Host Hotels & Resorts (HST) 19 Feb 212020 Q4 Earnings call transcript

Good day. And welcome to the Host Hotels & Resorts Fourth 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.

morning, good and you, everyone. Thank

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

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

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

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

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

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

Tejal, Thank be friends Ernie caring by years lodging everyone the morning. start us joining to found for family you, to like engaging authentic, in Ernie’s most space. heartfelt of leaders and I’d to the have him known thanks to and Marriott. I and my this expressing one XX for and condolences at our

respected A a missed husband father, visionary lives colleague touched. has our the be he legacy and leader, industry will and within and and a Ernie lasting a friend, leaving loving deeply is and all

the robots from year as in challenging emerged most prospects. long-term growth with has stronger Host lodging company history a

Our from accelerating from to RevPAR streamlined in approximately April hotels operating while lows, growth second $X quarter have their expense January. minimize and models in operating $XX

second by fourth. million more our million cut have $XXX level quarter than the to from half the $XX we loss operating in in result, a As hotel

fourth XX rooms breakeven XX% a level or our quarter, of and rooms have hotels sharp in the in positive at quarter. the hotel We XX% from increase hotels of also XX our representing profit operating achieved third

North. share market of ability new enhance in delivering retain gain several total significant hotels with Moreover, upgrade entered long-term and to growth $X.X and by XXXX invested our Hotel continuing and we’ve we’ve the Scottsdale our liquidity. to Additionally, available AC dollars

grade that to Our by sales refinancing flexibility announced hotels our strengthened sheet opportunistic earliest has debt at provides has amendment asset XXXX. land which this lodging new pushed valuations a greater pre-COVID-XX further Last week, acquire and us to maturity investment credit and second late best-in-class our to early in we agreement, cycle. balance been

to that through quality are and driven us highest we With portfolio balance sheet growth to opportunities, history very a elevate the well-positioned company’s in EBITDA allows recovery. our growth on external the profile vaccine capitalize the

focus My transaction projects trends, and comments opportunities. on markets today views acquisition our will and latest ROI on topline

the optionality Sourav will our and credit through agreement. EBITDA. our and walk will in and and hotels the control amendments also detail improvement burn He cash by created hotel operating for flexibility additional the second outlook expense to

group with hotels group increase booking trends, for January. Starting in we marked a Marriott managed booking in our activity saw

month for increase with January slow booking typically Our for group XXX,XXX booked group a nights hotels over being room of XXXX, activity. XXXX, January XX% a approximately

our an to of booking lead addition, XX% In approximately rate to January hotels impressive conversion had XXXX. XX%, interest compared

returned pleased types which are hiatus being meetings, While we groups after bookings for are to see XXXX. incentive of there booked, in have several a

nights January, XX% also of XXXX. booking increase future booked a with beyond January approximately activity in to We improved representing future saw room XXXX, XX,XXX for group group

bookings fourth continuing these the X million third definite Through year of are XXXX. approximately this occur million for to the January, on largely second split X.X we nights half books of where quarters, evenly the in are between Approximately the and fairly year had full hold. and room

definite of second materialize, Should second room group to on XX% have nights will based almost group on business our recovered books. the levels, XXXX half group’s half the XXXX

group sidelines. the While meaningful is most less on as remain today, planners meeting pace

revenue encouraged are XXXX. half latter the by of group pace for our total We

of in improve than versus year. comfortable Pace the being year more restrictions is travel. only first assuming half with relaxed to XX% the second time the could same last group the activity, attendees down half additional This for state compared and XXXX lower about in booking are year, last with the year, become XX% local and

positions that Staying quality share gain group market sales with well and with travel to longstanding hotels, managers group, location our markets. we urban as when returns as the demand favorably of our them key believe relationships to

and prior on For example, this and XX% hotels the the surge the rent temporarily Hill demand. day XX% we from of demand government occupancies the Capitol capitalize D.C. respectively, reopened day Hyatt agency and around up to our on Regency inauguration, groups inauguration,

the and XX XXth an For than January XX three points those region. was day $XX higher our and occupancies the hotels percentage for higher were that average XXth, we achieved of ADR XXst. hotels days, and upper luxury D.C. other upscale days each percentage Moreover, points on in metro

Our hotels ability upscale upper hotels locations, government and XX-year with to accommodate groups their relationships downtown luxury coveted agencies. significantly other due their key outperformed large and to

approximately At on a books nights sequential have third the the definite the of decline. end for the fourth X% quarter, would represented quarter, XXX,XXX we had which room

drive representing a fourth to hotels room increase nights over for quarter, sequential -- the XX% quarter. our quarter of a However, in will group the total were third the XX,XXX bookings for XXX,XXX the in able quarter

Additionally, small delivered that helped third short-term and XXXX, first XX.X% demand smurf this average groups. fourth group than mid-sized corporate by quarter a driven by bookings quarter accounts was to group rate higher

take properties XX%. our XX% of tentative Rebookings rebook as at with bookings Marriott that cancellations to almost percentage of the funnel a increase, and continue total would of to managed a now rebooked approximately cancellations

$XX.X and full an and to and quarter full $XX XXXX, collected million additional million group million collect year million respectively, XXXX. fourth and in the we approximately $XX In fees, attrition expect to year $XX of cancellation

most restrictions. Hawaii, and destinations leisure concentrated various of as Sunbelt to in remain on demand metro destinations as Moving city leisure leisure key in and such trends, remains markets stages

XX RevPAR comp that the XX.X% our relative X.X% in over XXXX. of sets. and compared find share quarter, the resorts X% quarter their occupancy inauguration better significantly we the index As was gain driven D.C., In the quality rate and share. has location with our market resorts, scores them index to enabled fourth in better fourth to RevPAR by of to their This gained group

in index our Moreover, XX.X% as Phoenix, nearly nearly we XX% XX% outperform Gulf have demand. capturing Miami gained in their XX% share leisure Coast, RevPAR and the in in Maui/Oahu, Florida hotels peers in

acquisition, Our and Presidents has X which a Day $X,XXX through X% weekend, nearly year-over-year a with Sunday, finished increase. occupancy continues Year’s Hotel to Beach, performer The at achieved on from New $X,XXX, represents occupancy an just with nearly Eve XX% hotel ADR a of outstanding approximately South XX% most be pandemic. nearly despite the averaging recent blended the Friday rate

leisure performance to -- Encouragingly, continues RevPAR improve con weekends. to holiday over

three Day, For RevPAR Marriott from improved by those XX% to example, away weeks Presidents out weeks managed hotels, hotels where Day. compared three Columbus were our at from

observed process. the In addition, Gulf where of Florida in the have the Coast, requirements Hawaii, the more and window in we travelers testing and Miami booking comfortable getting lengthening with are

by to we spring break markets leisure Hawaii. continue holidays Sunbelt improve leisure occupancy expect our Easter, over upcoming to driven in and With

pacing the to of are half pacing the XX% while at hotels higher total three For higher. XXXX, transient are year, almost our compared Maui second revenues revenues XX%

third leisure XX.X% over by quarter. by we XX,XXX grew In the roommates quarter, the fourth or

Sunbelt week the the to by is Florida XX.X% and markets San quarter, ran Phoenix and growth Gulf the Our of Miami, first which in quarter driven occupancy the progress XX.X% Coast, throughout Antonio.

accounted represented Orlando. quarter the Resort the Moreover, higher and was properties third and than redemption nights start XX% in since the driven pandemic. the by Coast, in Phoenix, our the Gulf of quarter the of XX% loyalty for fourth rewards growth demand Florida loyalty redemption highest Hawaii room the

drove low over impacted in transient, most quarter San third the remains on by quarter, demand but business Houston that fourth Philadelphia. was sequentially Cities since improved the of travels. the increase and were to pandemic strongest as the Antonio, Moving which quarter XX% that

driven than liability decisions we accounts, risks fade smaller organizations sidelines As with deployment continues large vaccine will trends that the is be -- partly expect demand by business group, by business rather to corporate due accelerates. to on remain whose as transient

our advantage revenue is our Shifting portfolio Host and by will favorably share position ability let continue begin invest lodging to through growth competitive expect market and saying portfolio EBITDA deliver superior that we in gain to reinvestment, that recovery. a to me to this

EBITDA index $XX of to on at and of $XX renovated annualized to million in would weighted XXXX X million have of million translated growth incremental to points stabilized points basis. a our revenues million X hotels roughly $XX $XX incremental into

In addition value of underlying to projects real to ROI our materially enhance this, our the estate. expect we

Pete Last completed Don Regency Hyatt repositioning Cesar and we extensive the resort Maui The and Resort St. renovations at Beach. in year,

in Francisco Island Marquis, Program, Within Spa plan in Buckhead, the JW Marriott Transformational as among following such March year, notable Atlanta & in Marriott Coronado Capital Marriott The Clara Amelia completions several York we the and XXXX completing this on XXXX. the Downtown Resort New San Island and Marriott, Marriott Ritz-Carlton others Santa Marriott

Marriott as XXXX spend. Transformational and substantially in program end XX% invest be expected of which on nearly of year the is as be ROI completed by Program, well We basis should by the to another continue to XXXX. capital combined the investment in represent program end XXXX projects, Marriott XX% a our Capital Moreover, year complete our entire nearly

XX additional to end Having XX the of renovations completed an hotels make through the seven transforming year of the four up in expect Marriott program. hotels thereby program XXXX, XXXX, we that complete

environment. We for profit low given in RevPAR commensurate of experiencing XXXX, revenue the Marriott $XX without expect guarantees from to disruption benefit -- operating million current commencement

villas in achieved pre-pandemic addition, this tripled while demand two XX throughout Maui year Resort existing XX the in at In The new RevPAR normal exhibit XXXX recent approximately of a years, -- battery bedroom than for has at to from more luxury in XX villas we and expect villas $X,X year. they the deliver levels. April two demand Wailea strong Andaz

ADRs for a $X,XXX have and villas, $X,XXX them. and at books in already $X,XXX a a for only new night transient almost of begun at marketing the December night rate XXX a these night nights with the just in ran room the on has We January. hotel villas

we wasn’t exceeding our are and expansion project both original underwriting our for when villa on XXXX rate XXXX, the occupancy. acquired hotel the underwriting currently we part Although, in of assumptions

value, we and our The opportunity also of to resort create to performing one Ritz to at excited meaningful the announce are standards. repositioning expansion while meet the where an top We Carlton luxury today’s transforming Naples, see hotels,

the The tower Ritz XX adding existing of or X% reconfiguration XX hotel at A new keys, almost XX% to inventory count overall. than within total less will the and keys increase from suite while

suites achieved RevPAR resorts by and resort overall $XXX, the the the sought double highly customer of approximately are XXXX, base. of after In the RevPAR loyal XX almost hotel’s

eliminate lounge annualized on in which size the club of will in expanded premium constraints upsells, an ADR an XXXX. excess Additionally, $XXX generated

on in COVID-XX the makes of occupancy, impact and project the to time generating opportune due bar which an low to to be also be restaurant. our guest pools, May complete renovate The pool the will to XXXX. continued commence upgrades estimates to and rooms and expected XXXX is to December ROI interruption Business this resource in make

million expect $XX.X represents cash underwriting. As incremental EBITDA, XX% this stabilization to on on of based in project nearly incremental return annualized our generate on XXXX, we cash which investment a

in increase for acquisitions, of been marked a XXXX, opportunities of have first looking have handful and In of market. by just at on owned the contemplating the at Finally, weeks time. XXXX, coming actionable of number in the are liquidity in many seen of have deals evaluate. interesting attracted instances, owners fourth From are to quarter hotels now looking private we events hotels the a solid we who we pipeline some a to

to This expect in advantaged investments multiples with from we track at relationships cash face a our and sold quickly billion deep XXXX to our While we XXXX. for large well-positioned assets tax and strong $X.X of very provide management acquisitions, alternatives are and $X.X to billion strong ability equity competition having sellers. and team allocation to move capital has of acquired assets record, due favorable

leverages insights developed XX. the to over biggest model from natural RevPAR discrete unstructured shift and language Watson in million growth structured million X predictive recently minds sources The top our data markets beyond of our processing IBM acquisition X analytics by consideration market. is forecast strategy over variables

EBITDA expense We profile markets growth this operating topline the revenue to hotel and model market in our the proprietary predictive our to footprint. narrow down outperform based existing use research are by likely that growth of expectations for

sake. lodging is cycle this believe capital, the to recovery, we While be period to acquisition we of emphasize the beginning at acquire deploy opportune strong let are we appear economic time me a into are of as not an to for and looking that heading

growth EBITDA of optimistic truly elevate that profile are finding about will We the our opportunities existing portfolio.

administered vaccine States administered we data. over are according million gained and doses very being XX in with million day United momentum, conclude, deployment new encouraged X.X already doses To that CDC the has to each

has American to The As recovery certain Post States driven United adults, today recently enough more supplies has the pandemic Washington it began. making the reported, than purchased the vaccine vaccinate been all since

the as that and quarter may XXXX, third by the the the quarter U.S. of of estimates early achieve immunity vaccination the McKinsey normalcy aided herd spring a transition and or population. risk highest by as that possible quarter weather if to second the fourth

Should to this point to of scenario in in rebound be half materialize, second benefit the the EBITDA from resist. achieve some and a pandemic year positive we to travel expect to able the at hotel continue as

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

you, everyone. Thank Good Jim. morning,

to on of a details expect this level property give like and Following the to demand, we would group trend how revenues shoots bookings relative year. revenue Jim I expenses sense you transient better related green to

of start and quarter, the closely XX% fourth model XXXX. adjust pandemic, worked compared with service, managers were property the for excluding expenses In limit our lower have to the level environment. evolve the aggressively to of Since quarter to operating we the fourth approximately the property business costs

variable benefits downturn. expenses through RevPAR year-over-year, reductions were fixed with overall XX% consistently costs, XX% lower Including of while declines the with have broadly XX.X%, expense revenue line approximately line Variable wages lower. roughly expenses and in been were in declines

increased reduction restructured sales to improved Fixed and somewhat shared as IT property business utility their as a as volume, through slowly half seen associated organization. operators second costs, in business services have such and our saw above the programs and the the quarter maintenance, services, expenses Brand reduction, that with have of back as are dramatic such year. has marketing offices material

Finally, operating credit, Marriott saw and Transformational Capital include line profit one-time fixed costs such fourth below guarantees are traditionally as quarter insurance to taxes completely reductions the and Program. associated in the gross which due profit the modest with operating

property and for by in reduced third efforts stable expense decline in improving X.X%. our the reduction total quarterly of slowly remains approximately second, the revenues fourth fairly X.X result which that a the decline ensure management growth total that cost our This As divided expenses X% hotels year-over-year at year-over-year in level to our with decline in year-over-year every quarters. property by revenue, was year-over-year teams and in line ratio, brand revenue, means expenses measures

XXXX. what ratio is like The revenues question look now in as does return this

We expected where always plateau deteriorates to and standards of reach middle the ratio the have services revenue a as return to the recovery.

be the the and still XXXX. ratio between reduction and by are we to declines our X.X is throughout an expense as revenue achieve year, expense Although, the of level to this year, to case, because transition measured expect property relative hotels XXXX total X.XX striving

hotels the greater losses, we stable. that increasing associated we Moving expenses results volumes level as relatively operating on as mainly to improved by expenses hotel business XX%, the fourth five was well overall. the hotel with quarter, quarter-over-quarter in in increase while Most our by keeping of revenues, reopened

operating the quarter, approximately in respectively. million third received passed credit to and $XX the month in quarters, level Act hotel of fourth quarter, million the in million and CARES under on and the million down fourth per $XX averaged our third XXXX retention $XX $XX employee from the including Our us managers in loss

approximately losses revenues outline averaged third of the operating the call, than fourth on quarter. our sequential level $XX to in monthly and XX% approximately higher were in being hotel we million better level Excluding one-time a quarter primarily credits, losses million our on these the hotel fourth due operating basis quarter $XX

in in than further hotel commensurate quarter fourth to fourth leisure in of occupancies operations by and Year’s offset including which We to the as quarter with New ADRs up seasonally may be from first improvement leading be being the benefited strong XXXX, demand the expect days quarter weaker fundamentals Eve. broadly first and quarter, the

cash from million $XX quarter. G&A, expect receive an of between in million the approximately Adjusting hotels payments to a therefore including million $XX loss range not expect million. We to operations our $XX corporate any may approximately month, monthly one-time interest for flow hotel operating $XX we level to and credit first average

will it our second regard breakeven XXXX, as EBITDA administration state forecast level With hotel challenging we and on depends local of half of to the achieve to vaccine outlook, restrictions. the profitability and remains precisely the in when much continued of easing success and

when the driven in hotels may RevPAR. and Following upper gradual second we upscale first to quarters, be this and anticipate quarter, decline third a expect suspended reopen. in as occupancy sequential improvement sequentially We ADR the luxury

XX and upscale of operations in occupancies and indicates luxury at low this top third markets reopen during that Our hotels XX.X% suspended at to approximately second are upper of year. our and currently the likely research quarters

the XX% XX% hotel have Turning generally fourth the estimates ADR the XX is or has breakeven occupancy range been which we in XX% in approximately down quarter, with EBITDA to line the achieved April. first positive compared breakeven to hotels in that to the in achieved XXXX, in with to provided XX% range,

Assuming the at XX% XX%. of corporate and would inclusion of XX% approximately for ADR at of corporate levels breakeven G&A, interest level levels we the to and same occupancy decline XX% expenses

our $X requirement existing sheet, credit billion Moving a liquidity our to minimum amendment with capacity the to using balance agreement has second on the acquisition of to increased $XXX million. liquidity

that of million the asset use proceeds that we are to to by $XXX unencumbered repay debt, otherwise would as long include assets required have may capacity The from debt. proceeds sales as been acquire

we growth third capacity our quarter well the internal of as as of XXXX relief accommodate created covenant and acquisition external opportunities. exchange the XXXX retained leverage doing extending covenant to second for to while the have ‘XX. $XXX quarter into ability so, for redeploy our our of recovery, to process, our addition, period cushion leverage assets In million period via have we easing In sale proceeds

There items are of like to I a to bring attention. couple would additional your

an benefit operating by incurred First, to $XXX TRS. we net tax of our due loss recorded income in the XXXX, million

As income refund this back of previously result CARES net to net first in XXXX. a by a We of and paid will benefit a continue the we procure of order taxes. a will be XXXX anticipate TRS then years five Act, legislation tax carried in up federal to operating in loss enacted the may corporate our to record quarter operating loss corresponding incur that

fourth ADR, forma our to EBITDAre pro scheduled updating RevPAR, Second, eight XXXX first historical adjusted schedule quarterly. include EBITDA and revenue, quarter we this in occupancy, going metrics we back on have quarterly included plan metrics The XXXX with of supplemental. quarter the hotel quarters and

To its conclude, to of our and share levels we objectives expect with Over be $XXX $XXX market gain redefine gaining in focus and continue share and strategically capital. the XXXX RevPAR recover be costs model, complex. a three outperforming that were a to lower to with million allocate portfolio strategic to XXXX than they million nominal that’s operating time, on to may basis, market

to are augmented external EBITDA We positioned by be that and we opportunities. have growth further expect growth robust revenue will

we as that, with will have any to of many questions. time yourself limit to to take from To possible, address we one questions question. be And ensure please happy you as

is Citi. [Operator question Instructions] your Please proceed from with with first our question. And Rose Smedes

light you you? talk for on maybe a follow commentary kind interesting of just pipeline you’re as those could your just Jim, kind up come to thinking actionable wanted of and we And what’s call on change a about Good underwriting last you Hi. and quite properties opportunities from of of morning. causing if touch I could to bit like a forward? how around properties like and an sounds I move wondering that about more to your

to your Happy Sure, Smedes. question. address

fact properties of the at off what that started today is who lot of messaged tunnel holding see we think market a were changed as has owners hotels their to have of now bringing simple have the to I the end here. light

our I rolled new variants vaccine be and confident our think to continues to doesn’t the which release anyway. be it tell there isn’t that commentary due assuming out we being today that any from disruption to from you that can found, feel appear and

and sat new wait the to interest has on for might a the the lot of sides that there and sidelines of And we’re be now. of between there beginning cycle see this are to early year. -- a fourth truly the a buyers buyer meaningfully starting the when pipeline quarter part expanded time It’s more who and

opportunities. many wanted distress, monetize So investment much have reason say or there. for out the are lines owners their who that These instances another, in when modestly of I actionable there are to one along not distress private there’s

But who we’re don’t say owners we analysis and time who market. on these to take are people based think having. this that price lot to want assets their this there the of to the are is a time is is These I seeing the conversations hotels. just sell occurring, really

really given unique up position, fact assets to Now, of of $X.X we inside the out the maintaining have to ability of cash are in liquidity existing to of we billion $X the that company. a acquire million have subject and we $XXX billion liquidity,

And without that is cash distinguishing gives solid done. and us for buy an which hotels have to move basis a strong out deep ability reputation, get this all in obtain very quickly deals debt And very years industry for to to factor us. and having over financing, the a the been we need to relationships XX ability on the and go

other is opening markets market up. the fact today I think the The people thing that that debt to bringing are is

expect happy we be competition. going firms. no that have But There’s about So, question to there’s private that competition equity from we’re to it.

create fourth value gives for the a group we’ve the our that to very print of environment enterprise us asset and today. margins analytics on the degree in quarter even a can we’re in managers that high that think accomplish our that able in between what find ways been environment on confidence we I to challenging

think economy were going So into we’re cycle of do company’s XXXX of and done. the But ‘XX as that part hotels that been We the prudent into came heading were believe strategy lodging it’s begins the to at for how reopens giving off the in into and to that us. the beginning the our believed large don’t get the opportunity as capital we going know we we in, pay many in us I the because it’s lodging ever shape deals I we’re cycle. to the we in cycle Because to move. we’re and allocation confident. acquire best going end

Thank Great. detail. Appreciate you. the

Sure,

from next with is Farley Our question Robin your proceed Please UBS. question. with

thinking that Thank looking Great. your interested data top markets that comment you. will the Jim, we about now, still that -- was would temporary more think when it And Are resort points the that but Would and to about last Thanks. thinking you you that I at? if be with driven part IBM outside that two are change, about same predicting looking continue know acquisition. question, be of to wondering are machine urban? a in -- be as risk by the talk when with and will these think XX about of when temporary necessarily you is are AI kind you’re you wouldn’t I that obvious really the just some that guess, from data based of market Watson, years. there points things I’m on data that just going points dynamics. the

Yeah.

Watson, predictive markets It addressing opportunity tool IBM give me through evaluate Robin. Let analytics. does It’s for start us powerful a by an us. to

will I we it’s say mentioned, As I use. one tool that that

We are still substituting.

substitute our for IBM Watson never markets. judgment what will in happening we We on see

to mean, Watson has tool to that data. Watson have I a that. data. out unstructured to think I of do looked continue IBM have lot the we’re but and changed, looks at IBM always a yes, at account like into data there And takes data the capture structured we we data. world is it unstructured so fortunate and that very And

markets about allow higher think level we as that portfolio our that at than of acquire we existing believe EBITDA where are will we hotels grow can a assets. looking at to Additionally, we markets, us

So detail to expense have looking at of strong to it sell good you the you in flow-through. that, studying your if ability the profile lot will we have revenue do and management topline, be Because but yes, each you hotel. doesn’t critical don’t have addition you a property, of it’s the in

at controlling how critical going to is So expenses properties we forward. absolutely look

markets looking likely you tell the come will reasons facing think are top markets just because is major pressures urban that we out we’re the of for this, be cost growth at expense I at outside the that markets, the near-term higher XX in given as of urban today. is that today to least one we

to question, resorts I resorts So story incredible. -- think further answer your is our

If RevPAR you here Coast achieve you we’ve with been like, Miami, at able how look is, more to properties look statistics, XX specific at if resort performed. our the we and be and The the of resorts pleased the markets, resort index Gulf have we on Florida Phoenician, have couldn’t

So, the top yes, list. of there’ll be at the

more you, would to tell it’s where I demand But importantly assets going multiple be there are drivers.

transient and properties where of mix leisure business group. So we look there’s are going to transient, for a to continue

strong demand depending the ability pivot one giving We of from and of demand to market type to diversity on conditions. other having believers in are us the

Okay. Great. Thank much. very you

your Malkin One with is Capital Securities. Our with Neil question question. next from proceed Please

operate. you Hawaii, avoid largest idea your pressure, Jim, or markets it’s unprofitable that think, you where union Hey. Good morning, generally part big either have two think of question on good your to one it’s is it it’s market. ridiculous everyone. I making My I a portfolio. the Hey, a to Maybe for

timeline or to us even around a average. update high, saving of of playing give you of terms ADR one graces was sort to story portfolio see out maybe you sort Hawaii how of and kind like demands, that looks then of sort market in pent-up like what least very occupancy was our relative at Can as I the demand an think on though that of was the expectations. actually or travel well? Asian

Neil. Sure,

not is really on We driven three are Maui. Hawaii hotels by -- concentrated It’s by U.S. to domestic in travel. The our visitation driven EBITDA travel. Maui is Asian terrific in located

a not heads is Asian Big Hawaii, on predominantly, the Oahu to of Island and travel Maui.

to that the I of particular. ability in XX% rate back pacing, desirability our up to total to the resorts Maui of hold So, we have in pace see on in XXXX, loudly think the revenue had half and speaks rate Maui

So the even put family figured over testing the navigate Christmas. occupancies State out other to the though ADRs were and to requirements Maui and took vacation And very had we high. of requirements how a Hawaii place actually very low, were in

Maui think I Hawaii increase, rolled to as we to that gets the continue out. particularly vaccine going see travel So and are

What’s on commuting, the going people various money there not that leisure restrictions aren’t that of and the amount saved the is that out aren’t incredible. going incredible lockdowns is as fact out out is particularly they’re a and apparent to has pent-up demand to of to and and to there, side lunch, they’re been going not us the dinner people the pretty result office

So continue grow very to villa with what seeing respect ADR just see over that is will other the the very, data bookings Andaz, encouraging time. we’re on at to we’re $X,XXX and villas is incredible the the even we getting that aren’t Hawaii point villas how new that the we fact had of complete. our demand a during XX month December for And

really on that going transient evolves. to carry continue and group today as is Hawaii leisure we’re So we to we business bullish think see and

Thank you.

with with Our Please next your Baird. question is from proceed question. Michael Bellisario

of… lot Good morning, give everyone. a you Jim,

Hi, Mike.

… -- hi. input

that and these markets? BT And the the mentioned What occurring a Just transient lot urban coastal heavy go leisure question gave what’s for both any is of you your are uptick, coin, seeing so markets, can in then markets the side, perspective? a on leisure gateway more well. specifically the side update? then from of Maybe you in you and doing impacted on you sequential detail group other the of

commentary I’ll Yeah. on to ask of going Sourav part well. to also provide as this. I’m some take it

very surprisingly, not markets restrictions. still in stages the of urban So are various

in still you As dining in California, County, San don’t Angeles in an indoor is still certainly, know County, LA about Los in have, Francisco, I but example, closed.

have closed, eat restaurant, are the XX% So salons, you with amenities of outside ability like to but the gyms capacity. other hair salons are open, nail the

an They’ve up New Broadway York, example, as indoor closed. dining. opened is

see up to lot in see to Broadway think demand open a see returned But normal we going returned of we we’re you’re hearing until services the coastal that I soon. to don’t could and markets. So services normal, until

BT bit a touch on to want you Sourav, little trends?

Yeah. Sure.

much now as markets. the as expect you demand, not front, the On in would coastal BT urban right

as consultants. We to are demand seeing some relates

that well some that markets PwC’s government as and well. contract world, obviously, of certainly as government business these as are Deloitte project So as going some to the well, teams

and really -- a So, on offices it, BT travel the get meaningful you end comfortable about with way. of back to at in travel does when open to And companies their when coming be folks traveling think the the the up need that’s need day, business. when will happen, that

well of than we’re optimistic Jim vaccine given cadence with is that the administration sooner recovery later. occur poses U.S., really just we’re as that across to mentioned, And the the going rather and recovery seeing the that

nights I was mention would XX,XXX XXXX the encouraging room And XX% do front did we beyond. just of Boston, made York nights on group and one of there is room thing about and of that from XX,XXX, New bookings future is sign Seattle. up the

markets are, for again, and sign urban that’s obviously, an encouraging those So future. the

Okay.

had But the conversations impact of returning urban a Mike, we matters. the opinion are around that So, when we’re four markets. this we BT, here XX% talking see the particular, XX% managers, year. this might We’ve corporate of would about obviously, to add with travel quarter our thing and in lot of by will I other

for that’s us. an encouraging sign So

sign encouraging recall, if was The have that XXXX accounts XXXX, flat rates to in other XXXX. versus special held corporate is most XXXX you and flat

they’re very on back accounts pushing a aren’t when So corporate encouraging negotiating. that rate sign that’s

country getting keep So all there opening the and and there, us a achieving it’s talking out people immunity on are not getting of green the offices vaccine, shoots back but and the about road. and on lot again, vaccinated to dependent up herd

the for Thanks follow Perfect. up.

your question from next with proceed of Kelley is question. America. with our Shaun Bank Please And

for for think Sourav’s on of something want about I talking just moment it, this what of it trying in analysts. comments, terms year that to through dig kind flow-through like you $X.XX the understand as into let’s you of one to to of Good just on could I the everyone. morning, of little crisis a Hi. appreciate flowing said to reframe we’ll expect of a that sort dollar and the put revenue, was, call of out kind like, I rev bottomline. bit, thrive, think, to you $X.XX wanted coming this I

like go lower what back that And go thinking decently clarify, rates, one and correctly. if and just believe hadn’t fully if an least that I we industry they So as XXXX, am I were I XXXX, to to am, back believe let’s two, I is then at about occupancy look, the was flow-through yet. than happened recovered

be then to flow-throughs. the first, it’s that. equation that more And us you’re equation filling that just as could there’s going so is a it So really portion the of go that there’s well? is because variable to down little different bit? higher rate yeah, as that attached the to drives see rate this little to expense around actually come help But and/or high hit, break And starts took longer maybe flow-throughs, going little up, higher back to you really flow-through -- a be a

Sure. Thanks.

think, so numbers So give give the an into puts let’s just let perspective. I example, me it,

XXXX, XX%. Smith’s let’s and estimating -- If Travel X.X, this saying for we’re and expense we’re that’s -- X.XX What reduce That’s take to saying what you that were ratio you the would just the saying take they’re is What we expenses XX%. the take and to if between numbers that in X.XXX RevPAR midpoint with down of what saying we’re XXXX. All the we XX.X%. multiply is X.XXX. midpoint by by

back. this ratio as subsequent obviously, went peak every It not as as expenses high are high the relative from that have as and a to downturn -- back got as We coming year, where XXXX down X.X. ratio had seen in the starts X.XX would that going we of last

out. incremental are taken definitely time being this So around, expenses more

way. expect having margin the makes the of so ADR sense? better over would going meaningful the be, you come to that the Hope flow-throughs growing the So quicker multiple a to the sooner at back, be, revenues benefit expansion. the And point coming you would flow-through back you as also flow-through because starts come the your revenues would quicker will better in be better have back, expenses inflation not years,

much. It does. Thank you very

your next our Green Hartwich proceed is with with Lukas Please question. question And Street. from

Thanks. Good morning.

morning, Good Lukas.

-- hi, lines the of Jim. One that

One that maybe of there in the get? apparent are the in opportunities aren’t hidden hotel lines terms portfolio if sale, us we development the the land unlock in of just disclosure value to of AC curious that more the I’m to Phoenician

doing Sure. thoughtful in with one opportunities my and are having underwritten, in that Carlton conversations our very to Lukas. share really until are happy the were to enhancement value There comments, our about why is what of And you projects are, Ritz reasons we we today, with Naples. are respect are and at we’re designed and permitted

hotel sense in develop working add attractive bathrooms a in opportunities land really So based it the the on a of a luxury of additional is properties is the opportunity ability refresh repositioning that -- excess addition and the to suites select number of increasing to either and makes our makes are value of where service believe that very it, truly and truly create cash resort where we underwriting to what the cash hotel enhancement on rooms we parcel of take underlying addition us. to on rooms sense on at addition to it on a return XX% the through value the think And of it. guest we

the have was we is, as complete as and it’s in a And whole on answer So, time move from design, lot hearing -- designing our through team more entitlement construction and be us underwriting. a over the short we who of process costing course this. you’ll the we

a enterprise unique management, We the an within with we company investments like construction, integrated position have designing are in analytics work. do because asset as this to the sort and of company, the workforce,

to It’s not not We continue is many -- to So going time our we’re in make is, to now it it’s own about That’s than but you’re a for times to it. assets acquisitions. saying that well. the in as make your acquisitions, we’re in properties us. better excited invest that key think a focus place invest you to are

you. Thank sense. Make

Our next your proceed Barclays. Please question. with question is from Anthony Powell with

Hi. Hello, everyone.

Just and versus It seems for resort, Sunbelt the recovery kind urban see -- do for as how between urban view a question resort and rates visit you trend you think do how as seems transit you to rates on, I to now. opportunity those plays maybe markets Do like of in group going more underwriting cap hotels very competition to you buy hotels cycle? look cap be popular this transactions. urban and of for right your hotels transit competition guess, Sunbelt are guests part going in and

them. underwriting, by we’re deem would operating that be aren’t the that rates stabilized at I hotels as that, today and Anthony, have it’s -- obviously, large, are I there think -- cap metric one there many models, operating stabilized out looking of to

And We and time rate the that look the with a traded a Board at over expectations would back today. asset is cap point might just obviously have the get it the that sense -- at been that back all seller XXXX to in pricing and then of -- have has. apply it’s how it’s

a going to pre-COVID assets trade pricing. that So to certain we’re discount are at seeing

assets at pre-COVID seeing trade going pricing. they’re We’re to

how at a is like EBITDA be So what demand also market. asset to cap quickly we’re we’re multiple metric will think stabilize looking -- the EBITDA with that factors supply with going one But replacement looking to discount rate any growth is the given look at at. that we can we classes,

one of underwrite you -- not it’s number if demand I I there’s a going just yet think costs environment. in about a mean, one, so a different this today. is any It’s it’s to on dates bar, tell given store, the you’re hotel will you things is that way cap replacement EBITDA market. multiple trends and multiple in rate another, its another is that

way is to it. So one not do there

underwriting different in into a We’re our model. of things lot taking account

around urban that to will buy this be are you Got than it. resort right properties hotels what And now? popular competition, easier time the about maybe it do think

It’s people into it’s the when back think too back that. say of to to recover. are going get urban restrictions lifted, question work, coming U.S. starts a soon I travel when the to the just are markets Clearly, international when

off than I would that urban and markets recover a resorts the the just little given the going slower right But dynamic not I’ve to they’re in referred markets. to. certain other So

you. Thank Right. Yeah.

for Risoleo, CEO, end Jim I’ll the of closing call question-and-answer to turn over remarks. And the we now session. have your And reached

thank and Please person. call really our weeks positive on appreciate and you talking you, and results to healthy you stay for to and great We over look all with the we day. us forward today. quarter opportunity fourth hopefully Well, a the joining the in discuss have months, coming with

lines you today’s time. your disconnect concludes Thank you your for this and participation. may at This conference