Apple Hospitality REIT (APLE) 23 Feb 242023 Q4 Earnings call transcript

Greetings, and welcome to the Apple Hospitality REIT Fourth Quarter and Full Year 2023 Earnings Call. [Operator Instructions].

As a reminder this conference is being recorded. I would now like to turn the conference over to your host, Kelly Clarke, Vice President, Investor Relations for Apple Hospitality REIT. Thank you.

begin. may You

XX-K, good Quarter and call to Hospitality and Apple be yesterday and Thank afternoon. Full morning. Year Fourth Form release earnings and on Today's we XXXX REIT's distributed based filed you, the Welcome which Earnings will Call.

please uncertainties today's as current on risks, we differ to the defined assumptions, include or and as projected result, future could call views forward-looking are events numerous implied. based begin, those from performance cause Before federal statements securities are may outcome of actual statements a expressed, subject materially by or and laws. note that These forward-looking that to achievements and results,

in and undertakes no Any of law. qualified described revise the such company our factors speak today. statements statements, report The publicly to by risk by any are as on Form XXXX forward-looking only our except annual SEC, as XX-K filings or update forward-looking including obligation in with the required

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

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

for quarter Chief full our Officer; provide fourth an Perkins, results year morning, will Justin This XXXX Knight, our Financial and outlook Chief our operational the Executive XXXX. for Officer, and Liz an of and overview

the it over we my overview, to the Following the turn this for will open call is At call pleasure to Q&A. time, Justin.

total operating report you performance, us shareholders. another strong of pleased returns thank We're our joining to and morning, for for Good portfolio growth and year today.

acquisition million our improvement balance growth operating with to enhance provided of grew our $XXX our net capital our year, by of with ATM through thoughtfully our sheet through the we strengthen, projects, and for the distributions positioned raising and X continued proceeds quality the hotels, shareholders attractive portfolio hotels fundamentals of program. During continued

the our Our pandemic and of broad brands management of with rooms-focused with and of a to merits diligent while flexibility strength companies owning the outperformance of maintaining financial with team. testament our XXXX of in the since leverage onset speak strategy efforts the and and hotels the appeal the consumer portfolio accomplishments we to our are work a of low experienced diversified

Comparable quarter the the XXXX, of flat occupancy With resilient to for XXXX to and the million are Adjusted travel, XXXX. was of fourth for report comparable periods X% year business to primarily the and $XXX for of X%, steady as of same year hotels approximately and Hotels was full to of X% compared XXXX fourth growth year, to up EBITDA and quarter down was respectively, compared Hotel XXXX. the as and the in for the by RevPAR for X% for quarter periods essentially million improvements pleased increases ADR driven up the leisure respectively. Comparable X%, fourth XXXX demand of the $XXX X% comparable same more than we and hotels in quarter compared as X% nearly hotels

and EBITDA ahead rebuild and quarter opportunity XXXX, X% and of comparable full continued approximately quarter Comparable fourth continues Hotel respectively. year full both despite prepandemic portfolio the up perform with X% was the especially approximately relative Our year to RevPAR to to to fourth hotels Adjusted Hotels midweek. XXXX, up levels occupancy, X%

into position be meaningfully favorable that travel trends move first we occupancy Based quarter over remained to X%. the we X% January with on ADR grow bolstered increased and seasonally more continuing We hotels comparable and year-over-year as to through preliminary be a in stronger growth. results operating near-term anticipate occupancy months. Overall just will supply by over grew rate limited results,

our leverage practices to companies continue are teams management our drive benchmark across asset share to to to of third-party to scale rooms-focused margins wage ownership and data unparalleled strong best performance and hotels continued and and inflationary pressures. management access revenue Our despite

partnered the and some focus fortunate industry hotels overall of best with real-time to to of operators performance without service, monitor in cleanliness, the who We on-site profitability satisfaction. maximize be guest maintenance sacrificing or are our efforts

approximately continue a of disciplined represents Supported timing the share XX.X% and investors Together of an growth X%. Wednesday's regular capital. full the hotels our uses relative to controls, of achieved Board of quarter paid during strong we by approximately of dividend yield. with annual we Directors, monthly to share and performance, Through share and Adjusted of common We our of per our rate annualized the other the $X.XX and our distributions price, the year with closing lower totaling fourth quarter Hotel distribution margin strong continue cost for monitor during for per year. $X.XX yield RevPAR will to Comparable EBITDA Hotels per on total our XX.X% $XXX operating for Based million. potential distribution performance despite cash we $X.XX common provide

sheet, approximately deck combined associated on in acquisitions to accretive and $XX.XX fourth opportunities. total continue multiple to During a acquired of $XXX sales the total million. approximately under X.Xx market be $XX.XX for market fund quarter. in to to our XXXX, a balance and X a our active million In the and we of The net price X proceeds proceeds a common multiple approximately we were parking pursue for EBITDA, hotels received and hotels position per sold under $XXX an million. the to XXXX per average to reset we XX.X us shares for acquired weighted the of used XX.Xx just fourth quarter, share approximately share The spread at ATM represents program

total previously combined of a acquired with $XX Courtyard Salt million. $XX.X City acquired As Lake and Circle Courtyard million. announced, the Hyatt a we for garage October, Downtown, in the Cleveland In June, parking we University House, corresponding together for

acquired In the Embassy South December, acquired October $XX Vegas $XX.X Inn the also Suites million. the Suites Las million. we Center we Salt $XX purchased Jordan South SpringHill of total a Seattle City We million. for Residence for And for Lake November, Renton in Convention in approximately

are year-end are that professional years. to pleased recreation, have markets and presence manufacturing growth our The X% rate universities, for proven the to of reserve. complement positive standard in blended after care, FF&E industry economic recent an to home Hotel and a markets events cap portfolio group world-renowned of generators and and hotels within XXXX purchase an These XXXX over our seen X% significant demand enhance multiple acquired And and these a expand trends from We business, on hotels entertainment. investment health price combined technology represents just sporting The and demographic reflect existing leisure our strategy. variety XX.Xx EBITDA. recently Combined financials outdoor business-friendly wide on

respective embedded We contributor believe a upside it enable that and our its each to meaningful has of within will to overall assets positioned market is well these be performance. portfolio

construction. continue late mid-XXXX contract under for anticipate are an and Wisconsin to development $XX Downtown Motto the We purchase under in Embassy XXXX, hotels We acquiring in Embassy million. the Nashville million Motto Madison, approximately in of for X have Madison in for Suites currently and following $XX Downtown completion that both Nashville A approximately

meets we be years criteria. has at market past can pricing Our high-quality that internal a patience in our assets to positioned competition, the share with us over underwriting several where active limited

for articulated a calls, value acquisitions on utilizing to recent equity were incremental strategy portion a us generate at the shareholders. our Consistent with our targeted spread past with of able to we positioning our activity, we to ATM fund issued specific existing

accretive However, contribute scalable and are opportunities returns. to actively we long-term balance and additional of underwrite we further potential exceptionally and unique our we shareholder pursue acquisitions enhance to continue set our positioned to a that number platform could sheet, well

a and the developing As in drivers. demand broad high-density to continues has focus rooms-focused case historically, been on supported branded high-quality markets, variety of business be and acquisitions leisure urban, suburban our hotels by

sheet Through experience, of believe brand Combined environment transaction have tremendous be data, performance diligence we that across these broadly diversified we access our due coming generators, our months. acquirers underlying net the are to to available our to believe capacity positioned continue competitors relative our to strength we deep relationships, and market be unparalleled with well our will which continue the and in in enhances scale, and markets optimistic we market efforts. current and ownership balance demand industry of we the hotels,

seek also older our of We opportunities actively portfolio our in assets capital to and markets. by program optimize refine of growth disposing lower reinvestment

for $XX,XXX the sold an exchange, Inn the of represents grown financials, price PIP in this gains Homewood a $X.X combined a in XXXX approximately Earlier deferral month, of which key per refined assuming $XX these a cap We or $XX.X transacted million portfolio. have sales be proceeds a that the from onset used pandemic, The result Arkansas million. portion to Rogers, of our anticipate will of total rate hotels strategically complete taxable X sale X.X% million. we capital related approximately Suites of the and on improvements. located have in Since XXXX will ways and year-end we of Hampton in the all-in

of acquisitions approximately $XXX maintaining have strength have our and the invested balance approximately We million in $XXX sheet. completed in while new million hotel sales

benefit our CapEx trends. and transactions room These from positioned demographic us revenue needs help average near-term have and portfolio, economic the and to of increased to manage continue age lowered available margins, per near-term to

our ensure are remain also in in reinvest and hotels markets to their existing to competitive premium portfolio positioned We to demand respective rates. continue our

And we Over hotels. with between in $XX expect $XX to $XX of at the million expenditures. past XX in our million and approximately approximately capital million spend we major renovations invested year, XXXX,

look new favorable, in we continued and ahead, As with business our limited strength demand of the fundamentals supply. remain

product impact over the a or downside did risk by enhancing meaningfully portfolio providing potential under incremental from us within any both the reducing ability to the half overall of profile hotels upper of launching demand from mid-scale have impacting upside and and variability upper positively with our -- As of demand. not upscale benefit radius construction in our X-mile year-end,

value have Over years, a of the diversified the scaled in portfolio with we broadly a of low hotels leverage. investment past several demonstrated rooms-focused

same performance to confident shareholders for drive in and time. will continue strong strategy over are We enable to the us year that coming this

of reinvestment strategy are franchised proposition value with industry industry hotels provide broad consistent some appeal. corporate strength and experience. team portfolio Our in by the dedicated Underlying is management portfolio the managed a strong companies and of extensive and a the with management with effective a industry-leading consumer our brands best

further industry are additional to and It our financial specifically. the our about As for trajectory during over optimistic into pleasure the and annual Liz sheet, guidance. on my detail portfolio call our balance is now we the quarter performance to the of we move XXXX, turn

Thank Justin, you, and morning. good

the year, Hotels for to quarter portfolio periods million $X.X hotels. We of to of $XXX X% strong and our respectively. for X% up another for was report are quarter XXXX, same pleased revenue Comparable the and billion the compared as total

leisure in strength and flat business to in of Continued and enabled and up and X% essentially $XXX during periods of Comparable $XXX and demand of respectively. ADR travel X% the XXXX, up XXXX, to and full quarter same $XXX as X% the $XXX, compared X% Hotels quarter recovery RevPAR achieve and with XX% and with year occupancy of XX%, fourth X% and up to us

Same-store resilient in weekend will remains and XX%. leisure the brand.com demand XX% GDS meaningfully XX%, with in through business at XX%, while our to the improvement Looking was relatively year remain bookings XXXX night prior bookings compared improvement in channel at the XXXX, travel. room continued occupancy continued that stable at to come will mix stable growth quarter in and anticipate day We bookings quarter weekday travel occupancy day, leisure fourth demand from of with levels. with elevated over which, below remains OTA of at pre-pandemic quarter relative stable most during PropertyDirect the

elevated properties highlight Discounts and we And [ Other third the of in of in same-store same strength XXX property opportunity to XX%. than channel that the mix, direct believe in with continued maintained points quarter. our continued XXXX. represents XXXX, almost make continues remained was which segmentation same of the at in Bar Our brands up field. XX% with in strong period at our to sales negotiated seasonally mix, for the basis segment lower consistent than was upside. XX% the XX%. ] the but mix largely of Group efforts our still our line higher Fourth XXXX, the quarter power remained are period

$XX XX to same up of Hotel respectively. Comparable labor XX.X% XXX in quarter the the Hotel wages of under periods utilization quarter same XXXX. at EBITDA fourth wages of elevated Turning up for and room compared of full during to million expenses. XXXX. fourth and X% to to during remained higher per per XXXX, Total points XXXX, XX% for will achieved employees while Adjusted quarter, margin to moderate cost our and year, was XXXX, XXXX in in $XXX basis to third the of the given basis Hotels the levels. We higher we and payroll XX.X% stable occupied the was XX% the and X% for payroll quarter stabilized part-time X% growth for XXXX, operations occupied pre-pandemic We relative Hotels up down for hotels contract to slightly anticipate points and the quarter, improvement the year-over-year full $XXX for the Contract roughly total same-store more to a in labor continue Adjusted that quarter of the EBITDA year, result periods expect and down million quarter approximately room respectively. to Comparable

periods was stated XXXX, $XX As conditioned Adjusted for hotels as have million, to operating to EBITDAre to increases $XX rate. past period the ability to million saw X% maintain up of staffed, the grow over growth the the we up past on and Though year was appropriately same and the to to near-term inflation X% be fourth and $XXX expenses our grow our quarter of year. expect manageable we and million, the on for X% relative $XXX will the same down year moderate significant we the margin ability calls, was respectively. numbers and was compared in MFFO with potentially more quarter X% respectively. and for XXXX, for million largely

billion of months in outstanding approximately rate issuance a Total debt approximately as interest debt net average unamortized cost balance $X.X value outstanding debt, had adjustments, of X.X%. Looking fair with at debt our $XXX XX total EBITDA sheet, maturities XX by our trailing $XX XX, approximately XX% million our of on we $X.X comprised December Approximately X.Xx outstanding availability had year-end, of credit on in cash. XXXX, and of weighted excluding our our and was hotels million At outstanding just under was approximately X hand our and under or $XXX facility approximately were secured revolving debt hedged. of credit average billion approximately total facility. million We property-level debt of unsecured fixed years. cash weighted and

credit and term using next sale pay debt had and/or funds XX cash of from were of quarter funded these December of using one of debt As of our the mortgage under revolving and a we We under million $XX hand, XX, loan approximately $XXX completed months, operations, under proceeds our borrowings for consisting maturing in loan million maturities credit our million. $XX the net approximately program. to availability plan new Acquisitions from fourth the revolving facility ATM on financing. shares facility during upcoming

average $XX.XX proceeds proceeds costs sales per share million during $XXX remarks, weighted a approximately received ATM in gross net our at the shares of of highlighted approximately quarter, price aggregate $XXX his offering approximately and Justin sold and million. under of As XX.X program million of we approximately

our able portfolio full the and year-end, with facility maintaining X credit ATM had today. under our of during process high-quality to program. As filed this agents our on later of and hotels our while attractive program in We approximately remaining the we successful opportunities. to accretive reauthorize With filings our anticipate to are Board acquisition public grow million related $X we pursue were quarter, be revolving and to extend raise additional with to capital program the ATM availability

press outlook our provided in XXXX Turning yesterday's release. to for

Comparable Hotel be year, million $XXX and to Hotels XX.X% $XXX to and expect Adjusted X% change EBITDAre and between XX.X% full be RevPAR million. to Hotels between be margin $XXX between we net For Comparable X%. million. EBITDA to Adjusted and million income $XXX the and be between

operating by our midpoint. asset that guidance working increase purposes to are hotel management assumed approximately will X% the we of and pressures, teams for have hotel While at cost diligently mitigate costs

quarter unanticipated because business take pullback the XXXX nor be by the continued reflects business shifts based environment, This operating concentration, The as performance and view on low of range in low our our months transient any high portfolio into through or comparisons should demand growth It in dispositions. with to hotel in and it not anticipate end meaningful the acquisitions does with quarters. take our range business third below full Super outlook with driven occupancy in noted unannounced changes be is developments demand, account we our have or does XXXX continued higher account of Phoenix, improvement for calendar leisure Easter challenging our we current the into in improving range a first leisure improvement into modest our relatively transient. The with end and end demand year that we performance strength the conditions in Bowl holiday macroeconomic and lodging in slight by reflects any and steady of in offset where more of year-over-year group. portfolio second move more

XXXX, As well confident, and performance are we we we positioned are pleased the year. for our with begin

pressure Our challenges us of activity environment, which recent funds the basis to per on the range. shareholders for share modified put our guidance midpoint are continue up a operating operations despite acquisitions from has and on higher incremental year-over-year drive to margin. Implied at value in enabled

Our proven cycles. differentiated strategy economic has resilient through

is to we sheet transaction. pursue with to strong continue use balance which ample opportunistically liquidity, will Our accretive

demand. incremental maintain we with a to investments, consistent business we our markets. of supply fundamentals dynamics, favorable over products condition good And believe benefit competitive other allowing are the ensuring with capital in sound, advantage are assets from that our us Our in

of and favorable continue external concludes team pursue can will pricing. That remarks. existing where growth we the achieve assets to our maximize prepared Our work performance our to

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

question Instructions] line [Operator Our from of Michael Baird. Bellisario first comes with the

in Two math underwriting maybe prepared same term? might can should least the you sales? questions how targeted I on CapEx big you equity you just you you capital briefly kind that your near disposition, for in remarks, picture hotels one-off returns acquisitions? Or issuance? think of about allocation. your older in need do you. we know it of And topic, first on view more regarding but and the as at also sort But sell then portfolio of those to us separately have when then when the mentioned look your on And over remind of the

our you case if question, released to to fund XX.Xx exceptionally in for So at rates to answer also our to spread the to continue has the EBITDA and the issue We're your assets issue expectation we've which first we to have assets the we they year. on shareholders. for acquired majority -- investment look Vegas through that the the of of November to prepared growth of to was acquired that trailing when that is confidence But remember existing in continued quarter. highlighted specifics will can that in excess last my looking produce well. And all incremental a mindful is equity the value fourth the when of with equity of we asset, hotel multiple only as acquisitions. portfolio do I that spread drive acquired, average. our remarks, specific we

from outperformance drove look we've of were to second at the pandemic, our response years adjustments will to hotels all But looking of we've we margin. Produced higher on a looking higher X% of for that younger. portfolio Importantly, the this average, beginning the beginning and acquisitions into RevPAR margin. when average, On the been on acquisitions pandemic. from to continue your feed $XX making our the at And and the the acquired acquisitions XX position activity the question.

prepared old, you look to average, drove on X remarks. of through were, I when that's at of in what we're which and it key dollar So my acquisitions. need franchise time, we XX activity. The sold hotels then over evolution And higher of is both dispositions quoted renovation in just keep per fresh the years our significant over portfolio the continuing renovations, that end that through supplemented

a In to our there's opportunistic. we'll category terms that of our We're continue we conditions. a fit are within that lower-priced amount such that where portfolio, continue assets quantity reasonable And think it's competition that we'll expectation our to be can transact of some generate Conditions there's that to market sense. we makes and of assets of smaller, that manageable within around date continually the exploring portfolio, amount.

would gains new have meaningful significant drove supply period. looked we over well. that relative assets, we our at was incredibly and see market done X when we table chips coming online, the we'll that opportunities positioning do The the reinvesting the where But and to hold felt our proactively On hotels our and be best our to we continue by served taking within elsewhere, off portfolio. we

Trying of it. of thinking then Got Maybe high What travel? what what the to very just happen see achieve in need just the follow-up business really to quick you do And helpful. X%. terms on to about one to just that understand guidance, RevPAR happen? needs midweek end? end pickup? That's Is high to it needs

To the we're see high opportunity continued side. maybe in need and really BT. strength guidance on I recovery leisure and assuming range, we'll the But guess, end, the more achieve throughout to continued

assumption BT will stable our on remain Leisure is I general, will grow and high in think end. the

have you continued I making not strength there BT in much leisure pullback would as up and some recovery. think potential

from question of Wurschmidt next line Markets. the Our Austin Capital comes with KeyBanc

into kind the just seasonally how occupancy of an year? ability into kind much middle And rate then to if midweek, would meaningfully going the months. as do Justin, What you think rate to primary how have more the segment helpful. today? power early of see be to of you managing strengthen maybe -- part does the versus stronger occupancy pricing play is driver? things the BT, you sounds I'm push that, you into confirm but like middle It highlighted be that And could you curious

very of closely part occupancy. tied to rate with your we question, see starting the So last

hotel, to to strategically aggressively we more hotel, hotels. as teams And compress able our So continue with fill that hotels the the drive base as price can meaningfully we rooms. the work fill incremental they such fill business we we're to rate as

In And pre-pandemic terms that greatest the an to look when running opportunity relative from highlighted where occupancy exists guess, Certainly, we to levels think of have we at extent. we're opportunity I we the the you midweek. where with pleased we we're like the from government. standpoint, midweek have certainly progress year, standpoint the with mid-week and transient and over other made both but occupancy business an segments opportunity continued standpoint group -- rate we past believe

I think one we're move We the quarter, yet is pleased also is occupancy And weaker January, able and quarters, highlighted, rate to of were with months. able think through even how we our which occupancy in move we were weaker we progress still our rate. which of fourth January. one to I into

have move have our the performance that Phoenix only one market. in but with challenging Phoenix and comps Super more last concentration just February, having As we asset the Bowl Vegas, in given we'll Certainly, into been of we're we in year. happy

able then at there February. second continue our segment as we'll rates be through segments shaping up. and calendar and how group believe our move as as so of optimistic the specifically movement year, think holiday as shift meaningfully. that well. on excluding to into to into build seen And will drive And have we look we're as related Easter some business pleased third progress and able yield But be within lower-rated the more the in to is with the rates then maximize And and moved we've accounts. based some we'll trade-offs we Negotiated move quarter. We're to I government Per to we negotiated out March, we performance those in occupancy, that Diems be

between that So fair XX-XX guidance and split ADR is growth Occupancy? say to assumes a it

A compression but that little, growth. occupancy more rate. It's at Justin help that us weighted incremental really, heavily mentioned, drive should to midweek it's ADR, the midpoint, and as probably some Occupancy

know is utilization? see was on job in utilization expenses. What's down strong. just next been this what But Understood. driving lower? really like pretty And an really has growth It overall need see holding I think industry to seems agency leg then do in agency that from you back maybe you to phenomenon.

really We're -- are good to That's markets really, continue labor in-house where a really working for. question. hard the teams to allow think leverage I

while that sort has been of think improvement some nationally. there I

market unfortunately, more. on we in have think dependent. have And are to rely markets contract environment, really And there occupancies even have relied higher that I it's on some labor. today's where always

the contract more can I use to of labor hours. in-house and have we are we're bring in So have seasonally or lower, if efforts put and use that flexibility, and a where where the the labor to contract we teams think really made restrict we're having labor, flex in-house position labor occupancies maximizing themselves less not to

think see like. immigration in I we be although I And helpful. would don't that it's do term, mean, I I and culture know more that we're if benefiting But think on reform. that certainly from slower near the but it more anecdotally, the be going from standpoint see we'll that to than been slow side. to steady. think it's I we'd like

easier, might a We but than slower continue to it's hear that availability is and like. pace we to normalcy just easier at

line from the Wells Kesten comes of Our Fargo. question with next Dori

was between assets XX EBITDA For you acquired difference multiple and 'XX, what [ that the underwrote you what the XX? in full trailing for the in the ]

We haven't provided that yet.

We portfolio. high acquired the the average, have And for for exceeding or are range of we end our newly at high provided assets guidance provided. that end on the the expectations have entire the

from will the portfolio have demographic in hotels we're growth that on in of and questions, shifts. a markets have think benefited to lift economic I recent from we and earlier intentional standpoint that the As response average, one highlighted been, targeting leaning into

pleased us. we're activity near the and and year, past term I at done optimistic long to have over performed our hotels over acquisition if think you that how for look about our term how with the the certainly subsequent

a versus it on today, around turn you today where you equity Or and turn is X.X where noted in acquired that the the underwriting you spread you're then QX issued based same? come you trading X.X And Okay. has where to in? assets noted you're

today, overall. on trading for average, mean, they trailing we're the did the performed certainly, where basis. than based I So that assets company on better multiple And have, on the a impacts

that So impact some would pricing we But the a continue you math incredibly lock on have shifts we to well, look advantageous and the position when to multiple, drive value incremental again, it's where we acquisitions which at think perform at kind puts higher in of that. to in that through the that fact were we able us to us. issued, they

there's assets meant that No, the sorry. if you're pricing... underwriting today, I

Oh, pricing today. Oh, sorry, a mix.

the recently, take So when require acquired have for levels financing, to we -- of availability advantage, on lack of meaningful we've larger in put exist. able competitive especially were fourth larger what assets financing. to that us that, meaningfully We that a continues advantage in we quarter think of of a assets look position at which the to

continue acquire constant that And pricing And to kind range. price by there price. the varies optimistic in a Certainly, drive at point so clearing about we're transactions of our in cycle to we're asset. ability to not a assets and market where around sufficient

And greatest I to priced continue drive ability to think value. the we we'll transact being where are Assets individually. see

a extent be quality. from a I financing assets pursuing basis we for a of continues similar go-forward be think challenge To our you can that to competitors. quality would the expect on standpoint,

are can then most and move the expect becomes into the assets more fluid competitors acquire as pivot we our which to market us pursue for those year. You challenging as to to

from interest are in transactions continues drive sellers we that look on we generally did see expectations 'XX. to I when buy 'XX capital be and brands significant adequate around pressure certainly a incremental due, more And side. speaking, the refinancings at to to motivated improvements and they're than catalysts that we that coming the market in certainly, think will more are

between one guiding shift you're what you as Okay. one. goes pretty year difference And G&A how year? price the beginning then a Liz, give and G&A And just last versus the of can large that a consensus like There's the then, guidance at can the share us performance for relative how teach-in set guess, I year. on? little is on changes

Absolutely.

reevaluate year, each set keep way time target historically that question, of this compensation. we So it beginning we typically because guidance. at definitely I set the the at But -- the getting approached though guidance we the we've

and of So at with that the aligns the compensation, midpoint of guidance. midpoint

Now because here throughout team return to internal year. basis, that a tied the relative is our stock performs is and of compensation and fluctuate can to how executive total team much on both the so the

how year, And the for, midpoint. the we're it the XXXX rounded how speaking, resetting and actual performing perform, if last total perform with will as we on impacted year, this align had out a QX based updated up at as guidance a on return of perspective. And so And we could which release, at we should we're we with operationally for and even and it well. end the from it increase for how generally well run begin accruing we depending we're and relative performing year shareholder

Our comes Anthony the Powell next of question from line with Barclays.

around a a in of lot brands asking guess track, mid-scale construction growth to of ] the have brands markets? of under introduced. you larger I'm there's be supply the guess, I mid-scale terms energy lot that because I the to [ properties have the started in new

up price you may I'm so in creep curious to properties? your start those and eventually with And compete believe if properties

We have.

in So modeling potential to ways. our us subtract segments. supply impact different of number add of or at the And allows internal to look a different

significant midscale exposure. on it there our and amount been and around when on While at impact keeps needle potential slightly portfolio, moves the talk potential us development, look mid-scale has the margin of but we about very at the XX% right a the for add

larger than higher meaningfully not we've still it. historically but way higher, at slightly the looked So the

We we least have construction we that, impact more see development. from talk, of projects in begun but the continue extent mid-scale meaningful to monitor But very markets there's few to have lot to date, adjustments begin make where been a at will the and to ownership.

Got it.

population friendly Okay. maybe acquisitions bought on states of in where with western And you a buy. mean, of lot you of this kind is in I growth, want terms to areas. high

deals like bit more You also did some were slower markets recover. in a Oregon Portland, to that

you been more recently? those urban property a get that the Western in kind Or focus that State of do kind more challenged of you more deals mainly of on doing high-growth pricing? Looking well you've bit going so are that -- forward, would are Sunbelt to markets to

where to think us look expect we potential markets. to appropriate And upside. can all you to at the is think pricing I invest

Worth And about average. profile was got as we gotten our Certainly, are we've at of transaction about incredibly market. done basis, good of that our asset assets, Oregon high we've a that returns the have overall. asset entry returns Portland, the gotten been together, slower to two performed with of that portfolio into that which the really the assets. we've of well or combined transaction Importantly, of we and on portfolio end Fort date on that acquired growth comfortable part all and combined on price acquisitions But lower Fort for Worth feel with has gotten that two than have Oregon near with our rebound, on slightly what Portland, to and

urban model invest turn begin that is will I be part appropriate. a to pricing diversified. we our intention begin we of I think slower recovery As where beauty it's of opportunistically have to the more broadly and corner, is to think markets to to been see the our of design look And

those And so all able the and view underwriting we're for assets markets. broad the a within potential taking we achieve upside for to markets where in pricing are looking opportunities matches assets

Point. line question Our next Dijkum from Compass comes of Floris the Van with

to maybe company? year? amount set the in Justin, kind could your opportunity a that what little talk Select And provide this the you about CMBS bit of maturities Service segment can of

maturing We us Certainly, on we of watch asset to level that provide closely. lists loans. with number detail that a subscribe

tendency it's happened think, And dynamics has in the driven a total that important I to that a by think of trend are before the it's, past. I I the are industry transactions where interest enabled with different most prices loans a attractive market being have to were us. for to maturing assets we this us time And ways very higher meaningfully experience than that forcing in at with rates of purchase have these it. the has said, transact note to slightly originally financed. This answer. assets number That fully is already over-anticipate

I've So from the higher to future, those for that continued interest and meaningful really, the I now, part drivers. highlighted with primary being capital and for the we motivators brands be time rates for of required as pressure potential around coverage drivers loan believe refinancings then think, meaningfully when market. capital investment or as those foreseeable improvements some optimistic And we will two pushing think to as to increasingly us things opportunities bid-ask the that's we're volume. about And We a transaction certainly, increased to factors catalyst think sellers spread will bring volume. creating those assets for total need bridge that And well. transaction that be existed greater create and suppressed two refinancings

maybe you guess then 'XX? thought, the in be I the volume of percentage maturities what my view And appropriate what's way, the, in what trying so would of for to you I was think do get total guys? the of your by the that's at. And

the Historically, can vary us market we haven't given specific coming assets attractiveness quality in to to price. targets on based and because

and a in I They going over at and we think the are years of meaningful we that point to somewhat a look significant that couple we correlated, total increases for transaction when with transactions where should We're financing. forward. both. volume past coming correlate maturing see driver being see

rationale that anyway many active There Maybe if about follow-up on transaction. are talk REITs for that like are my Vegas? maybe into that can you not the And market. Vegas. Hotel getting is in I

of opportunity obviously talk you a lot bit is Apple? can set for Casino if that why good about you But REITs. And could expand in the also you talk a this little market? about how and So think

Absolutely.

now. So time liked Vegas is some for that we've a market

Given our portfolio. that and are opportunities that good fit Vegas for are to majority of fit Casinos, with rooms a associated are the hotels of limited profile invest the there thesis in investment in overall rooms-focused our

Residence sold great Inn that full-service We in the we We a have historically Marriott before owned crisis. Vegas. hotel financial owned assets Hotel and a

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not close We something opportunities And incremental. heart in land given the development, And so available special think Convention it's the with certainly, scarcity have there. of Center. the of for proximity and to we very Vegas

winning has leisure now outside But the how even Vegas the on trends transitions performance additive of be incredibly the and in look look as for market, excited pleased benefited to the And and the is -- the And future specifically But be week Super that you have I favorable. that. on we we'll early transitioned, portfolio produce to with incredibly to leisure Bowl. how right Bowl overall. think from strong certainly incredibly if at have those say we -- we'll certainly year date. year-over-year. to expect they're for I for first something the we'll I there reasonable think think of And at the the projections hotel has continued interestingly, have Vegas near of our us side in to more to us in it's feel performed numbers to Super meaningfully

line Riley Securities. the next Our comes question Bryan Maher of with from B.

do most younger take and of two properties you've kind asked business know I discussed been and to kind Is increasingly respect and into of have me, portfolio. with creating as taxes unfriendly states But of out looking might you make older Just difficult where properties, a answered. there. business well? your trading But working consideration that what newer, or do it to of laws considerations out for at of mine you're trading when

presence, markets, look think new management overall, area asset addition both shift that's looking to But performance looking assessing we're underwrite at performed portfolio, companies and the And pursue them been our we're existing such concentration it's is Liz our to I differently I'd And the slower there, which opportunities differently one what we overall of for interestingly, moving we're rate prepared relative states. I to efforts explore And overall. our when business-friendly and the to as standpoint. the the of mix drive generally needle of potential and we're our both really, been to an performance country indexed have And the Outside happy a that's continually at our in will portfolio of challenges we from consider. by looking ability city. certainly, depending we're with in to and large, those expect to each we when hotels opportunities underwrite margins. management remarks, team is the that towards submarkets say ways, outside of It's cost mostly other. that we're our with dispositions. And to and concerns. certainly our increases. our And think highlighted that, reasonable from address and acquire dynamics assets as Chicago of potential an we're I the around to very on we to optimize we continue rebound. factor

which And questions, can of markets is our where the we higher concerns to pursuing in to one highlighted for those adjust been earlier of portfolio. lead mix investors. I more profitability our ways in the the to response One we've holistically drive margins, purposeful that can assets address we greater in of

in pressure maybe much that? impact And a well segues property or how pressures that, address and expense of maybe, and particular. will lot inflationary we question, second tax maybe kind wages a you But increases, do about which better you the kind you is and That talked insurance for of is which that repeatedly can mitigate? hear my of Liz of the think about increases, into

question. good a It's

assumed we have growth property our So and in a taxes, around insurance for rate other. guidance, XXXX, higher

and to have positive there. could that tough we as And more had we hearing your of as still -- last And crop Hopefully property year. not more good assume cost. increases I a But property think insurance, fixed your prudent So variable the we've cost a run we're things. hope with the decent market than is We're tough. taxes conservative some that there.

isn't think market we'd quite I year, challenging the market but last harder as as like. than still a

strong the anticipated fixed double-digit expenses in we've across so increases cost on And guidance scenarios. range the

be overcome increases a We more when even you should That standpoint, being XXXX, able ourselves, more moderate will lapping variable a growth. continued RevPAR are said, from look expense for cost comp to backwards, stable year XXXX. really require

of the [Operator next from comes question Tyler Instructions] with & line Batory Our Company. Oppenheimer

on is Jonathan [indiscernible] for far. This Tyler. so And

leisure? level for me, of on in one and that conversely BT the end, does BT? range, low maybe of still some recovery flat the just Or assume probably on First stable but a low assuming is the clarification that question Helpful end on commentary range the high guidance Liz. for

to December. increase there, RevPAR but perspective we some really, improvement in even January and you and we're seen, Where mean, in I hanging was really are that January, assume we've continued related we we an still believe crossed as ended business from was indication recovery. in which a travel which improvement came what up, seeing. from leisure recovery of an where occupancies, to that's midweek over BT, gave I into

range, we so And anticipate continued I the improvement Related transient. think to midweek. business throughout

any switching far. year all then you're dates development color acquisitions? for on deals so acquisition In kind on contract, commentary that guess picking on the activity, with under outlook gears I do of Justin more are acquisition how you of make forward? acquisitions additional Great. of appreciate light the those And two new I about of developments sense thinking going Okay. for up that And this these anticipated

challenges recently supply currently to of asset advantage are an very continue adjacent underwrite at pricing to build It's are have few where we the There we in same feel around the to think currently term, long it's attractive opportunity expect that assets able the to contract. They're Vegas that we near keeping response about We're to deliver for low overall optimistic exploring the that we underwriting sense. developers to near markets industry while makes who are underwriting. Certainly, and on a that competitive for one impact our growth that expensive The in the and that land questions, to think existing with it's build challenging. will we the for in highlighted earlier are acquired. existing we over partnered arena term. have transactions us. And well hotels. next very I so in the markets or underwriting under be that or I to more projects development I assets. term, complete deals of group, be will in X majority we but that the us likely, super it's we we the will X and add have or the it's new located And more in And both be active we year assets, strong could think X while the likely reasonable incredibly

of Street. question Green comes the next Our from line Herring with Michael

quick the Can Las union on whether your not that acquisition underwriting are again. market? and the impacting the about one hotel that's impacting Vegas Just market in labor you a there agreements in the just how or talk

Absolutely.

that union activity, where market labor significant market. there's impacts any in pricing within for So the

rates. in That higher a us. And is is also so it's relative said, market labor that to I that drive market expensive think to more positioned market other for

have is of that very with Union of most we Union we looking one with all the at markets only is activity very recently in that. And factor effectively markets when The in factor in at the feel labor at profitability. feel underwritten market those long-term that have we we so assets impacts look costs. We is comfortable way profile, and And acquired only I margin in availability. look comfortable cost bigger a their think assets we the

feeling markets just I about Or But I'm little purchase other so? you're you yes, or that? pretty changed the just those bit in the supply us last in a months if Or all still if the And changed that's curious know on, if have good one on at updated contracts. just dynamics if all? X at

the assets? markets recently or our where In markets acquired overall we in

are Madison sorry, under contract the the ones dynamics at there in that have for if the, and supply In Nashville, changed all?

No, they've constant. remained relatively

have I Nashville knew said, site most of seen growth. significant that I think potential result, And cases, that's the at actually the on assets our selection feel supply again, become this we looking even When not And we that is market radius supply good supply a incredibly so. taking time think talking within increasingly new going of that's in that a the for very And has view a reflected We exposure. been portfolio, Vegas which, more some has attractive overall supply. acquisitions favorable in trend in the That in. own. we And been less a term. The a performed to new very at as And across time, development. well. into Nashville board, markets call. over has picture down markets. about our coming X-mile have that, near market Vegas online lot supply coming for about of consideration that a is look spent little our we

comments. question-and-answer turn floor back any the to for concludes I'll Mr. That final our Knight session.

company. and Thank questions us We thanks continued spending you, appreciate your in with and morning. this for time your our interest

we individual As always, in meetings. in our And many as hotels. you to look the with take at to you to you'll stay of in with have the meeting or opportunity forward near the conferences us hope opportunity we future one travel, here of

conference. concludes Thank you. today's This

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