(Mark your calendars: RealShare Hotels 2011, Sept. 15 in New York City)

DALLAS-Executives with Ashford Hospitality Trust Inc. provided a mainly a positive face during the company’s Q2 earnings call, citing increased RevPar of 7.2% from the previous quarter. However, the company’s report of a $1.4-million loss for its FFO (versus an FFO of $38.4 million in the prior year quarter), was grounds for concern by investors.

According to a corporate release, the FFO decline was due to a derivatives loss and a 5.9 million share buyback of preferred stock. The REIT’s stock opened at $10.42 per share on Aug. 4, and closed at $7.76 per share, a drop of approximately 27%. This occurred on a day during which the entire stock market plunged in value upon fears that the United States would end up with a double-dip recession based on gloomy employment and economic news.

Ashford Hospitality president Douglas A. Kessler noted that, in late June, the company made a public offering of seven million shares of common stock, priced at $12.50 per share and generating gross proceeds of $87.5 million. Kessler said that $50 million of the proceeds were used to repay borrowings from the REIT’s senior credit facility.

Analysts, however, were concerned about the REIT’s equity issuance. Ryan Meliker with Morgan Stanley questioned why an equity raise taking place a little more than a month after Investor Day “where you showed us how strong the balance sheet was.” Meanwhile, David Loeb with Robert W. Baird & Co. also challenged the executives on the stock issuance, suggesting that there were other opportunities to deal with upcoming debt maturities such as recourse debt and property leverage.

“Our credit facility expires in the spring of this coming year, and we weren’t willing to draw down more on that credit facility,” responded Monty J. Bennett, Ashford Hospitality’s president and CEO. “As far as leveraging some other properties, that’s expensive, because of fees.”

The news was not all gloom and doom, however. Bennett focused on a 196 basis-point increase in occupancy from the previous quarter, and pointed out that net new supply is likely not to come on-line for quite some time, based on research from PKF Hospitality. “This low supply growth means that modest demand growth will translate into occupancy increases and leverage to increased average daily rate,” Bennett explained.

Another potentially positive trend for Ashford Hospitality is the growth of business transients. Bennett pointed out that companies are not hiring, rather, they’re putting their people on the road. “Given that 71% of our company’s hotel room demand is transient, with 77% of that coming from corporate, we are optimistic about the top line performance growth opportunities in our portfolio,” he said.