384) $ (351,392) Cash Net Income - 4,103,898 Cash Exit Apartment Rental Costs $ (2,233,384) $ 3,752,506 Adjusted Cash Net Income

 

 

21 EBITDA is defined as net income or loss before the impact of interest, taxes and depreciation and amortization. Adjusted EBIT DA is defined as EBITDA before the impact of non - cash expenses (stock compensation expense) and non - recurring costs to exit SoBeNY. EBITDA and adjusted EBTIDA are key measures of our financial performance and measures our efficiency and operating cash flow before financing costs, taxes and w ork ing capital needs. We utilize EBITDA and adjusted EBITDA because they provides us with an operating metric closely tied to the operations of the bu sin ess. Twelve Months Ended December 31 2020 2019 (4,615,725) $ (477,599) $ Net (Loss) Income 577,769 $ 374,026 $ Interest and Financing cost (4,037,956) $ (103,573) $ EBITDA FY 2019 - 2020 RECONCILIATION OF NET INCOME (LOSS) TO EBITDA