Pebblebrook Hotel Trust (PEB) 23 Feb 182017 Q4 Earnings call transcript

Greetings and welcome to Pebblebrook Hotel Trust Fourth Quarter and Year End Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host Raymond Martz, Chief Financial Officer. begin. may you Sir,

and year everyone. and end Sheri, fourth webcast. to quarter and XXXX good you, Welcome morning our Thank earnings call

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

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

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

So to we today. have lot cover a

highlights. let's our review So first XXXX

completing we Common Palomar renovation which repositioning made projects, great XXXX, Hills, During Hotel last Beverly progress transformative major Fisherman's of Wharf. and Hotel Zoe Angeles Revere Hotel our included the Los and Boston

to as completed in more our $XXX hotel which reduce $XX selling using dispositions, involves million and parking shares. cash property common leverage repurchase million in of last then the proceeds successfully a our Boston York our garage well and New as also large of further than We

XXXX Turning to financial our results.

non-room outlook Our without same-property growth quarter due end $X.X by hotel nonrevenue revenue fourth EBITDA increases. was our million, – $XXX.X to million, top which exceeded related of the primarily expense better-than-expected

in all and Washington XXXX very performance just Hotel available XXXX. the X.X% of in declining Station X.X%. improved same-property EBITDA room in Hotel downtrend Nashville, San continuing renovations increases at San a at generated Lodge a of we up resulting increased Zeppelin Francisco, adventure our Union in DC, treehouses. line San strong has rate And are during a the as in hotels our Hotel Francisco third lift with did available per per and revenue well highest strong which ramp the same-property XXXX, The addition their to EBITDA While RevPAR and and Zelos who XXXX. to end had non-room amenities following declined growth rates revenue Zelos total Lodge Monaco of transient healthy our X.X%, room Skamania fourth XXXX. also management add group zip our as has new Buck, our Skamania Francisco park the over like and as were Viceroytaking continue

which was above property little its of at upper lower EBITDA adjusted This to G&A of EBITDA the with XXXX, the our share adjusted was TRS expense. exceeded million and same expenses combined hotel from EBITDA tax the by and the in beat end beat $X.XX, $X.XX end per range Adjusted resulted share $X.X FFO by our and LaPlaya end For $X.XX of per outlook a bottom reopening. outlook following share. to property same addition top due per our lower performance better our

a our work overall of significant XX% performance our compounded adjusted include a return existing XX.X% These by we which rate a support of highlight was share annual portfolio efforts, of as our Now as our place, well over results since and capital the redevelopment hard decisions. allocation teams of for achieved total management XXXX, back shareholders our annualized projects, management hotel EBITDA of XX.X%. the rate growth success transformative asset in tremendous portion have per numerous and a looking share growth adjusted per where FFO our and

increased our revenue strong non-room property room revenue up XX a X.X%. and in and on same total to from XX.X%. room beverage hotel increased fourth decreased quarter, revenues Focusing on XXXX very with declined available operations hotel quarter which a the basis EBITDA the points resulting property RevPAR operating food the X.X% side, fourth Same X.X% our per margins per X.X%; available

to reductions points declined of tax taxes the which property due However at in successful X.X% improved property quarter. by margins two our XX basis hotels,

our result, challenging reductions X.X% true-up great item the property significant hotel for a expenses XXXX. this will XXXX make for taxes was comparison lowering quarter. fourth While Total in a more the during line increased for

which While markets hotels, shortage will the all we we benefit will into XXXX. of continue a the continue our and continue operating due and to to make efficiencies urban workers to progress improving of wage be pressures headwind, expect

as as healthy, quarter relatively has XXXX. in quarter October. was X.X%. for in rooms have cost about been due increase which largely fourth labor labor to and remaining growth that past. markets with in leisure, up of quarter, successfully demand Overall the the transient increases to revenue, of of convention We QX – in the as discussed expected offsetting productivity stronger increased makes pass-throughs portfolio transient transient shift we've these revenue The our room Group down the XX% corporate the rate ADR compared X.X%. calendars while up the were of ADR well trend revenues improved prior This total many X.X% and with soft stable while in by holidays nights which Jewish transient demand X% X.X%, the our group the been revenues across remained primarily and but was improved the growth our out throughout of during year

which decline Our Seattle properties X% a our X.X% experienced LA in a the San X.X% decline, hotels decline at which our improvement. the X.X% a in Francisco realized were of West Diego our properties a Portland, RevPAR X.X% and offsetting a up were RevPAR located Probably Coast West fourth generated of hotels X.X%. on realized and our San hotels, in quarter, this

increase Gables. renovated quarter Common renovation. on our largely under ramp and a solid due properties rebranded Coral Colonnade Boston Coast a with of year East Our Hotel when had prior in it also to up Hotel newly the X.X% compared fourth RevPAR produced was Revere

to X.X% in X.X% November, X.X% weaker San Diego, our calendars declined and Now increased as were which convention Francisco monthly in in San due factors, these October, portfolio but a result expected. largely December of for RevPAR in

was par hotels As and for remediation at much period fourth the include property it's quarter growth of Hotel this as We Zeppelin as in utilized of Portland, all Hotel, the results Francisco. Beach Nashville, for at EBITDA all our for Gables RevPAR as online back from and LaPlaya, the of led the our due LaPlaya our Union except year colonnade January, The Coral rooms Resort, of RevPAR Naples, repair San was and by fourth dispositions work mature is Nines fully were of Station, debt portion from now the all to ownership the and December proceeds specific during a net our and impact resort property was XXXX we a XXXX XXXX. the are in the fourth to loans of off news quarter at strategic as closed completed reminder, owned we XX, reopened. quarter we including property Irma. the hotel scheduled Hotel good hurricane that same end guest maturities paid

extended and million maturity availability portfolio. We our extended also overall and replenished $XXX for the the of credit debt average our facility

ratio sheet X.X our was times In and was of debt coverage our ratio EBITDA balance charge fixed also and year-end to X.X times. at liquidity terms

maturity credit XXXX. and next average extension debt with of the now loans at and not completed our until October, our our we years that a term stands in maturities As result facility debt refinancing X.X of weighted

interest X.X% our rates. average XX% debt of Our is at weighted is rate fixed outstanding and total interest

on ratio, a dividend. our stock maintaining as Based is common a X% is which Based anticipate for this our X.X%. dividend price, a $X.XX same over XXXX which this dividend implies payout Regarding ratios we of reduction annual dividend consistent current our yield coverage XXXX, FF&E implies reserve dividend outlook, includes closing of our CAD the current our for the of approximately dividend XX%, a share with to per Thursday’s coverage several years. last XXXX which

and a that business quick our property insurance update claims Now in Naples. interruption high was on

estimate quarter. we continue replace is be up and $XX will the million estimate remediate and with We and LaPlaya costs the million, provided to clean to $XX inline between which you last that to repair

our carriers, working so are amounts been of closely with their aware have We they total insurance of losses. these fully

the we at the which was EBITDA costs clean insurance. also not the additional including by estimate business up XXXX during are of quarter covered million interruption side, $X On that fourth least hotel loss

We over the with claim XXXX reach our couple resolution next a of majority expect insurance months. BI to this carriers on of the

Our of for our outlook million claim a business assumes $X.X interruption which partial proceeds, of XXXX net reflects losses, deductible.

carriers BI insurance claim increase working our this XXXX loss. the we that to with expect We finalize made as progress will

our that minimize We’re also order work that repair receive do go claim. amount be business for the We record will proceed, to income in estimate will that additional forecasting an expense of our EBITDA XXXX currently negative increase in back And adjusted million. statement our we EBITDA. $X out in business adjusted impacted we when in which XXXX will business interruption season the we additional this to interruption XXXX complete losses interruption

on continue our over Jon? call to progress. updates to would more will Jon as provide We the as make And year like with as turn that XXXX. now to well the to quarterly I provide outlook we insight for

due upper outlook for challenging Ray. over New not was we beat be travel in end the And the Revere Thanks, factored range year to also had Hotel improving outlook year into in we one from than last hurricane. even been those to share EBITDA that aftermath worse that of we major going the range. industry occurred Hotel EBITDA the markets lack at in XXXX more our the Industry healthy underperformed upper out of we year stretched managed benefits eliminated economic our ago was significantly worse by Boston, than the in of managed at a On in the parking points, forecast, hit economic the per from markets than substantially that AFFO adjusted anticipated the sales basis was primarily in increased areas. achieve result increased and the range initial due aided construction a given more X% supplies Despite both deliveries to than hurricanes in also had lower a industry the bit above that which rate initial of business X%, demand both of note, the conditions growth hoped of higher been by year. still year. year the last it have of growth and the which that in per we and to positive end XXX was to the course significantly XXXX would at but York of Miami our of urban year. the cities we and were resulted and improvement to being to garage the would a was the RevPAR have of we ended end and of Nevertheless, initial Houston South Texas the top we the beginning our the forecasted for in occupancies star at initially the the sold RevPAR middle Florida due for of assumed Dumont had XXXX, for in and

initial XXXX same Our for reasons. the our RevPAR underperformed outlook

weren’t we in Florida able in due of the spend so on we almost provided area. of for any experienced don't while have hotels not improvement you following first the August. international Naples' we to continued did the XXXX. our and is we take In has Commerce Department only Irma half travel, quarter, continued been Unfortunately, when food almost And which increased we see has through. beverage. in in the our also in only into complete improvement data South demand to the travel. that hotels travel, However, spend the months advantage came for also did inbound far redo closed the Houston fourth the in data, Hurricane including of reliable trend group had business the increased international know, That to was the hurricane softness renovation couple of of inbound see through second year and three being XXXX, we months as in In any property

for of global while grew X% last was that travel the basis. However, eight months down overseas inbound the year first data X% on shows over travel a

as continues likely course was leisure the in One consumers in quarter fourth people positive the are travel So escalating in the entire growth year. of clearly may have in significant over continued trend softened to the that decline U.S. of the continues lost strong the wanting the generally now things trend dollar last year the employed, the four wages travel. the decline to XXXX. negative secular share than collect the trend versus as benefit of We was to inflation though faster experiences still well months and believe

believe these in XXXX, have continued. far same trends we So

attrition several travel group spotty We've – These in initial not does of group now. and that including also definitely for attendance it across are markets. haven't seen yet a base in bookings also we blocks. signs some short-term trend and business wash but the some consular group in However, signs improvement positive, less improvement group we've aren't our yet years improvement certainly consistent or make in seen our short-term seen

As for the grew in RevPAR expected than number. a the quarter, perhaps industry X.X% fourth better

However, about caution we number. some the provide misinterpreting industry

from hurricanes quarter. fourth the benefited the significantly industry in the First,

look without Houston at the you If was X.X%. and industry RevPAR up U.S. Miami,

range of something there’s points help. the basis So in XX of

the it of does the wasn't improvement the some detriment from. to improvement to third the in mean clearly and Also benefited without both where fourth but the the came isolate Houston Miami of underlying that some hurricanes, quarter help quarter. shift from holiday Now there doesn't that

benefit We XX the so basis of XXX points have points positive and basis was basis estimate between to points somewhere points, combined impact. basis XXX XXX

for of last our successful hotel our New there, from we As escape York in Dumont. the completed with XXXX sale the Pebblebrook,

garage market at of advantage for In of XXX our less Revere million. to share. $XX our a and space garages proceeds we very the than And for we sale strong sold utilized million parking per stock Boston repurchase private $XX at addition, $XX Pebblebrook plus took in

Generally for our and successful a performance we our our than was So expectation. efforts. of better the our the of quarter result good those about little strategic feel fourth as shareholders execution benefits a plan

was EBITDA, the market beat adjusted LA October, range though and and trend to by to When at mentioned, their performed middle of and quarter in Nashville Ray revenues San in other Florida, we expectations Buckhead, Diego beating on performance our EBITDA RevPAR little our Seattle the both were As West expected, in South hotels allowing than compared all of better outlook look continued FFO. than as a of fourth us hotel forecasted. our the softer Philadelphia, our and forecasts

for Finally, our they And DC, a fourth quarter. in XXXX. Monaco on well basis continued we Zeppelin performed San all much Hotel better four Hotel in expected transformative Station redevelopments Union XXXX overall, perform than Francisco better to of last and fourth That than Colonnade EBITDA the from combined total Nashville, from million almost the Coral Gables quarter over year. in fourth the significantly million these to grew million brings $X.XX the the another the in $X year. forecasted quarter we $X.X increase at four properties of XXXX had the beginning

should more increase from regain see and transformational completed traction Hotel additional of XXXX Hills, customers a to higher was bank, redevelopment In Western which million all by with XXXX, $XX With Revere forecasting average the million. new, a million last Hotel We an properties in Zephyr hotels We in we the Boston as EBITDA. Common gain Fisherman's total would exception three in, of of of growth in in best previously, million We expect higher stabilized remixing dollars a these million, to that rates. comparisons hotels these continue into and Hotel drive due their to calculate these Palomar the In to redevelopments Hotel. the DC and increased should the four we of Beverly four XXXX. we little due EBITDA the forecasted $X.X a gain bit we $X.X RevPAR in XXXX where the to of EBITDA XXXX, hotels. redevelopments remaining with will Monaco this the year. $XX paying was million invested approximately additional originally the $X difficult the reduced and of lost XXXX and EBITDA three business we’re Wharf, significant Tuscan finding

after, the addition, the hurricane then the our damage all was was in beginning again November. completed Tower from LaPlaya by resulted had renovation before at it. and to once interrupted and renovate the after Unfortunately, In Irma we that twice: Gulf Hurricane cleanup right

to Tower renovation in the by that earlier, public $X over complete quarter Ray all LaPlaya. end million and its lost Gulf estimated As rooms, the of month. areas were indicated the of We of last able we restaurant at with we along fourth of EBITDA

work million. the year damage all and this with and replacements of of will lost throughout at repairs have by again impact However the months go from is hurricane, along EBITDA to backs and XXXX. that We first nine due reduced insurance. estimating the we’ll inventory the room in significant this EBITDA available LaPlaya $X We're covered currently therefore EBITDA believe XXXX’s

outlook the million portion that does level we've a mentioned, in upon. minimum agreed $X.X a represent of for XXXX in amount company of insurance Ray loss This not for conceptually As the have business proceeds XXXX, the of amount final insurance interruption a our included we deductible. and but net

in We sometime all of is once for expect occur and including final determined. additional settlement year the is the amounts completed XXXX to income lost work late this

We and year LaPlaya, a renovation work. hurricane for of the following the hotel to repair terrific expect XXXX be

discussion XXXX. RevPAR between Now, to I'd to more the of we’d grow X% for lean is like to of and we believe to range. the year. turn upper a And that industry likely X% Overall, half today,

slightly and in X.X% forecast is somewhere better of expect ADR X.X% and We range. between in to X.X%. likely GDP X.XX% overall economy X% will growing to X.X% increase increasing with X.X% with between by and supply based the demand growth XXXX X% on This our a

inbound very on turned international the impact have or urban We're the trends at if forecast supply the basis XXXX. positive. urban in growth industry in more This as versus business which We the XXX expect a not markets the than the improvement points urban industry. industry anticipate under-performance urban forecasting the markets underperform overall approximately RevPAR to suffer again positive markets urban's more travel, does travel either for any would

to We industry This with expect Since would portfolio expect to track urban also by next in until our supply tends the industry the urban else pretty points. not in relative performance being supply bodes STR's we growth XXX well peak equal, underperform growth XXXX. XXXX improved urban tracks year. for closely, peaking all basis to

have else a last basis year, issues to out all for tailwinds our estimate XX take year, This However, above Pebblebrook we our into isn't unlike headwinds few to points net a positive specific equal and account. markets. urban and

impact points the impact as year's IHG’s well about last in having fewer basis activities to offset the disruptive XXXX. positive from for XX in market plus negative net Specifically, minus the will pluses as of benefits including a of points specific to acquisition Kimpton from negative Women's and XX from Marriott Starwood. not result and events inauguration by Combined previous have renovations integration basis DC related March impact and of of although range RevPAR minuses X.X% of X.X% acquisition

convention We in including calendar expect This to due quarter. in quarter San as DC. Washington challenging the of inauguration March an the shifts be year-over-year and Francisco, first San Diego as numerous lack most Seattle will is well and markets the

the a RevPAR quarter and Our of in outlook X.X%. for for X.X% decline first between is

of Seattle year, the South is growth the and benefit last a and Washington know calendar given this year. Francisco international convention stronger city DC, markets The XXXX single and to in better And the general industry this X.X% The for to to think metropolitan and year better convention Philadelphia calendar ramp Seattle least X% up and the RevPAR negative what markets, extremely travel. the in LA should quarters to not the upon Overall our better likely XXXX market. its significantly corporate reasons. San second stabilization QX RevPAR which expect number in third its for quarter Francisco's travel Francisco, as Francisco, is that Florida. RevPAR the well the again two shifts Palomar year expected of we should of holiday deliver of but inbound U.S. from a second Portland. weaker RevPAR convention positive and is today We single San to calendar include see West to and renovation portfolio, also continuing the than finding robustly; in decline at probably costs in excluding that for our forecasted higher development another are to the of leisure grow Nashville, XX% is business rate have be travel, and starts spotty and the its the continuing San strong as such a travel in continues In the that that us include to likely economy. discouraging half and future. – We're especially at not as time from U.S. the worsening X% and growing same following Diego. terms,, improvements with profits. U.S. as all, at should dollar that increasing shift to the low the city, strong year trends for in that no negatives San a travel market, show in illegal which revenue in increases the a environment. a X% to our due metropolitan provide of that due same and industry be without in this markets, are short-term year that the seeing allow combined encouraged a the secular construction construction supply synchronized program in than more more to early peak cancellation particularly year, are travel shortages and in with better revenue and been albeit some been global travel this negatively in and due the growing global better challenges reason economy hotel in to financing the in improving and pressuring major the of and margins outbound for improving a ago. regulation XXXX, mentioned and loyalty operating some a travel that we trends, include non-economic formulas little than down structural enforcement construction historically increase business and will also progress rapidly should reimbursement and strong This our based include in a also Buckhead, because last trend rentals, of XXXX, issues San labor All San many case markets Francisco XXXX U.S. spend has growth especially of we we to of strong Other has growth U.S. for look Industry growth affecting year issues online optimistic the lower in rates beyond Declining in travel management digit in positives evidence cost high some and growth commensurate increases early cities for believe digits, late urban are for that

hotel RevPAR outlook property for $XXX.X million million. and EBITDA be Given same we XXXX, between to $XXX.X our expect

As include and numbers second LaPlaya to reminder, its EBITDA of not our post both do XXXX the same and hotel a XXXX closure property due for and half RevPAR disruption. hurricane

arrive quarter outlook range for we added any in year, include included adjusted our comments is first same our property for XXXX. insurance proceeds not Also the our beyond $X.X EBITDA interruption our of quarter in this which business EBITDA million fourth in mentioned little to that earlier a EBITDA over $X outlook. and the Our LaPlaya that’s outlook of to million at hotel assumes does

our of EBITDA retail in releasing our we call another XXXX, we renovation $XXX,XXX in the by while floor most need that at which Hotel Finally, to completing negatively Zephyr, of impacting and ground Zephyr XXXX. retail Walk, will note be we're

to million space the the investing streets redevelopment currently of million Zephyr square with of value will $X structures end million of $X four floor of our the million, $X.X release be all retail floor that the would and EBITDA street the Once ground Zephyr improve almost makes which expect we Walk. Walk roughly $XX sits. level the higher from of to second stabilized the by XX% income three around quality the XXXX’s We're on that which higher all ground of stream. we're the tenants, have feet retail of to XX,XXX than up much We left Walk. to release we the quarter we the hotel retenanting wrap at of estimate EBITDA on forecasted upgrade space, Zephyr which And complete

of to a level luxury. at which should LaPlaya, drive disruption hotel without with year higher years, we'll performance of a the in couple unless we much be current in slightly expect we of the benefit up XXXX. that make from year. comments our Moscone not gains portfolio see the reminder So to Pebblebrook books most expansion It's a be convention honor our will their to a overall nights the announcing transformative in we significantly significant a that will stronger our work, and when renovations looks see Each already like transition these this property XXXX year which all stable their passion expect improved our business to from this which what on benefit our year, Center their room Pebby We'd XXXX past year outlook, XXXX, our to in case XXXX. We’ll pickup Friday We also and the Sixth in due of today for to our redevelopments. a XXXX up up over year in with for is compression Annual for further outstanding our teams and of its wrap awards should completion Convention hard winners. teams XXXX over thank will the and nights Awards ramp from record property like next preceding and collaboration from clean last travel

Operator, happy proceed us Time we'd on to have. answer could live questions be Xnd forget X:XX year's as Twitter Q&A. at on the winners. that may to don’t with p.m. With starting any So you March that Eastern follow award we you reveal please this

this question Powell question. be your Barclays. we’ll time, At Our [Operator first Instructions] question-and-answer with is Anthony you. thank a from session. conducting proceed Please with Yes,

everyone. morning good Hi,

morning. Good

Good morning.

in you this Could After the opportunistic to it your point? has update still changes general? is your And disposition on last at NAV $XXX are since sales, plan you call? million estimates more looking in or us assets actively sell

Sure.

it various as then would we plans opportunistic favorably part of So to as And have look interest any the plan, minor more acquisition don't on in the that But aggressive our to I or portfolio. some the don't interest year. relates for there to But we’ll relates are within selective to our reevaluation. our acquisitions. range dispositions might NAV at portfolio. continue point we and look disposition say very into is properties I side typical particularly at we attractive we know to $XX I of we it relates point, given beginning our to some portfolio. to it strategic I aggressive. closer overall upon the anticipate successful of know our would don't this this be movement how range, NAV level sales. quarterly at whether the as of Anthony do for change we’ll we've this NAV the no in within that range. comfortable get is interest our reduced the And be time between activity little be. as valuation a our bit we’ll $XX.XX the gone And stock through in feel

of their in Or they is Got than with significantly OTAs. to more are lower talked me. you boutique in more one a Would commissions your hotel announced and willing it Airbnb for [ph] platform? some them hotels platform listing about you there I their consider believe and traditional that? yesterday feature have are that that

can list business deliver attractive our on is the to our business if to hotels. hotels, answer attractive terms and We’ll sure. most they platforms are the Well,

it would So to to certainly program their et works, we try what what understand are and working required cetera. technology is is, how we

that's it me. for Thank you. Great,

All right, thank you.

W. with is question. Baird Company. from Michael proceed question next Our and Please Robert with your Bellisario

morning everyone. Good

morning. Good

Mike. Hi,

about bit little Could the we a to think more side? the you're about you push? lift versus maybe lift least XXXX? or there detail non-rooms incremental doing should revenue what provide more much And have on how in maybe And at XXXX you how the

as In to their restaurants Sure, food higher our portfolio. We’ve events allow within to many create rebuilt perspective spent cases, drives focused pretty only so our you're perspective operations. well revised a higher throughout as we've portfolio, as material leased fourth reconstructing has us our in And from rental much the seeing at now instead in food that and beverage in food more and you in on and beverage some we've business a and which restaurants, of out quarter’s a numbers. in been beverage but dining. instead and and driver concepts, that food know, cases profitable tried revenue spaces cases many related unique to year’s not down the years other beverage profitability of spaces sit last – revenue, flexible both room drive particularly last we've

relates to cases them our spaces it as many both as the In addition in flexible from make and terms a redoing ways to that hotel. design standard a trying meeting well and groups as unique the are differentiated typical atmosphere, room in more of to in meeting more

success – we areas. So and the That's have those base that can revenue our revenue in our both in in of in helping increases numbers. non-room profitability our both drive and see you

RevPAR at our with that the revenues to non-room for range along low-end X.X% the think high-end. I goes X.X% something the outlook like is at XXXX, For

That’s you cycle? the kind acquisition – know still is the helpful. thing you been guys? follow-up doing targeting just comment kind be a what same Is it for made. in it’s early but focus of the days, on And still of Thanks. and repositioning really just would you I then one had are you earlier

Yeah at there strategy any in I change is all. say wouldn’t

were of worked. that there think years to a improvement ago I lacking opportunities we a lot strategies We’ve are be properties There our of in value for investments. have believe than going capital the been created fewer shareholders. today

for quality our assets continue occasional resort the and to attractive end criteria the market be turnaround, day. there they to in don’t regardless you and of that to much, the trade coastal high maybe in at be opportunities fit our perspective, from so prepared move our of terms would major but fewer that cities so And need

That’s helpful. Thanks.

Bill next with Our Crow Please with question. proceed question Raymond James. from is your

acquisition Jon, but disposition guys. go to the got I a morning want good Hey, of I’ve opportunities. couple back questions, to

some And year cap unintended portfolio up one think and that maybe consequences jus I of shrinking from shown the curious this how your might going rate or value-add I portfolio? And whether acquisitions? very doing – and your impacts week. decision-making discourage deleveraging this of low you am has process the

Sure. Good question, Bill.

strategic we in dividends at flow, we cash with company, there's art on have science, happen to what to would it flow company projects, that of through in if timing So those returns, to buying a all into and that for happen would of of well what would look of how and and into diversification, do things and happen did the impact what an every be and those the a would factored through acquisitions and of leverage, on taken which redevelopment. flow, back stock balancing cash our issues for through to flow cash plan we a projects we're the it when mean with our in any our our we per related buying allocations as take cash your timing and contemplated put balance assets in we running would a share. account, try that place, the the dividend, redevelopments market would acquisition of of those of invest with plan size make type as account all benefit terms that We your the the importance from

over a of our the all Bill. strength our good think thoughtful all we approach the years. the our assets, course very years of And decisions directions, things. I over how many and of of sheet, the in of our in done the we've flexibility balance very performance we that of job So shows hopefully, And coverage dividend, about those many, were major both

Jon. helpful, That's

four up. next determination some just how And or pointed business I'm may I be think where five shoots in these or your in out early year? seasonal green important wondering, are there. picks actually travel entering a you've taking weeks out the are root But we're whether typically us the period misleading

we associated evidence, hope a try cautious takes that with for activity of shoots four else to a Sure. of trend. for the starts to you announce improve, And to been including reality. There've I And three consistent and the trends. we've of us or trying find the of If to ours, lot months a to conclude anecdotal couple to is we think is over that communicate this a trends. to everyone industry, last of trend years. certainly we're there's want it and things about don't is conclusion green really been probably sort something yours today, inconsistent very because hope we Yes those while false to bias that versus our mean, come to a

a or should that I'd a of months, But got beginning say, period May these into more least pretty period a maybe the where are good we would get couple so We're you're trends totally say right. over I of mid-March we've And Bill. at idea fairly strong pulling whether in, end not. through

more that, – something there out outperformance opportunities, not hotels? there only really finally from in was and Do out different management one different are Francisco change Viceroy manager – putting was other toward me, opportunities your outperformed prepared for wondering, the at there about mentality they I'm comments San the switch things they to stood is the stood remarks of more much have Jon did? asset the there what they how Did rate? the And out that market. and that that in and just

Hotel been which really is where made Yes changes the effective and Viceroy to operators we I think they've things. we that Zelos, brought of XXXX, a brings are case think what following I of table which in couple the in in multiple the

work very create both environment they're a to all, that and good And very create Hotel and with both of Zeppelin coming and property with Hotel been customers active relations they've relevant an property, that, direct with our I collaboratively for with up creative. in make media. very on successful a story, through basis order a sale out, at and to ways They get very unique First Zetta word us. and that's position as at social a as the well public think they're us,

think I that's part Bill. of so And it,

there together. with They revenue relatively I albeit that the and Convention three we their stories because Union similar within They're we are a each versus the a And they to of and Square the are two. driving sold think perspective, properties, close together. even be Center of from have it's the a not other three package blocks hotels other, sell few two rate really different fact have both that those. a it's is factor, but cost manage properties and ability very slightly different to about effective really not and of positioning part savings, with how about small and of more

relates to do it as to So other that. places

at the we have brought Union Portland really brand. Sage unique the and those Station as Hotel Union of January Station, they've Autograph really because just manages way in the we luxury in. of the in the costs where But Collection. as we've is But of it collection activities. us creativity where higher story, our – approached Portland done the just independent about So case make did well case, for the one just hotels, experience, the Nines design, a same the the we hospitality X, change, in similar those collection under things, as cases, the Portland in Sage Madeira in brands, in Nashville

and to same basis creatively the to both at Nines, with local weren't efforts Hotel we in on take the And activate before. properties way together Madeira, so the sell advantage to do property hope we of their a ability able that it the

picked [indiscernible] Alright, I’ve thanks already outfit for my awards. Jon.

So I’m excited.

Bill. care Take

Alright.

Our with BTIG. questions. next is question Jim Please proceed Sullivan with your

increased exceeded about it, is the the November what it just you you. this could range have earlier same comfort I make at peers end provided. And Jon to indicated budgets wonder level just that your Thank referred guidance a week you guess, missed their not. if clarify, that may more have And understand of range? morning. saw if it the the to and XXXX I had of end one your driving or Good but want upper pretty at commentary materially, may I just the being, that's the little January you you I of comfortable had because sure upper

numbers. were of so, our Yes own just industry. the necessarily for of comfort my about the all It on clarify, range the comments the wasn't upper to first for end

some don't a it to remind properties from or But because the I the just was lot hurricanes – me we your not industry as without unfortunately, relates are think a Texas in Houston. will numbers see benefit our think of from benefit place. I second? to that, question, any And we're continue took that get particularly other – which

the Sure January…

over January, light be so Okay, kind we improvement that see tell budgets. did early in tend yes no, to the would you process, of a but budgets in funny I not general, It's year.

and a are really not uncommon incredibly property wouldn't hate our our commenting not want experience that. and quarter that's reason on and our light get push to back not I whether know the I'm that's year. to off properties that in the But eliminate peers. to in budgets of in it's start, teams because budget the I case to in back-end with are over load a that looking XX for own and we try loaded. first dealing to for bias unusual, at years, good I no budgets conclude have in later in we then that that own idea. So budgets try for our this one

budgets and our material – unbiased it haven't identified a we've seeing. few from impact fairly been are seen, we And hasn't I've things just a that seen while quarter-to-quarter, numbers had so on yet we think the we've

Francisco. San of terms in then And Okay.

had quarter you think, I I us if information don't I updated. think nights that's in if share of an know the in, and back you nights don't outlook. more compression there's year. regarding specific I last XXXX updated can some with information provided been last know any on

Sure. can. I

from on So books, SF the this Travel. is

to now XXXX, nights, right around move is number. for $XXX,XXX In increase on the That – books some, from XXXX's from XX% X,XXX,XXX So right compression books do XXXX. Jim. on up XXX,XXX a are now these XXXX the That's and rooms.

quarter at we the the talked four were that's for month. is over So They're last XX, it. I about in they're when from we which last XX up up – think XXX% think XX another And XXXX. I at

Okay. Francisco was And of want prior to that. peak XX% compression nights total I rooms, XX%, than less in San terms the some, in say and

nights, in XXXX compression I So year XX have was was in And on numbers the through highest for the nights, which room XXXX. XXXX, was XXX,XXX.

to release, additional to you renovation if Okay, very say that. Hotel good. in the San referred the in that's way right Also your Francisco, at Zelos, some

you, Like you. yes. like Zelos,

you project? do finished? expect you. thank for Can that renovation timing you be to that confirm When Absolutely the a

likely the it’s to finished. be Yes year when would be late in it

And on EBITDA Walk, million and you Okay. your think I Zephyr upon had fully the you the prepared think in referred of then $X.X comments completion, being I leased. indicated

that? And Just what do you hit there on basis quarterly a that. with two currently? questions expect of When the to is level preleasing

Yes.

So turned had the over we've last we've the months. leased expirations over that space the about of that the or XX half course of

have the that combined be spaces we gross you spaces. see average there hope [indiscernible] of obviously, XX,XXX of small under is that's course, the can the spaces, the remaining a could will And with is foot rent in top of spaces. which for the between I full Our left, rest $XXX that. paying tenants a but feet small on taxes at space represents think some little are seven and basis and most, And on relatively a $XXX they're six,

of paying the So start have hopefully and sometime, to get and end this XXXX tenants and hope rent. in all this expect first in leased as by we space year the then stabilization to fully would the half move of

retail separate plan? lease the that space ground Is And I Okay. the potential still And selling the agreements, the underlying before, Jon, to that Okay. believe the agreements, you lease leases. you referred for if

benefit of lessor. that into as it. getting mean, with don't ground Retail will we're owner to urban not with believe, that Jim, the in as others Yes anything ground it if best our plan. But And going well keeping obviously. lessor. we up they that's are the both plan dealing particular, not long to we expertise, not property would end out work We the and completing We're them, of a that the way still hands specialists and the do continue I space. from are is in retail, optimize the who

Okay, great.

Okay thanks Jon.

Thanks Sure. Jim.

Capital with is RBC question Markets. Wes Golladay next from Our Please proceed.

Good morning guys.

much call at weaker the demand? some versus performance, it supply some to would under in these international actual urban Just the gateway of cities, attribute how of especially looking you

tend Well, it market. still that's would supply issues say vast the a is I the mean, the to of majority toughie, that Wes. going be in I is to –

XX impact a when points issues, I a basis impact to have point think or or XX something market. supply demand X% so I in from think particular with – bigger of a – international could going points given international demand you or you in X% a supply or XX than of a and see start the But add travel. markets that basis basis particularly much more year,

upon $XX stabilization slide And your presentation you How on capture website, Okay. potential embedded guidance? of is in or in your the guys to stabilized shows that million much EBITDA of then of of EBITDA a have $XX the a million assets. XXXX additional that

We're to back get you going have to on to that.

as we redeveloped last updated yet. there's script, those. properties before. But I relates from year, that of another properties of We haven't year piece I can haven’t my done investor mean, all one you to $X.X we the it the I those But the million about relates properties it. presentation And the $X – as to give million from mentioned the as EBITDA from in it – increased

our So those would that would represent $X.X in million be outlook. embedded

get the once update you to to relates to investor the we'd As pieces, presentation. back it have other we

get probably Is bulk year a in of have ramp Is year it the Is three-year a these – year I two-year imagine the three? it one. it? stabilization when it point the Maybe question. slower typically to have you asking bit of little two Okay. or typically year, you of of renovations. you

say So four the it’s disrupted. like we'd of what I like to get than two, to we'd back half And more gain. lost, usually get we year years. would three to one, what then we And year

the works, we a first back were more got before, in in ones that we But for with a done sometimes, as the on expecting year. get example properties And completed we we depends when we'd But XXXX, year. back. were an than XXXX it project thought the than the less got during we year in

vary. really I does general, just mean, of the what it's I But mentioned. along it lines in So

guys. Okay, thank you

Wes. Thanks

Dory from Please next is question with Our proceed. Fargo. Heston Wells

Hey guys.

Dory. Hey

Can see trending you your how talk versus going about you branded market last few share forward? independent And years? that over the

say branded Sure. Yes the I equally. our at when years, properties and our XXXX, pretty would last independent look of in properties we performed couple

urban impacted the markets pretty have ten at against year. We and independents, major underperformed markets in our again prior did independent actually, take I look properties did performance. eight our in renovation the We similar out they're But our year to existing properties nonrenovated how properties branded In either versus by of impacted. we our the independents XXXX branded actually better. or properties had think when the XXXX, our their in

think thirteen only of six I underperform.

across for greater And majority outperformed XX a fifty-fifty when of properties for minority brand "collection of brand" pretty of and would branded between us, underperformed. major it's brand year-to-year. the and our Kimpton tell But markets So be my point. into the close this both, the from to years only across you I doing may pretty at major branded and wanted our if we independent to top I at line, performed consistent increased put they a think

does Some years, one better.

most generally the is has with team, just market going and in other's isn’t It factor. critical on our independent. because better. a are do others years, the the and what's to It brand with Some more which what frankly, one's do that dynamics

experiences younger brands the from as haven't customers' unique the of away the way weaker towards change other despite the stronger we XX has that have around and loyalty over lessened, more or seen brands getting frankly, years course been getting or particularly fact moving any independents So generations. the preferences and with of independent the

you. thank Oaky,

Shaun America. Kelley Bank next Our Please from is question proceed. with of

but bit. the really back asked little This Hi with lack apologize coming indexes. positioned overall. if flip I sort kind you or strategically the urban seen at forth third in I broader to already year trying guys and to has on you possible. keep of And good generally there, a been pretty the kind all think ways kind jumping I've just to are amazing But a second extent of – guys. I'm this and row side, RevPAR of of been we've morning something. the is directly outperform up on curious you're independents

anything picture Is of you kind you portfolio of strategic with way further I'm the just high-level kind want given adjusting interested So big-picture out of positioned there are as consider how Just you about it of the your performance be. bigger a or kind view of the of perspective? look of from move next or couple large that under kind thinking we've seen? years kind this consistent you to

cycle this a little very being administration bit them, If you in events prior our been travel significantly outperformed we think and place, change. to gained the of particular business the different and it's it's inbound part, suburban We back this travel came unique prior international the particular cycle. through round kind some from in significant the dollar markets We urban are where of cycle, think that secular secular and international, more markets, dynamics of taking all the markets. the that that the secular and so suburban don't just urban about And go the which cycles, cities And secondary first secondary from going a reversed XXXX, has underperformed half cycles. benefit more in trend or major trend part got of which the are than benefited of the global to one that first are a little that reversed. think than as

urban benefit still So the continues work the that we to think to markets. of

continues markets a cities. The a about which little this to more ability to reasons. – most into of the change the cultural suburban compared a just markets. to term long those of more in strategic It's major to question the second also necessarily cities number few been the – works to going And one There's Shaun. buyer suburban the cities, long are or a benefit as don't I We markets? cities over of urban detriment the and years, has major cities, there being where over buyers that benefiting yet in think build cost is to we the re-urbanization And so, structural much always the globe of the major of of being traffic validate transportation thing other over supply much in secular urban We're around centers better the came – secondary development every higher And we urban continue in maintenance – markets major outperform long the problem, major pool. markets the think the people more markets ourselves to markets. are the than your through itself markets. you but those a convention in liquidity of the cycle. they benefit term unique the more increase of think build. never last of being it's the the urban urban values the think we then secondary Again, and There the for and the all to back year, the those none America, complicated in changes, up major completely do asked values bit buyers hold there's the markets, more term, And over or particular is for markets. activities in strategy think the are the city of the bigger moving earlier but that limited we've and the just in major in or markets

again like of putting Great different kind in part done hotel can revenue move through saw of quarter. Where I of or kind drive the – uplift of a what And things kind add? you as those some the model. at of momentum continued the Pebblebrook job initiatives? can see features you are to, we nontraditional in this kind has are thanks a Jon. of big side good second that XXXX? mean, of then the to And we alluded of Where is, as this kind on spread I we of we

Yes. I revenues, favorable non-room mean, food it's or we momentum or AV. room whether expect XXXX some our in beverage really rentals for and

continued think how every do could tastes are And late as that and some as I be we more packages, at I customer in of rolling make I – of more activities and quickly down other think leader cases, to customer to within a we I check food things, are pretty long well. closely in, have kind check And not and the out, hotels laundry there's been being to afraid and been Our but to thoughtful related work I pretty beverage hotels. the our should list related with go and cases, think and things those operations to on successful room things a early a being consistent, operators, being we we mean, to out amenity fees. within pivot successful successful? pet fees or additional through or be how And And leader in some a frankly. of then lot a desires able other of year to some we've do pike pretty in changing. still take advantage because we there, our leader, And careful opportunities. portfolio continue and there other profitable to coming the look are service

much. Thank you very

Shaun. Thanks

Stephen from Sachs. Our Grambling Goldman next with question is

thank. Hey

trading the demand few priorities to potential a follow-ups questions. allocation assuming NAV? in the versus acquisitions your guess, kept months, hope how you impact you four next Just over three and capital dispositions, would get that corporate first, your I for if reacceleration quick earlier pursuit to do of

acquisitions think this we're it'll making our don't point. – underwriting. affect open So I will affect at mean, it our to I

perhaps, I So successful on on cost we change strategic and we the to capital more well. people or think be conviction depends direction, But changes our our something, competitive. ability pursuits. more other help our as but It don't historically, how it our underwriting and would change approach conviction, it have use when might advantage it with make of that get us about to would

then second Great follow-up.

compelling brand there associated all? bookings become with appear you As be where to fund consolidations actually does point hotels system more and potentially charge-backs, is to brands direct economics gaining steam a improve, the

been the than costs that's I work properties. hotels down have. deliver RevPAR We our the They Well, line. have the do independent bottom find it bring has we than our that majority hotels. the economics the higher that they'd at easier brands to vast don't mean, that challenge independent I the for significantly of make don't the think

need time at are we regular it would We as comes as to it so look hotels we need us them the imagine, within found at of are we collection this when brands. salespeople all it it basis And We specific their We because or could for Our calling number work But brands. on large opposed have portfolio. order generally a expertise actually the compelling. independent and it can you help just to the takers, on harder. do haven't all a easily to hotels. to brands independent in properties be have And that collection make easier. growing

have the portfolio. two in Nines. the the Portland luxury collection I in a at have in three mean, we We have – we

Tribute Starwood And of Coral branded with We have Autograph it at in Nashville. was – them. as at in they we were we Union developed Weston. that both Gables it the Station creation and It have when was brand, bought we a where

we could we tribute an had that we and easily create them our but of to and because both help that a relationship more unique something independent hotels. So make made tribute money, maybe the it property, ability a and at our it make kept perhaps

basis to Doesn't talking make if work. signing keep of about there, this really to – we'll we'll that about get they not year can't XX regular these drive to hundreds a mean it reductions get guys get it And is We're basis. on So costs at be significantly, points But basis or talking down have looking every in mean, in I they order up. XX we're points. there. they'd if

XXXX, expectations inflation color. your what but for level? one Thanks. That’s insight to market on have and maybe you last you are wage super if I changes regulatory that One do helpful looking in any missed, into XXXX both even

or additional generally the where X.X% on mandated I generally between ones increases There and wages standard I and in by would employees our through were the contract, X% hourly have effect. portfolio, the most a X.X% say are basis our some tipped minimum increases fall I would union salary an of all hotels union for would think range. outside of our X% we’re to a apply

is housekeeper to in example. minimum most making a typical markets an as wage of $X $XX Our our over

Put that.

Plus full benefits including care. full health

size doesn't than really increasing there. So X%. it Clearly, have the impact faster much is of an benefit

our changing you we costs. productivity probably other think X.X% that's be as probably then about and levels at imagine enhancements earlier, that efficiencies, below improvements through to can And to you'd without something looking or midpoint, we'd said in expenses efficiencies, With finding somewhere we productivity or X.XX% lower X%. closer staffing that down to in So X.X%. get our

not For beyond different that imagine are increasing would see point, At increases. XXXX, went those it because than standard that much would this we inflationary our much property significantly, already all increases less sure inflation increase. above level as that. I'm Unless the I inflation, up and at

so year. Great, luck this of thanks much. Best

you Thank Steve.

Steven. Thanks

Our with proceed. next Advisors. Hartwich Please question is from Green Lukas Street

Thank any you color why on one me, quick you. under the disposition fell had Can you Hey from contract guest through? provide a just

Sure.

So past open find the number if always if I significant attractive value that get and in to creates think properties indicated our they we that for for – value, a we’ve to shareholders. they any we're from the approaches of buyers

United than But one And the bit It bit capital could sale together they were flyer. bigger, their didn't. States they was confident but of put buy. and in, number It buyer get at actually a substantially was in typical little hotels. this of their a was was bigger to a they buy with – at that it equity and a knew our one We partners so significant had an we potentially. those of opportunistic hotels of the and a

us have for an so And one the had time And paid still extension. that extension. arrived, they for asked capital when the didn’t at million they point, $X They available.

pulled deal, and So our with a we ended discussions them. we

Thank great. That’s you.

Thanks Lukas.

[Barclays]. is question proceed. Anthony Powell from last Our Please

deals had a majority on the just exposure of with recent REIT focused follow-up have in acquisitions. and resorts, years Hi, LaPlaya. A you on

your exposure with relative some core you transient properties? in to to kind had years. your you’ve recent addition time In business Would increase success resorts urban over and of experiential Skamania hotels Lodge

of There's our have – Yes urban – at versus to bigger. it's percentage, we're complicated. negative They're usually They're strategy are I the mean, in the per not bias there's those grounds on properties. increase se any but within There's portfolio don't more open. but in We terms And a general. lot – resorts – we’re a while weightings tricky. harder going resort. are of

is of You're what demand. like think we three-legged a sort typically of demand to two-legged as

a you base. your have So little less demand diversification of

– tend be You to you lot of tend to a to group, tend a lot of have you leisure. have and

You very unless near little market. in to an tend it's urban corporate to transient, have a resort a property no

leisure better for is So on XX% hotel, often has part XX%, at dependent been great corporate resorts the other because of soft. better they’re in leisure can times XX% in But a goes heavily this when or often and travel doing or for that the direction transient like cycle. do – of

the moving away define think depending risks. So There's frankly, more to resorts higher you or golf in careful. general, be The from you we to in traditional the They're higher. costs then And be tend complicated. frankly, want courses resorts active to they're how adventure that you spas, risks. of are traditional resorts returns more because of them. have and customers more moving upon need towards higher think capital just We more have

is with consistent trend have to that able and resorts, trend from want move we we be we to to with So what think look consumer when at be a flexibility perspective. that secular a

Alright, from me. that’s it Thanks.

Thanks Anthony.

reached our end Ladies session, turn remarks. would Jon have back for the of I and over gentlemen to closing we the question-and-answer like call to

look of news We for the good participating. Thanks. And Sheri. forward in side. bye-bye. hopefully there’ll thank all months. to you Take comes be And you, trend some update two that Thank care, just more out our

today’s concludes This conference.

And participation. for this You time. at your many your disconnect lines you thank