Pebblebrook Hotel Trust (PEB) 24 Oct 172017 Q3 Earnings call transcript

Greetings and welcome to Pebblebrook Hotel Trust Third Quarter Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Raymond Martz, Chief Financial Officer for Pebblebrook. Thank you, sir.

begin. may You

Good XXXX Michelle. Welcome our to Thank call morning, and quarter earnings webcast. third you, everyone.

Joining me today Executive is Jon Bortz, our Officer. Chairman and Chief

our comments those in statements filings, could are Before many to other numerous comments. statements quick SEC a uncertainties, subject implied for federal today as differ XXXX and our our described under These we results forward-looking XX-K are materially and laws. reminder securities by future risks from considered our start, of that and

we duty that effective as them statements are Forward-looking make and only of today XXXX, XX, we later. today, to October undertake no update

can reconciliations reports of You use, and contain financial non-GAAP release, measures we which at SEC our the website on our find our earnings pebblebrookhotels.com.

Okay.

this cover So morning. we have lot a to

from review quarter let's third the financial So highlights our results. first

lower beep in by end and EBITDA third same This to the share $X.XX the beat, Adjusted our the growth. the a resulted than property non-revenue quarter million San our legal which to was non-room which property upper revenue and share, QX as outlook. pre-opening expected and end due G&A exceeded per $XX.X bottom same of at fees. related million the of expense by outlook hotels, lower our $X.XX. This end per with limited upper our and performance $X.X Adjusted TRS benefit was EBITDA true-up financial of expected EBITDA tax growth, our due property above compensation, expectations. was incentive as was range expenses, hotel of - our better share Our to of hotel than combined well exceeded per was expense. Same million, Francisco one above $X.XX which upper adjusted the tax overall savings addition from $X.X EBITDA outlook property a are FFO the of largely to

of our was X.X%, X.X% minus outlook operating to end the property range RevPAR minus in hotel upper same side, declined X.X%. of the which On

and from a was and result renovation the RevPAR by Our Francisco was in decline driven of decline decline July, a expansion, the in X.X% impact negative into National decrease in the the San disruption Moscone the Center occupancy. shift comparison ADR Democratic The from October in a Philadelphia X% year the Jewish primarily last and a last Convention difficult holidays from from year. September prior of

growth. Francisco basic a implies RevPAR the which had San our rest the Francisco on that properties, Excluding of point same XX property portfolio decreased San portfolio RevPAR drag for the X.X%,

exclude decline quarter. San RevPAR experienced decline X.X% Our a other RevPAR X.X%. experienced the hotels in If during our in six a Francisco of Francisco we Hotel San Zoe, properties

comparisons Philadelphia year a XX.X% a to property RevPAR one the to the Philadelphia Sofitel, our National the this the due year declining the CBD’s suffered point ADR, basis to RevPAR XX last compares with Our Democratic evenly which in on its on decline in when RevPAR points negative primarily in and hosted XX% quarter. pretty quarter, basis Convention. third performance, XX Philadelphia, had impact in This

All Station Lodge San these of recent these Union Coral Other Hotel by San led Zeppelin Nashville, Gables, performers hotels. was quarter the in included strong and our Hotel transformation three to performance continued Hotel Francisco. following up Our Skamania Francisco. Zelos, Colonnade ramp hotels of and

and results as EBITDA of Our include for own we XX. the same hotel September are period and RevPAR QX property hotels all our ownership

morning's declined the LaPlaya August portfolio call. which in down provide for monthly closed the September. with up our revenue, not I’ll in hotel decreased X.X% the compared night total portfolio, were and later LaPlaya group nights to was group room of exclude renovation, any was do on XX% Naples the since decline We following revenues during Over room unless X.X%. year, renovation. decreased numbers demand this San X.X% and down a for Irma and Francisco. and in mandatory Our to X while cleanup nights room subsequent order an up our X.X% July, Group in with X.X% basis, a in hurricane occurred the of ADR XX% about prior X.X% on and a ADR efforts. On rebuilding update declining revenues September X%. makes group in did the under Transient XX.X%, evacuation demand in exclude X%, they due hotels closed RevPAR quarter

total solid During EBITDA our above million property beverage as or Buckhead year. The solid versus the a than quarter, grew million in X.X% and the F&B ramp a at primarily prior also million during continued revenues million, well at and X.X% Washington were and the RevPAR outlook. $X.X XX.X% driven banquet $X.X up the to Intercontinental $XX.X of at This in revenue food National. in Same in by the Union Hotel million. Dirty third as better revenues in X.X%, declined DC, the quarter, Station increase quarter was growing by due growth Habit increases our increasing quarter, just Monaco, decline. to catering declined was revenues other or and Rental $X.X rate which healthy $X.X

basis is expenses XXX our decline, XXX Despite quarter. property a better decline same increasing EBITDA declined to operating only the basis Our controlled, outlook margin than well XXX point in X.X%. margin which were the points, of

as hotel ways Station Hotel has practices, the well property impacted just property the by RevPAR Hotel property Year basis declined Zeppelin has time growth same inflationary were percentage date such in San hotel market increased part renovations up the Francisco the X.X% in We disruptions with property an across new to additional properties overall finalization third portfolio from on operate the of Francisco Union to Francisco total year this that declined Francisco. RevPAR above Zoe Moscone to However, wide value. and despite total expense impacted our implement we XXX X% have EBITDA as quarter taxes and managers Same Center more increased points about of this EBITDA issues to of one San leaders X.X%. accounting growth specific XX% or for one XXX as million, our date XXX our $XX.X the seeing one-time estate million our and benefit have San pressures basis San growth of by continue at of points. this and of negatively decline. $X.X assessment for initial Coral expansion, real following benefit, a our true best limited estimate are our million or asset teams RevPAR wages Hotel points efficiently. Colonnade Gables; our from find post-acquisition a our growth Notwithstanding comes expenses benefits hotels negatively Same The Nashville, of and basis markets. $X.X X.X% revenues same

the Now extended updated let’s call. XX, our as last you unsecured second shift After since as facility, our we our our unsecured $XXX focus to capital credit of comprising third term market during refinanced October quarter quarter our $XXX on the million well end activities and million. successfully we loans

of XXXX. facility of out out of as this a of well our credit XXXX, term and to refinancing, loans million of As to $XXX extending our we as one the portion loans extended maturity term existing part

$X achieved this $XXX,XXX million. interest annual refinancing, reduction cost part our and overall we our As reduce which rates, by interest in we between will a of estimate

also our and covenants. now have several We financial of under operating flexibility greater

We’re pleased to outcome support appreciate receive of the and we from with banker. strong this the financing our continue

XX, September our of $XXX outstanding million As facility. credit we $XX had on million unsecured

times. is Our fixed ratio X.X charge

have and no times Our we EBITDA debt was debt X.X to until XXXX. maturities

floating. is current remaining Our debt, outstanding at fixed is XX% XX% and rates the

our at of and million to Hurricane during Francisco, Hotel Tower an invested projects Los following San renovation restoration the resort Focusing now capital to portfolio, LaPlaya. of Angeles related have and to Irma. and Gulf on the Hotel capital and Hills, want the third with on Beverly repositioning much we Hotel Relating provide we $XX.X Common, invested quarter, LaPlaya, date, reinvestment reopening you Palomar projects, at with Revere the Zoe our in the the update to renovation Boston year we million $XX.X

the was the the remediation we that summer. this repair Tower started overall not the LaPlaya sustained was now of in the at conduct addition Gulf significant completing infiltration damage Although as meaningful, we and work, resort remains closed renovation largely to water and

currently in late are resort to November, renovated. striving and repaired to mid reopen this areas with We the public

repair, cost biggest and adjusters December property estimate of early on and estimate losses review permits. property have replace and $XX This our be rooms could and up with the renovated county the to had with being completed $XX and completed we expect XXXX. progress and availability as third The between continue the Gulf in the QX contractors, the million million. before most property were house FF&E million LaPlaya Tower that increase In physical between our the of to storm at Based inspectors LaPlaya. and program. of we at through remediate, experts, materials, and that will remediation in at of We currently of Tower the resort the that be quarter, the the clean - comprehensive Bay challenges property timeliness late $XX phases rooms the to we beach time, available in

will believe program property property recover million our our through this we insurance deductible. However, largely we after $X.X loss insurance

in Together, $X.X following the we in and impairment our this QX. costs EBITDA $XXX,XXX hurricane. other statement. line relating on addition, EBITDA adjusted adjusted incurred million to approximately adjusted we and this item In LaPlaya of our million back $X.X reflected added additional We closure income to combined FFO of losses the

won't proceeds to QX. and reflect do XXXX, of adjusted this $XX tend point receive as is we more addition, we coverage. will in until finalized our our million insurance, have $XXX coverage be of interruption from financial FFO we BI be and In And back million reference, under the to likely estimate our a that we amounts of statements. flood similarly insurance than which When our not collected we add windstorm program in amount EBITDA

$X.X interruption addition, for losses. of million an In million interruption business have we with coverage, business deductible approximate insurance also $XX

overall the don't concern we have any So about insurance of adequacy our coverage.

would our the operating call I Jon? results, on turn to the of color over update remainder that completed with recently as on XXXX. to as outlook So to Jon and the our more like for well now provide quarter, financials

Thanks, Ray.

Nevertheless, more employment are confidence, increased growth by been begin operating fall. growth, slowed have and business as obtaining significant the annual include year, is to correlations, though have certainly our demand in improvements positive economy regions yet stronger experiencing quandary to historical in a and the for to equally estimates show continues major that continues a me last financing, had statistics for of macro. the XXXX declines. growth is industry modest gains. inflationary our gains construction Most and not would demand. by we the On of construction to the term XXXX, have in continue economic number also employment growth GDP an metropolitan despite for industry corporate overall RevPAR a with the growth and This supported costs, let again. have statistics, world in growing gains improve markets world. have increases year, These around US across challenging business to among overall begun in to underlying profits growth, our an lagger, combination development maintain future, So next meaningful stronger benefit moderated for synchronized consumer softening industry since to economic better any most environment for others. in healthy RevPAR been roughly And construction the intermediate note now. a has the modest starts and improving also a and which experience due Despite see investment, these benefited suggesting with

of top declining of nine with defined third Smith fact, quarter. year to the Travel, RevPAR suffered top markets In in XX the XX date, by the declines as XX markets

the falling growth, in is our that's earlier dollar it continues business, this is are election. be, all due growth expect positive economies should abate. supply The of growth and its from up. out increased acting more international around significantly year. in rate travel inbound XXXX. should much the markets factors as has a supply This And that to the relates declines of the as we international been to other is down year if aren't we as continue industry, for the the and result help it saw top global dollar's urban peak our world, due travel. to Unfortunately, in it in international which As One over this increased to should peak political X% see in the things participating we being year little following headwinds dollar the general. in lead, XXXX equal, industry currently as all inbound the occurred, that supply hope currently last to travel a run travel non-economic as previous while we not future, US to equal stronger things these inbound to expect We to

in performance demand in the in industries a as expected, but due pluses from Industry our expected growth QX, for the primarily was likely quarter, the and Houston hurricane. was As supply and following than the to it was a for minuses Florida. Texas result and September, which better hurricanes Texas better than the in of benefits mostly

the basis Houston's over fact, added growth robust for following September. X.X% points to XX In growth Hurricane Harvey industry's demand

quarter already to of into even holidays to with the a September X.X%, growth year compared shift half’s and industry X.X% to up Industry longer but from This as down in the X.X% X% supply a slightly trend the out QX’s the X.X% industry continues last increasing likely the construction X.X%, the that for X.X%. and October building exacerbate the shortages schedules. from to X.X%. compared of and to is this RevPAR rising for With both and and of up increase city marginally X.X%, growth in even labor X.X%, overwhelmed further schedules deceleration flat supply two was quarter's Jewish result labor QX’s year. the stretching inspection construction half’s surprise third as occupancy construction a demand departments. growth expect us and due quarter, ticked the of first will For construction we roughly quarter, up to first And last demand major ADR increased of the hurricanes, more result

the observations notable in Transient slightly remained in whole And healthy stable, that other has industry to were in September. relatively the leisure holiday quarter overall third remained lower modest, from the due far. the but outperformed for shift The the though the business outperformed quarter group so travel demand and for quarter. year growth

trends the Pebblebrook, For were similar.

from out and result we the beverage their not the their but the was headwinds people room directly businesses by roughly and due just that country Gorge million $X outbreak only hurricanes, all in directly the even hepatitis revenues, Columbia had So the not a impact negative the additional growth in shows wildfires estimate including hotel some were quarter, San we throughout markets events, total, the in demand, at food the lost on another cancellations in our quarter, and or we unexpected property no which of regions. in affected and River as of a What communicated in of had but in inability Florida, revenues South and our in quarter that most XX previously other $XXX,XXX travel a properties In to EBITDA. RevPAR points same and to like were detail. affected of all in including $XXX,XXX Diego, shy basis affected

bad for to Hotel fully of Zoe’s negative expect performance so improvement late slow QX, also expected, QX the coming from The of with The biggest RevPAR declined came Francisco the QX the last significant the the was due very renovation city. next San completion customers, to as as As Zoe Hotel been by declines was the in has we not the received case as delays year. quarter. our up in ramp well in hotel of from majority our in in see occupancy. XX.X%, it impact

XXXX. underperformed Fisherman's Wharf, this impact we than underlying into to the effect renovations, these properties them outlook. well Francisco in expected Drake the thought, about at in also build and closures. challenges make And significant Sir from helped Both had much a Francis at our they though an the account and comparisons easier inability for suffered news next The citywide We under-performance particularly strength and (Oregon) we positive from little took our is San and the at properties Zoe, out, working bookings the they offset We're hard the therefore in ships. group negative for to as that economy good our Moscone a of further with market are right their year better of these Francisco performed as as market. operators Moscone in San year, concepting In both the locally Hotel base XXXX. general,

for with to room way ongoing along nights days down more the currently days compression from scheduled history. books. XXXX, room with due up up XXXX. strongest In While X,XXX Francisco's books next at on of more nights and citywide numbers years X,XXX in from is on a XX% up year, completed With surpass or were renovation the are room XXXX. XXXX are in books another the by what's still These more expansion and record days nights, the days all whopping that from on citywide to XX in XX room nights end XXXX to the XXX% be of the they're XX% in roughly materially or up compression nXX prior San

Pebblebrook, market gains Hotel due better San also to Hotel Zephyr, renovations in should Francisco due For as to Zoe, we relative Hotel at and Zelos Hotel performance Zeppelin at see share continued as management. well recent improved

year, Zeppelin upside and West enhance upcoming Colonnade the transformational and and and million, redevelopments and completion recently Beverly the Tower DC, Angeles should Gables, Zephyr Monaco years. LaPlaya above Hotel Naples outlook rose million. Boston brings $X.X couple W million including our In significant our Continuing completed and Nashville, Zoe, next addition Revere the by completion Monaco completion next Francisco, redevelopments provided renovations Hotel Nashville, performance up Los years. total at of Hills the Habit, Vintage similar of at few of That XXXX EBITDA Francisco, other in Hotel Hills, Gulf the the transformations already of EBITDA Station ramp over At from next Union Hotel performance the relative Dirty in in Union drive quarter. should four early Portland, the for in at year transformations of Hotel Common to in Gables, Beverly renovation Coral $X Station Palomar the of XXXX, DC San the beginning third and San the of hotels Colonnade to transformed also increase the our at $X.X Zeppelin the Coral

we Palomar by underperformed X.X%, Notable out Nashville performance market, Kimptons in there of under-performance Naples, in RevPAR decline these We Boston. our portfolio Gables, San outperformance look are each particular at seven of in When our the and RevPAR Coast hotel. five the at RevPAR Intercontinental Washington to the also and While where described, leadership East Francisco encouraging the X%. was come. of while West Mondrian particularly a Kimpton, and key recently to markets. hotels the West Notable at at excluding in is outperformed RevPAR experienced the Coast at when numbers, very in more comparing at Buckhead LaPlaya Seattle our urban where markets our our hotels, DC LA, we've in declined coast, as Coral and struggling, are Portland, occurred by changed

to the and year have third been RevPAR urban by As the does you it expected. year points, industry's all underperforming. in have in changes we continue range. The the are better. both if or of almost X.X the making the not Manhattan industry urban - at our of of to RevPAR by markets underperformed basis leadership we and numbers, X% would hotels of quarter forecast points underperformed our as Intercon, XXX likely believe date performance change has it Francisco changes growth will third X% for from many that end RevPAR basis year the we and urban have of Interestingly, to made process QX quarter San basis industry XX for points remove middle growth the XXX the the been towards

year, Smith So season of the two to markets. due on their Cleveland sizes the and rates, also octane a the comparisons by impact have because markets, last conventions difficult quarter Travel. disproportionate you and in political worsened those the can third statistics performance the see large Philadelphia of in urban that overall reported The star urban high

in For due same overall Pebblebrook, now Irma. the LaPlaya beginning LaPlaya’s operating our and outlook hotel's EBITDA, QX due from to RevPAR early takes QX for taken account the and corporate to numbers in hotel hurricane are both removal performance. of September into into the closure account

end FFO and range Accounting range, the the beat the to include company's the the by impact $XXX,XXX adjusted Then numbers, the property, by top $X.X by and the of reduction LaPlaya in which the performance beat of delay of hotel property’s to taking more adjusted account same the LaPlaya the the reopening same in our $X.X Tower entire the QX for from Our hurricane, reflect million outlook the implied do to Gulf due as the and EBITDA and being for $X.X at to beat end exclusion million outlook and EBITDA of but at $X remains of our into rooms renovation of the during due closed range. without without for by the previous EBITDA then numbers, completion for the the QX in LaPlaya outlook and from bottom QX, impact the upper in to partially outlook, range at LaPlaya EBITDA negative balance due million our closure of loss year the outlook, million million. our our related decline the the than offset the the and adjusted the of the equaled by QX the lower $X EBITDA reduced QX, our sheet at is increases amount in quarter. offset QX deductible physical increases of the for

adjusted reduced third Our $X.XX of amount end fourth the the beat for subsequently the LaPlaya. FFO quarter, range impact goes upper increasing the machinations, $X.XX the of same quarter the in through the for by with at by outlook

X% hotel to same RevPAR Our year outlook the X%. the at for same minus minus for remains range

bottom negative the including to be as the October, This disasters, LaPlaya the from the due revenues various at due the the natural at to quarter of outside of year's where is when in lost expect numbers the quarter been the of wildfires removal was impact San the the to following as of ongoing of now resort we Francisco However, range. QX originally to comparable forecasting end the RevPAR last the the of fourth easy also under completion LaPlaya’s growth planned renovation renovation. strong and third we've in well comparison

For is RevPAR X.X% QX, range minus of our now X.X%. growth to

the we duty, like our safety Before as the running make and beyond and and the Gables both up a made special to they incredible hotels get prepared I'd of our mention in complete value the in LaPlaya our of associates, of remarks, ensure Coral call possible. Colonnade our back and operating quickly teams to Naples and our at guests of efforts as Hotel protect

thank again, So you.

the to may Finally, we've answer disasters the questions be still prepared R.E.M. whatever We’d proceed happy Michelle, of facing remarks. despite now you That feel natural recently, completes our been song the with have. as all Q&A. we fine. says, please

Instructions] [Operator from with comes proceed Please question. question Evercore. first Our Hightower of Rich with the line

go as to seems there the then while of several to ran to also, of theme And remarks topic, with then about on respect of on Good a to combination going with portfolio. IHG at that what's fairly underperforming the we're and prepared wanted managers about perspective? talk morning you And Pebblebrook your Jon, to Marriott part hotels guys. with be in is where I Can through the list well. maybe the with right there now respect you how consistent Starwood and from going hotels. Kimpton talk your back those

Sure.

year. So our five of at Kimpton hotels, of we've this losing seven them been share

Palomar, by Now, renovation an been share point some as at believe be share. renovation. the should the we've been of this had since at impacted has we losing example that we gaining And we but

- new think do for been kinds coincidence. with time some it's perhaps issues cases, successful of many issues at folks but who've various We different I had it's very a leadership the including properties, past, scenery. in we have in So

Buckhead under to I working with they're closely had Kimpton that over There a working them those been integration its from made we've this made in where we've also changes. at also a that We’ve the so that the distraction struggles compared is performance probably make But think marketplace. are couple with to on, as for property this of we've year competition And changes there well some now still of most as point. evaluation. in

overall I know set just going there's or on So likely IHG of if a within more portfolio. with something don't coincidences the it's

I think as it you're Marriott fine recent most that's probably our the the relates Pebblebrook, for as as of song the feel Starwood winner question. we with not Hall getting Fame But said. merger, what of Partnership to at your

So I property at would integration, still the level. say specifically integration in again early I it's think fairly related to the the

issues whenever been within might been responsive. going closely them from working broader think with they relationship well. been we've standpoint, I very as as issues. industry up come Marriott’s on it's very a and well very the They’ve the been flexible portfolio, very appropriate, as

So terms seen they're haven't the coming, told that but We’ve we in yet. haven't seen from been of integration benefit cost much we savings. again them

That's All color. very helpful right.

for Second portfolio, are week. that reported you Pebblebrook’s your supply sounds like bit guys your for with little it final here, just question respect I more a maybe than outlook earlier to competitor guess and last bullish

about about talk with forecasts, also color Just methodology you some forecast don't the And you your if for than prepared uses little more Pebblebrook maybe and the that mind. ’XX come up gave those to talk in maybe of a ’XX comments. and

have obviously Pebblebrook year terms RevPAR yet. of industry either for a Well, growth don't or the don’t we Sure. in - forecast for next we

in the But our in we markets down our early upwards urban from started We going our gotten weighted think average supply X.X%. for proposed stated we early year is for to haven't forecasts, I XXXX. have come an terms us, November. down I come urban of being and Those even as of issue, begin or X.X% we we've in growth where when first But - growth the for from this think as the look budget past, will year peak of would the market example, we at XXXX have even that talking say about historically year. to for our come supply in beginning next supply numbers the we were the the year.

forecast is current Our X.X% year. for the

obviously So When the marginally in market growth current our increase for I the a meaningful the or those markets healthy XXXX, Again, from year, twos. a X.X%. the been from threes, throughout okay expect in about down would the forecast but trend, supply is where come at are deliveries we expect look in low little X.X% industry higher be us has bit for which than that's the weighted but next those we with in demand still mid-threes, will to general. in delays certainly upper even industry,

differential with markets. XX%, in XX%. Portland, driven up increases Minneapolis Diego is urban At DC So up Buckhead at at one, we X.X, wider forecast few X.X%. at is like forecasted Beverly a Santa X% ’XX Nashville San Hills X.X, have X.X. Boston and X.X, X.X%, gets least we at up It Francisco have a our much the which by Monica Hollywood markets X.X, is up San But markets which Seattle, at in healthier with some at at the which little is

optimistic experiences as deliveries. to show at the way of year. they what we brands the These up obviously tell there's what us, our look are Smith are We market. we developers, our as schedules. Travel. tend but forecasts. upon And by numbers upon the talk about on will completions dismiss time well tell a market I do overly construction you, So understanding generally own be walk they And We variance the fairly would the based throughout every the in the We deliveries. market our the to they of estimate because large based

’XX. in in not will open come talking So a about X,XXX we're upon rooms really market when depends market. in It they the

So upon the December daily a July to the little property addition Travel way supply. work market. something on And obviously to in that availability. obviously in the that's And impact the comes because it's in be is to Smith of half no numbers A based comes year. will be on January XXX% comes that in X X much going as property is an that on for

we in our it urban So ’XX. think peaks in peaks in markets We do ’XX. think

little ‘XX for weighted average growth under supply Our is right X.X%. now market a

likelihood, in or there be the higher think ’XX. going in industry is So all we to

great. Jon. Thanks, That's

you. Thank

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

guys. morning Good

across food good Are additional next further lease a for transactions to revenues there even done beverage that, grow restaurants You’ve year? you start the and widen that growing opportunities new portfolio. job or do to

certainly sophisticated good our question, a maybe others, then products. Yes, is F&B Anthony. case little and for the more more and in commodity for complicated

up. re-concepting some Monaco portfolio. opened lot going be Seattle, and some have as such more is being at within have do We we the a ramp in quarter Outlier lapping done and on re-openings in in first we’ll the Yes, the which

restaurant at Vintage We’re Portland winter. this redoing the

dining events a the we've where we of rest so private that within And in the lot restaurants that XXXX. been and rentals. results should and have are of lap doing importantly, primarily private other re-conceptings But get we're spaces, event paying of thing room we're easily which spaces, dividable, with these better the that more sub most great doing is are creating

restaurants multi-purpose Zetta make very drive San room little much we've because that you can can in we are rental we in in even Francisco, room where few expenses rental. a our lobby more importantly, if above our So at space spaces game more into go imagine, room as there more $XXX,XXX revenue against revenue, in the that profitable converted really and Hotel

and margins. And continue those to so help it's highly profitable our should

for next off it's an thing Francis houses a and of a that And food expect the The at as Intercontinental, group Westin would other Gaslamp Sir that from the expect I the group be Drake. our bigger result to is a And particularly that, overall we say us like perspective, as company. would that enhance and of year would group segmentation revenues. we our a portion would beverage year

group What's year? up for your pace next

but So to you tell currently. love I'd up, down it's it's

it. X% about group And us. most down aspect of revenue group XX,XXX is is So up the X.X%, is down nights which X.X% room total or for encouraging Rate is

And me. more just for it. Got one

assets As for late become NAV in to we does the are estimate, to (Starwood) closer more gets you interesting the buying that? your too cycle

it more our than being Well, just in NAV I think take would range.

need in buying assets really additional the offset risk premium in this involved currency a the to we think late cycle. I

but rather do we Now, we recovery is eight when of much don't know cycle. a we the know first end, years to five years cycle into be cycle recovery and a in and the going the we're buyer half a

in opportunity take buying would the been just in itself own it than assets, being more So have assets And market. know, presents our but you buying public when I the range, as the Anthony. mean been we've we

me. for it Thank That’s you.

you. Thank

the question with next comes Jeff of Please your with Wells Our question. proceed Donnelly Fargo. line from

I was Jon, XXXX guys. how question. potential. to guess trying build urban morning about, just RevPAR think Rich's I say out you just I Good figure to on earlier want would the

you have to a X.X%. X.X% I this it year think around

As just the you and of curious are takes you think to what puts in I'm that strokes, broad range. sort major ‘XX about think

things Supply supply, something be And and we when let's think deeper looking two generate One expense suburban urban I that, going it from urban But Well, to you're the tend be obviously at with when supply city draw to think it's demand, puts know takes. the markets. additional see. happen. you the as than the in you biggest Jeff. to in into and the up for about do folks the the demand of but And markets, demand the rate. tends would generally markets be is, can about we

on be is don't the to And know, markets better ‘XX not in expect, likely so we would I probably that urban average.

have better you in a Francisco. However, San situation do much

very Francisco, early. it's San our now, And in right guess so again and

year, don't growth to next the that to underlying at strength X% As economy, we business the including I citywide but be have we'd X% the said, X% of we looking ADR and market. the just budgets, in RevPAR or think, X% growth would with

will next say we're year. next markets would to slack be general, up it'll I that the So hopeful urban the we hopefully year, by underperform in pick demand the think less. industry are likely while And

if revenue, you certainly San some hurricane in some benefits this nights say, to but some comparison be in we'll you see that of inauguration the markets? the I for impacted about in you offset, think will, going you think there you Do DC the XXXX the, is will Francisco? Certainly And guess do kind maybe of that they're too same year gains sort the time, there's there year. a business? hotels some Are more room net disruptive. next of extra positive open had of producing also Just if absorbed curious think at how

one Jeff. Yes. that's figure, I mean hard to a

I had the struggles, think the least York it one urban markets is year that next of this supply New more year. for has than at

it Southwest probably down going York's Bowl weight on has heavier challenging impact. was in you're probably more negative better But little it New example, is than Minneapolis a be the inauguration, urban market. a right, Super Bowl to some year. think in we as - where overall this and the it's So But and has Super an

you I'm there most Is just that you’d in price mentioned curious, of you buyer shares. repurchases of a where be And as recent by other or this quarter. weren’t your just threshold strictly maybe sort approaching the active driven that? factors are

there be factors. other could Well,

not stock to as And We're that we said, going is abide not of to then on those, are factor. periods price. but we've by comment blackout any have buyer price price company, We’re our at do, - we every that a have typical. like yes, a we

annual a an proceeds buyer at of pricing. is one a discount we're is being that This at time disposition our certain cash and flow this We’re generating generated. stock

trading is discount, for higher, decision. the long at buying our to opposed good if If we great. term, ongoing trying stock versus back as so opportunity But higher. we're allocation arbitrage that's And attractive over be opportunity at we're and a stock would shareholders the a an an to it it That's trades continue capital - look play achieve. what the as to

little looser or of compared a but I'm disposition you deeper maybe terms? come just sort guess last I And ago. Is that year buyer and market? really, there's curious in I certainly friendlier debt Just if concerning markets curious I discernible activity? are that's there dispositions pricing better Is one by you transaction mean late, - a right? market. think a my at of been that change instinct quality guess if just to to one that helping broader, is the easier if And little feel been feel of a

the ago. Yes. And I impact this right, biggest on year. do pretty than been buyer buyer from last definitely in however six I mean for up, when availability of is pool of you they you the the were available improved better is, because leverage most year want just markets of if of last to the of the think been is to which the leverage a terms beyond over is It sources mezzanine level? nine they're really have months it's what’s And And you're helping year. compare deeper new readily pool, or construction. And But availability. plenty the year good available all there's today. for this year last that. for has less of course, debt, traditional capital lever available the of

guys. Okay. Yes, thanks

you. Thank

comes the proceed next question of Michael Robert question. Bellisario Baird W. from your line with Our with Please

assume to that that Jon, it range is ago morning unchanged today? fair Good is guys. XX NAV you gave days

Correct.

assets, little talk sell hotels maybe selling on the are about the less would you opposite. focus I a today to And mean just sell bit We a then side. little motivated too, view change but know much, the changed is that higher? things cycle from XX stock your XX too your of when pretty now your goes to I hasn't stock quickly. obviously

think a the assumption is considerations the we of consideration, a I that when think when stock where Yes. of fair is, we sell. the about decide I mean that to that's factor one

could the of private versus cause us be It public be the view is. regardless yes, intermediate in less late cycle maybe with considerations are of - other there opportunity, a more on would the cases some perhaps continued motivated stock so value. that the particular market in stock's a term the higher, And selling. lot value that's one in But where if one to of the disconnect the side consideration,

number So one, it does it's a course of the only but we have impact. of some of use. factors one It's not

just look then the Francisco And how do San you. excluding those numbers page circling to comments, group for Got XXXX? back

those? Well, they I look San back. worse Do Well, Francisco. it without They're we take better. have

are things or your up those out expectations San pace numbers, you little ’XX? in just with where to is looking line are a disappointed Maybe for while Francisco, with shaping qualitatively, you're far maybe at so looking

Yes.

X.X%. where Morgan piece underperformed that pricing, we we've with good gotten don't in so for It’s about and far ‘XX for San our for year success. - we Rate the get We’re so on is have based is January believed X,XXX up of to that Healthcare almost We pricing we - that room J.P. you. can our aggressive this good A have with more don't is I calculation. up nights. Francisco group us $XX.

revenue in So San our Francisco group for next XX% is up year.

we're In little a terms yes, overall disappointed. of

books the are Drake properties sales sales Intercontinental, like and changes the issues think person couple in. the process solving in the booked with the half I portfolio. know better the beginning of we’re group and narrow much on to even Intercon. of I pace With we're issue so beginning for is year for will we portfolio a a into group we think through leadership Things year, of those that go where typically our us changes rooms the the small hope have in I year for like have of there. kick with And in that and get I like we deficit the it level. mean to the at we have would at we don't the being the

short it much is term. So of

up lay most thing is hard encouraging up the your rates. weak if rates frankly say would for at I make X.X%, that is base because to So rate you

Got it.

sounds asset business. of the like is kind that disappointment of the the So underlying specific side it on more Is than anything fair? fundamental

Yes.

That's for it. all Got me. Thanks.

you. Thank

question. the Please of proceed Crow your Bill with Our with comes next Raymond question from line James.

the OTAs in the Good integrated where take for news they’re they the point have or in teens, Intercon low Kimpton there, morning they’ve the new folks. Intercon up Jon, still rates XXs? the to negotiated the high out on on Kimpton

it Some the some Intercon we’re that lower we're are getting and of not. of rates it,

all the on it capture hotels? ultimately you Will

we're we're to the order process discussions. systems, in those We the told integrate that, need do to and of in

you. the year? of Got San on course bigger at group of question. insulator ramp can the And Francisco do of the year. in are construction earlier Francisco, then On in the business over A part aware see delays more how of San group B, you year you’re two - I going the Any than the in you activities in just assume there Moscone?

that out. us help understand Just how lays

Sure.

get reports, of we the that monthly they've - we informed of, and as we the completion latest aware far authority, the from as in no expansion. which So of us the renovation delays are

the been past. So, so far so in good open they've very and

So the they hotel mess - when clients as both on there because talk issues, around as don't clients the well, the as were who the well to they’ve got to are conventions. those putting

quarters not relates out over QX how on and because it that's and the best of and surprising it quarterly, lays two buildings a As for year were closed to year the two three three basis are QX.

And around works quarter back they force the the so sales year, next I those next And this year. that accommodate quarter are expansion year. the and third work renovation able believe to in into moves buildings and citywide fourth three

little So quarter is weaker. a bit the fourth

four. is it because rate J.P. little some QX and accommodation business was the of in quarter QX's there a year, from first up second the Morgan perhaps will this The of perspective. a for But weakest weaker probably quarter make quarter

helpful. That’s Okay.

year on strongest. the a year are two basis Two and over

That's me. Jon. for helpful, question Final

about commentary containment. hotel You expense your cost talking started expense growth, growth and

impact that? you environment? As costs X.X% ahead real taxes a percent And and are environment, X% does look year, how we next to in like insurance estate things

Sure.

component, we That plus area in beverage markets. in the which changing So when is hotels. take whether we in the do next the a you wages world think doesn't into food and probably about and in or account our we're operate it's X% the way the way year business, benefits, biggest

take it most continue of to So We which that. other ways we account new pursue. into well think costs are of generally more doesn't operating efficiently, below the

keep increase X% in focused is you of half those Our or California. keep effort trying to estate get is mind our then on in down real to taxes, portfolio to when And less.

is city most pretty York increase And of aggressive in tax have financially we've than been New aggressively. taxes markets, the that and raising in inflation. in much Chicago, at for everybody most stressed maximum knows been out growth one where taxes you're a properties have our not markets, looking been of for X% faster gotten we're as which growing And much, So those. a reassessed,

we not So what? market I the it pressure in have we tax a frankly up as therefore assessment think do you’d unusual of from and we're are don't where insurance, relates to have a And don't values have don't going pressure, nor up. many that amount we up until going cases, we have don't then have perspective, think we values - an in

go we through May negotiations. our time April,

negotiate So or you owner impacted Bill, but these our I obviously you're against think zero by is any a we probably don't or to property want the storms if weren’t to think fires, environment and expectations, of X%. ourselves I

clearly, And could a If the Caribbean you markets owner California, storms, that if big even rates. or you're X% impacted by be like Keys, were or Houston, certainly double northern in it’s more. digit

that working continue we'll So process.

know, you As had we've years several last actually in insurance. declines

about Our insurance costs this year declined X%.

very So insurance environment are and good we've healthy. had a companies

we we'll best as that in our So do renegotiate spring the

is insurance mean high those disasters. strongly. come Bill, The numbers these away even may are as we markets further down I Yes. up in sector capital all we think, know, amount the and still very global of and I available as from get

the so from very And balance sheets. companies insurance doing are well their

Right. the Appreciate comments. Thank you.

you. Thank

Capital of Wes your with with comes proceed Please question the Markets next line Our Golladay from RBC question.

than you do revenue all efforts, that the guys. expect revenue year? room With non-room next morning grow the on Good faster initiatives to

Yes.

has a of or projects aggressive? you see Okay. of lot supply supply, be markets, looking but of owner more gave at is large just might And more where Portland particular market the disruptive then any the you the there supply type obviously

That's the demand big properties properties in into opposed parasitical who's prefer into basis service, which an more a in then to and typically market. on We see interesting aggressive most market. Those be market to question. a bring room to the select as more meeting a have per I'm not space come demand a sure that tends market. bringing

interestingly maybe think I exception of nature a parasitical unfortunately Nashville of growth a of most the smaller of So sort for hotels, of markets, of lot the our is with supply that couple the meeting out significant the as convention space jump there. markets But success a with no hotels have authority they at larger because where being of of Wes. us unique, of

then but business retailer extra you the seeing defense category much there? growth traveling variance that Any if they still maybe Are little deeper, exposed more? a And in lastly, you low you traveler, are type have for of Okay. mode, as granular names the drill down versus the detail bit names.

to cost is limits the weaker who the yes. hard travel, like in industry, controls, are that what available. industries people, travel. general don't and continues Well, are mean the are be say but the retail, issue there travel. probably many when contract you - the for standard There thoughtful biggest buy suggestions of their our to on of of up corporations enforcement And not general will room that can't think it's more limiting in not on I suffering would general, focused the services, particularly be or to you I those expect, fashion softer financial if your tend

different a to go to got hotel. You’ve

And with higher contracted also generating business were X% because how obviously, we rates corporate so rates losing I that's average years. as as business and you turn can mean increases our rooms premium in of at be not prior accounts picking X% into we're lower or many up out rates rates. with negative could corporate

think and our the industry financial those there's Wes a that, your But the as services because for not customer, better of rates, those for tend less us. good are to frankly many of your of softer lower better in accounts. I lot be rates,

with a the unwillingness to allowed up closed So standard being it rate do it trade has lot down. are when at the or more base the to unallowed not - rooms

perspective, seeing travel Coast properties? Okay. from And lastly you just demand on geographical the your West versus East a Coast more the from are business

demand industry, Much versus West overall of Coast, Oh the stronger East on yes. much the set healthier there, out Coast. on industries

Okay. Thanks a lot.

Thank you.

with Jim from question Sullivan question. your next Please comes proceed Our with of BTIG. the line

Thank you. questions, Two Jon.

wonder of talked work what if be remind the when when you us will Zephyr retail sale there there about there. going just probably lease the I and you the in investment potential could to complete undertaking and you're of space spend But you the the you're it You've up. complete kind past think at

that is $XX between renovated spend of and improvements frontage sides about the tenant all tenant fully and commissions retail on leasing expected three the the investment of the space up improvements, so retail including million Yes. for space. building, the for

XX,XXX the be or available. total quarter are the between - the months that first we we And intent XX,XXX, point up releasing. expect about are occupied to leases, the being will completed two at thirds space, fully we in through about paying is we the of letters and way renovation available becomes of We And pretty signed to leased four all and that we’re feet which as fully for probably and hope so. be fully another that close not rent or leased in space

can rate any account. if comparing Airbnb. of a either And we mean what or Francisco weren’t of a that update years I'll And think concern sizing Okay. when should exist me, about of San regulations can versus the we and could lost just if about you think also if I the how was upcoming with ago update for in into capture curious factor be us business we kind capture. the peak, - about call us couple today on that peak, just that touch versus that wonder sense that is comparison should secondly that on prior rebound in there then San prior if And by have I'm you you Airbnb and amount I so future a you didn't take Francisco, when and enforced was to data or

what not different So a - don't would between doesn't beginning There’s here. of I to who of but the the from I'm we to as I lease deal legal when don't don't have management in online any situation Airbnb the bring kick will with how who city are deal only that down But far of you lot any can sure to other only out capture. both actually The is misrepresent market, way rental people know, good unit they Anecdotally, the settlement, I'm know registered Airbnb registered not. by number we term in until there. of be terms have folks been Airbnb in tell legal. settlement are, the I be companies. listings supposedly we expect for there short next would And get the year have sources sure the or and that the they city. don't data the good we - on as sources. and the

by just of extension, regulation capture? And efforts regulations Are ramping or think the imposition of Airbnb the the can cite aggressive. up touched markets, or were if you those past being any of there reversed where markets you tougher some where that has some other of on slowed clearly markets in you've more the

don't for mean - New we don't have information has how been the I and again capture gone down don't York listings What’s reliable that I is. Yes. I the reported has number know that data. city, been of in but the

Thanks. great. Okay,

you. Thank

question. Please line Scott. Batory proceed with Tyler the comes question of Janney Montgomery next your with Our from

Good Thanks. morning.

the customers? questions any of on looks markets few us specific the remind and just weak can international out the don't Can you is what being if Just for Then there’s follow percentage up also, know booking I a like mix you international on especially business. those your window international as what front. call

Sure.

because on in portfolio, we're New New somewhere XX% any was XX% runs there York to we longer. but and we the portfolio. York average or It think higher our business, international it's when XX% owned closer probably for So not across between XX%

you countries at come commerce regions X%. is worst number is down overseas portfolio. look the Interestingly, that So May, international restricting anyone, to efforts and which our on the Middle a various out shouldn't now are the through data our rhetoric - surprise or of which has East. be travel public because down within Middle The travel East, if both in from the

overall the be countries, is it may not to from fully While Travel primarily about, - travel leisure. the travel discretionary, I impact travel seemingly of an think has coming US. those on XX%

we're more the folks and that's coming number US, in here. from Visa a challenging, coming number number we if both rhetoric the believe it we well of so are for we long which agents of additional rejections, come it's requests difficult takes, to believe the available, as to information, perspective, making much the and from as people number of for processing, it And more we think additional information the answers gotten that or through of that in how

the and So a I'll gives the three saw business LA and the or a big of The the give a draws end we from and come very base. who money lot great of time, weeks benefits four customers high XX% Middle a at folks market. you the for that the spend Beverly lot a over East, West one softness in that's whole folks in was and summertime good example. the those market even the to that permeates part summer, in estimates are market in Hills from that LA Hollywood down of

So Department China, Eastern in XX% at which which the that's in of strength East. increase, the countries, Europe, just of now one weakness example. to government’s in that originating annual There’s negative. South Middle data our Commerce, There’s Africa. weakness was America. the was through significant But running a when one providing in weakness the there's you at look And XX% weakness is

don't believe the so State Department the industry, and visa yet. from it we And trying data to but get through that’s we're have we processing the

Thank me. for all you. That's great. Okay,

of your question Advisors. with Green line [Operator Street question. from you. Please Thank final Hartwich with Instructions] Lukas Our comes proceed the

Hey guys. Thanks.

one you Or kind to the across all more Moscone. Square? different Just benefit expect Fisherman's performance expect sub some Union case, of on example you equally? Do markets, do in your markets Wharf for so versus

down market. Square. up fill do similarly. travel bit travel if year, the group down pretty of that in of as number don't we in in very little fairly A been competition at the overall look It’s with for in make participate in rooms market into percentage eliminates a large, conventions leisure by the this similar that having performing business. But terms renovation the We stock those more up hard near a the versus other Wharf markets have Fisherman's differentiation. Yes. city, you they're Interestingly, performance the the Wharf of international and but at of filling anywhere Union to the lot and city by

Thank helpful. Very Great. you.

over like are call Thank Mr. you. any this questions remarks. would to further to closing at I Bortz no for back There the time. turn

Thank next updating you to for We year. Thanks look early your you, everyone participation. operator. forward

Thank concludes teleconference. you. This today's

day. disconnect your Thank your may have time. participation wonderful for lines and You a at you this