Pebblebrook Hotel Trust (PEB) 27 Apr 182018 Q1 Earnings call transcript

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

You may be again.

good and Donna, you, morning, everyone. Thank our to first quarter webcast. call earnings XXXX Welcome

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

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

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

QX than from February that business expected our ago, X.X% than the saw two weeks XXXX updated RevPAR better Same-Property stronger beginning of travelers which second down original the to half getting you declined was of much issued we X.X%. our the significant we're outlook to back we of on particularly be X.X% road as again. appear March, outlook and So,

Our reduction which probably ADR. in by by driven was in RevPAR X.X% occupancy increase was offset decline X.X%

and last Washington like As challenging and would activity believe be challenging San reminder, quarter the Seattle call our Francisco, Diego, D.C. primarily indicated a markets in the we convention our year-over-year most we San that first quarter due to

to in ramping to Los hotels the high but including year. and quite Hills. grand renovation days due to Hotel Zoe the remarks, will Revere in rate. nicely in entire our Angeles strong strategy one three last Fisherman's hotels Super performing surprisingly Palomar event up quarter these February hotel also are detail The in hotels a this more Jon Common, performance four encouraged far were pre-sell promoter best quarter improving not Hotel and had and Beverly Boston primarily very market benefits Bowl later their in speak in the Our his were that of year's and first for a quarter under share Minneapolis by so the very we're hotel at Wharf,

quarter business the of Philadelphia march rated business CBD in market the very in to a property strong the had Eagles’ in group the ADR a benefited But both more our from we Super transient market significant winter short-term This as to in able rate. market X.X% Philadelphia to Sofitel travel particularly advantage pickup. take grew Bowl. also business. increase importantly, were Philadelphia's and allowed convention lower us travel drive replaced QX as by and in the and

the quarter the due short-term at the in Monaco quarter. We to in as to our outperformance whereas declined the Suite the week year about expected comparison San due from the weak which expected, X.X% makes the seen short-term of since in March Washington, year. Madera X.X% of our well and quarter, DC and really down room's the X.X% year-over-year The for such This prior a Hotel March, haven't San quarter. for We Monaco increased toughest the largely month system ADR week XX% X.X% inauguration was the these in RevPAR or X.X% the in our for work Women's and which cities experience month was the total broadly is QX dynamics, increased revenues we in uptick negative of CBD something declined monthly Portland for room an January Bay in earlier, quarter, Group across February, up well year business a ADR Kimpton the in experienced during Women’s which Downtown calendars Washington renovation first revenue markets. portfolio which year our But the of compared X.X%. based underperforming difficult the Transient in X.X%. as due is the transient transient in-the-month CBD as is as for pickup inauguration throughout prior X.X% Hotel the Our of of activity prior X.X% we calendar Overall growth quarter, quarter. underperformed significant very nights Diego experienced business which in D.C. in portfolio as last was challenging above of I the both from most and RevPAR Francisco. XX.X% convention increase from of increase IHG XXXX. last fell supply our displacement integration. outlook. was hotels revenues declined year. Because in-the-week to in March and to impact mentioned Washington Embassy in matching

ownership As the hotel a all of property period our reminder, and as results XX. we own QX our include RevPAR the are hotels March for EBITDA same and

has higher and generated hotel of the better is $XX.X above original revenue This and is to business led stronger due revenues. of top other $X.X million demand quarter end EBITDA the hotel Our room outlook for than that midpoint. same travel the our well as forecasted million and to $X.X property beverage food which as million above

performance redeveloped reaping at increased in the The Seattle, are also Double game Hills, group at the Francisco, and increase and from Outlier at San Take event Monaco Beverly and newly D.C. beverage as such spending spaces Hotel Monaco our Dirty and Palomar In Washington in Zeppelin in room and Mantle bar bar food addition in hotels, focused the reconcepted the we of to benefits our and in and Habit

grow the to our X.X% additional increased XXX-basis-point hotel outlook and revenue though improvements received just benefit the revenues some XXX XX by points which to see are Total quarter. real yet this lower expect Same-property assessments basis EBITDA completion X.X% end top versus above beverage revenue in reconcepting from X% to with declined improving same-property which continued able by EBITDA points of which all estate year food operating increased decline. of We Overall following in margins increased we basis encouraging. margins EBITDA and we of other X.X% X tax increased the prior in F&B the is quarter. was revenues expenses and

benefit Los growth Zoe across Grand investments Hotel We wage manage expenses Lodge. to performance. finding our portfolio Wharf, making The Minneapolis, Skamania to and Hotel in through improve pressures quarter and Hotel percentage that and first keep continue check the hotel through Palomar Angeles, EBITDA were leaders Fisherman’s in efficiencies

million of hotel million EBITDA income QX a our end upper of well same adjusted Moving EBITDA expense $X.X $XX.X to legal above statement, are outlook largely the the million property with the X.X and combined was This of the was of preopening incentive $X.X savings lower result million expenses as G&A savings our which in of compensation timing as down to G&A fees. was compared outlook. These range. related

were million expenses second that in now for $X G&A of are the incurred So, savings in and quarter. to year the saved the QX expected be are

million and QX We our Beach Resort interruption net of XXXX income expectations from in in outlook. business This included with business also claim our in our was line interruption was recognized $X.X Maple. at LaPlaya

LaSalle dividend income during invested was prior reflected nor from our the We we in this also of common QX our $X.X realized in in was the outlook not XXXX million quarter. This shares outlook.

payout that with was the dividend per our Adjusted that with unsecured credit the cents outlook our outlook the share. quarter This the we to At our times reduced provide accompanying debt includes excluding common Jon was with increase for from as second outlook for LaSalle $X.XX the to shares. on end the strategic upper range offset for shares now the debt like shares by at the partly turn the debt from of LaSalle interest purchased call would income as charge by ratio insight the now well our update, use to interest per quarter share purchase the drawing $X.XX along And XXXX. bps and our increased with year facility. of X.X was level associated or and but our end, million expenses Jon? at original X.X shares income in which hotel of by acquire EBITDA the at exceeded was and the fixed LaSalle quarter on EBITDA $XX.X ratio the resulted around dividend I associated rest remainder adjusted new Our the EBITDA of to costs the FFO more times. XXXX on

properties. our travel. to Thanks for to improving. improvements seen And early the finally of markets in Ray. our XXXX for industry we majority of indications in signs quarter, very talked out our travel of well Last and has business most out those early mid-February, a we've about broaden signs We started business see and Pebblebrook. of call for healthy some since begun

and that the for that the new It's tax have surprise is Given to federal because significant corporate continuing increases only surprise shouldn't improving. of of a it corporate in strength would much XXXX, it have happened a profits passage projected travel come sooner. economy, expected everyone the as bill

in up hotels the specifically we of from in in the first down rooms to group at talking the the industry only group for end month XX,XXX the seeing our either Ray seen on been XX both QX, short-term pickup went for seeing example, a I So, it really month. for quarter which been rooms And bookings for finishing term or And or being increase over seen X,XXX week haven't demand short-term the about at for we've for short we've say a As of in down what to business in we're week quarter. hotels, mentioned when transient we corporate relates days, basis. we and numbers? just for have January our group an number years. the in In the at a pick transient,

started further the still for addition, an year also to year. a increase bookings we've in in group out, In little the see but

two-month allowing to been that from continue. last meaningfully eliminated and to more lessened of record up Seems to for completely. them likely room end that the more not are of end groups March. restrictions with people as This the companies March. when or trend that operators January period, Again, that the reported and of Maybe for going shows. almost More encouraged at down $X.X is XX,XXX if the many is the better X,XXX pace rooms businesses. being businesses conferences. months travel it's convention have their Perhaps and so we seen our attrition at sending business have the improvement the what million same nights heavy we're employees group your in-house to we very related being to attendance short-term these far Our end primarily with or now feel January but went year We've continue to of Over year I million that business see group comfortable cases we suspect to quarter both groups, end on less signs we yet, and go are and told a view from the $X.X been from fewer of and we've some improved meetings us also corporate down for of their their we or this seeing represent the and through in the conventions encouraging. then trends. they real travel solid travel just then great up business

other growth. breaks, our per following hotels, so see of meals, in tend we what it for tend identified every occupancies public the while quarter suggests leisure spend This demand first travel Industry trends. than REITs. breaks or business either to cocktail Travel at of look month And for continued Upscale that their quarter This that more then data meals hours proxy remained roughly as indicator doing, weekday an has focus corroborating evidence the that last shows industry see weekend the customer of groups are believe RevPAR I accelerated this travel and trend we folks risen weekend focus better year expected has business data adding our have grow obviously We quality the than year quarter growth improving see Upper at from last a to healthy. this business business know or many the weekday the in and last or data growth how X.X%. for improving year entire occupancies continue that demand first was additional But on many is as a better flat. When to definitely we year. strongly Finally, Smith to events. we is demand travel. midweek when we data far has demand on the group industry outpaced

QX mid-April. than from of to improving industry Easter's increased movement the a negatively quarter, the this XXXX industry degree well that the the first inauguration while quarter rate as weekday March and QX grew ADR RevPAR grew we this strong X% though the down is X.X%. that Easter X.X% since the industry is RevPAR While benefited X.X% to X.X% grew the QX did believe shift arguably a in the ADR X.X%compares performance fourth benefits quarter of hurricanes lesser RevPAR XXXX is noting and quarter. into It's improved RevPAR holiday Passover on X.X%. business growth last compares Even the we from we’re first to by year's which by ADR at aftermath the This look in the in RevPAR impact more best quarter by the increased year and while worth impacted from year's year was And full a Women's as out completely, healthy weekend that which and a increased the of when from point a of travel also believe growth had If favorably weekend to benefit positive last March QX, last basis XX of weekday encouraging quarterly better is even X% more slightly X.X% by representative when year. April growth.

L.A., portfolio that to more we've was the in redeveloped Diego three our with And update $X.X recently and our Common this really earlier, performance Wharf with the of February East on from on was hit in Florida, said hotels. was three performed markets signs and our performance travel weeks like that way Fisherman's Hills, in Palomar redevelopments result San that worse Boston row Philadelphia, quarter Revere lot markets and to we on from XXXX three a in a better better QX improvement even expected. the late million. so quarter than a the forecasting our we our and our Coast; expected. increase a first there by million we Ray than of in Francisco, expectations. those EBITDA $X.X throughout Better broadening on Boston of described XXXX. business quarter encouraging these West are San I'd pleased We're combined than Last million. acceleration and of now transformative Buckhead, the Even This to first of would the As Many March. year. West in the the primarily In performing basis that included that performed and of Zoe markets move Beverly the three in better South Boston was were nor'easters and no performing grew an increase Coast. We $X.X be March. properties far by were EBITDA in expect properties very

Colonnade last of over of $XX should Hotel head XXXX million in in as properties million transformed stabilization redevelopments. dollar they add we Monaco year's by Nashville In of indicated $X $X our to negatively this EBITDA other properties Station DC just decline to Women's the year, Zeppelin EBITDA of their the XXXX, add first another towards of $X over increase total four Coral Monaco exception continue million additional DC impacted XXXX. four the they In with DC year the over San in $XX of three well included and over did the a Union quarter. we while this comparison by March. a EBITDA on inauguration quarter Monaco we to million the first The following investment $XXX,XXX. four be QX In total, these the gained last addition, Gables, very just $XXX,XXX in which discussed track In in which properties saw properties was quarter Francisco, Hotel million

LaPlaya. Now, update I on brief a to want provide

end renovation following the the of looks last that The year. in rooms by mentioned renovation terrific it we that quarter the you go the between know service the have wouldn't a September its Unfortunately, hurricane, and knocked hurricane out completed of we hotel were of we backs As last at early last due repairs January, of to the and by of May end scheduled to are and significant ever certainly from was September. completed be replacements damage hit and Irma hurricane.

We have the and, impact work will scheduled months this the is order the business claim. all of interruption performance loss property’s to covered loss believe, we work of with through the by and This year slower a work, EBITDA, in our along negatively insurance. this mitigate

for impact the of know in any included outlook loss year. outlook collection year, part this our the be the included we've don't a negative this for income settled as not claim EBITDA in of will our estimate if While the we've we

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

turn year. not leaned better quarter first the continue that So, of our likely we we've RevPAR is X% expected yet let's our outlook of adjusted a to to full range. other performance. industry to improved as and today, year the towards X% grow than discussion Though top the believe the and outlook business quarter Overall, is travel the XXXX. second for of between We've than for for of

into We positive we will after trends. see current if QX signs positive and adjust the continue turn

improvement If We any underperformance turned we the urban travel positive expect as markets XXX than by and would international markets in so industry positively overall. the if XXXX. very significantly a trends urban positive. industry impact the would business more narrow anticipate so industry as doesn't continues to improve, to the forecast have travel by overall urban business continue much to narrow which RevPAR underperform also on urban as impact maybe this expect This points the versus travel basis to inbound do markets the the and in

not Pebblebrook, we're of prepared the of For year's bottom that our we the less outlook and basis range top handily we're up room but while to range QX points. by XX a beat EBITDA. mind very RevPAR the QX, pleased bringing increase of in we're year the represents quarter keep the for yet revenues well than Please for the

QX XXXX million of $X.X our revised plus top range. the by We're range of which to EBITDA hotel the flat and full beat X.X%. the outlook at is $X.X million RevPAR increasing bottom for in is by range Our the at the now

adjusted our outlook and the the As it top $X.XX range increasing million the of FFO bottom relates $XX.X going bottom of range the at increases range the is by of million. we're share by of EBITDA, at Adjusted per and range. the by $X.XX top to the $XX up

were For the an is second to comparison quarter, San Francisco a two RevPAR to our closed for easy X% positive year calendar outlook the renovation. convention of has a buildings growth stronger convention three and for as X% last when

The year-over-year QX. San favorable second Washington Francisco, calendar second convention Boston stronger calendars third only comparison quarter in even a has basis have in and the D.C. Philadelphia, quarter should for challenging more the while on its however, than Portland, be quarter.

I'd company to make like our Finally, our a few Hotel to combine properties. about offer LaSalle with comments

offer formal substantial dinner two LaSalle’s in premium shareholders. LaSalle had combine the time CEO premium of the The a we made a was to a discuss with proposal I Following topic, offering the that XX%. at including companies to March to early

proposal, of our final REITs. was combination us of final two and offer the these positive very to XX% the It's all most the we've the likely at clear our time obvious ratio of response the of exchange the spoken stock that logic is of the the history of increased to merger companies combination our in to investors the to premium of offer. and With our

are Our very overall strategies similar.

shareholders same overlap, out to markets believe of We are last many and the LaSalle’s many and of focused the the we've board operators shareholders quality benefits we those seven and clearly same whom weeks. similar, partner have LaSalle our laid letters are in the of to Our are huge with the over most hotels our brands. benefits the clear and

Outside to us hotels increase XX and as the the we the them here. another as compelling. bid this believe to feel bear XX than expertise between and better particular more portfolio. $X,XXX in room the two revenues of EBITDA $X,XXX So hotels of at proven the to for Not to we XX unique the our of for year companies to renovating LaSalle, term a at reviewed than restaurants are or team my do well. underwrote to these allow acquired one their we this believe but do. $X,XXX the extensively necessary will more the extremely prior Pebblebrook know outlook our our either portfolio profit be we only under Nevertheless, could it's Putting more and can bottom properties want were portfolio of and on which, no per our repeatedly XXXX, knowledge don't benefits deliver long over LaSalle’s as much repeat to experience LaSalle over the hotels bring we of reiterate company's to we and differential for in to we've purchase has compared LaSalle’s to portfolio provide this truly similar outlook as line. leadership key that for incredibly per are redeveloping We them. customer higher and hands years,

premiums highest portfolio. portfolio we've these many While we've support research Through offered history paid our shareholders heard nothing combination. results, potential in REIT the completed but weeks, a we've been consistent for The also be companies. LaSalle’s the to the the has our community in mergers. in yields support there REIT earn ability one our strong merger made We've ever of for EBITDA last investment double-digit of strong over of the in a the to four of discussions would our achieve with investments shareholders demonstrated significant and on the

about higher and recent for RevPAR most dividend today When also than growth XXXX. long Our offer was before was high, stock dividend LaSalle’s their mid-XXXX. for outlook industry is has optimism doubled since LaSalle’s traded the at

lodging REITs in other at prices the also XXXX. traded much of early higher All

in stock Pebblebrook's fact, In high XXs in traded early the XXXX.

target it's our consensus a also significant In NAV and addition, pointing premium that out consensus prices. proposal is worth to LaSalle's

We to the was addition Board a March their in for large rejection our believe the indicating own of In XX% as the who or want mix component to that of by the cash a that rejection ETF LaSalle price response to index and XX% would letter combined also reason want shareholders stock we've initial need significant that offer. premium, would additional in offered LaSalle consideration shareholders their own company. very well and the Pebblebrook LaSalle's who of roughly own continue to own of XX

we Of LaSalle of course, own elect X% just also would shy shares. of and

chooses cash disclosed shareholders value also in week, So, the manner confident do it that to could sent shareholders. LaSalle's their fair anything highly last any we Friday, bid, our that almost with and they troubling. a final merger choose consider XX. recognize if LaSalle's that Earlier to they and means maximizes choose that final Board April LaSalle's attractive this in it XXX% lower Board our would likely get be that offer offer. Board expeditiously so this a offer for not should If remaining we will or We're

we be hand, bidder, if On lose to it. then the higher a other so

that for practice successful with that been create have remaining will has success disciplined on would opportunity. by based pursue shareholders. to our always to our exercised value opportunities will remaining We continue But duty our this shareholders disciplined and fiduciary we our

in a travel potential with and that terrific record and proposed team to the our for this our the that consistent travel us, of in mind our due more nothing performance say in track better great than can a may with your We the of should to behind we a a optimistic to about strong now increasingly positioned rest proceed business position a legal to improvement goal. well questions. is We're first Donna, will accrue committed happy merger. including outperform year performance come will answer that benefits is continued we're for Operator, the pass. We about Q&A. With keep Please that have instructions and to to company there expected from counsel, be you continue to with XXXX. for quarter

question Instructions] Hightower ahead. Please first [Operator Our from Evercore of is go coming ISI. Rich

ask can't topic questions on nowadays. I favorite my any Unfortunately

straight So, guidance. I'll go to

bullish more the commentary lot a So, in remarks. prepared

One why not talked even, business why this point the at not outlook reach of high this of our the RevPAR point? and given books, in you that's pacing questions some on at about forward and is end year, the the maybe the the range the of

look a if Well, years, if that. folks few did you decision at that the good wasn't very last

let's out. And, of given at we administration, trends see And and May how risk, point, how in turns and think travel June, again, the given strong half volatility to the that the environment of market, volatility then the think of these increasing to in, we'll our we see really business so, of do we're geopolitical just months some the prudent, the it wait continue. are rate April and interest particularly likely this in the first it's

then pretty made opportunity clear. probably I think do, that we've to that. do there'll they And be an if

I say that presentations. you've highlighting think, I an us tell recall done return last you're every the a some spent been EBITDA And, those detail of ahead of years? in that of the and, can highlighted for for terms the quarter a job good you're last And redevelopments ROI quarters, you where then, you trending of basis guys over on several you spend. Would on of that something investor this - point? you expected unlevered return in know think, at XX% couple on I that the have I around put what's

think return. yields. and EBITDA differentiate done nine projects particularly I generally large to to the that would half the said we're it's that we've Rich you flatter But and - when the out easier the markets by I'm of cycle the of last the going have up because years I the tell markets the we've transformation. always of and differentiate been It's healthy I over XX% in in put market hard that in the first benefit or to years much not eight benefit double=digit Well, sure redevelopment were way last years, But between we've unlevered been in the would that really our anything stabilized of of lot over. gotten few a say a overall.

be. guess there are I would look that's investor first year presentation have the what right our and page you so forecasted have incremental back XX direct or our third a we in sort of And to yields yields now at been year to take we'd to been what in

as then line one moving at question far the right goes in And top last the as quick trends sounds least here. like are direction. It

about As expense a any labor little there that you're other you talked little or trends estate way year that be are and and Are taxes. bit we the about? about about should concerned we worried this where know categories think real operating I cost expenses going a

other there's the way to our compared Well nothing going was. what outlook

go our the into a We our expense length talked policy So expect our significant renew base labor already outlook. small and but relatively at we've clearly that increase. cost Again built we to in increases insurance also that's again with into that see it's portion that. our along when we're a outlook. benefits certainly about seeing And built of

to that. more the costs even the particularly some business nearing see with to in increases changing which that portfolio and recovery tends hopefully continue credit because some of OTA in distribution we're book Marriott has particularly reductions of be direct travel loyalty we change and costs within processing are some with mix of We group the in the the lowered end mix costs things card that hotels. brand OTA it's to programs, whether mentioned with beginning or commissions or costs things our some - And like see then,

Powell Please go Anthony question from ahead. is Barclays. next coming of Our

I I'll it. for I this but ask go think can’t

Your be would Does you with knowledge cap in in range. imply of to is offer situation mid-X% other that that a for deals that in assets is LaSalle valuation the willing your or given the markets? do size this special

additional It doesn't acquisitions. imply about anything

part your the or views now? what's do appetite to of at updated business on alternative So cycle deals additional your right this travel given

upon We'll moment. on of individual out see Well, relook the right price property plays our individual kind how also is is. and focused not we're on at asset opportunities now one first say depending opportunities I’d this it we're that at thing where stock and focused then we'll opportunity

your And what's of your share? updated your valuation NAV per - what's estimate update

quarter, No change our this NAV to Anthony.

in East past of been Has in? past, the some think RevPAR Coast good. quarters you’re changed that preference your Coast West markets. In for your of has expressed markets the that I you've pretty couple of views the a overall

hasn't with views. believed at West better it underwrote bias we was I our all ultimately at. we successful our we've acquisitions we what was When what flow. changed really that lower were the returns risk ebb and Coast that mean, markets was gotten and Yes,

to And buying so, East we're adverse on the not Coast.

for We many those assets perception upside and continue to have our of depends be markets and focused risks. pricing upon those the it really markets and of

focused coastal the that past. on to So, cities focus we'll continue on same we primarily the have in

next Michael Our from ahead. is go question Robert Please coming Bellisario, Baird. W.

that the in types you're or pricing into demand least made. comments on of bit at in the demand the Can seeing further companies a sectors uplift Just you the dig particular uptake quarter? or you business most maybe little

spottier was more broadening in travel. financial increases companies seem financial the think from in We've We've of about a fairly types some being Francisco consulting in we've the services the more corporations. seen taxed. sector, the and was last we've industries in Coral active it seen the I And in of out the a was services significant is industry. of like Boston, international talked that places it and to consultant. it be and I Gables San what think seen quarter lot it In the

White upgrades or So work lengthy mega projects these by projects out those lot might that you groups certainly services financial or it's in of a people Boston doing IBM with and cases effect or of PWC systems technology Ian in our are that driven who or say whether other Deloitte us come upgrades. industries. staying are with or are Consulting But are consulting the it's the

lot definitely than eight banks more just saw we've So, what we pickup been broad-based it's weeks seen a from that. Again, as ago. six or seeing We've well.

there And the a and group for seeing or just you're group business to that different clarify what categorization side is transient in too?

and transient group. business It’s

that majority that's So say corporate group lot would of - talked and about the the corporate in that that we of that's I short-term group group. call a vast

go Sachs. next ahead. Please is Stephen Our question of from Grambling Goldman coming

that follow-ups. from on the allocation. evaluating that projects be or you'd quick amidst have first question impacted anything they the any Anthony's delayed or - of Two I Are guess ROI on like at been capital all LaSalle? for proposal

No. impact of our those any That doesn't existing projects. or business any of

of LaSalle assets? not competition for or Are been out handle one-off have you I'm looking finding sure you or then And inbounds your suggesting at reports hearing has deals for equity private getting kind too. about own more even but on a what what this,

assets increase I get cases that some probably many or who operators property individual cases, an those I would there's in private follow I smaller are I funds to And groups. more quality In had offerings. and on market small from sides, side a we've more mean, kinds the generally focused buy are I supply would owner cities, we calls would equity institutional assets, say high inbound on with as groups, our assets robust in major sponsoring from the they're say meaning say relatively continue efforts. both do the fairly say fund. we of would for limited in demand transaction on good quality

seller's by gone market being with So, narrowed up. debt rates and aided some healthy that's In to base back continuing spreads probably extent. cases, even a it's to that many markets have offsetting going probably

can sneak last And one, in. then, one it I if

non-room you're versus margin leisure this versus and should also, at from, versus group corporate leisure I point? of how EBITDA categories think transient transient, strength through strength kind group and in your call corporate transient EBITDA we the Thanks. seeing Given in a guess it, the contribution let's

business we're end if group, going are to we XX% it's Well, rated coming range what travelers at the profit to I customer. bottom upper that to than San Generally, seeing we'll flow in cetera. transient a or because probably corporate it do bring when our business more travel side. bottom the With see more the generally in term is a lower unplanned. than like a probably not mean, departmentally that Atlanta properties. would business example. say, of and been property when an if example But one line probably the generally the Departmentally close lower have health is or a not. short-term to markets the a in in that independent it's group we've just over even key of likely pickups the going would group is better to us to customer And of short about F&B the be and example, many travel. to to seeing branded is it's of upon side flow our generally, at business in in, or is it’s for going I be more rate staffing rated XX% to of a mean, going ultimately last additional be suggest lot per would of quarter. that if properties. increase is longer whether It on double-digit on going what cost Diego as line, be to transient on profitable we certainly the that it's because transient we're spend bottom and is it’s that range cases better margins and the be It’s say, of I and the make groups et group depends to the happen as to some end comes going it going term, restaurant from expenses, rate be where customers comes a branded sort marginal would example business seeing to when travelers. good profit we better the then per to group's the it it’s think Then the I is depending that customer than somewhere think as I going an the if basis, to that rate, somewhere what range do on in to more again, accounts our lower most market But basis going the side, corporate XX%. additional was to marginal an QX in because market, if be utilizing one line customer - a And the,

are EBITDA which on. And per but is important per margin key alternates what customer and margin we're about percentages focused most

a you made between your any differently quick the you very up non-room in weekend? and midweek one guess trends be, the that to between and difference food very, - the and that resonating just or I offering. is leisure follow in food changes seeing Thanks. business are Is

Actually, to made ways. different appeals in changes we've the both but

the purchased. to room cases meeting just in the use that previous because the restaurant that we spaces energy to profit the style, high in those particular, environment properties is create ability in patios events portions charge the that rental, the these then very So, but ability were business the appeal has use we create that a in in to the per higher may the strong of spaces outdoor never like change That food we've for be design, previously a high things of and leisure driving of we space and many bar foot in our courtyards of flexibility spaces. in the would and with square orientation, events, way those entertaining spaces much used

completely. investment the we restaurant restaurant experience So and an and in $X.X redid just just that increased The outdoor D.C. half and The there's we now guess restaurant a in we we as Boston dramatically I example was and expanded the - of the basically Dirty the quality significant where about there courtyard Habit them. completed a million. just of year completed it the that size ago in also the

side which the beverage food Now of and to minimums. year it's to room over and increased addition million million from rental $X $X is a much investment but event charge profit we've ability by our in the coming

Donnelly question Jeff next Wells of ahead. is Please coming go Our Fargo. from

international that urban back national If were that go RevPAR saying to I outlook discount just I point and a basis there's the markets it think diminish. could you between can XXX you, urban

will strikes coming stance. urban trends really just me more could point industry sort to cautious I be specific persist? you is cautious outlook. little the just keeps occupancy, Should what's if it operating of XX-year increase a corporate maybe you in that a probably very market RevPAR. is there at seeing You that that's any quick cautious? present peak history that these you're that transient or a and tipping marginal a factors Are assume knowing that that lead that in past volatile maintain from you the like With industry didn't demand to

really months those it's when from we're and more lot business and latter the i.e., of information travel. see heavy couple let's Jeff travel that's months month, the most gauging part important have particularly I then we'll business a mentioned more why a

and one think versus I at XXX data thing industry first the would than quarter you analysis worse So when point out some you might did in urban in it's the we look the basis that actually is points, the right.

for to that D.C. Washington, from up versus or of industry X.X% think so for CBD X.X% urban goes was if you And I X.X% X.X% goes I X.X% think. out the X.X% difference take But up the the urban. from but industry to both X.X%. calculation,

versus showing. the is X.X% what quarter about to narrows gap the So

some one there's indication of think seen it's at just trends travel it of numbers. business But rest of at and and But that I in in obviously base at than are of it’s do quarter dominated we've you just which by particularly the DC in tends statistics. the the more the up driven analytically the to than little by markets to first to see the world the an already showing improvement government. early have clearly look a is because other what looking the factors look sort Now look way different be

be even years. upscale a or some relatively might sticking is upper see? price point, weaker know are it that particularly believe short the been last of out there I’ll rebuilding price. I points that there's that think you one coming resistance you know to traditional I corporate time categories frame might two on and data maybe of downturn that I while on relatively lead call has can challenging be the one increasing And demand

the the demand you while coming if wondering ability any the price in push seeing to that demand think Just is increases to increment? resistance that’s corporate are you changing, at through

mix to up we're of for at lower are was We Ray where I at up this answer we and pick I as mean, push ADR. of little rates. seeing up more would example we an a we're that and which I some change. minute I have our answer - seen it mix in you picking been rates are show would is Most just eliminating through more higher pretty need little as gave higher of of tell different through I demand markets. think seeing even it remember of seeing what go customers And I could in because to for most pricing think - beat customers in statistics in if was have don't a prices strong Philadelphia we our go a And than ADR order to Those the numbers ADR and up. ADR some rates where we've QX X%. and need incremental up result raise change we way. we are last

there. managers that thought if messaging you to call aggressive. managers? become messaging wakeup people out budgets the sort of sometimes comes your you for But sure more I'm is a your the just of to this altering to contemplated more of doing a downturn, a mean, little managers? changed bit you're we've guys that I you of budgets. changed Have industry there's them your some I'm as about when convince seen when little Have just your to deliver traditional a curious

in are messaging and that the the to the the wouldn’t with Those property the by and level messaging say would environment off I budgets. But we agreed of where we're more and time So, has that pricing and upon more change last to we done messaging on and pickup. and come And to changes, further with demand. we as that have for to and drive do change have parties. we at going to demand terms with on out pricing the signed get depending do the it's raising focused period. some little being the minute market lowering aggressive in cases in patient compression changed short-term order we're to waiting think a also not in more I prices where think

that So, property tactics we're beginning anticipate pickup using level. strategies in to the that the short-term we're and at

active proceeds haven't sort one is Is last maximizing you last to market. yours. about debt are And been where of weeks. proceeds on know, really sort in could yield? But asset? is assets the the an What such dispositions what a appropriate hear few want guess individual question pressure I the going what of what tenure that debt just I'm the maybe or I after. kind talk points per financing markets and available from as key? of the Just dollars for on Is capital think it you it you

It's on market than going it there areas. better outside the you're urban to A markets suburban Jeff, the going lot top seven out capital to you depends of only if or major if get the urban more to markets, you'll debt five terms. start

a We floating existing or capital the - stay very continue good to which acquisition actually to really see market CMBS in. allow robust owners a

going interest rates be press bit. with there up continue So, a little to

We’re see likely get to to pushed. or some compression spreads reaction continue proceeds

in XX% get the right be need certainly in rate floating that could a on But you CMBS. basis level to one-off a they on to So XX%, basis market.

New You get York. can in that probably

to You're as that an in going get not Albuquerque example.

which is disposition market. be to aiding there the very healthy continue good, that So and

Jon as now. it's why right we So, market which of to seller's is alluded more think a earlier

of Bill James. coming Crow question from Next Please Raymond is go ahead.

you inbound the call where accelerate increase and push front? international things. be an on from if It And of to international they're that not really I'm and anything see increase a Yesterday mentioned travel international in inbound quarter X% are But travel. tends getting the the the data. seeing mentioned lagged. in first sure you their over it kind you Jon Hilton that would edge

I could begin would of anecdotal look evidence. But the typically A would at at absolutely in through the have focus I is somewhat now. complete. the for right mean frankly brands up the first say you more data and at that. OTA primary lot with we point is say would to property guess side not you it's what done We reliable been haven't property the hasn't I level level we to is - The addresses. It’s get all least I end back be the comes we can data. look brands reliable the to problem we data the that of don't at

travel where agents’ know is address going travel picking up be individual they're And data don't so you the So and use reservations, from. system the be then, your likely on information. to in is if you agent the to a address wrong U.S. the

Hilton So, know careful data point. quite be what to business as need seen we're you they've bullish we they've pieces look non-U.S. which We've in We've I of rescinded to international coming And of not other to this some the for leisure. said data. typically travel. on always between going coming heard the home And at where certainly again they've commerce unfortunately maybe increase rely said. from think heard to airlines some the Americans or for citizens U.S. you and need

be reliable. commerce which able we've evidently to only on tended to So, data wasn't the historically rely

you last of feel or and was it a emerged. been topic factors your going Has mess. think portfolio forward the merger kind progress fronts. I as the it quarter better mergers on still of Kimpton/IHG is Do there Starwood/Marriott those on negative

lot we've progress. a Well it's mean, much of I better. made I think

which at last would we we're in lot here than to basically And is the was apply IHG/Kimpton was we integration we're lower exact positions communicative have dates that. what of for. - sales the relates as issues where now I the experienced and lower in be into first it the other Marriott it new or it's much we negative a legacy all Starwood seeing quarter. of property about properties think well it changes. issues don't and lost. impact the the through level than made yet. quarter what that the positions that the months impact than people and what at don't think longer had fourth is progress business were then I is Starwood-managed believe thought still resolving we've not has their the extremely have and the being quarter the which replacing eliminated much four channels but But And over still second this but created point for is versus Marriott, happy it were are organized marketing systems Marriott-managed legacy from and with the we three reorganization to systems solved

getting by but that to close people share. back But those we're So, getting properties properties. think having and positions particularly also group BT all affected you it sales. to our filled lost three in our focusing two can significant I on have see And the sales of the

so a organizational to forward of So, only structure performance. what that we've seen the we better lead look But hope negative to we clearly is will side far. better that

this plan. one more for got spending was capital year quickie. through I plan investment I looking your the

before. you once the Mondrian. at I to going one the to SkyBar that want say do You’re did

Correct.

to just And - of mean, new right? Were mean, got trendy, if some of the West there the in that's I'm - curious. that's out time around trendy or? a I place of supply returns L.A. challenges the I kind and points if correct, keep first trying it some

in It's included everybody It's mean, pretty because So, description me the we mean, that say let long explain. we around legendary. been I that knows time. SkyBar. I - a

It's it. know you a So, hut.

any redoing renovation, we anything else time that the SkyBar. anything which going $XXX,XXX or the spend just the to $XXX,XXX or not in soft renovate I spent $XXX,XXX there. say or the and total we'll or in with the when probably last building what deck so We're there. or And in pool is are goods structure we're mean, doing or we

mean, in business. pretty because that million year somewhere does healthy profit and between I million revenues all $X almost it's a bar So, and $X I think

and customer. too wear about It's tear of

a on goods. tear lot is There the and soft wear of

three done we the heavy I a or are general, finishes you years go the into So, the did of structure think in which that mean, four customer. when that the then Francisco but money the if know which use, we'll not habit and yes, bulk on has dirty into gets mean, things I I gone as and ago, cushions tables already actually by in heavy And and it like the chairs which use. touched gets and patio San redo we've you heavy

Instructions] [Operator Our question Please Wes ahead. from Capital Markets. next go is Golladay of RBC coming

how give call the us short-term mix. mix. it for it means much at Can a of then I'm ability versus context hotel some and this business of the travel just XXXX you and looking to how XXXX get compares, kind

have - data that. are mean continuing we’re of we I you at We about to things Wes, But any off talk these again, handy, line to about that the margin. could talk

say, So it's I Corporate business know basis and coming the is back goes us transient travel group and demand in total. the business industry XX% overall our in talk I the business don't travel I mean by strong up base. if and demand business know, of mean business overall I in travel we about that XX% represents, points XX%, for goes customer don't up of industry let's represents mean, side, probably XXX all I - for probably and it's

more you of that see in back more have But powerful business be the impacts so side momentum increase. the translates points overall it percent a could a into and again increase it often pricing what little because on So as from couple well basis impacts in it occupancy. if demand demand gets increase than might XXX can

It out to rated allows leisure makeshift customer. discount customers, you lower the

I'm that’s at. guess, I get what trying to

to had markets, meaningful high a in corporate, this then few at of mix probably as with rated have supply way called delta obviously difference you've well, have business mix. the you versus the Is the different special too now the the, the the a between travelers? customer I and last cost and what's X,XXX-basis-point think the Maybe and over years potential guess, you a I look the an - down and acquisition business will OTAs the aggressive? OTA

ballpark. the in probably That's No.

what had what rated lastly, the business increase then think year? do ballpark if wide range, this a travel do high will you you And think, you

maybe it no we when to Wes, you I I that QX, said, data issue. more mean, we're then can how some on like call more And have next of substantive we get playing monthly. some idea. see kind have - get and our quarter, for we let's through the we of

coming from Our question of next Advisors. Hartwich Please is Green Lukas Street go ahead.

balance I quick hoping just an today, to The regards and on you the cetera. and leverage, in philosophy mid-Xs was update one. a have the could I leverage the is provide just et in sheet

which obviously investment below the times. the our cycle to objective at at the is X. debt EBITDA is LaSalle it the the is So, And look without point in X.X in liquid, highly is business if this what liquid, you run to

don't. again, views preferred whatever as for we Green reason Street, debt So, know I and

preferred equity. is, I So, it's our focus mean,

upper So, coverage takes think and LaSalle the related the we and is at preferred it. the on costs into investment the no we fixed today to And excluding coverage the which when related that Xs again to it look there's charge maturity account debt of costs interest in charge since preferred. that fixed our

point just where comfortable the be we anything at if some time a in mid-Xs. So, little we to this And pretty more probably in bit levered are. room feel than we have

longer a property. And, marketable making could get leverage out sell you different through to takes that It in acquisition leverage securities through of these in an Lukas, than month. the is a and

any to to for Thank over back additional closing this comments. like you. or I'd the floor Mr. turn At time, Bortz

the thank Well, forward Bye-bye. Thanks we'll that. for We look something you and on quarter very doing all we to hope participating. long before of have you end much. to the next update

and gentlemen, you This participation. today's conference. your for Ladies thank concludes

disconnect day. this a wonderful at lines and time your have may You