Braemar Hotels & Resorts Inc. (NYSE:BHR) shares surged 8% in premarket trading on Friday after the company unveiled plans to terminate its long-standing advisory arrangement with Ashford Inc. and transition to a self-managed real estate investment trust structure.
The move follows a strategic review conducted by the company and a recommendation from a special committee of independent directors, which concluded that internalising management could unlock meaningful value for shareholders.
Company Targets Significant Cost Savings
Braemar expects the transition to deliver annual savings of more than $25 million through lower general and administrative expenses.
Under the new structure, the company will directly employ its management team and staff rather than relying on external advisory services provided by Ashford and its affiliates.
Management believes the shift will streamline operations and provide greater control over strategic decision-making while reducing ongoing overhead costs.
Focus Remains on Luxury Hotel Portfolio
Following the transition, Braemar intends to continue operating a concentrated portfolio of approximately six to eight luxury hotel properties located across the United States and the Caribbean.
The portfolio currently has a gross asset value exceeding $1 billion and generated annual revenue of between $300 million and $350 million during the twelve months ended March 31, 2026.
The company said maintaining a focused collection of high-end hospitality assets remains central to its long-term strategy.
Major Changes Planned for the Board
As part of the restructuring, Braemar will appoint five new independent directors to its board.
Current directors, including Chairman Monty Bennett, have agreed to step down once the transition is completed.
President and Chief Executive Officer Richard Stockton will remain a member of the board, while the newly constituted board will be led by an independent chairman.
The company said the governance changes are intended to strengthen board independence and align oversight more closely with shareholder interests.
Additional Ashford Relationships to End
Braemar also plans to terminate its contractual arrangements with Premier Project Management LLC and Remington Lodging & Hospitality, LLC, both of which are subsidiaries of Ashford.
Certain members of the management team who are currently employed by Ashford are expected to join Braemar directly as employees following the transition.
The company believes bringing key personnel in-house will help ensure operational continuity while supporting the move to a fully self-managed structure.
Asset Sales to Help Fund Transition
Braemar intends to use proceeds from previously announced asset disposals to pay down a portion, or potentially all, of the Company Sale Fee owed to Ashford under the existing advisory agreement.
In addition, management said it is evaluating the potential sale of two or three further assets to meet financial obligations associated with ending the advisory arrangement.
The company expects these measures to facilitate a smooth transition while preserving balance sheet flexibility.
Advisors Support Strategic Review
Robert W. Baird & Co. Inc. acted as financial adviser to Braemar throughout the strategic review process, while White & Case LLP provided legal counsel.
Investors welcomed the announcement, sending the stock sharply higher in premarket trading as the market responded positively to the prospect of lower costs, improved governance and greater operational independence.