Apple Hospitality REIT (APLE) 5 Nov 242024 Q3 Earnings call transcript

Greetings, and welcome to the Apple Hospitality REIT Third Quarter 2024 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. Thank you.

You may begin. .

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

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

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

the Perkins, and This of the copy our quarter of Financial the Chief of applehospitalityreit.com. our outlook the the an year. Justin third morning, earnings an and our operational for visit of provide a please Knight, Liz For Executive release for about or information XXXX Officer, remainder company, additional results overview Chief will Officer;

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

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

portfolio our approximately with leisure in of in a continued for but on was on relatively joining to third improvement RevPAR occupancy, remained pleased improvement slow steady comparable trends and third stable offsetting business midweek our the weekends. us across RevPAR morning, for are and in strength report to transient X% today travel, quarter rate as Good of the in increases hotels earnings pullback With growth by we growth during call. entirely quarter quarter. slight largely Travel Day XXXX. compared thank driven Election you demand

anticipated of in travel primary continue the onset our at we As . the improvements driver be business the growth overall year, to of portfolio. for

line with have, the travel resilience achieved expenses, leisure Bolstered in however, and we moderating quarter. performance markets. demand the bottom our pleased strong top been many during ADR of We by recent of growth acquisitions, line

and results with growth, was strong the EBITDAre quarter of October approximately modified million RevPAR operations X% quarter XXXX. $XXX to approximately respectively, up up October funds for $XXX X%, XXXX. Third compared from adjusted show and are to was million, and Preliminary X% third compared continued

of to business a second any upper XX% At our or quarter, radius within be decreased X% within dynamics continue radius upscale, construction Supply-demand same under construction the not have our actual approximately the of for the upper new end year-over-year. rooms product X-mile and favorable. under mid-scale hotels X-mile upscale did

our in growth from materially lodging demand. in by risk potential variability of portfolio enhancing supply limited profile markets and our calls, impact past reducing upside the on highlighted downside have the improves I As overall both

our dividend. represents over disciplined conditions cash distribution Based we an monthly strategic $X.XX strong regular X.X%. an to price, market Supported demonstrate Evolving capital by the to our closing have past us year share with approximately to continue the of operating annual pay and approach stock annualized yield performance, attractive allocation. Friday's opportunity our of provided on per

fund have market to lower the Proceeds been strategic and markets and smaller these portfolio debt, for a near-term have CapEx and from needs. through profiles share we transaction acquire continues dispositions. growth seen While able properties challenging, been hotels reduce with select concentration repurchases stronger overall market have to our sales private optimize be within used rooms-focused to strengthening

sale the completed approximately of SpringHill Since Rogers have X Suites combined of beginning $XX price for in hotels, we the a XXX-room sales in Hampton XXX-room XXXX, Greensboro million. and of the XX-room the Homewood Inn Suites and

entered Garden In total of Austin in addition, North. price TownePlace Homewood contracts our suites with XX-room and we $XX XXX-room Courtyard separate the in our approximately Chattanooga Wichita, of Suites recently into hotels X in XX-room our for Knoxville, Inn for additional in parties including our an Hilton a XX-room sale sales million,

complete expect next the several to satisfied. to months, are all of over the hotels We closing these assuming sales conditions

at a multiple the after the varies for and per trade pricing improvements. cap the and or CapEx taking group, average a individual X.X% rate EBITDA multiple rate EBITDA will X consideration sub-X% $XX,XXX into before key of hotels While estimated a XXx capital required as hotels cap XXx or

an repurchase shares During common a purchase per for million the our quarter, we at under aggregate price of $XX price share $XX.XX purchase average approximately X.X approximately share. program, repurchased approximately of weighted aggregate purchased million through shares to total at approximately approximately the per an approximately bringing a price X.X of price share million. year-to-date $XX purchase market purchase average for weighted million, $XX.XX September of market

over into noteworthy improvements. taking purchase a shares at a to been that X.X we've around capital spread before disclosed X-turn spread required improvement consideration EBITDA recently turn property is required after It plans considering dispositions multiple to able and

has after to been While continued our June of acquisitions months since several to repurchases, positively continued on portfolio unlevered past basis produced contribute recent last on share trailing a year an of X over The performance. much yield acquired X% CapEx with hotels our focus XX-month the overall upside.

and September, a the in Madison Washington, Embassy Our Suites opened D.C. on recently basis and is XX.X% recent well. ramping respectively, X.X%, through Las in trailing XX-month and acquisitions Vegas yielded

act to actively opportunities. where additional and opportunities to achieve yields to allocation we are We positioned well underwrite continue capital relative can attractive other

for downtown is We which $XX in for have under construction hotel purchase, a approximately by million. contract Motto X under additional Nashville Hilton,

invested of we approximately an of the $XXX acquisitions anticipate and Similar acquiring strength $XX this sales Since this and asset XXXX. year contract, maintaining Madison, under have the under to completed in sheet. construction million the of end our million onset Embassy by we new expected hotel completion additional price have $X while being to a hotel the and billion the of developed contract of pandemic, upon in in the late with is balance fixed close

These markets further near-term overall to increasing of transactions to have platform, CapEx portfolio enhanced age, continue performance, size manage to lifting well-positioned portfolio to positioning near-term the our the benefit lowering exposure our demographic trends. economic us average our high-growth and already and helping from needs, growing by

maximize to adjust returns activity, seizing long share and shareholders. our the disposition for with optimal and and our tactical repurchases market conditions total our account impressive changing track at opportunities acquisition strategy recent our record cycle issuance highlight and underscore along in for ability Our to times to of

$XX approximately of EBITDA and XX that a During in overall between key of remain ensure our expect in months and $XX we first growth. strategy million are component with to competitive and at to we during of our the major hotels. our These year, also the invested X their expenditures, hotels renovations spend capital our XXXX reinvestments $XX approximately in million drive further million markets portfolio respective

and of balance the sheet stability experience end XXXX, management by corporate and we well exceptionally future. of with brands strength effectiveness high-quality, flexibility the As our demand markets and our of of we are positioned diversified and provided generators, portfolio we companies, for across and the rooms-focused our the that of are depth hotels, broadly our approach confident our the team,

and to coming believe past I ability additional experience. the While detail we strong. our strength we of do operating have travel rate. our both that guidance. years not investors Barring us turn towards several events, stability continue over improve and annual steady current The Liz through coming midweek demonstrate should have produce Leisure for into now business our It consumer for the on for pleasure in our resilient, year, unanticipated performance returns business supporting observed the with to occupancy the of over macro am has greatest is quarter opportunities the proven are strong to perfect team. during balance years. growth opportunity the confident visibility fundamentals capabilities call to the our financial to coming for shift and the performance my sheet, and in provided

Thank morning. and you, good Justin,

to in the damage pleased and quarter adversely that strong were our be for activity of to hurricane another hotels fortunate portfolio are and not recent Southeast. we report impacted We by the

hotels Our their no serving of the path hurricanes and communities and material, associates. had in guests remained and the structural open, for caring damage

by members and While they also the communities. acts our by all those our are were team . hospitality care warmed extended of service, that and out hearts go to impacted,

up With XXXX. uninterrupted comparable strong up Comparable comparable of approximately occupancy to to third X% $XXX, brought September For year-to-date to for total quarter and was demand, quarter up leisure than the was ADR A hotels hotels approximately ], hotels the XXXX. $XXX, with demand month strongest the year-over-year revenue of more compared X% comparable our third calendar flat RevPAR was quarter, X%. hotels approximately X%. continued XX%, RevPAR holidays to the both period than We quarter occupancy August through and nearly strength as million September, more during $XXX, $XXX through and XX% more compared as up RevPAR XXXX. ADR recovery comparable to $XXX, growth X%. periods by hotels additional quarter was up the third same [ same comparable or the in quarter and to $X.X third shifts, up X% than of billion essentially business in year-to-date X% hotels was

October and growth preliminary RevPAR on in occupancy even was approximately of improvement Based the month. continued results, performance approximately stronger with ADR yielding X% for XX% in

around quarter. weekday primarily continues quarter. July, was growth down but for nearly Looking weekend resilient up Xth X% less third weekday in travel and occupancy disruption basis the to driven August up at XX of during with day-over-day points X% in than by down trends, slightly September, occupancy total bringing holiday, the leisure be in occupancies July to the

and ADR and continues X.X% by for ADR while July ADR down just absolute With lag demand as flat, to September slightly RevPAR to up with continues entirely for quarter positioning midweek representing to the growth higher year-over-year, August overall Weekday weekends, and essentially flat essentially ADR was increase over move the driven upside rate. in Weekend respectively. rates. day was X%, us weekday X.X%, meaningful ADR strengthen, grew weekday week quarter occupancy

at mix, bookings to at relatively Direct slightly Same-store brand.com and XX%, XX% the of remained and with OTA room stable night mix XX% second Property and representing GDS bookings quarter. bookings XX%, channel up respectively, quarter-over-quarter our

the same-store quarter with consistent quarter was segmentation of Third XXXX. largely third

and XX%. [indiscernible] our segment XX% XX% of at occupancy mix, remained group was negotiated the represented strong Other our XX% mix. discounts of represented

quarter, driven was by of in growth the X.X% total expense by total third reduction payroll in and quarter, were respectively, Total decelerating and costs same-store first same-store per expenses $XX in payroll, Comparable coming the disruption second quarter. the with occupied insurance XXXX, The room. hotel the quarter. in cost Turning X.X% was quarter deceleration with holiday our and room X%, with up costs year-over-year for third property the the to X% quarter year-over-year to the up hotels year-over-year the down primarily in expenses. X.X% hotels, per increased hotel quarter a occupied sales fixed most for maintenance greater adversely meaningful increases XX% in and from and repairs which XX% for impacting

XXX the the quarter during period basis same total of down wages was decreased labor versus XXXX. points XX% to or in and Contract X.X%

approximately hotels will adjusted efficiency $XXX flat period as year-to-date, to of operations over management the enhance million hotel essentially our work of with to quarter of comparable We companies time. We our XXXX. for compared EBITDA the same the and million to achieved $XXX continue

margin basis especially XX EBITDA year-to-date, XXXX, hotel our our We hotels XX.X% basis period of consistently pleased exceeded comparable has XX.X% the expectations. down points of the adjusted points are and to same only quarter and which for XX with

was approximately X% same $XXX respectively. million was the of EBITDAre up year-to-date XXXX, as same million X% and the $XXX XXXX, to to X% up MFFO quarter $XXX and X% for Adjusted was for compared and quarter and approximately period year-to-date, of the period million, million $XXX

of Board common our share. distribution totaling During timing we to performance with distributions our monitor relative or rate and capital. other our paid per of uses Together hotels of continue Directors, the million and we to will the potential $XX $X.XX quarter,

Looking at sheet. balance our

our revolving mortgage of September of unencumbered portfolio $X.X weighted X.X%. approximately of the approximately total approximately increasing had In X $X of in interest average we availability of end, hotels XX was in $XXX credit had hand net debt XXX. or of XX, XXXX, debt rate a of quarter trailing our fixed approximately our and of average total outstanding our $XX of under outstanding we EBITDA, hedged. million, to facility maturities As number months X.Xx X At years. approximately on repaid full weighted August, million with debt cash, cash billion We million, loan XX% our approximately were

repurchasing weighted million. $XX.XX average As through per Justin the shares bringing of September mentioned, purchase we an approximately X.X shares the third to at were a active total repurchased quarter, price $XX for in share million approximately of aggregate approximately year-to-date price

end repurchase our remaining share the September, $XXX million under of of As had we program. approximately

have We dispositions outlook for and Hotel refining range transition. the for full date, to the year of updated XXXX, to and XX our account narrowing the announced the timing performance

decreasing just adjusted adjusted midpoint, income by $X.X we change hotel are the At increasing basis margin comparable by XX RevPAR basis $X net decreasing EBITDA by hotels million. by EBITDAre hotels decreasing comparable and million, XX.X points points,

anticipate net change we and be million comparable $XXX hotels between million X%, and $XXX adjusted X.XX% XX.X% between and the will between and hotel and XX.X% year EBITDA adjusted margin For following XXXX, the $XXX income the results EBITDAre comparable hotels million. RevPAR ranges: between in million, full $XXX

This growth it or take takes, than the for our to modifications in impact growth several our EBITDAre. in X% developments bottom business view and and continued the or account environment, RevPAR related results of changes and hotels any These acquisitions the yield quarter, a on any does take into outlook the transition outperformance modest account later change reflect on in into based does operating the dispositions date unannounced unanticipated and less and nor puts current including not changes adjusted hotel dispositions. The on XX. to announced EBITDA comparable line expense margin Hotel is decelerating third positive

XXXX, are for demand with of are As and we bottom stable The relatively environment strong operating performance. operating fundamentals well end positioned we supply the dynamics. we line confident favorable near is and continued

optionality. for enabled to has with drive Our provide recent activity incremental capital to and us us balance meaningful allocation continues our value shareholders sheet

economic differentiated opportunistic conditions value improve more be to equity Our preserve strategy resilient and environments value to has through enabling positioned are market us in challenging cycles, proven when uniquely constructive. through transactions

any shifts for returns while diligently of existing prepared of We now works to our would you be shareholders. performance the maximize That market and take ready concludes to advantage enhance this questions to team remarks. to morning staying Our our for opportunities have us portfolio further answer happy

Dori from [Operator Instructions] Kesten The first question is from Wells Fargo.

Can between and disconnect that update believe rates history? You you their give on highlighted leisure now, you spread a trends. us is where And an from trend then business versus going? historic is transient that where line I guess,

]. see as The XXXX, nights as more rates slight year-to-date, continue Relative XXXX, up gap as start XX shrink, weekend to X%, continues weekend a is shoulder to weekday pullback and [ but of And X%. about to improve. mentioned, so our we've about both ADR relative and then up to weekday still that's up we included, about it's to but a combination

still transient there's as that and forward meaningful improve. continue business we move capitalize to see on a to can see you So gap there

with just for December to X%, QX election assumptions to guess, then And swing assumed midpoint. to versus the travel. figure the get November I trying RevPAR around holiday your out up between and been We're Okay. the what's October

at positive the look look But get the booking rest we booking November this are we for vote. week as position, expect and month, When ahead November. a at softer people we out our as we certainly, week of seeing and trends

are some November, and this on December in growth. trends, as as at So booking December. both point much based position But not current RevPAR still, for November projecting overall, for quite we projecting and

expense your 'XX would current to compare How just what's then And XXXX in you last growth guidance? implied to Okay. expect question.

think in super our continue coming still current budgeting the to in a meaningful said, trends management that process, companies. is environment, with I That early absent sense We're into change the year. our the likely are

The Wurschmidt Capital next KeyBanc Austin is from question from Markets.

could to performance than think are XXXX? improve. you that calendar you guess, Justin, about what should So into the has played look operating into changes year what different, do you towards heading continue turning year most And next remarks this your prepared the how I end highlighted that it out? excited I guess, of

I said resilience remarks, the think pleased we in to my be of Similar prepared with I leisure travel. what to continue

us better begin been mix a build to we dramatically than I have trend occupancy midweek, we market, varies in performance certainly, to think will the positions looking continue rate seen in But has as by continued rate. some and our And grow a We're pullback to to in be continue across manage more move backdrop, ways midweek. we that which portfolio, overall, favorable. have to markets. to with that position

And I continued with, coming highlighted, incremental office, continues travel in for I positioning year, bull supply related, really think when really demand a business be to the it of advantage return really for to on demand a to continued growth side. about we matched as favorable think case the outlook, with improvements us take

a talked guess occupancy about and from on able press an getting managing kind guess, are how to rate far moving lot I you to opportunity really more higher? I the meaningfully perspective really lever, midweek. away of manage mix You've mix being growth the

has those the shifts, When midweek months. control are we around at It's ability there we've we meaningfully major we're around meaningful been look in unaffected had by weeks rate. more that of as across and or and interesting for holidays solely getting Part look terms move holidays. blended of an holidays more disruption to occupancy challenge calendar at

begin to things we that them occupancy ramp a the into year, that is the position in this as move turn as an more now seen meaningfully continue think area. assuming needle our to from up standpoint I in we're expectation next year, corner -- we as we've

occupancy and in mix and to moved capitalize we opportunity little to think on growth QX as our continue our momentum, where off around I to And think continuing ADR the in management moving of started be to and that we of team that and dynamic forward rate that levels really really well. I drive some manage to And at we between able had bit build also, -- from sort looked on back QX, as focus saw of mix there occupancy that. a you and based occupancy refocused QX should mix

then And helpful. last just one. That's

guess, maybe decision growth I sell with the if little stock Justin, some that us the the the at guess, I Like similar just Is remain heading year? economy, slower on remains can the Just, of noncore do extent assets buybacks of slower-growth attractive is predicated this environment to to kind is shares. directions, where the to repurchase additional in environment, next kind ability of mixed direction we RevPAR through on thinking the trading? an of just the spread into and to you latest very the walk on

Certainly.

with think ability prepared our we've I my highlighted been positively in I pleased to very remarks, execute.

between positioning especially looking into trade asset of us. I quarter, to through the redeploy and given there sales our think the how to our back certainly, acquisitions, On to to traded ability and share continues across and attractive sheet protective repurchases, balance create and recently sales asset share be liquidity we're we've

create continue and potential my to both And of optimize prepared really deploy capital the capital as well. acquisitions, at look performance and in strong can in market where highest the returns. looking at to are we continually that acquisitions we we Certainly, and have the highlighted confidence recent we'll look of I then remarks, the opportunities redeployment

The next Batory Tyler from is from Company. Oppenheimer question &

here. Batory Tyler

that's sure for about give So where investors always follow something the of up around talk versus I if that It's you as a weekend. bit sounds how room of occupancy here ideally think growth I'm now little implications kind are you terms pre-COVID some midweek, occupancy discussion. on you'd bit on. mix on there is midweek. not just numbers can where what in are you around focused really, shift? to where like a you moving Can there mid-week is much ADR? the in shift is growing and lot where more of important there's And your you Wanted be. forward like And Do to or continues mix really that going are the that it's weakness. terms a little of definitely mix offsetting It were a occupancy

through I'll of looking on the anywhere A couple XXX to there. from to questions We midweek an October. opportunity opportunity. travel through Wednesday relative peak our XXX or day, the days, Monday points Depending basis have start year-to-date, of still or XXXX. we with percent opportunity still

on So still some the room occupancy side.

been traveler. as has leisure seen a transient and I a continued business that occupancy have and think we that rebuild midweek from we've to trading higher-rated shift there mix it

to think that's as when said, results, look our you in little I I That a put some ADR And on earlier response bit our rolled-up at pressure question, mentioned growth. Austin's are and levels incremental we really where and to gain can at we rate. that based we're we starting ensuring occupancy the appropriately where business pricing some looking traction have drive higher

there. to starting see some we're So benefit

And I that shift think over time. so continue decline the negative to sort impact mix of will

Okay.

then I Nashville. you question a quarter, market-specific the of in on And It softer market year-to-date. Okay. markets the the softer one think was for

that's have assets a in coming be underdevelopment Nashville. of the later XXXX, amount to there's supply in decent You I online going

underwriting, that perspective market, talk about Just on about you're how as pending acquisition you're thinking how your well? that

reasons. view a Certainly, the of on be Nashville has the couple new continues positive to our development been One, of continue for a absorbing think supply market We be new I positive. bit very recently. on to

specifically time, at during beyond for of we the event a Looking also and to see as we of weaker brand. continue quarter, was performance the be played continue they dynamics favorable. that, slightly Over underwriting the performance open, there for that really And performance continue the about during that to good to calendar feel quarter. asset into Mottos our market that as

some of in our performance by that Franklin business also quarter-to-date and suburb Nashville year-to-date And group driven is in part year-over-year. our had concentration

we've the developing perspective, there. in a year certainly, we're think had some this I the sales demand pocket Motto, from turnover where Nashville And So in optimistic we continue market. the feel to

our there a upside as we standpoint. back from there's some representation sort . get sales think I footing of So

next Kornreich from Wedbush is from question The Securities. Jay

opportunities seeing guess volatility rates. acquisitions? coming your about about it are interest what and talk overall I your based current in on you're there the transaction the how where you you interest is stock Has marketplace, considerations, assessing? Can trading you're guess And still funding that Or down? in in think with up do I just slowed

has interesting. volatility there some It's Certainly, been recently. debt the in markets

We continue be deals. to very underwriting active in

So and in the and there fundamentals for deals proceed ample should our total business us of capital of terms of volume cost our available are there, the opportunities to allow for it.

That be said, shares attractive reluctant past adjust pricing the we've over months, sellers made to to demonstrated several And continue on that's basis. as more relative for assets. our a

transactions I looking with to in able be anticipate continue this. bulk price And we competitive especially around ordinarily local Where owner-operators. total would smaller, think total transaction we've to has seen market, lower environment, assets. of in purchase our experience, more at a been the the than create of we've bidding a the there like activity market fewer been

spread of cost wide. the to interest bid-ask for the through continues and/or potential there out is operating performance assets meaningful in Zooming significant but end we'll shift I think to the for see lower transaction be volume year. the buyers, of in capital continue a And space the the absent

if is wanted for next you have if the time this demand. I then I'm one to any seeing which you're segment? right. relative And looking And your how ask XX% curious, into group bookings read recognize year just business, of I any component are of changes with to All just follow-up. that last year? only about

It's a good question.

a our than larger think acts bit industry as little it group about large far don't at Our group book out. I group the We a convention from typically differently standpoint. see talks

versus as year to booking year. it's time. same much a have that clear that don't ahead see just for a shorter next how We window. booking last We don't we looks So time today picture -- of

has really performed onset said, That Since fluctuated hasn't our pandemic, group percentage the of consistently well. much. the of business group our

the of we and over And so years. I current believe couple seen past based both what reason think to on we've no have trends

group no wouldn't have be to it mix or that be reason small strong group. both to and We to and leisure-oriented believe continue between corporate tends [indiscernible] a

from Baird. question is next the Bellisario from Michael

your booking back any moving? just way and is to And activity maybe just then XQ, cancellations of unpack shifts calendar window in want I change some or Which are in go occur? visibility, booking window all XQ. the the the you on rebooking seeing

A sort shifts, of if bookings lot strip of positive. think average I calendar some back good I'd the you there. remain of questions daily say

remain shorter by certainly leisure a from some typically occupancy shift seen a you've from as our month. bookings, encouraged transient business for meaning seen perspective, we From So more pattern that. even but come month booking to shorter-term most comes the the slight leisure term, have we trade is still in

And with impact nothing transient in might business so material. week the it but for the week bookings

September. But as cancellations from had the cancellation short-term little in perspective, in probably overall, that, We certainly some Beyond we monitor year, cancellation rate material impact either. from a rate a it's cancellations no throughout bit change noisy with the storms in September.

along the Got wage at that booking impacting does all? just it. is that at today, window how level? affect growth booking same That's hotel planning operational helpful. And rate the window shorter with And lines, the then and shorter staffing the

question. good a That's

occupied my the I I at as bookings that looked quickly to payroll mentioned remarks, on we changes per think meaning relative stay on in third I room occupied prepared cost forecasting. of scheduling in was it think room per to top we with do a some basis, sort of quarter, have opportunity for near-term there

position evaluating to where flexing make their to sure management companies that's so we're on forecast appropriate. where the team something with internal booking we're is staffed works closely try to And relative our appropriate, and

by storms, I an play impacted dynamics and of maybe additional some having with that cancellations then for. sort of there's the around do that, more shift, need the incremental shifts potential Day And QX I things think and to as that so around Labor think of at teams the impact Xth And July, hurricanes week slightly adjust slightly. impacted our numbers

Understood. one me just last on capital for allocation. then Justin And for

selling push side. Maybe side, the on talk than pretty X spread here the if be X.Xx ago, were is assets? I move know on you flip the year higher. aggressively sell the with maybe not And sell wider side? think the back spread, when you're to aggressive not which can you the more Turning a I mean, why you hotels aggressive smaller why you acquisition-wise, was dollars. on but more on on side the I little capture bit buy buy a stock side, captured

I we're not that's And say X great exactly I'll thing. things. same a think question. buying One, the

cap are rates only I've been clear on acquisitions the the our our growth then market have performance, is average. recently meaningful stronger way. the reality So see aggressive to that certainly, open, extent expectations the think it side, about dispose that way in redeploying opened a going-in capital. these acquisitions rates a of And us as assets selling our you'll while really that it recent But has I stays on the than will flip and been, portfolio to has our enabled recently more and in assets us be has much

this -- and several think we've I times. highlighted

sheet. strength to maintain the of our intent Our balance is

needle easy a an trade over spread we can to returns leverage and And incremental so provide that's total terms a deploy where in how increase we to mindful at returns we're of trade us to -- the we we're required shareholders. trade And an assets and risk in when of and the moves make. I environment investment, think make for overall able capital as time the of

there. [ still Or and all terms of sell best portfolio follow-up Xs premium ]. Any side? then just on emerging it Xs in is X And the expectation

the competitive in of earlier a not premium or owner-operators. buying response to able around a prepared Where still there's highlighted questions somewhat that's local be my point, we're really, create this had. portfolio I in of with that And remarks. to environment assets At individual is most one the are co-located. assets to Yes. and pair

for and I think the demonstrated tactical our to market the to have conditions. we foreseeable response be that think, to But strategy in ability our certainly, make changing I to future, adjustments case. anticipate pivot

from question next The Green Street. is Darling Chris from

of on pursuing any that Vegas Or you're Justin, in out would provide deal you sort? to sheet? with a on you land in a parcel developing, is balance extent more have maybe is partner can there consider you something structure and update some likely the would interested the you

potential explore So term, around as conversations the hope have make I with as there. to that opportunities an then the we'll extensive announcement there and we continue near a had to well opportunity with developer. in brands

worth attractive with a sheet, I an on that adamantly who date part second think we opposed perform And while And environment we're products. to fixed new capacity third-party fortunate challenging. we a with your in done and quality the land developers. of as to strong contracts response to have groups own of construction develop underwriting where be it's the in like number are preference even construction, we highlighting not we question, I to do Vegas pricing have think have balance can to deliver have market price worked through a to in

So that the that to development. be continues likely particular most direction for

some front, you've of then of to of pipeline those And the latter there, see your more next the you the helpful. does today? potentially enter would over and like structured. takeout those to months just we in of That's be the that half quarters? contracts terms curious Okay. expect development look And What maybe on transactions answer I'd

construction primary a deals. less having to finance portfolio, increase repeating, to a pencil muted. include costs in meaningful of is looking supply any that under of in potentially. reason increased and the given under continue XX% supply prepared that I worth difficult to meaningful finance my costs remarks, across we construction it's developments would to construction markets be rooms the us our highlighted our The not than markets -- construction and in it's reality handful new in our a at to that With be in and reduction for be potential bit continues little So is, attractive active

very other one about feel similarly handful think, terms market increase Vegas a And newly well like enter justify which, markets that in constructed Springhill the with perform have the our in higher bullish I focus think return the to are we'd a RevPAR to has to over we a markets opportunity market our still with we and we I our Suites can now of achieve that cost to experience construction limited of to happens in and where continues assets. exposure. higher thresholds. that where There firsthand time,

existing continue we been you to around where will But cost to by I capital see think justify focus large, of acquisitions and assets. our a have

pipeline I believe, assets. significant investors to -- an a of area. portion over will for be attractive at. in I look we renovation forward next of think I scope years demonstrated that Certainly And transact the our what broadens returns can we've think several to that standpoint ways a from ability have generate the continue in unparalleled capacity which existing really

Compass Instructions] [Operator next Dijkum question from Van is The Point. from Floris

Billingsley for It's Ken Floris.

an Just question. expense

year. listed is CapEx million $XX the at million to $XX for Your

question And for for of that So to some 'XX? fourth how is is, year? CapEx My do? bit in going type where next given budget get leaves of are And the much left a is into looking quarter, pushed that we the are. quite you same to

Good question.

today, our perspective. following we similar finish go quarter be beginning anticipated typically into fourth we of this . quite update guide we quarter some 'XX. here year can first are of anticipate reason we the as will As didn't year. the full to do of over no Most the bit spending renovations and we we are into now the position year, that year total began that a But we're spend our we our a relative quarter, that as which so renovations sit in for out spend a to fourth fall in in as the from

would a typical year, we Though CapEx related much at property CapEx to perspective. mentioned, look early, XXXX, midst As also anticipate budgeting expense it's another both question. as still from for if We're we barring level but our perspective of rate in run Justin any they as things changes. of continue are, next the

insurance And just given, question you a on the was Okay. XX%. then said it down

Given your portfolio? priced about maybe Can unique those something down been you bringing last it's year or have talk that mix or so. where in what and the over

should renewal loss trying a bit, restructure were little expense. the did tougher -- program some that we Relative which the uninsured had did I in we Also or I rate comp an say, to April, year-over-year, a reductions that we related to year-over-year yield in easier the quarter, and guess, had to drive favorable. capacity incremental

have down April. since been were this premiums the said, since meaningfully quarter had So good have in also year. we loss and experience That

a of combination it's both. So .

like . This question-and-answer to session. closing would concludes the floor the turn Knight I back over comments. Justin to for

We for appreciate time this you making morning. us

us of done weeks, you the opportunity as one We to of forward hotels. hope haven't to few stay And you speaking and take look day. in the our you already, you at vote. so upcoming would encourage and as a conference travel, in get wonderful we always, If out please have with to a many at with you Vegas

This concludes teleconference. today's

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