Host Hotels & Resorts (HST) 5 Nov 202020 Q3 Earnings call transcript

Good day and welcome to the Host Hotels & Resorts Third Quarter 2020 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the call over to Tejal Engman, Senior Vice President of Investor Relations. Please go ahead.

Thank you and good morning, everyone.

note to of Federal be please today comments Securities begin considered are forward-looking we that the many made Laws. Before statements under

statements obligated risks in subject differ cause forward-looking from described our statements. and with update to SEC, As we're or expressed, not these filings future results to publicly uncertainties and these numerous those that to could the are revise

hotel-level financial results. today's call, cash we information non-GAAP such on certain EBITDAre, as addition, In burn, discuss and adjusted FFO, will

You information, GAAP to in the in this at the can most today's the website filed our in X-K hosthotels.com. release, reconciliations find supplemental the with together on financial press directly with information, comparable and our information SEC, earnings

President President, Executive Executive in Sourav Ghosh, Financial and Chief and Chief with today's Jim Participating call Vice Officer; and me Officer Treasurer. will Risoleo, be

now, to like over And Jim. turn call to I'd the

Tejal, Thank everyone morning. us joining you, and thanks this for

families you I healthy. your hope of remain all safe and and

from this the responding confines. end, Over we've to challenges I earnings within achievements our call. would to highlight To last our pandemic, posed its that since like last business the to key rebuilding three several months, transitioned by

our First, $X a month steady but achieved growth, delivering of $XX of revenue estimate each preliminary we've higher sequentially in RevPAR from with low gradual historic to a portfolio approximately April October. in

XX% year-over-year. lower and than Although more quarter remained third RevPAR October

to access increase. sources grew XX% gradually operators potential over their quarter-over-quarter, all revenues quarter efforts wholesale our Third continues demand, as of to which maximized

a monthly quarter we retention excluding employee credit. operating the benefit, hotel-level compared XX% employee have Second, benefit quarter on by by approximately including approximately hotel-level million we loss average credit reduced to XX% retention operating of second quarter third levels, the results, loss our have on quarter. second our from ongoing the Based and third reduced $XX

minimizing line, our operators do to growth job sequential outstanding of to revenue through flowed expenses. as an Our bottom our has continued have

by liquidity of strengthened asset Finally, debt through our opportunistic and we raising robust sales capital million over have further repayments. $XXX and refinancing

fourth we commensurate quarter $X.X if cash $X.X XXXX. debt end As available quarter, billion operations with a the the third total reserves, with until FF&E of no to including are liquidity, billion result, maturities and year with to approximately expect

hotel As pandemic demand number ninth all near-term in operators gradual remain: all-time the case month COVID-XX remain of that before of sources vaccines with demand; the our key we potential daily working one, recovery and believe therapeutics. highs, effective COVID-XX two, number maximizing will and to continue expenses the enter priorities the States with minimizing and continue the United to Therefore, access and our number counts availability to reducing we three, of liquidity. widespread choppy burn; near cash

to and positioning for our portfolio We're equally focused longer-term on gain structurally operating capitalizing objectives redefining our investments of stockholders. opportunistic create RevPAR to our index on share, model, our long-term value

you walk to operating long-term me these through handing to our quarter Sourav near Let explain third performance. progress call over objectives and our the before on

Beginning with demand.

crew, airline to more group, nights hotels group transient also room than XXX,XXX second We small steady volumes. by the and booked continues our in occupancy travelers, the quarter capturing driven be leisure are Although XX,XXX delivered third but quarter. and short-term business nights

the If and medical majority the room responder to you York, accounted first which New for second in due exclude quarter of nights group business.

July, rooms XX,XXX and from Smurf and in XX,XXX progressively in XX,XXX in increased by the group to Excluding throughout events. September, corporate driven primarily August, New York, quarter

Championship Regency and major for for XXX booked PGA league to San booked Nine and rooms sports in of blocks sports-related Burlingame our the baseball group other ESPN notable teams Hyatt media, with NFL hotels August. a Francisco at

when nights across regular Andaz $X.X suspended. a film hotel unit, incremental X,XXX two months on generated place, daily production a little safety basis, the in the over business. hotel-level which attendees temporarily With total Andaz EBITDA and employees by a generated out including testing over were and arrival Maui of million robust was upon addition, this protocols operations room In October, personally bought September from

While striving of working focused planners traditional sources to hotel in potential restore group and on are all demand, our operators remain meetings access events. confidence to meeting they with

safety distance In home. October, X,XXX Trade at attendees as Conference Connect Marriott was Every spread Show World designed the more Center detail virtual year's hotel, Orlando hosted was than XXX at with our were attendees our with XXXX and and maps meticulously this XX,XXX in-person for the booths site. hotel's Attendees ballroom and so available groups to mandate, were complied square socially safely. with widely spaced the of on across able attendees foot aisles, map large of Crystal the plenty

our the to Trade and was Ritz-Carlton, to complement will property global X host able We a events hybrid in-person suppliers November at meeting demand with this simultaneously. Show Corner. events starting format in-person believe virtual that on meeting The Tysons four occurred and plans augment Marriott hybrid digital

meetings for states been in the complexities pandemic, that despite take help can through the next jurisdictions, remain events nearly most and the large quarter place such fact the in local city-wide on of cancelled safely by first gatherings While publicize had group year. and posed restrictions place conventions all

business through to with encouraging about business future group of was year up patterns. continue cancellations group as holding approximately half groups of into for booking to increase, XX% a to optimistic that book Moreover, from scheduled second remain in of cancelled basis on We for steady. concentrated rebooked that group remain a are fairly cancellations now XX.X% in the group percentage next long-term the medium XXXX April, Rebookings quarter. XXXX due with years, second

of net D.C. the Jose, second York, New we the driven Orlando, rooms for group XXXX Metro by and San a quarter, half the booked San Francisco, XX,XXX In region. third

which is on XX.X% a We books half lower. same have second X.X% basis year, the last lower X.X time and basis on definite million rooms for XXXX than full-year a is the are on

year. full-year for on books last XXXX For million the at context, same definite X.X the time approximately we had rooms

XXXX nearly down the XXX,XXX booked year. with the we night We Finally, our nights group room more XX% XXXX operators last same for to bookings. only than increase quarter, room third the in out achieved activity second years in a robust time these did to sequential quarter in

for prevailed basis discounting same years, points out is the contrast and deep the in in that XX lower to Financial than the last time Importantly, Crisis. aftermath these only ADR Great year, of the X/XX

XX,XXX XX,XXX particular to driving consulting, industries transient, and but including in and technology, of demand business September. on demand, Moving XX,XXX variety financial remains from has improved are minimal, healthcare, standouts. with July, August, nights A to no and in in services business room

than large corporate business being the accounts. is and group demand organizations, driven both general, In transient rather by smaller by

that We ROI will because in travel it recover with line businesses. broader economic to business for believe recovery continue generates the of the

revenue return years. XX $XX according For every industries on business dollar in profit XX there Economics, and U.S. is which return $X a over a statistically Oxford travel, spent and XXXX analysis to modeled a in Travel by

Moreover, travel of X% up commonly travel makes Analysis, than cuts U.S. according less impactful corporate making perceived. roughly profitability of the long-term total only U.S. to sales, X% Bureau and expenses Economic of to operating is

Turning to contract revenues.

more continue quarter have during airlines Although the TSA third as volumes slowed they grew destinations. add recently, to steadily passenger

a the our Our rooms XX,XXX additional third quarter, XX% resulting contract hotels, the sequential to operators second crew in quarter increase. in drove compared to business more

short package. Marriott Hyatt remained other but operators launched Bonvoy than hotel example between our Hyatt Day. the it work, home. looking demand. The packages created leisure our or stay, Anywhere resort home Work and If appeal of finally, introduced package day, through sources with being to via historically extended the access relatively to potential better new types a summer lines from vacation, a operators the outperformed productively up innovating which at an to Work Marriott of does all and school blurred, facilitate demand offerings working to demand held escape From post-Labor of And another consumers have for the has not

loss the quarter, averaged our the Moving received case not discussed $XX million Employee under call, per approximately including our than Act. on million we CARES $XX cash million to That million month scenario a May. burn, $XX burn Credit second of the $XX to in monthly third hotel-level Retention on outlined cash the the in lower worst that scenario we quarter and half month operating

on Credit quarter. XX% of the to second Our Retention compared expenses, increase the third over by Employee XX% less quarter hotel-level cash revenue a increased

as only as expenses have rates. commitment as achieving possible operators their demonstrated back costs levels a occupancy to business to break-even as by soon service continuing hotel-level Our necessary add to and low current minimize

performance outflows corporate reflecting as remains expect total overhead. million well hotel third operational and level average million approximately approximately interest payments loss an would month, as we $XX to cash Assuming estimated of million at $XXX CapEx, general $XX a monthly quarter of levels,

payments. fourth property, and the be Above sequentially will timing of quarter higher level the corporate to CapEx interest cash monthly in due flows

near-term our on prepared details in greater burn provide will his Sourav cash remarks. trajectory

This $XXX our last liquidity, asset $XXX final asset. of hold call. since this over our value objective near-term Moreover, who Hotel Beach with sales for million, & opportunistic to million and through for for of pre-COVID maximizing Moving Marriott raised exceeds XXX systems of including own the we Capital pre-COVID reduced our CapEx to to opportunistic this strategic million owner contractually a Program sale Transformational pricing renovations. of asset. Marriott was buyer hotel, future the commitments associated refinancing and which capital a Spa internal CapEx debt the we $XX our room sold at reasons sale has an required Newport We earnings funded

of valuation rate generated tax anticipated times and to Beach also. have We're EBITDA enhanced and the by XX.X spending Inc. XXXX, cap X.X% liquidity quarter on of to our and be common achieved dividend a Host, imposed was our first no be net CapEx by gain requirements the by due in will further XXXX NOI adjusted sale Newport XXXX, Moreover, near-term combination capital based requirements. in XXXX total April have paid incurred there the the a to redistribution tax incremental XXXX operating and to cash loss to Marriott pleased a reduced

The second year. million also the sale at sales the We of $XX closing on approximately to development Phoenician at land our bringing total asset this land that completed

in the we hotel of land the As underwriting we the in have our sale past, in this discussed when XXXX. wasn't acquired

However, of unlock to a part The Phoenician. on value vision we the tremendous it our was saw

purchase incredibly We single-family will other to help anticipate these resort amenity XXX that drive approximately and amenities XX to Phoenician at units, and plans luxury on the villas build revenues residents an option golf to stockholders, will value by approximately have XX access an food program an expansion. resort of land executed demand XX retaining value spa of and complex to we services. additional producing and building future so buyer have create and condominium the combination have The homes, and The land pleased issues. this successfully through with parcels, monetized of acres a beverage resort. doing, We're while created In entitlement sales process multiple our for XX.X to solving rezoning non-income further or acres technical

conclude To and Series our our a Series offer further of XXXX, tender oversubscribed a substantially approximately on X.X% $XXX our by Notes in attractive objectives, of yield liquidity I a completed In we Senior an notes E position contraction reoffer Series X.X%. of we two rate. with enhanced coupon resulting senior near-term I an due X.X% our tranches XX% in total to million of issuance, participation of X.XX% issuing

rate. As debt our by maturity average cash while interest our average further and a result, we maintaining extending million, augmented $XXX position weighted our

the on charges Shifting redefine priorities, longer-term on a To-date, forma marketing, for expenses. progress property million savings operators model. fixed above hotel-level both the operators X% revenue and pro of workforce $XXX have are our reduction property of contributors solid is to services in these two shared to and Cross represents as with sales, operating our $XXX X% and long-term utilization of IT. and of to management revenues our which component million, functions, target they of we're to XXXX above our their restructure XXXX cost to based working management, biggest objectives, of approximately made their our

make recovery with committed to also levels that operating to for deeply assets. the but generate model more remain a greater working long-term levels, allow EBITDA We operators lower will to occupancy. profitability at our it our only efficiencies A faster not will us would to value of of improve create long-term XXXX profitable

the and for to turning Now competitive our trajectory throughout that a will investment lodging We to influence in ability let continue investments, advantage me performance portfolio with believe relative growth our unique is positively plans to begin cycle. our this our capital invest our portfolio.

program budget in Marriott Moreover, CapEx spend. nearly XXXX in in be XXXX these we will to Although we and will investment capital be have Transformational XX%, the our our completed maintenance entire combined XXXX our continue year-end Marriott cut Capital XX% by substantially other projects. as Program, XXXX. of XX% represent of by On the well complete nearly nearly the year-end ROI a invest basis, as by program

the we to RevPAR of a As heart recovery. expect result, share during the gain index

First, their that operations later to in as in and, we as we many year the next: invest likely maintain outperform with share gains second, invest the index competition competitors disrupt to RevPAR that to our is this meaningfully year to cycle unable the their able renovate first portfolios. assets XXXX be when and being

$X Marriott Resort market X.X sub share XXXX. over Island XX program's example, Marriott It the renovations its three points this in has times with Coronado year, last program gains. the revenues. by This room The also year-to-date, three Spa and nearly is RevPAR points of Diego period of points August implying in has million completed four through upper-upscale index transformational outperformed San the incremental & expectations by year, compared for Downtown its to same index improved share

Moving markets, or in roll-off. special and on start loans to servicing XXXX are And Research. with servicing in Delinquency rates special servicing are the record X.X% December XX% higher move on either CMBS acquisition XXXX. to forbearance expected a opportunities TREPP XX% of to as in according watchlist compared agreements loans transaction hotel Hotel were to in special of September

recovery some to in to hotel service sustain be decide throw were a outflows tile. who may to indebtedness able and for the the may hoping Additionally, their speedy owners cash required not

trading we see leverage focus continue do deep and time, large our relationships, at owner, broker advantages, So high can we to competitive where although we our opportunities as assets on operator and such ability don't quality to this transactions.

Our closing to providing and advantaged certainty and offer sellers additional structures distinguishing reputation speed for of ability factors. to are tax

margins, our to liquidity near-term designed and our while conclude, market are To assets. our our recovery to acquiring EBITDA aim improving share burn faster by longer-term objectives and gaining objectives maximize lower drive cash structurally

$X.X this we this as greatest attributes value remain crisis liquidity year-end, REITs to at believe and these available one sheet to entered withstand With create that opportunities expected believe, growth. with billion total long-term are disruption necessary business $X.X in for prolonged ability of new billion the we the on meaningful of lowest lodging and capitalize We key capacity lodging to leverage and balance the cycle. have

With to will that, I turn over the call Sourav.

everyone. morning good and Jim, you, Thank

third the reported decline as quarter. leisure performance with in second improved the Year-over-year hotel quarter. comments, improved compared declines the historic ADR XX by on year-over-year second Jim's occupancy overall both in third travel XX.X% quarter reopened we our declined and quarter third on top-line a and XX% summer year-over-year Building a the the basis from lows bolstered hotels in RevPAR quarter demand. for sequential

in in the basis upper Data outperformed markets, than STR top portfolios our our markets total average points better for to declines U.S. Compared hotels top tier were XXX ADR of industry's. our quarter. in We the occupancy on third XX

the portfolio our prime, than downtown has line in as and than primarily does. industry greater our our markets Notably, because Coast, as Jacksonville, the oriented However, RevPAR XXX industry's points in hotels and room crew New better benefited from or STR, such was more location where and our Northern basis overall in we Gulf Florida declines Hawaii, were occupancy Phoenix, than as business in Miami, York, resort corporate Virginia blocks. well

rates are especially exceed as preserve time operators even high versus to properties to dates cases on holidays. and to strong some able national Our continue last in be year compression at that demand, same the such in

sanitization than September. doesn't downturn. in prior our standards In delivered cleanliness hotels that to therefore trust be loyalty Florida normally year-over-year more will Customers sensitive standards occupancy driving rates. it degradation Resorts customer room demand. Coastal and to that than to be drive cleanliness remain extent less stringent benefit rate growth rate in severe We downturns having hopeful and XX% appear to in and example, are a For would ADR branded the will to to help programs from strong gain help general,

non-rooms revenues. Shifting to

XX% beverage reduction transient outlet XX% property AV revenue. in on declined per our forma to during continued guests revenues reduction due as and and XX% quarter year-over-year, leisure room resort properties to pro basis occupied were in their XX.X% a open dine Third by however, outlet year-over-year approximately food nearly and banquet revenue, an At on a revenues higher stay.

fees, attrition group $XX included revenues the other do to material revenues business. of cancellation not recognize related of we approximately as While million group we continue and forward, to pandemic prioritize expect and the to and attrition cancellation going rebooking

numbers compared for RevPAR $XXX RevPAR XX% and was a and of declined September. reflect approximately XX.X% occupancy approximately same ADR. almost but gradual the with in $XX $XX.XX, October RevPAR approximately top-line steady So as September an by at literally driven reported RevPAR month-over-month to year-over-year decline October the Year-over-year by improvement

the improve Looking demand at this to top-line are that we week, around hopeful performance but holidays. impacted by November, be negatively expect gradually Election will the

as remains lead representing remains limited, have the room we hotels now booking open. visibility generally short XX time Although as capture XX% extremely portfolio of our total demand, to length is well-positioned short, the our window of count of XX

hours with let a who reopenings, reopened brief show more on on of Travelers, before me tourists Speaking of XX get COVID-XX a October you no than proof update Hawaii, XX. departure, test, return now thereby enabling from offering provide test rule. a mandatory and to airlines are rapid quarantine the XX-day now upon and arrival, bound for Multiple a Hawaii islands. exempt the COVID-XX tourists to airports negative testing of are gradual which passengers

between to November through and Hawaii four ADR on transient currently up hotels for occupancy our across the Moreover XX% our year-over-year. November, pace in is January ranging For Maui, XX% Oahu. is books in X.X% properties

by to in the operators severance reduce $XX third paid of quarter. XX% our expenses, Moving we operating with quarter costs excluding million the on year-over-year, to over worked hotel

received in $XX Employee third Credit by offset than benefits quarter, the the furloughed million to expenses $XX to more operators in million Although healthcare this reduction paid benefit related Retention recorded was employees. a of

expense accrued In As third the payments $XX a $XX that that an will second for additional quarter. quarter. the be accrued the we we reminder, in fourth made million for in million quarter, similar

incur implement the million structure previously fourth are lead in model continue expense another the that to $XX the of As more we as to expect to operators expected a disclosed, to to and million quarter, workforce operating reevaluate our severance $XX efficient long-term. changes in

despite achieving We have and reopening to third quarter, hotels levels expenses closely with minimize worked of more our the occupancy. operators in greater

quarter-over-quarter declined consider is that credit, the the expenses portion largely fixed XX% The to utilities at fixed significant in and you increase service a excluding due the the property, business was which third remarkable and costs of were reopened increased costs costs XX employee year-over-year, hotels and when consists retention that improving Fixed insurance. quarter. the of contract during remaining taxes maintenance, levels

Variable declines, total on cost XX.X% costs April, down only declines benefit revenue ongoing decline revenue were slightly increased with while wage broadly have year-over-year. XX% a variable matched volumes. improving costs have and of Since

protocols, Hotel management teams have utilization beverage cross improved platforms, the implemented productivity associates. of food restructured and and saving

our in example, improvements by protocols increase the housekeeping. revised driving operators productivity offset associated more cleanliness an have with than cost As

the fourth cost For quarter, reductions variable expenses in overall for reductions see and containment wages we where believe, cost volume. benefits we'll continued mirror and

costs. communicated same costs, expect Moreover, brands regards tax reductions trajectory. the continue we to the third quarter have above corporate to With would in fixed we level the benefit the the along also at already experienced property in

hotel-level we for to down delivered in the XX the Employee range third profit is hotels September, Credit. we're with ADR EBITDA excluding quarter XX% provided impact entire the At breaking in April. operating when XX% a XX XX% XX% hotel the level, hotels, of occupancy recording profit the line operating hotel-level in in Retention even estimates the a to with

million XX% XX% average, approximately expenses for XX%. the and of Assuming occupancy interest G&A approximately on same of the at levels level of and corporate would corporate ADR we per inclusion at levels of break-even month $XX XX% decline to

a would once is inflecting would expect business past important Therefore, to expect think achieve range growth, we to and we of ramp you to within break-even break-even consolidated hotel portfolio, note volumes. As of at commensurate occupancy remain operating we upward. before that our subsequent break-even the it for expenses EBITDA with

Moving on to cash burn.

Based operational due quarter noted, At fourth million quarter an Jim third the of CapEx outflows month. excluding to Employee Of interest of cash the the third $XXX approximately $XX benefit the corporate in be approximately we the timing payments. cash month this Credit. our approximately quarter loss property As would expect on fourth than quarter $XX Retention of related operating this level scenario, hotel-level, a and would quarter, range amount, the to above third be monthly performance a a is million of expect burn $XX remains the to if to largely month, levels, at higher million overall we program. than million CapEx higher and

may we note to breakdown of haven't level month of for because quarter I provided and disclosures would a monthly that the the third hotel-level inflows burn each make cash like cash outflows lumpiness misleading.

example, Capital operating run For Program, the for Marriott would the provide and therefore employee accurate profit not an as months. well rate the as Transformational subsequent retention includes September for credit guarantee

land refinanced Jim successfully million, our that transactions combined we maturity, approximately value debt which multiple our the from The Phoenician our Beach weighted mentioned, ways our strengthen liquidity, This Marriott, for liquidity average extending and in $XXX our further sale create weighted with $XXX interest million the average can proceeds maintaining the and to of shareholders. while of deployed As maximizes in rate. by Newport net further debt be

so may continue continues we make conclude, the they to we which our forecasting To working operators includes on and over focus the on limited to outperform and with visibility liquidity in near-term, although burn our the influence, extremely cash while redefine challenging, investing hotel long-term. in our minimizing can maximize model, operating the assets, to what

and and balance us the while today, us to crisis grow strength endure position allows value an the our to shareholder opportunistic of be enabling liquidity future. Similarly, unprecedented sheet in

to now one address possible, yourself have we'll open questions question. with that, of please you up to as we from many And to time limit ensure it Q&A. as To

Instructions]. [Operator

line with Evercore. question. your Rich Your proceed Hightower first of the question Please from with comes

guys. Hey, the case you may good afternoon, good morning, be as

Good you. afternoon, morning, case may the Rich, be good as to

maybe we sort want beyond. Exactly. impediments might factors thinking of half do year I think back, and about guess holding health weight might group it corporate one A stronger maybe bookings, but at of next to talk to two I of I be that between sort could of here, second profits, point? think if cover as you this business Thanks. what the those budgets, the about, be is mean, the lot ground sort And question is to that I different and we it public other about their companies factors, you or mean of or the biggest had hindrance

Yes, the can I'll Rich, way on Sourav start. jump here. in

whole transient the it's in driven on backup concerns. and generally side restrictions routine, one, think I and government the things. of is bookings, being Number to group both that's couple by related side public a health the business

So until with said, talk have we in see seeing happen combined of about sense the many to year or think we or cancellations. business it mine I his maybe -- with we're vaccine to therapeutics normalcy effective to Sourav what talked about vaccine. vaccines -- respect next as was That times, did we return talked comments an group not I think we've any going or we're

groups back on come to very well. to in planners being hotels, It's for groups for important us at corporate held road it's meeting get Center, clear together XXXX Connect associations to and to meet as want World with the and Orlando the

business XX% an come call a So mix, which effective XX% is and it into that basis, praying roughly our other, XXXX revenue strong I vaccine. that, average XX% the group association part of have on XXXX tell all we're was smurf. really we corporate, seeing we're back, would to you business mix and a from desire on Association,

So XXXX we And pace I'll can take group let is that. looking into about talk Sourav how and beyond.

Sure.

a down tentative uncertainty. on So, talked what was the obviously quarter think than is we're the is on when to of year. as more tentative have broader focused comfortable we've that's booking want which second sidelines obviously of I now, would it's expect But you said, the concern. Right really right up the But do just as pushed last revenue like and the of now because in tentative people about half meet, was waiting pace, Jim books our again, really they're the because pace bookings Rich, traveling a clearly, XX%. to next matter

rooms for XXXX, that obviously in we same for time to And perspective, ADR about did to so an the so XXXX third rooms. stat booked is from years encouraging, that rooms XXX,XXX point thing again, to for when other encouraging compare the last it's future than a is is down time XX,XXX which quarter year, other book, ADRs the trends we less you into only the same booked out and The future. last down we encouraging year, look

Your the next question comes question. your with Powell from line of Anthony with Barclays. Please proceed

acquiring kind alternative ramp-up in start activity? structures the peers deals for first increase you transaction, as let's your the those, think lot and you'll hotels? consider an environment of of start transactions ways about activity say and have in of year talked to next that like your club other JVs and still you Would on half to overall see Question do afternoon. good you Hi, a in

exploring this billion trends discussed, have of into and up October of think have acquire credit it pleased very deals we of I agreement, next third Anthony, year, the open off-balance-sheet $X.X with to billion club fourth we $X.X facility available as that quarter can existing maintaining assuming to million trends in subject has $X.X the under waiver end we We're be unique $XXX company. liquidity quarter made in our liquidity where that how to we format the would hotels that And expect very we're liquidity will billion mirror and at taking the JVs position year. if a us sense of played us. to to existing out

that club think not I deals So only available. our

again very Europe itself. happy hotels do be were the in partner and putting over we we successful as presented in that deal where with something general APG, XX in we and know, JV together to acquired you opportunity Euro like a the if club would As very U.S. GIC the

One side stock. issue truly other liquidity available have we in just is distinguishing the that on And the us given forward. acquisition the of, units, that I gives distinguishing our opportunity of to of the XX to And factors on now the is think stock ability partnership the as well, share the owner provide a we're trading upside day. provide some to an it shares million to liquidity, going but close to operating average

to So EBITDA our Host in continues and our as improve provide to price improve the upside stock as continues well.

as indication we talking So, to do forbearance come answer start about is to lot Every have to expire. to market. weigh, significant what of every don't see liquidity, service a unfortunate come first other see, owners a debt to is about payments position people as half next of expenses, they expect to And and the or properties that not indication expect fund we they periods where and the your year, choose in question to number the who this. are we're of

So questions. is to the both answer yes your

Wells your Please proceed of from next question. with comes Dori with line Your Fargo. question Kesten the

Hi, thanks, guys.

any that this that would to your at in quarter. we out your your constraints revolver be the bond in be eye for And down you from keeping detailed expect release minimum? on under an reasoning are there You should other covenant similar drawing And point? when

out test. Dori, difficult be speculate incurrence to it's awfully would we debt when underneath from

we to in to the are on don't Rich's the to are lot have have mean restrictions on going question, vaccine. how rolled a and people -- authorities until be various vaccine is have it's how that do out which a quickly I loosen, restrictions quickly comfortable And government of it public. answering think government out businesses sending have the prepared road, when as going to I know, I to a of you there. We're we see I lot a that going and think we to depend

debt So we answer -- don't with come the will debt short the in know, test will test. we whenever incurrence incurrence is, the compliance back

very opportunistic cash of and way. We job shape. quarter another aware cost job, don't and a raising amendable a an low should today. you good of done other very We're good have million $XXX issues a I any think, be We've very of this -- that in

the where focused a we're the So, portfolio expenses, liquidity. today open maximizing and in up can our we when do position on putting markets outperform reducing

comes Rose question. Please with your of with Smedes Your from question Citi. next the line proceed

Hi, thanks. Smedes. Stefan [ph] is This for

You rate. spoke the a of little the bit remarks break-even opening in

would and mix? more margin occupancy savings scenario, of that focused be rate kind targeting also the before that business driving given stepping the in you're about Thanks. in shift or to thinking cost just So on just are you you with how then

jump Yes, part then the in. Sourav first and can I'll take

just occupied. So have margins better rooms with clearly, the through having provide the we better, we if other the flow And expenses and for it of drive associated expense incremental more occupancy, rate line. to perform can won't bottom with will associated our will at cost housekeeping

look other at very, periods. as not fact margin recovery say with not night not we're after going what That's And, that is But that going When take performance, we that the we've by to every after we the room better and degradation can. X/XX forward. we we're that very think seen what to margin happened rate Recession. happened pleased performance rate we're about Great every, the in the seeing driven

about that continues occupancy we let Sourav crossed be little And bit think to forward. fingers the and how break-even So, ADR. going that trend about talk a I'll

now part from most mix is a right revenue. question in was that Despite revenues and we're changes margins. situation of is we're mix managing perspective, is the in, our your the of how So rooms only coming really in second

because at group So primarily whether it's in we or rooms reality coming business is business only. leisure look any

on really expenses rooms' drive reduce that the and really margins is focus higher level. Our can at

outlets we're profitable as it's in and beverage back limited we ensuring and beverage have we a bring profit operations bottom to before we any offerings, on are lot running and food said of drive Food actually before, and the cases line. in

perspective, a margin the a necessarily dollars, day, From EBITDA not margin of we're at end at looking it's obviously EBITDA is the business, lower but margin.

be and in recover on of and then focus will expansion. levels do getting revenues once we're revenue, -- where sort we're position of margin So to the a pre-COVID back

reduction. as compared beverage where of messaged department, have levels. incremental driving have on lot on before, And of is to of management of we a And million there's the really to $XXX to quite tied been food $XXX EBITDA And level made the a we we're that. progress and it million significant of XXXX focused bit

we a XX% believe forward. directly going which had that quarter is of going in to severance headcount, reduction The we management is be of permanent the third tied almost to reduction

potential can you'd And whether then dispositions, competitive Okay, about or to thanks. basically leverage. on as there's equity exposure private just just transaction, or other talk more add just you then or given you one like positioning And market acquisitions of think versus additional kind exit? to about capital, higher

of That better geographic the maintaining some take believe business. the part way agnostic, generally are other up going run We're to first. we than broad sooner and a second market the I'll that is question, diversification markets. open markets to do Yes, said,

all in evaluate underwriting take will criteria we our we as consideration opportunities into forward. going that So

With it, equity -- today, of high level just firms their for respect XXs drive teens that make need I there to closed levered positioning, competitive the generally to observation returns to typically call or an returns mid-teens that markets are low there to the debt private debt XXs. the low in

So competition really fairness, a there not seeing on of there's now. any lot the we're products out right just In today. market not

mean, we deem would that evaluating to every we're attractive. deal I be

the and across that haven't the criteria, given that in facts of and We our circumstances meets anything in phase. we're underwriting the cycle recovery where come

proceed Your of next Jefferies. line question the from David Katz comes with Please your question. with

bit. will I've and taking Thanks and good a Jim, my I the sort just recently get you the largest questions. they updated But you detail for can wanted can the Hi, just we to success are and really everyone. admit, out your And which for what I for about reevaluating back morning, thoughts to of this, discussions brands, value what and your of little all it, forth and what expect gone with thanks degree view frankly, pay the come of that all deliver and to they what is?

this testament the grow have standards. They to heard brand a in that let us been think and in clear, the loud a with Sure. to us what are challenged brands on I'll way today, few Well, jump they in business brands deliver respect the to heard us fact we minutes. and a very Sourav listening I to the the able is environment. And, love we

Marriott, that brands, basic be and forward. your to major at each offer what worked when closely you customers. to long As to we know, have roughly relates food that reevaluate the they be with to to do there XXX to Hyatt, And it you of and standards them are be beverage most have would have David, have those Hilton, brand and restaurants and standards open, the open, offerings, how the going

to the a Hyatt strong And that with today. brands we're fact based us our both weekly it pro understanding I'm They're true to on about to XXXX and one more this, expenses testament with to seeing the in The fact going $XXX the give two that Sourav a performance, when is talking it basis. million and million between I think $XXX interface of little get a on operators, owners and that Marriott brands, we challenges face. detail comes let seeing major a forma on reduction and

million? talk $XXX a of we're little making So bit -- to Sourav sort you to what about on how $XXX progress million want

David. hey Sure,

restructured services, property and towards of So IT and I management that and for saying their are shared and actually working has Marriott reduced the above fees start Services sales Shared reductions year. program for by revenue right marketing, now would following

costs marketing value their much about reduced as their as this talking that cost really were moving more XX% to the so to component forward, proposition fees they're is committed what exactly XX%. above by actually fixed by the to Hyatt tied variable, also For you the fees IT of has And and year, the making chain property owner.

would there'll the that reduction $XXX think as $XXX the about permanent the XX%. fixed long-term, we way much by the of of to of cost we be above terms In property million portion million as to expect it XX% is,

million putting would tied everybody revenues. that million the million. $XX between $XXX context that's that dollars I into So XXXX of that Obviously, somewhere $XXX would of be million $XX to remind to to

savings reduction property assuming a on get million of to costs. the above property So fees XX% be we'd of the $XX the revenues, above we to to piece fixed million back with XXXX of XX% $XX

Lukas from comes question Green next the of Hartwich with line Please your Your question. Street. with proceed

Jim. morning, good Hey,

looking bookings, start of point curious, things Is So time? there it group improvement on the really a hockey rate the stick? calendar kind just at what activity when forward to in is looks Or curve gradual of a over I'm where like?

right now. Lukas, Hey

Sorry go ahead.

Go ahead.

activity folks future like bookings, thing booking activity was right now, I encouraging there than definitely for years; looking are a even the future think there lot on you on but is the because That's have for at sidelines. I however bookings, tentative future saying what their books, expected, definite what's have would you of is lower happening years. necessarily the is why the waiting not

the really uncertainty because in isn't place. short-term. booking than all would that's cancellations exists However, expect, the slower typically of, the are taking And It's I there that of activity encouraging. sort that somewhat is is you just would say

Right.

of In some fumble thinking serious demand knowing of they're booking? consider a more point they're it thinking, there gradual kind next some year tentative really is that going is of sidelines, their mind strongly where in terms that's of booking increase that third just waiting mind? the sense Is of quarter on well, kind Are there planners about business. in meeting where get Or -- is these they to latency? a

quarter is is get population. some right the feels going I be we year take to out of that do third timeframe, And rolled -- to mean, time vaccine, it Lukas. I first the among a everyone be when half going to continue challenging. it's think your to that timeframe the get next

half beyond. looking second are at the of next people year So and

Bank. question. Please line Woronka Deutsche the Your Chris with next question from proceed your of with comes

Hey, little guys. maybe the on down drill good I afternoon, actual a hoping costs. to property was bit

some much You changing but an opportunity and guys services cover no these above housekeeping the that and make on the and a stay food it? like you some to brands accept of initiatives of permanent, can operations, property, how the of labor of on you up of much lot shared how customers realistically think you willing beverage or willing see are accept over to do ground that do

a type towels the going some be to rooms customer. demand opt-in housekeeping depending to the of as want linens the going front property forward. get profile luxury long our as of their as customers There may housekeeping really and it properties, staying are different clean amenities and going Chris, need they is on opt-out going to be continue opposed the who on hotels, can to they on, people basis. frankly, in and think door. side may to delivered vary on personal rooms, it's they not bathroom daily types services if very clean going customers, to they're well, to to of one And And have that housekeeping we not to the are the at I of

food the are likely breakfast, a or likely to the Clubs have beverage, to M of to hot example, and highest breakfast are respect side be forward. don't past. in as buffets I you're on to thing with be I So, seen think and change going think thing we a likely concierge that lounges see going of one the meaningful the buffets Hot past. offerings the F&B a

want know add, respect how operating the cost have I model? you to to with those about thinking be going else don't we're anything Sourav; permanent to you savings. So are

ground-up Yes, customer, I budgeting proposition that budgeting, value would and add is brand the a to from do the and but the only the I look allowed also sort is tie what this with what only really pandemic has thing owner. to the proposition the what is zero-based to of us think customer not value to is and perspective at

we the that. understanding model and how the wants, on the based property at the would customer really needs, So shift customer and operating level, what it's what

of sort base being minimum are the completely redefined. standards So labor

based is complete, to earlier what customer So talked how reevaluated tied preferences. Jim to on going brand it's forward, about and it's be get standards going

And right where food the So savings we're kitchen well. to as the able only perspective, think beverage, actually to going do an model. confident; housekeeping where pretty this we’re zero-based that's particularly but get is is roundup and not in budgets a we're what figure to labor from budgeting we opportunity department, from out a

like closing gentlemen, of reached and And have Jim to for end to Risoleo turn Ladies would session. I Mr. remarks. the the the we question-and-answer call back

call today. I'd like joining us on thank to everybody the for

appreciate the the discuss at you. our to and to the I after over forward to you week forward As talking we with look talking or week coming NAREIT and we to all you, to always, look weeks results next opportunity months.

and please, get all good stay day. and We'll positive. healthy So everyone through all this I stay you wish

conference. concludes This today's

lines participation. your Thank at for your disconnect may this you time. You