Apple Hospitality REIT (APLE) 8 Nov 222022 Q3 Earnings call transcript

Ladies and gentlemen, greetings and welcome to the Apple Hospitality REIT Third Quarter 2022 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Kelly Clarke, Vice President, Investor Relations. Please go ahead.

Thank you and good morning. REIT’s XXXX Hospitality call. Apple to third earnings quarter Welcome earnings based Form filed Today’s be the yesterday release and call will distributed on and we XX-Q, afternoon. which

performance statements today’s we those uncertainties forward-looking These and achievements numerous differ future a based or and of Any revise undertakes and from may XX-K factors Before result, note views such statements are by obligation no events that the current cause forward-looking are XXXX and with expressed, any our the our please include securities update outcome begin, as except statements statements, company Form actual in forward-looking materially that risks, on assumptions, speak law. as on laws. are risk to defined publicly federal to the results, call only required to forward-looking could annual projected as subject or report by including SEC, as implied. qualified of or described filings The by today.

measures non-GAAP be yesterday’s filings GAAP call. of of of will addition, release in in SEC. remarks other the In earnings this are certain to and and definitions our included those measures referred with discussed Reconciliations to measures during items performance

about of release copy the For a please or the additional earnings visit information company, applehospitalityreit.com.

Chief This third the for Perkins, our morning, quarter provide and Officer of XXXX. our Justin results our Chief an Knight, Liz Executive Financial overview Officer, will

Following the Q&A. open overview, for will call we the

call to pleasure the my over Justin. is it turn time, this to At

today. Good thank morning joining and for you us

we grateful the of team with since over and our accomplishments the and As best-in-class dedication this of back incredibly our companies. year end and for pandemic, onset the for we the our and management corporate relationships XXXX think and brands quality of approach are

decades. straightforward We strategy inception two multiple against have a economic cycles over since through executed our

shareholder low outperform with portfolio of and merits of environment. and trends in potential historically a to are strategy, headwinds of our and While Demand our portfolio our hotels value remain macroeconomic growth, our for for mindful we positive. of lodging of supply specifically remain industry strength in of us, the poised we ability portfolio are ahead recovery. countercyclical And maximize investment backdrop the any the the confident the our

was the Top with for third since to the $XXX, onset XXXX. to portfolio quarter approximately line our of XX% compared RevPAR XXXX of X% our up strongest as performance pandemic, and the of the quarter up third as quarter third of compared

rates. X% quarter occupancy experiences demand, more the occupancy was only up XX% X% for XXXX. Occupancy and for of shift to $XXX mix, boosting the both to spending push towards quarter portfolio rebound. XXXX manage travel business With in to XXXX. was robust and to and continue for Strong the at ADR hotels and strong third our quarter, allowed the XX%, consumer see midweek down we our up XXXX to

Positive approximately demand business Day, continue and pre-pandemic with September our at trends occupancy XX% surpass post to XXXX continued levels. rates that XX% up of October and to Labor leisure RevPAR,

fully strengthen. recover portfolio is occupancy our for improves, markets to and continues corporate confident additional there are our travel We across additional upside portfolio as

to under and from We supply markets. exposure historically costs, continue chain the difficult low construction of radius. did not debt portfolio XX% High continue growth. labor in At benefit starts new most markets new limit quarter, have third to the approximately end construction to of our hotels disruption, five-mile within challenges supply any a construction

growth completion, averages the and environment start below current foreseeable to expect construction for historical the be of supply from future. we time Given typical the to

third to revenue million or to With up XXXX operations third modified hotels share, the and EBITDAre of XXXX comparable quarter to quarter we bottom and results, results. compared adjusted Turning million achieved period basis from quarter, $XXX more to quarter $XXX despite we of than with in hotel comparable of X% X% the modest line basis EBITDA in achieved XX% during per total and up of million, third and of $XXX compared $X.XX of the same XX line points XXXX, same XX% margin of funds relative adjusted same respectively. declines of points to to XXXX XX XXXX, XXXX the the the hotels’ period XXXX the and up period

to margin Comparable intelligence was XXXX, drive period up in third hotels EBITDA to unique management our our quarter was companies XX%, points the adjusted and platform down with adjusted interact the for XXXX. hotel to margin hotels. across but basis of portfolio hotel business data-driven for our XX use slightly XX%. Actual the also EBITDA We frequently quarter same performance

with Our and create an asset environment cost closely our managers balance with guest management efforts satisfaction to order revenue a proposition work to controls to teams companies strong sustainable support customers to management with growth. in continue value and rate maintain in-house for

creating for Richmond, and In in forum on of for each Revenue best hotels. Operations challenges a operations August, Summit current X-day we and our and at addressing sharing practices, leaders and experiences companies anticipated hosted our focused a management strategies of improving

hotels, performance Given opportunities to statistical and our positioned and to practices benchmark and access maximize utilize assets. our are ownership our best the scaled of unparalleled size to across metrics operational our and identify both of we branded rooms-focused data uniquely portfolio

coming of and pricing, potentially term greater position, Faced with in of to shareholders. and early optionality our for incremental credit from the liquidity The managers, prospect contributes size of growth recent still of continued project bolstered already in increased further platform. pleased are facility our refinancing which sheet The the the macroeconomic the volatility the are us of indications be primary that we revolving and stability will markets value years, capital unsecured long-term our uncertainty the positions credit process, strong ways over extended improved opportunistic XXXX. with early loans. maturities, both we our drive in our in strength and budget facility balance While liquidity increased our to our

and have able to XXXX. are We are as with in a relatively young portfolio. And capital maintained we spend to result, renovation strategically a reduce fortunate XXXX entered to pandemic well the and preserve

in property of between we a approximately year’s approximate scale invested for differentiator appropriate and capital for we determining portfolio $XX months to more million $XX spending investments two spend. rooms-focused the a more X% our the and contributes we first have dollar $XX of returns spend to scope shareholder for most our million This decades, historical timing to investment anticipate branded and our year. X% maximum and impact XXXX, of will minimal ensure significant over over experience Through meaningful X and is the than feel effective us, to total of total of revenues, closely which time. properties ownership During during million operations expenditures of which in our disruption

During The XX-room boutique trailing price industry opened and $X.X enabled XX-month rate million. in more the investment. The forgo an the to Downtown than to In our variety meaningful X.X% year AC demand October, after million purchase acquired approximately $XX downtown expenditures are we independent sale for areas from for $XX a sold quarter, for Virginia million, $X.X a reserve. similar Pittsburgh through Downtown uniquely of million Both hotel they of a a Hotel hotels capital represents gain-on-sale drivers. positioned original where premium rate XXXX benefit a on cap in at Richmond, Louisville financials us combined resulting vibrant in cap X% transact and and standard planned and $X the on AC a within August XXXX business we in million. FF&E leisure and Hotel full

to leisure and anticipate up Given for XXXX business acquisitions with seen recovery. additional travelers individual and of the post-COVID and brand increased the performance AC exposure strong stabilized for Louisville both RevPAR up both a of our AC increase markets, to in both XX%. presence ownership of produce X%. been strong with and ramp have which AC, provide we Recent Pittsburgh, both appeal the properties X% Hotels, robust the our their in have strong Pittsburgh returns that respective These in assets numbers excess Louisville and September for will of

time, to have and business our in and million macroeconomic of portfolio the demographic refined of in markets our to Since $XXX intentionally shifts. be XX and approximately will been hotels. mix to have and that built a leisure from benefit concentrate onset sought have of we invested beneficiaries ownership that exposure create over As and pandemic, demand have markets we we

first to the the $X ACs a subsequent two end our exceeded these more of hotel Excluding meaningfully during produce quarter to meaningful year-to-date ramp year, COVID numbers on months by of an through acquisitions XX investment recent these upside On the yields return X basis as assets markets in EBITDA remaining continue XX%. to acquired of September, underwriting continue on hotels excess XX-month to third outperformance. trailing our our the million in A produced quarter, the contributing than original impact improve. these with of hotels and first third after and CapEx despite X%

Higher rates and impact continue debt market. transaction the broadly markets disruption interest to in

We and the expect with of year, underwrite but between and to end total to engage we transaction somewhat volume the sellers. muted now be deals continue potential

and the and borrowing liquidity, in our young Given the outperformance balance to assets potential maturities, dislocations with over EBITDA, off-market to well-positioned portfolio incredibly the the and market. since patient relatively staggered conversations our million $XXX amended facility, on in X.Xx to capitalize total onset under groups strength flexible capacity additional ownership debt as credit net flexibility we are of we to come are deals. about work we able With as of just our the sheet extended both market be and and in and a pandemic,

attractive we RevPAR continue and acquisitions own that will and to our assets our build-out selective consistent pursuing and be been meaningful of achieve in where potential. in cost that investing high-quality have with with of be structures Future currently strategy additive can those we rooms-focused We growth located strong portfolio in markets the to hotels will highly are attractive pricing. intentional

for Through our volatility average us discount with share of value. purchase has at purchased purchase $XX.XX at a under had Shares just purchased price to written weighted market million. were the approximately under per meaningful we as XXX,XXX of price approximately shares market our purchase program. also part share opportunity trading aggregate of to $X.X plan an their intrinsic own repurchase provided Recent a shares October, a

had XX, As program. of under October approximately this $XXX XXXX, million we remaining

market see buying creation. We we dislocations to create where shares, opportunistic will value for be opportunity continue

from with led Subsequent pay additional We by approved of per an also have monthly our payment. approved cash November an $X.XX distribution were to increase post-pandemic our during with dividend total $XX beginning our to September quarter August, $X.XX our common in from in strong third per able regular our $X.XX million. a to increase We beginning in Supported operating payments. our fundamentals to our Board approximately share in $X.XX Directors the the of distribution Board distribution. dividends end, share common for of per $X.XX quarter share, monthly peers

of approximately environment, closing opportunities our to investment in payout an the the on represents share returns common context the yield monthly November with assess Together annualized the on X.X%. future ensure that to our total allocating the price of for shareholders. capital distribution Board, $X.XX strongest other our Friday, Based operating we drive annual our current for per are of and our expectations we X,

While low travel, we mitigate business environment. and our of our potential nearly our resiliency remain shareholder levels, we With levels business. with the future strength strong pre-pandemic and of in and any in Fed exceeding balance drive about remaining optimistic to new recent a sheet as are historically strong every we takes pressures, acquisitions portfolio the operating the the results supply inflationary cognizant of are metric adding ability liquidity, macroeconomic of to significant upside incredibly existing confident value maximize travel action in at to additional headwinds

performance now the our to my balance quarter. detail pleasure financial operations during call and additional is turn to Liz for over sheet, the It on

meaningfully and Justin XXXX. was XX% for by ADR, third line primarily and same growth the portfolio lower in to performance third morning. revenues X% Top was the total RevPAR with of quarter good the up third be both period to of to approximately than XX% in Occupancy X% for prior XXXX. quarter you, Thank quarter and continued XXXX, XXXX to improved but approximately strong came the quarter which to the driven XXXX. year

to XXXX. in for was to the results to of results XXXX. occupancy XXXX XXXX increasing occupancy X% show occupancy gap October the line and month X% to strength RevPAR only in continued Preliminary October to in ADR third September relative While widened August, XX% double-digit bolstered growth compared with for down demand trending as another by quarter, growth to of approximately with

levels pre-pandemic with line We producing upside now results meaningful are remaining portfolio. top our consistently above in

portfolio, and While historical lower strength the November for ahead will October, of produce of seasonality of our continue we with RevPAR anticipate remains performance we quarter, to and in year. year the XX% both expect we Recent weekend consistent down September XX% meaningful on and stable in average end and occupancy remainder recovery data were in the reflects occupancy the leisure a less through August strong occupancies through continued business XX%, the to Weekday July, XXXX. respectively. to be and booking December than XXXX X% during remained XX% than demand. around

notably nearly XXXX. the weekday fourth further for Weekday ADR to X% occupancy gap improved $XXX, and entered quarter we shrinking surpassing occupancy over in As rate XXXX September, October to quarter, weekday was levels. up the the July

and Portland, RevPAR patterns beginning occupancy transient San Diego quarter. Downtown the had performers Oceanside, levels Anchorage, to from of markets, XX% trends, business variety of included quarter Tuesday hotels included look of a hotels to XXXX. above above and including urban Atlanta, both the of Maine, regularly we demand produced a suburban during impacting XX% in pre-pandemic nearly mix our XX% Phoenix, and in As RevPAR during or and with and demand our Huntsville, same every Wednesday locations. with improvement XX improvement Syracuse Top period at Greenville, of travel market. normalize segments more the relative are portfolio

St. assets over we high-quality the Houston, results Paul. additional improve continue number performance including slower to hotels and located for While Virginia, of in These their a markets, to their and providing Northern are Philadelphia, recovery expect improved markets portfolio. portfolio, we Chicago within well across our see respective upside in time, our

Hurricane did and by any Our hotels the open during and material impacted damage sustain markets Ian storm. not in after remained

property to brand.com growth remained in teams quarter. during to quarter from and corporate a bookings XX%, room bookings declined support XXXX, showing over data improvement basis stable direct quarter. sales in quarter, shows represented trend XXX demand terms and elevated a of OTA business channel GDS mix, as efforts continued XX%, XX% the return in bookings increase well continued property night bookings of and second increase our Preliminary testament October further In of third for indicating travel. continuation but increased remained to to the the the to revenue point at XX% of a company management the

continue line to remained with and XXXX. at Looking third third XXXX levels quarter at Negotiated at the than quarter Other quarter. second slightly XX% stable also to elevated third quarter in quarter far higher same-store be the group at the XX%. and remained still segmentation, during was discounts XX% of in the XX%,

labor. same-store XX% labor tight of total wages to slightly occupied quarter was quarter, the contract and by results A create utilization training higher to payroll around costs challenges for higher XXXX. quarter and hotels market third impacted room were operational Turning the for continued for up and the third and our employees, part-time full higher expenses, per quarter to second than $XX of

remain wages labor will temporary overall believe cost growth elevated we down of able reduce the we stabilizes, contract anticipate and costs as rates is increase relative to reliance pre-pandemic labor. staffing will in we in-house a come levels, are that and While to portion on training and year-over-year

position to conducive profitability will talent. work we initiatives assets. to the high rate uphold levels maximize As necessary to us of growth sustain efforts service balance we cleanliness done, productivity These our continue the attracting with environment efforts our a top retaining and to have of positive to long-term and always support and better

relative XXXX, pressure. excluding and to rooms significant Our increases room same-store inflationary asset management to occupied able a payroll to basis on were despite per X% keep on-site expenses, teams in

and and was the to also and hotel the EBITDA Strong our down control XXXX, XX million effective XX the XXXX. XX%, impact cost rate third of highlighting growth transactional to of approximately hotel up challenging inflationary basis to points the quarter positive points adjusted third margin adjusted environment for EBITDA hotel quarter activity. labor enabled third XX%, us basis of comparable despite comparable but Actual achieve margin of EBITDA quarter $XXX adjusted approximately

have on we to the will our rate. grow and past As long-term be believe on portfolio expansion we ability margin that industry conditioned for our calls, stated for largely

level expect use driven be line XXXX quarter, we costs of as stabilize third to create While portion part share quarter our wages MFFO for compared growth elevated XX% in expenses, recent we our increases of other efficiency should which and to model, property and was expense operating contract third and continued temporary, $XXX increased our approximately to anticipate with we XXXX. quarter training the the by opportunity of million a in for by alterations $X.XX short-term in up labor, on or pressure near-term operations. the offset per

$X.X property-level months is X.X%. approximately $XXX costs Looking company’s our maturities average at in XX unsecured September weighted as debt, X.Xx balance $X and The total debt debt, our EBITDA, facilities. debt secured unamortized approximately debt outstanding years. of adjustments, credit of average and on value outstanding a Total comprised we had of approximately million outstanding our XX, XXXX, fair weighted sheet, XX rate almost excluding by interest are billion trailing in hotels issuance with X billion

end million under agreements fixed mitigate approximately was debt credit levels X% of cash current $XXX $XX environment. rate availability of and low on interest swap availability we the of approximately impact hand our of outstanding hedged. the total million, the and At $XXX of had leverage term facility overall or revolving our rising million. quarter, loan Valuable the of

million extending billion, for additional achieving These in highlighted, credit pricing accordion $X.X the an dates under includes total capacity credit and increased maturity revolving existing facility. the of facility. in and $X.X facility the increasing updates approximately agreement credit million facility, under The feature the $XXX be the $XXX $X.X to $XXX million from approximately amount As capacity across of we the restated Justin improved term to provide loan July, our billion. billion borrowing amended and which may

recent to under shifting million are and of a At proceeds million portion notes and $XX to in mortgages, of our X-year as the the for XXXX, non-secured approximately and three total outstanding we our revolving achieved in $XXX extremely under balance and access facility refinance closed repayment the assets lenders through term we the facility the credit additional loan the million On used continuing of objectives June, and maturities, our secured facility. our liquidity outstanding we full and the continued the loans repaid our increasing for borrowed mortgage support. their X, the closing, revolving key of $XXX to under credit to repay unencumbered upsizing our a August unsecured managing sheet debt a portfolio. we senior of of the secured and increasing facility, term And pool loans result, of credit debt Through $XX facility in primary million. credit our an additional previous grateful stagger

sheet, allocate uniquely to shareholders. has The strength capital in positioned from drive for our will long-term robust us balance we flow with operations value of our combined cash ways believe that

dividend quarter past to assets, Over and $X.XX to shares per share the we October, November stock in third increased our monthly our months, own purchased from the of and the with payment. effective during $X.XX then have $X.XX acquired

our will ways in over returns performance total time. we our for capital optimize believe maximize allocate to continue will We and that shareholders

certain guidance G&A provided we XXXX yesterday’s including corporate expenditures. In expenses, expenses, capital expense release, and interest regarding press

range, at to year share-based total expenditures or between XXXX. on estimate the at be Full at cash all are the million midpoint September and $XX.X expense be have and capital $XX been expected $XX delay. approved, million. to to This expect million high be and the of $XX shareholder is million range. We G&A the performance million XX, compensation both anticipated assuming to All and limited expenses $XX end including projects we be between return and of $XX through Total expense, million interest is operational our corporate level midpoint. based and expect

trends industry levels. months XXXX, our recovery final results saw the RevPAR the consider company in and strong performance relative remain Preliminary continued elevated portfolio our of performance in and specifically. strength for relative the confident show to to for we daily the average outlook October we the As pre continue third XXXX be booking of from to broader pandemic quarter. We

to pandemic-related complexity add macroeconomic is continue factors of business current demand continues environment, our operating Although within to strong portfolio travel improve. to layer a leisure and and the

gaining to are As we should which build RevPAR portfolio. grow back further enable our midweek for pricing occupancy, we power, us

bottom continued the of of strength period quarter expect we XXXX, were in line same through Third the year. operating ahead results the and end

environment. we are the fourth As move we well the into XXXX, through we for any remainder macroeconomic believe and of positioned quarter

differentiated We have demonstrated of the our weathered the history most challenging industry’s strategy. period in and our resiliency

is and sheet liquidity, our additional intend to maturities balance pursue opportunistically opportunities. extended provides which to use accretive recent we Our strong, and restructuring

the our the condition The recent help has portfolio renovations, team experience our further Our bolster And internal and and assets ways and enable holdings. our is markets. performance current the products coming to planned with to dispositions us systems performance through are our recent of will in processes maximize should existing that our other enhance a competitive used good favorable year. in our in maintain ensuring to over supply of advantage we that picture

happy have us for will be answer to now Justin that and I this any you questions morning.

comes Our go Please Instructions] line first [Operator the question Markets. you. of from ahead. Capital Wurschmidt Thank KeyBanc Austin from

reaccelerate margins, the sort curious, probability do think do you hotel XXXX? think I’m Hey, contract to take can everybody. that how turnover, you benefits of that much Liz, more you And good permanent and think and periods you in can reduce morning, labor comparable do just look how and long with you versus guess, you hire expenses, EBITDA wages could expense see to staff I take? of out respect as limit and

Austin. Good morning,

Not labor will believe companies that working have wage long-term. broader results and retain with lot is that to question the So at But There in-house. will are are market what what there. in-house particularly as growth, be be levels. team we it in macroeconomic balancing and seen. more XX% and happen motivated. to team possible contract to more the plus keeping think there you our more be help happen and asset can future dig we contract that Historically, Contract is attract moving management the pieces. tell loaded on really we levels in labor. our today. I does as with are How of are you job is quickly needs having today. not look in our that fully the And available to to helps people I dynamic. morale even than and companies a top use is helps wage with have rate as talent we expensive to do unemployment our market site expensive, labor, reduce really with and able overall but Unfortunately, a we The keeping management management it where That’s may we take labor related both only impacts may good everyone yet over labor use as and to up also asked had time. labor a quickly? very hard time. of that that opportunity, productivity Obviously, can with it what’s really, to to doing But

everyone think as trying I so And quickly to as do possible. that is

September moderate, at August, rates improved. broadly did relative wage but see, that we also looked margins I Part we to quarter, you at too, speaking, September think can the As some was look of improvement. see, when you

on long of impact it I will think take a whether labor going mitigate – the perspective, to we from have what we how will see. overall

next And typically staffed of seasonality to really going of be perspective. next even utilize months need trends to keep retain decrease won’t mindful sure We to slower the want month. those same top we over we labor We months demand make that, the contract a seasonally. from extent in but level the occupancies again, entering to We’re we’re – talent. people

the you focused I improvements as mindful And can puts that making are we are of and lot tell takes. really team possible. there is So as a on quickly

ADR to believe of inflationary the expense moderate experience. perspective on delivering optimistic taking that will we of an an the long-term As will take from we from actions that that Fed be think that creep is perspective, to relative cognizant some still able an margins an is a long-term as exceptional there we’re industry, rate we some as growth and rate of levels XXXX, sort of the standpoint maintain focus

when long-term. we about conducive And cares that and work to rate need can our cares guest sure from really, do. to And associates think staff creating we and that so staff is first again, that drive a the staffing, environment really what premium comes make mind that’s experience in-house to have as we really that about to maximize hotel, about a

that some the we’re on So And line. I as think XXXX and there of still down opportunity we’re the optimistic impacts that to even hiring over labor, is costs to margins to grow rate do time. contract seeing come so training long we related can top should continue

where labor at percent maybe it, on sort you’ve today? of versus point And comparable you’re finer the of expense what putting a days at been contract occupancy, historically

wages. have been as labor of historically we where a percentage perspective contract double over probably a are from We

So is now. digits, are right low probably double where we

And then helpful. benefits me. how demand much it do leisure the think continue losing recovery? to Got can And that you in the enjoyed the improve it. that do of you’ve weekday That’s will some heretofore occupancy without of for

is I’m that inverse there. correlation not an there confident

weekends. while a are see on in I business leisure to we think continue maintaining our occupancies improvement expectations strong can midweek that

an the our still of half has lower to trips, to to that business highlighted traditionally which both were which of of have portfolio. begin think think every continued been helped and evenly. bid occupancy. I see XXXX overall extended markets in continue that see markets recovered to improvement, fact to levels. we continue nights. has we spoken And It’s peers markets expectation combined our where – I Wednesday improvement trips our But up to our the one pickup to night performance our not occupancy, with process, will that our power also were will many of incremental recovery anticipate the properties that prop noting But improvement top line. we gain in are pricing have with certainly, leisure the occupancies a midweek ability really, number Liz weekend Tuesday, drive we that of and performing markets that and slower worth shoulder a have performing nights, further above overall those time, is over will midweek meaningful further of from are our time in and occupancy that

Great. Thank you.

Thank you.

comes Our of One. next Malkin ahead. go from line Neil the from Capital Please question

morning. everyone. Good for taking Hi, the Thank questions.

morning. Good

morning. Good

Hello.

But it you segment local to guess But the what is, regional from can to you talked maybe help of of help further see first and maybe the Liz, versus traded you’re recovery. So portfolio similar Just hearing back publicly us to of understand how occupancy. been negotiated it’s hump. get travel pre-COVID the national that cadence sort upside kind of in maybe terms markets like going the about I maybe out It – knows as like occupancy? coastal cadences just the corporate get between growth like a occupancy that back have difference get you there the us to in segment? to really will understand issue, pre-COVID everyone like of you different and would incremental obviously, probably that need one, amount to in I would you the the seem think, that’s different least Austin’s over

directly negotiate with the I some some local we and negotiated accounts particularly more directly the of of businesses have brands our corporate that conversations, accounts with. the than think negotiated

conversations night their brands forward well accounts, as of room than conversations with moving more to corporate the some and have others I quickly spoken the volume positive industries rate some growth negotiated with contribution think as rebound. with

think understands inflationary we ‘XX, I environment approach as everyone the we’re in.

So occupancy to recently, sector. see But not more have pre-COVID start we’re Again, financial it grow depends think seen I accounts largely by corporate volumes their have we corporate levels, market services started in come From and to and a both rate from back negotiated good standpoint. negotiated we but we’ve shape and side see things, still technology to at increase. started volume. local of negotiated perspective, from the

portfolio industries and of we as broadened I generators reach appealing the of of has that think variety beauty broadly. of work wide couple accounts we lining for with, the happened is, what to years silver past demand a a our for the have

to hotel individual market are corporate of each our and somewhat in high see mentioned teams business. as But management growth his we XXXX. budgeting our approach for far I rates in as with in transient each bar be will Justin they part believe think initial balancing we’re And different. negotiations, comments, the base future volume so so of And I the process, prepared going hotel benefit negotiated companies as from

booking to And the through think will our way continue that when expectation to end the you things of exceed we continue relative about well. today RevPAR XXXX data bodes it year levels shows to that our the if be

ability an the to I to incremental XXXX to think and our help our business growth. only our portfolio bar back comes filling incremental corporate some but negotiated negotiated steadily relative will But also occupancy of as accounts in accelerate shown performance date, other as midweek think corporate further well. recovery with I we’ve grow with for

Okay. I insight. Liz. appreciate all that

is other the have Justin, I one you. for

You’ve are feel opportunities for like of you been that guys you the going especially pretty come. to vocal

lower think lenders that going short keep pits the are just market? tough over back brands next getting out, of them looked mandating kind And transaction can debt elevated It cap are have for the laid talk with market, acquired maturities earlier. assets a But talk contract You two the set, about call XX XX how maybe generally your it, again, do you Thanks. order. those rise portfolio about about landscape maybe in just under it just than rates, the fairly in to aren’t or I out, to they next, like opportunity were months, given the opportunities? you you I taking landscape maybe see rates just thought particularly interest the I put would given months, think, XX

trailing first question cap second Important that start that are were cap the for through the there ‘XX. note Absolutely. the rates. to hotels These opened we to rates and acquisitions. new related And I’ll highlighting midway XXXX with is

that those which in-line performance those the exceptionally have that recent of in ramping the yields been of we’ve in and incremental are fact we our that other based puts markets to expectations acquisitions. will, over recently well with on near-term, our ramp and we’re hotels on there assets. X%, ‘XX the So relative time performed in where achieve ‘XX for excess performing

That improvements. now Speaking of point of fruit months. in to XXXX, with be of the the those volume uptick to with from said, pressure as acquisition feel potential a market market industry that comments And refinancings and the is conversations But you number broadly year. our prepared will more volume to our to result assets. coming broadly, capital transaction for that the be the will as I over highlighted in could brands a continue my we end expectation sellers we a that of around think increased in dialogue active is going making whole speaking, into were industry transaction see expectation meaningful down between more sellers the and I a coming yield the

in assets motivated time. And sellers at is to scale a been, deals acquire for in more maintained that point were when I balance acquiring assets further of way could assets our be. place in very the performance shares we environment and sell our capacity always think the I sheet acquisitions in where a become pandemic would in better targeted priced aggressive and drive our and over better time we a an are have disciplined to us throughout think, to

the Okay, thank quarter. Congrats beat. Nice you, guys. on

you. Thank

Neil. Thanks,

you. Thank

the Our Floris comes go from next Compass line Van from question Point. of Please ahead. Dijkum

my guys. taking Thanks question, for

revenues known Maybe beverage a see for not ahead? known doubled you quarter. about potentially the some can little almost and your typically I revenue talk ancillary if beverage room Your but is food really driven. food for not it’s bit opportunities you that It’s just and revenues, for noticed the business of

Absolutely.

performance see did and our pickup and the a at portfolio meetings we our in revenue, for Marriott. of catering from And part food Richmond, and large food restaurant full-service driven in and both full-serve business. So from beverage is Richmond our for asset here beverage increased by us, in that hotel

a we broadly beverage related very to curated and anticipate even our revenues both our the that more grow select that’s efficient our select across I Marriott at in food and at offering area. have food portfolio, the at and brands continued to Richmond us service service think hotels and broadly And enabled beverage. opportunity, Looking portfolio more

primary huge continuing primary to continued to been for helped improvement pandemic generate parking And worked that outside made revenues. that modify productive has there, you incredibly drive the but at that, prior rooms, then we’ve other portfolio. intently successes, generating on-site began bolster I think ways to incremental we’re in focused is Looking revenues. that there And we’ve and our seen and to to other the move the in efforts though, of have and we incredibly our earlier, our brands room rates revenue offerings point our source overall business revenue. But to revenues on with

is I And market the I whatever. but an sheet quarter. there. The next also and sort the snuck you that’s year your if the is And debt that? your for talk give while in shape. can happening I hope for a when extra grid XX – interest bank refinancing basis question sort of But over the expense in next spread you of you there pricing and earnings quarter. comment can G&A the maybe of in maybe just comment the of appears your bit same, they that there you that what great another months? balance points did on of maybe Maybe XX a the Presumably, see little expects get or guidance obviously if pricing, Thanks. to fourth think Maybe the Liz, guidance you report love resume some for terms fourth you on

question. I’ll guidance Floris. the with start Thanks,

position desire and I be confident certainly to comfortable feel a in a to guidance. think we XXXX issuing have

next do see months will Operations be and guidance. here. more continues to what We But I happens few stable historically be think booking the to strong. given we’ve over seem data

certainly XXXX, directional certainly believe think as we the we appreciate potential guidance. like forward, to still outcomes, intent there approach move would I to reestablish some that So we that would of we market the variability guidance is just have some but as the

enter that cross will we bridge we XXXX. as So

LIBOR Going as bank yes, points see spread XX making to But time, to the part grid. a was was I far. of broadly we second of into SOFR, of pricing an for from the away so some approach as SOFR priced those approach amendment, get the adjustment. industry-wide LIBOR, move sort and that dissipate moves question to your part of the debt we debt, I and transition think from will is as LIBOR of as to that the adjustments basis on relying from blanket I that, so think think adjusting to Over will around today,

will XX their far think months, As the a cost rates. as the change the has to December looking Fed how over of moderate debt maybe increase are more at next indicated they they I that announcement,

to getting that that, time today. over take a is XX I then what But think see. to signaled in be we points rates we that’s they think basis now, consensus be will at in up may them December. moderate position I least right should is able And to start

to an Fed actions the have that the believed had think impact. more I would taken also that date of they have

all that’s point, before an a to increase pull it’s to see and I at one continue we I new very may think interesting of this a But back. think see little we rates environment us. of bit

Thanks, Liz.

Thank you.

Please line Our B. from question Securities. the comes ahead. Bryan next from Maher of Riley go

morning. Good

Just two questions for me.

you AC the do you of talk some move there those upscale about if you hotels bit own. about serves hotels a if Can On should that AC that a pipeline? those upscale to select think me, we memory how in are of expect the more you concerted maybe the And in of effort going a little purchased, kind bit the forward? is little more or more serve

Sure.

believe experience I plays in category. the about both And new ability limited we our operating years, space AC I an the design in have within we talked urban and brand So settings operating Certainly, think followed experience fits having brand seen service select upscale meaningful in But with at service an fits because elements, hotels think now Marriott’s of an while past, that well, select and model have there. beverage. the is and generate efficient into incredibly incredibly model. certain for AC to premiums those our with rate our that unique Portland with brand food especially you the have that lifestyle their found within And maintaining and particular hotels, these in many isn’t leisure Portland we business markets, squarely have guests. because the and

and concepts are tends is portfolio. I the AC be But the think the higher courtyards same hotels the our to beverage more beverage many models as comparable food staffing which focused again, the of within brands, on lifestyle margin. to our newer for component, case with heavily

with generate so The very particular higher rate, design we as to able are strong highlighted further I earlier. And margins. elements and attractive that,

brand. the AC of to would response expand in our our experience today, hotels second that part your certainly, on we to own we the interested think that with continuing question, ownership I in be based in very

think layer talked the with thinking on get rental do professionally, you mean to versus on what your F&B. you my not and airfare back head I weaker we How if you about have of about you take turning start once that consumer, you relates seen line off you forum hosted are fine then especially hotel personally that you and rooms to push to of people question And second a think can trips how ridiculous, managers. rate between clearly rate prices, walking Thanks. that keep moving I prices car crazy further? pushing some we this that they about that trying kind as economy? in up into mean are

order leisure that where pricing to got midweek never weekend we tripling demand. for for our that’s assets, a to-date of meaningful and I around at historical to think think when Remembering we the the own not have And specifically, market looking we business. trends. about we speaking, markets of broadly were point question fairly But in leisure have mix majority I hotels at on pricing hotels think where we our leisure a and our And having and business rates. conversations to fair even heavily tend we follows a tends which how we pushback industry the are the a on portfolio in our focused hotels longer opportunity. doubling business seen take often to rate tends of in float stay, we mix the and more business and around be to business, client our has hotels of should are lower length much heavily base market that the allow to total at the come Base maximize point. at much how negotiated consistent with price should we tends to but accounts, or are business be business also

our managers line. part, of we around managing profitability. overall the in were most not our the top with conversations are driving the maximize specific hotels mix business of strategies, order so And in pricing but And not focused in to around only on

our driving profitability We total on at focused are hotels.

were costs various we ensuring to pricing accounts that portion significant accounts. and cost of appropriate relative those the around types different to also of a with business was the conversation So, associated

Okay. Thank you.

you. Thank

Thank you.

comes line from of Bank go Please Asad America. Dany Our from question ahead. the of next

to in And Hey. give year, portfolio, Good of run have maybe wrap is into I we just are head can a you act year the some sense cost pain expecting the follow-up a inflation what you can this where and for then can morning question next where up as My everybody. us as offsets? points and be question.

prepared think our of that I increases in remarks around and A in because highlighted, to have expense cost of seen question, one I think Liz run, to-date larger line been has cost of expecting labor in it’s we there. terms focus items. as earlier in and part internally huge amount an to response our

focus. we operations then look basis a utility is And of currently position primary watching a and on item Relative see at in a largely think training slows on and leadership line we are in item. terms stabilizing. our are feel and growth line. are But point are that watching based costs, environment. better that staff are we taxes, in expenses, have in we for a time that rate which Outside in and where runaway we But the we normalizing on we top should to for mitigate in the meaningful, properties. line site that, expenses, that with to which I expectation potential to continued our costs us lower generate And today’s from closely. it’s growth and and costs are position to performance improve another growth begin to margins smaller of a put to ways and Our increased recruiting potentially expenses is those strong combined that, line productivity continue productivity, go-forward in come through labor, utility

basis Justin, kind better about that does points the then target look in And we have inflationary in about pre-pandemic past. XXX talked ahead? it. basis that this How hotel make you we we feel today, than margins environment XXX of as Got are to points being

a various number long-term of thrown improvement. peers out targets been that for think I have have margin our there

I we increase mentioned ultimately, think that Liz been on that our always we earlier as at drives will value rate such continue on to drive beginning, at we while from ability as service proposition we rate hotels. the levels a that to clear focus margin we expenses managing dependent hotels. we have, level able as have our to on expansion is intently the that focused are and maintain least And at remarks, her heavily are to such our ensuring continue maintain in of that staffing can we provide

an opportunity of higher increased our top to results. be I us driving cost there productivity margins completely exist think earlier intent that for through and focus I a move portfolio, continues on it combination Liz controls, for commented line and but will to agree

very Thank it. Got much. you

Thank you.

you. Thank

of the Please comes from line question Oppenheimer. next Tyler Our go ahead. Batory from

the Tyler. is Good Jonathan on all This morning. questions our for so far. taking Thanks and for commentary

months. And an on the sign increasing the on past of recovery? or confidence I twice perspective ratios over question am factors dividend from forward? any you contributing and dividend decision to payout thoughts the today, share the the to the were a can terms understanding Just of Is it’s in your on multipart of in what additional the details potential a but also the common monthly one that Board decision, few sustainability me range perspective going interested and

think are the in a in answer strength into performance to our result continued first. your of question direct I The continue of dividend expectation So, the hotels first and would trends future. increases current operating an the

the to have, your second and and in are to to to share to improvement. our our were than business capital in think dividends, addition able repurchases And been position also payout reinvest question, prior being lower acquisitions fund pandemic. our ratios in to preserve I to fund capital and we partially a increase they

And I our carry think primary minimize worst this relatively we position performed had in REIT well payout and and obligations. puts focus to that maintain operating a of in us forward ratio status losses a been to-date the the pandemic has a as into result, tax lower to year.

as we of you are that fourth seen a very our on coming commented for year. year-to-date performance think continue Early from I current companies quarter. would continued – that that indications backdrop, the comfortable in payout. have into that, management And with all expectations expectations are with the our feel Liz performance our their growth our and

helpful. Very Thank That’s for color. you the all me. for all

you. Thank

Thank you.

question of Street. Please Chris comes the Our next line Green ahead. from from Darling go

morning. Good Thanks.

Good morning.

the Going – back guys. good environment labor to morning

labor suburban, the any there the Going between, kind the trends back maybe that availability similar tease portfolio? difference say, out of of other can environment, markets, labor cost larger, in appreciable you or to is of urban, either smaller any

simple. that was it wish I

we and in suburban urban both robust growth. certainly, of that have seen on a more markets seen have markets. And pressure wages includes the think most mix I that

we and the be recovery. have first markets in the felt pressure markets that several meaningful acute over in pressure years. But that recovery markets of in I incremental function have think in the seen and to most past as availability tends labor individual growth that were markets is begun earliest the a of pressure the it has spread

any maybe last Okay. quickly, Yes. I gears then understand that that’s it’s one helpful but me. in not simple, for case. so And switching

exposure You out thoughts around time? an question. to are curious, to brands there there over other response earlier helpful that any might gave AC brands like the gain some you But to in just

active the And brands about some brands have in launched the in those families assets past I brand have around several include brands, We to Hyatt years. brands within proposing, and Inn say interested and newer of Hilton we Residence the like the over some dialogue they Marriott, that Hampton of Inn of are new for decades to in been that be have brands. been legacy they continue would with that and and

is brand I been number we incredibly think our brands – other those seen of those brand outside with point, to experience At our three within us opportunities to families, ownership performance there adequate strong those we continue and for positive, with families. explored AC have while another have and a we that opportunity expand of to this continue feel has three relationships from brands.

recipe select they loyalty line for is brand the feel drive our our the service the strongest Within that programs have in performance to success space, with the space. assets, we combined that, best reputation, continue and for top

Alright. Fair for the Thank enough. time. you

you. Thank

you. Thank

Anthony line the question comes from next Powell Barclays. from Our go of Please ahead.

Good morning. Hi.

follow-up a comment. to that Just

independent in about that remember correctly, that you conclusions hotel can maybe to took independent from talk the drew Maybe sell learn hotels. you did something You If you some experience? about I independent Richmond.

business. on on cost there has attention is intermediated we are hotel is the that would and the spent we operating we acquire did now, that’s And through hope outside earlier, incremental have learning of maintain average, where offline that we high looking level business operations a the at happy what in our capital sales hotels and investment families intention to found maintain to we and standpoint, on focusing I core on the we associated sell did experience. We higher acquisition that level, it. felt that discovered about hotels position point. would, customer a is to we that to and beyond our drive hotel. or of spend significantly think plan select have addition with the quality brand tremendous high our spend spend did same But some to varies. on in we engage you level a which But more a of a a have with what that and need OTAs, than to made in and think be environment a And time what of I greater from or Yes. extensive that, hotels to point But with the And marketing, non-branded price level same at reliance service would was conversation of to demand. of branded in the need amount better

back we returns yielding by on the results point own, on best are we opportunity future, and terms from current come we and see I are think it’s hotels impact of we may of supply looking at I based some supply for that in focusing operating specifically investors an we environment, potential in what the drive opportunity our the at to the think business that possible ensuring the but and on our core greater our existing to portfolio. near-term

identifying I get in know for confident to development starting I of but for Got guess they bit also it. projects? And what to maybe one more order in source more. a your a I been you, for guess in partners, looking deals your supply or new them broadly. talks it’s are

they curious they am I you with are as saying are what and thinking about discussed So, what them?

than disruption new to to with that contracts the around sign development cost talk is labor, and fixed with keeping certainty is today. chain certainty highlighted faster have markets, lack supply today. price impediment deals. it’s impediment the interest. I less are today individual are a supply. a new as interest around we time, ground, I they terms subs deals driven an extent in, market the primary able we and we getting And of unwillingness I part that brands But number costs certainty those factors And of in by bigger of future the think but really deterrence at biggest have they an could of around actually significant new that actual the in we most building construction to sign and we is to Over worked is the see there that sites. cost are people that uncertainty in of from partners to lack to rates the and certainly, availability impacting think are operating I total are of for think the Certainly, really availability construction environment have debt And increase in stabilize pace no that continue construction. of in more around performance the construction highlighted. the that final But of

needs of Are to guess that, there guess anything housekeeping requiring, next be Maybe year? costs it. And brands I is kind more costs else of headwind Got or like be in terms into being reintroduced that model, breakfast. the that I and could more. we added done for with one new

the Based model with. we it we to-date the the with is services into on conversations model model terms in forward. a is operating operating our be current of expectation And pandemic and that operating that model that brands, have their more came the going will efficient had the than amenities

incremental think I employee on that there our operations stabilize labor, base an standards. our hotels, as the efficiency expectation at is to current to is earlier made from gain based Liz point to opportunity related we So, standpoint the

Alright. Thank you.

Thank you.

Baird. Michael ahead. of [Operator the Bellisario Robert comes Instructions] from go question from Our W. Please line next

Thanks. Good everyone. morning

Good morning.

me a Actually for questions. squeezing Thanks of couple in.

around years referring same-store versus RevPAR that’s right, the that. the on time X to actual at comments Just ago, portfolio or clarify in all the want October the comparable? first to growth not Just actual

Yes.

it. Got

couple comparable So, confirm of same-store assuming has quarters last I to that. several wanted hundred points the been the lower trend basis holds than actual. just

Justin, base you that back base maybe taking harder to to if next having predict look or to year volatile may your business you XXXX, out business? more and on comment make does less be profits the just revenues less are when conceptually,

reduce that. with would operate, I potential at practically ability multiple a replace will replacing when our we look and to in there transient. we we anticipate But higher with more And points. be at think tend an confidence theoretically, for you that of think how strong often, existing the base be I have hotels to price our base forms only business various environment accounts business in where

view individual are there business we the change currently for I accounts at lower-rated our of and we properties. doing a that way future. the radically that the assessment But had we an into think is need moving would accounts in So, house not

that in mentioned the Understood. it. deals the about broadly And talk Got came one and those deals you just questions. seller for about? earlier And timeline acquisition AC motivation you Can of you the for how just seller then they process just motivations and the did? then

were be deals were the but motivated in of by able the and up broken and were AC marketed partners proven was primary broader us do part as us. highest bid higher to unlike the of being They around that not So, selected were have to surely The the assets ultimately, package fit bidders brokered, broader two portfolio. secure deals contingencies factor the closing. the with today’s that’s competitive the were determining the And best the package below financing in offer. liquidity a advantage by We we we desire our a our for from that deals. a the in environment, assets for for

and I groups broker potential brokered are think around conversations through are having also individuals with but having, continue broadly explore looking transactions. outside conversations environment transactions, we we to more at the of opportunities

go will think volume my and as expectation transaction decide a end I year. remarks, pickup now in the we see highlighted that our most the and between will into hold next I earlier to year. meaningful But in is of slow moving

have I of about completed capacity think can attractively priced in amount environment good assets tremendous where to-date. an and that we have importantly, capacity, we have feel a we that transactions incredibly the scale. We for we acquire preserved still

Louisville? those new and just you hotels both about there then what’s And there. Could the Pittsburgh on in horizon helpful on That’s potentially And two outlook talk supply maybe terms one opening up? more of it. Got in deals. the

highlighted the X%. I in And Relative we markets. prepared we been have XXXX performance own even or up to both with the recent picture explored assets has assets, incredibly the is ACM strong Louisville Pittsburgh, AC in and favorable that to other of in markets XX% the certainly, where up remarks, September numbers my Yes. supply

in on side. beginning improve level the over demand feel Our generators over and the have that expectation a assets the about to individual potential time. continue remains And of pandemic, Both business before markets is that really shortly good asset to time. opened in mix those the will of addition these that ramp both we and leisure

That’s you. all me. for Thank

reached Thank conference of end the question-and-answer Ladies over would we gentlemen, Mr. to session. and I turn to you. And the now the have like

CEO, and comments. for President closing Knight, Justin

to We get you extent vote. great with an you day. And would encourage Have at appreciate hotels. one us the hope talking take its stay our up and us look election I today, We to to as a of to traveling, you joining you will are you day. opportunity soon. recognizing always, forward to we

Thank now The Apple you concluded. conference participation. of REIT you. has Hospitality your Thank for

your now You may disconnect lines.