Pebblebrook Hotel Trust (PEB) 8 May 202020 Q1 Earnings call transcript

Thank you for standing by. This is the conference operator. Welcome to the Pebblebrook Hotel Trust First Quarter Earnings Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. [Operator Instructions].

to conference like to now would turn over the Mr. I CFO. Martz, Raymond go sir. Please ahead,

Karl, everyone. Thank our good and you, morning, XXXX call first And earnings and webcast. quarter to welcome

and other our materially May and effective risks XXXX filings. is laws. by And comments. are Bortz, no we differ for XX-K today in of statements These X, are could a that results SEC we are statements undertake comments reminder make duty from our and today subject future described and of only as quick Officer. our today under considered me implied to those Joining forward-looking XXXX start, later. our Chairman that statements uncertainties update But The forward-looking Chief as Jon we them before our today numerous many to Executive federal securities

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

XXXX for like are with first industry. lost the responders thanks well team Pebblebrook the as of pandemic, no entire frontlines. this healthcare The families the first appreciation thoughts the indeed who hotel on to history the quarter and loved the have the Well, all as in the of other has ones and tremendous been workers

the states which to their operations. sheltered pandemic of businesses and States significantly at the curtail across has mandating down imposition cities has and this causing United through speed effectively been or The impacted the home incredible world close many to policies shut

travelers restrict other and government decided to and non-essential In our all close to federal addition, international borders the travel. commerce

in demand weeks to to a All a zero March. dropped of rapidly beginning matter virtually of these situation where in led hotel just early factors

by been has day. changed the this Our we which decisive to swift as crisis reacted response and

guests immediate hotel, of three the workers. and first, were of protect to, priorities our health in strategic Our safety

take prepared we advantage that arise to begins. liquidity operating to in this Second, of third, hotel well recovery the preserve crisis. opportunities during are the And new to ensure our financial after the environment

our well as we in year implementing and February, mid-March operations and by response budget state The were ensure resorts in the February suspending of closings officials many programs of cost late workers, by yet hotels temporarily required to reduction we restrictions government local and we of mandated were ahead commenced and to started January in safety by and our guest, communities. and help

of today, have As of operations. temporarily XX resorts and XX our hotels suspended

and for eight operating open various Our skeleton amenities. are remaining and limited with and reasons services hotels crews

quarter EBITDA room March compared $XX.X XX.X% result a million. XX.X% year same-property first revenues XX.X% $XXX.X Same-property these XX.X%. total declined prior RevPAR declined to same-property of declined actions, Of million. to declining As the with hotel period to revenues note,

quickly challenging, last how and and cancellations ability March by level the to a which in dramatic costs environment in expenses hotel was Nevertheless, given XX.X% changed, year. month. Our substantially still reduced fixed hotel in were expenses caused group transit total before the and compared operating to rapid reduce increase

This reflects $X.XX. Our impact suspensions in demand subsequent was and hotel the per operations. and was adjusted hotel million the adjusted $XX.X FFO of our EBITDA share decline of

and per addition, GAAP. furloughing were the employees, hotel million to level charges which incurred $X that hotel care included health in March, one-time In recorded we of of related benefits future payroll approximately other costs

a reduction company. that of expense part as million the benefit issued shares, long-term We and forfeit share other February write-off retention executive a just also of Imagine measures. a corporate that late as corporate which restricted our non-cash prior to recorded $XX forfeiture million is result of our a officers in the been awards $XX had to the team volunteered which pandemic, write-off for for

to GAAP. look got You

a negotiating but GAAP $XXX culmination the of the was our and a of gains gain the these in DC acquisition plan. strong closing of a of million hotels, hotels billion of represent very the of a sale of as properties investments we $XXX X.X% two in the and cap InterContinental of completed successful strategic favorable The at of consequence and totaling sale contract. Since We obviously gain corporate fortuitous, two successfully million. from March sale November of part also early very also XXXX, Sofitel $X.XX and rate generated disposition timing taxable Buckhead sales our the

priority in we numerous the preserving second of Shifting pandemic, to COVID actions liquidity took our the became the apparent. response business, our since to crisis

quickly of which expense significantly instituting of suspended also throughout to number majority workers operations hotels properties. associates losses. security while our and reduce reductions at of portfolio, our skeleton our vast addition hotels we furloughing the and of our This operating In at also reducing drastic majority our employees ensuring to resorts, and hotel our hotel safety the and the crews level included

expenses teams non-payroll This hotel our We crisis. the quickly closely and this our course mitigates so aggressively companies in environment. decisively teams worked reacting Our challenging reduce management monthly a managers think our during to hotel asset burn with were across and management of portfolio. our also cash

$X,XXX burn. estimated As to and further expenses at our decisive key month. at level level average approximately monthly to $XX these we hotel actions, swift continue million And of reduced operating about monthly cash or by per more result our XX% per leaving we hotel cash million reduce this than a our $XX an burn efforts

employee XXXX. including corporate his the salary at estimate approximate remainder reduction monthly of board $X for of executive cash At member every a G&A who compensation for which million, Pebblebrook forego trustees, the Jon to in we reflects of officer, volunteered our level, of and

late annual of paid our in issued for mentioned, agreed will earned that next common and February. if retention to of cash and the executive program shares company forfeit that bonuses XXXX, long-term to modified any, bonus our in awards be cash. also previously provide as We paid year Also, officers voluntarily team were share instead

the G&A reductions for $X.X in approximately million combined Our corporate remainder told the year. of

for burn, our cash G&A look level as in corporate to hotel further our continue appropriate. expenses reductions we'll with As

Finally, our dividend dividend normal penny reduced with million per $X share $XX in and preserving quarter our $XXX common monthly month. dividend from cash first to burn Combined, which any to payments preferred one with million hotel We given we comprehensive interest our totaling $X.XX total per initiatives cash average to quarterly capital beginning year. per the to savings approximately and expenses million million approximately the $XX quarter for excludes our investments. the of million $XX million quarter level, estimate be $XX

of $XX through million of investments, As quarter. of currently an to the the relates capital end mostly We our first to invest million balance we $XX redevelopment XXXX invested to $XX.X major our year liquidity, complete hotels ongoing have our defer than To to elected projects. additional of our beyond. and redevelopment million $XXX to the the million further more into we approximately projects expect major enhance to

the as reevaluate we clarity on economic more gain environment will outlook. these our We projects in

Turning year believe sheet, $XXX end as a liquidity provides and our facility from down credit to sale cash the last We an this of sufficient to InterContinental unsecured of of increase extended end Sofitel cash us increase early of year Buckhead on on March. proceeds mid-March liquidity the $XXX as $XXX.X with well million over our This the in is million our of as balance DC in period. primarily had availability from remaining of hand. March, we on million result the drawing

liquidity sources to loans, loan term However, other government debt evaluate we level other programs will additional financing, continue of including or property finances.

second We assess values. and additional largely transactions cash favor believe will buyers recalibrate be hold of market half frozen and also likely all transaction the debt debt. We year than The and those need property until on will buyers sellers least rather markets this sales. the who is currently at as likely will

unsecured we November reminder, have XXXX. zero Regarding debt our is our debt, debt until and of as a all maturities

crisis indicates result governmental As value to just entered pandemic. to as that XX, a in with EBITDA leverage March we the our to but revenue efforts debt a demonstrates the we and of of depreciated debt contain we response economic problem, net don't very a problem low which was and have that XX% have clearly stop this book

depreciated debt leverage the in net represents revenues book proxy value at good of lack a lack to of current environment. Looking operating demand and given for hotel

and financial loan in and compliance existing our all facilities our we agreements. to of notes, note are covenants with under currently relates unsecured credit As unsecured

given hotel the anticipate ending the with second the XX. substantial for beginning covenants revenues, certain in we decline quarter of However, need a June waiver

As soon discussions we waiver a in and note update with result, we're our group holders bank this expect finalize accordingly. you will and and to agreement

industry plans is and ensure opportunities the to the which to begins, discuss for operating are call environment ahead to we and the third of our lies the the take to turn well-prepared Jon for hotel like our I'd advantage recovery priority and what new Pebblebrook. to when Jon? over Regarding hotel

industry long will future unclear times. over both travel, event now Ray. damage all a it hotel without hotel And the it travel economy on industries, behavior the how long experienced never world has impact to segments business. demand with the of human this almost last, time. and pandemic, that result an the cause have a eliminated the since the term before same in it's are much will many other impact crisis will how and Thanks, around These Along has of and and lodging the unprecedented at question effectively is the what

assumption our uncertainty, this protecting best efforts As focus business of the last as a impact the of it's the that for negative a significant result indicated, time. Ray period will under on to

can the So do best. for and we worst to and hope everything the plan for achieve

of and it. the that with we the remainder by plan for will recovery As knowledge to the XXXX, dictated world's be start virus the ability we the mitigate

upon fourth April So second expect better obviously the currently third disruption the we to to But a we segments understand, of significant quarter being improvement. year. but and Based worst this positive demand will the month that it's of slow quarters for the believe most we providing predictions what be worst expect with quarter part and the the are a reasonable difficult.

to Beyond the that good news But is detail, is really or know should out. better here. level this of how going play from one can predict get it again, no

first materialize larger without transient the of business they and group group, staff will likely is citywides. particularly group, plan return counseled to it Leisure hardest should the will to and and accordingly. most year hit We've then recover, should larger effective health then and an to transient, this assume small be We on books then group, the none believe group be that of anytime the teams not solution.

health willing state in unclear It's large individuals testing. indicated are before uncertain will moderate groups it's gatherings allowed significant will even like and are gatherings restrictions masks on have requirements already to require other most being they without advances congregate local distancing and how if substantial to governments likely government large but And when be allowed. that physical and

likely travel eliminating from with travel cautious very by much be the employees to of limiting companies expect travel essential truly thereby their only also We to demand business.

to So or still we books transient can't the them. may impose previously last on corporate books they up. show to restrictions that count reduce perhaps expect and to Corporations be be the the business were travel we severe the on actually first really was will on and eliminate

Outside critical to their recovery we consultants some of businesses, major travel, vendors, expect travel however, and others businesses. a providers, from healthier more would, service where corporate small is

is In governmental travel a travelers addition, in restrictions far year get but of the only the an uncertain minimal but part likely to for on given home on to go anxiety be to only rest not fairly plane world. from international the not of

in likely segment the a With to leisure one particularly domestic the to material drive-through hopefully resorts. way beneficiaries, resorts return be we as biggest and expert travel

represent at Pebblebrook, demand historical drive-through historical about of our over resorts. travel and about EBITDA of XX% For resorts represents our the XX% leisure

that suspended As a result, look hotels our have operations. we at

to some the our We reopen. resorts expect we be properties first of

month returns. likely demand looking up In month or at open fact, two late over this first we're as with the resort to follow reopening states our next others and

acres, Key which safe Diego all San Southernmost Mar, our in space Del resort. property on and of outside Cruz West large Diego Resort Resort, resorts XXX land in are with Paradise Club as waterfront of of spread pieces large for L'Auberge at pieces out on Resort Chaminade and XXX Naples almost Point on sits of Mission and & in Bay guests Portland on West, to significant LaPlaya similar in acres acres, Santa such Marker XX San Fortunately, The feel Beach Lodge Key Skamania Resort

parks, most health forget on recovery lead shouldn't well recovery its Unfortunately, including we Positively, closed to Americans relatively months. to aboard of be the that and to older also all leisure leisure vacation both are now to modest travelers sporting the and While these entertainment will to their economic about in travel. be facilities cities many expect these attractions similar issues. hold of their as cultural festivals, expect more not marathons, right and though other And and we we will have events, demand due risks few concerts, the cautious and generators headwinds who expected be over can expect instead be by tourist vacations next U.S. leisure reopen for offset here go we some

healthcare demand unfortunately all We time that back will associates operated well. can only be at than breakthrough. be based way slowly as unless at our hotel we effective choice is have results challenging were expect the Because a recover have but a to when slowly, if our expect closed. one to to we demand they to through likely an XXXX manner they we reopen no bring properties less a in us losing money and in to remain minimum upon

by certainly enhanced cleaning certification, guests. the in We'll With cooperation major housekeeping of every the the post to our on services we're different well Hotel additional during working including associates operations move brand and we have guest's in be protect with as will likely likely lockdown. covered an cost reductions stay. as in-room of a through U.S. protocols hotel be protocols forward elimination as industry-wide these The the is to amenities, of AHLA

There more there normal when is expect occupancies by be will beverage Food cross significantly does more will of number out shifts levels. and a expect rebound to job will reduce this with positives sharing, simplified should it that and managers of come longer-term be which we materially We until likely particularly help return can training, worked more and be costs. cooking, less to will crisis. preparation

hotel that quickly should a expect Let's right We trickle talk new this the starts fall new mind at for first. exists. to a uncertainty financing about future frankly provide time, given supply would because their who through in massive

that hotels some also under out. backs think We of financing will permanently stop construction the due to

deliver or stopped As previously markets construction various couple know, will for the has in and smaller we in later reasons. next will than estimated. many But what been slowed numbers years in deliver of

rooms Chicago, even starts many in the challenging hotels markets perhaps, economics it's the addition, homeless like years given for In York to were reopen converted New and fail see them expect many affordable of pandemic, we to before that facilities to housing and as return. a higher and new or likely next of better for positive to expect for the in use. way And hotels take three we don't to five hotel to long likely much how with,

are while in particular in replace events. some will banquets Operations we costs. has results hotels, touch. become amenities job decline. will occurred become become likely swan reduced services still or the declines in assessments some in next as tax think few black will more High it's fixed worked cross be tax touch restaurants, Expect changes as touch expect dining, real eliminated no and such rates estate with type and areas Technology likely to for Expect historically variable in-room cases. and And or efficient the even combination and costs to hours in prior over low to likely will the training years. And more sharing. More increase, we catering.

should more to other We should more labor rate This an also and flexible, relieved become become and help of can expect This overabundance wage industry industry will instantly just pressures. with we've work reopen lack increases the rules it all crisis of abate with will significant union on month has industry matters. a and need recover. to an flexible an labor get labor. from to gone one labor In

be from and there a employers we And better governments. requirements think to new from shift employees. likely local and the financial pressure particularly will balance on it's imposed governments, surely will industry less between Leverage state

similar For Pebblebrook, to struck. to last our year the did markets years year we they hotels in early their and would outperform expect this what the recovery before pandemic

in out our and the next the XX more we This or in a being Our transformation of in XX major last over five hotels past average redevelopments big our are properties XX including advantage have as will few in completed those renovations, years, on our competitors speak than better years. nine XXXX. in condition undergone just the markets. just months few of be

our we maintain capital of years the Many sector advantage lack hotels likely widening already to have. to to are in competitors private the their come

We harmful expect events. base hotel prior the conditions will customer rule have significantly recessions of with the recoveries following as and in in they cyclical years prior early

recovery with that associated anxiety likely because their to We outperform the experiential that hotels travel. customers and now for stress for the also be in expect will looking lifestyle something of lowers focus our

outperform they'll size we're smaller in allow provide areas of because to properties. our of the nature feel because smaller personalized customers our services and typically their should also our to think guests which public of able of and safer We to more the footprints attractiveness our

Our smaller lifestyle historically size less Luxury major successful. lifestyle needed are more attractive and group particularly they W properties and with have to our hotels leisure transient brands including customers like to generally Collection be

costs also year. hotels at fixed faster we than they they expect major lifestyle least can to to adapt are operations brand lower more environment occupancy support operate and and the independent what in They're is flexible their hotels for a more variable Our which efficiently in new low rest and this move customer of able to preferences.

and We lenders. that to due acquire to next distress go over-levered of opportunities and properties also owners expect prevalence in there likely a strapped significant to back over properties be to many years the few cash

in periods the creation the tail Recession. crisis-driven of of Great team end XXXX the Our prior has been Pebblebrook following two through including late opportunistic

a assemble also at had opportunities. very fairly, Following very resorts attractive able upside high that hotels portfolio substantial quickly quality crisis, unique that and aggressively were of prices and we to

buyers strength years. transformations, vast unique efficiently have our more opportunities our Given redevelopments the significant over our a of ability operate and we'll majority as to few and arise we believe the than properties next and advantage

To our and also for we we create current without advancing opportunities. away and efforts taking is Pebblebrook opportunity of large company, own from This lifestyle effort believe branding our we of continue to us hotels put long-term independent a to into value protect control. that and time the an is number unique to because

Unofficial in this these to to soon help some Z for allow This Z website their our us our to provide later Collection guests. expect connect time be hotels the properties will This in Collection our Unofficial roll of We out seven completed quarter. should first the eyes to recovery.

to lifestyle continue independent the also creation it XX collection We a aggressively by seeding broader our pursue independent of and hotel hotels and with resort completely resorts.

more provide will is efforts updates as there convinced opportunity should a we're these this sometime creation that long-term year. value here progress, but commence We

prior say creativity, safe it's almost about with we successfully team's territory management an Recession navigating reputation, and to including and have lack We're during incredible but ethic, and complete senior to clarity the following team experience uncharted fantastic ourselves future. portfolio given next that Finally, crises in a record, all challenge, we our not through thrive the Great the X/XX foresight, track confident only of the find combined an up current recovery the liquidity with work grind strong and cycle.

to our in portfolio, business. our once and our we greatly us to the your unique again appreciate with look forward team ability our We to experience, confidence and our create approach creative value proving

move proceed Q&A. happy with you to may questions. be to the Operator, we'd that, With on

you. Thank

begin and [Operator now Instructions]. answer will the We question session.

Please from Rich go ahead. Hightower from Evercore. first question The comes

was all thought you Thank in that and the commentary of there. the detail helpful. for very I

it this. but to just So there's lot pursue with of angles kick here, a off I'll

model hotels. be independent to is described, guess branded Jon, think and an -- need focus fundamentally you Any the advantage over I operating this change of independent will given management of the the And of the coming acknowledging versus model brands several branded in many think years the from a of of downturn? in over do I ways of past inde coming -- hotel terms And out advantages made differences? at point sort out that you've so, that the are predominantly an relative starting managed the everybody of this scratch that the you've much themselves what

that understand do that think facing in than charged. few. I hotels. will expenses, be be lowering will revenues the as I that, not Well, are would they for hard few on more It's creative I operate in the the lowering revenues while to hotel think mentioned working a they'll decline quite face sure well. the flexibility, mean their -- confident that be there's brand. a ability able the not that means fairly independent hope I dramatic against they I an independent to need looking to but I'm brands I they in there's And a less I'm given be that expensive script. and know are percentages that would that and at more

group And I also have They transient. better I view it's smaller So to people And come the hard independents it's in been people hotels are of the for world frankly all, at of smaller day. the think I mean I in size, going around I with feel far pretty think end independent the first properties mentioned. safer they're of interesting to fewer the always is reasons because transient. say will suited many think to and before attract back

opportunities. of a lot there's I think -- a more lot So

brands different have It's I interesting. will I XX time their the take think organizations. mean rebuild to operators. we

are people. of major six major huge brands off laid brands. think have I The numbers

so Our of terms I people. their corporate not to us off, independent and anybody think they've operator, in properties offices for laid -- every their to regional

focus there's the there's more more staffing, from So independent lot side. interesting a a lot

for the not way it obviously been companies that's big the operators do not. companies the also their loans but around, of You PPP for our the other case. a And would think the whereas would lot operators, qualify small have

limitations purposes forthcoming respect the mentioned do covenant carve for area the certainly unsecured And there next debt, special potential around there Okay. How kind any over with opportunities years. that. would with appreciate waiver credit to negotiate I acquisitions? the of not some of facility for on you today of can but that few then just given Pebblebrook, the distress mechanics are get outs and come that maybe in You the and waivers? that you

involved Yes. first And case relationship have banks XX-year those loans. in most in the of from acquisition our I term of LaSalle. think the think transaction of it they the -- I recovery, been banks XX creation involved of to with banker track some our regrow to in of because the I reputation and were record, I our in in our for think line mean terms of our in all And a having of and supportive our comes advantage in major of the my we're the opportunities will drive cases the company, take be value Pebblebrook, very and shareholders.

So I bank we're going be group. to with aligned think the

part discussions of bank now, various part discussions also the be next members but started with of those that'll year of that we the discussions of some And our already the have group. in so over fact, be it'll and, we've

view clear, earnings, be our focus trying better in better decided we May to now forward. for we operating perspective our June something the thought that to have, the versus timing we environment and but where as and it's to now stopped covenant Rich, we through in could a we which through just And -- April, push on is going Yes. but get we it strategy because wavers environment

So we'll through work waivers. those confidence we have full

near-term. deal the we best get We working in have that in-hand the can the we'll for that term and company sheets and through

Please ahead. from The from Capital Neil Securities. go One comes Malkin next question

Appreciate thanks your for the all Great gentlemen, as Hey, color. color, always. insight.

forward on when so it I what you look look kind will what a see a planned come pickup -- it you does of last seen your just doing far, or leisure when return plus leisure potentially hard question, but the do like customer like does discern sometimes, bookings I what business to talked start or looked to at least about, or demand you've First like would for call, hotels? least on to to pre-bookings it of at and lot website Based gauge back. of what think kind know it's

Yes.

think seen So industry the what it's answer a governmental we've in corporate a leisure what we're mean and this between isn't and open. good numbers of policies play one first and on increase any question. When what's they of world short-term, understanding this in up great going us I I pandemic, are sort bookings. to all the and resort for The so bookings we at out. have difference very through the have the seeing is as is be, time this Look, policies Florida, a looking behavior saw and human one is opened gone meaningful little going and we

like It for bookings almost beach, -- meaningful from beautiful average run is be the will week a means Now our X% of looks we're at XX% what be, this gone mean? with week be week. to occupancy this we've I those resort running all the weekend, on Naples, going the in in or X% biggest, on think to weekend our biggest

to Zs property, bookings we're -- and are two talking see for that few a We but one I beginning June, mean but into Zs.

onto now Keys. The work not portfolio, Keys they're June challenge Right They're allowing live the it's of checkpoints Key the when comes with West restricted is one know there, into bookings West. going don't beyond. that probably Through the rest most of there governmentally. are who and doesn't for open in highway or we Key to on I and our anyone guess, number the

we -- meetings. mean what's the say, we and from of look -- again, to basis. logically not positive any allow of better But a and in if just people they be that contractual hurry cancel to materializes. in for a quarter cancel then rolling I doubt there's don't have by We the because second if are no what the look on pragmatically to year, year and mentioned of possible. half don't yeah, of year cancellation before any, of I the the this to meaning, outcome our Neil. they're at there's bookings the got give going year. end and future, to a the are an majeure large, -- all we corporation happen still two down they only -- actually have year, time my I ahead restrictions you them in last don't million By say, they can group we're to the at the for if the in books to government they cannot disincentive you canceling a is and of rooms pay near groups optimistic it force hey, event, meet frankly change the comments. in we policy the a and their group than fact -- it's half go is this example. much, the but a restriction by I'll and that's our XX% maybe seeing in books we seeing the cancel a later going I we're large, going know when or or on can But on I We're be have second all certainly and really and of can months groups there's now group to advance what to cancel, tell

outdoor we portfolio of our lot have We unique of weather. do weddings of have have a we a venues, lot through properties, we a of lot good because lot a

are thing look that feet of with sort brides don't the if as wedding, to can about. they of masks having they being year All always even weddings they've apart gather, next dreamed romantic six moving their the a because at

of next in but cramming Now, their and they what to years eight would get want something to vast maybe I brides the ahead year. but and weddings majority be tell worth it'll married, two moving to next back move of of are because the -- may year, weddings be we're you months in some remember always, people

the are So the we which numbers, between seen we're what already these differentiate misleading. happen upon all reality is of things trying to to And we've great. going based think I of very likely think

Great. that. Thank you for

to one said Just as of things a about. the follow-up you

on half is Your year still groups reluctance the view back books the legitimate. to of that as the for

half is your quarter a of percent else would this come for guess, in rebut take it that back? rebook more reported how or longer view year. had you because of and what's the little cancelled back seen I people bit XX% on than they the that like to second that that or to it's March the already to view opposed your going who Someone group

they a I back, I we want we on going based think hope appropriately to -- pragmatism we is hope Neil. incur appropriately, have I want we run So, to but have do -- upon to staff look, mean happen. to what come costs we our business and

to had we've half in and have our of of groups and the and properties back April from year. May so And June that the moved plenty March

First of don't all, else meeting do. planners anything have to the

they said all, contractual who and there's until There time if companies great of are they're they a year, about company, will look, if about own to What accommodating of the next they think play year. probably group don't middle meetings? have Second why done we're out. But to meeting a a your One going already them later going group be the that'll in Capital the benefit fee what's -- because end they day. I the mean come move not to do? have at not, incur cancellation we of

premature, I employees. their ethos protect think little is to the that's corporate a myself, but

office, to a when and And don't for biggest of talked to corporate you they're let meters we've talk the it's accounts in and take fall biggest biggest you even the you-all, the okay about country, and come work in when to know say trip. to back the who some the going alone the we companies think to travelers

ultimately And it is I everything we're everybody believe I to come, sick rebooked just hope year. this and most gets all they Neil. so hope meets, back nobody don't that next everything's I normal. gets wonderful, wrong, or it. business becomes we of for think virtual

think I No, Yeah. --

believe it's our best Don't guess. likely. None have could Again, been happen. us it but that's through before, this of

with still, on any guys Yeah. just I you XX rules? And know could you talk just the but All that, it's or seating -- or level color but hotels give that on about, talked REIT comply one have spitball monetization high outcomes then could you last me. for still potential Collection that you that the Z right. early would also general independent the excluding

do this quarter next hope can't in be I to the or to and able but that at won't time, I two. Yeah.

for very guys much color. you Thank Okay. the

Neil. Thanks,

Next question.

ahead. Please go The next from question Citi. Rose from Smedes comes

key I don't I independent mentioned Thanks. your well room you you, a have to more guess, cleaning as likely think you per were wanted but labor go services Hi. probably don't labor have cleaning side talking costs for you that about you just ask on properties? the or that up, or that, you Do stay. during are brands considering

No.

standard. that had the conversations to industry upon Based that's we've they're to We've talked bunch be the the a what is of I brands. going already, think planning.

-- my then other question And Okay.

think And in most want I Smedes. about a second, I just mean for mean don't their their room think -- stay. during I it customers someone

they're out I no to in seen, the room's -- program a since. seal came Hilton you've where been little so mean room one's that going shows And and already the cleaned that on with the put there been they

I not never vast is it the what want most back majority I come think everyone, will part, that And an customer the I for think without the but will actually think additional not people. cost. of

but I'm organized I guess I guess been side of know be have more was some to I impactful there's extra there just think green the from group you of to organized I the some of know and was -- I able pushback mean that and think points not about those on labor programs going get more larger to it sort do used that's of you or wondering I the of labor, some and for programs, wondering I out? probably being kind because thoughtful play it's -- they're less maybe versus sort how hotels

large have other mean -- additional very on to and similar that's basis the there'll But be I by going They a the a by been. not similar think to is be. cleaning been thing required. I because that I important productivity it's ultimately for lengthier have than they'll Labor probably be to be contracts think stay. are restricted counts cleaning

been to guests areas, as between time because from it's rooms be the public to additional and an example, versus reallocating people So rooms extent we'll what probably of of protocol. to a historically clean some period longer

do that will when think people comes to So I it in it I people, cleaning. be fewer means don't it know places but different means

you. Thank Okay.

you You on also opened of other properties mentioned, timing properties reopening? just sooner yet sounds in portfolio resort around it have how a your the timing probably Do around side. they sense like of the made the

don't. No, really we

taking of few say see the not portfolio and And booking is most we'll resort until are a the July demand reservations our maybe the think in what of We beginning, June, I would most outside properties. cases cases, I levels. through

view because do last we thing we're think is I when money our up want open see more lose we to closed. want based to not going losing than to open and we're anticipation demand. upon real The the we're is

And so and back, it's by metropolitan to going come confirmed don't particularly the in markets. to we that's demand be to going just know major real need when

The next Please Markets. question comes Klein from from go Capital Ari ahead. BMO

in the following even of Thanks. you of, Maybe How year up the hotels there on the last coming question. second potentially? do is just costs back half then risk balancing if demand perhaps, that reopening think the about the and of COVID

think a not we're level. tsunami We of occupancies pretty wave a back demand very come I off demand back and Yes. back. low coming comes mean we're talking gradually first, about --

going being and Our when of the as in on those cases, average one low or being size two whether some closed occupancy, we be Zs we'll sort depending property of in breakeven worse not and high low-to-mid and as much between staffing some to of is upon in reopen, mid-to difference teens back And people union Zs. reopening not as of bring the in mid-single-digits. there's as the and first, upper-single-digits not it's

is to that going there day to all things do bring And careful. again, when long are to We're salesperson them enough we're have be legitimate. to back going a demand for

that And we not level if have, isn't then the and people bring of we're not few we're them demand to overworking back. going there that already so

about Eric kind second And I going of of to So to avoid wave and X:XX:XX. virus behavior. we're be way the think it, in very the a reversion cautious some that's

it. All that's on going ahead on? Z right. maybe it postpone seems thought like any strategy, you're there the everything branding then of And Was Unofficial with some given moving that to

actually limited. an ability talked we of course travel get of -- we nice to and a the mean journals about We think lot it. because I a news is coming in there's up fairly magazines and visibility of lot a Yes. these of press window

going get opportunity exposure, the have. ability so to it's get to and stories written the we think featured And or we're probably have that highest window

Kelley comes go of from from question ahead. next The Please Bank Shaun America.

back, here curious, you on Collection. years you very able implications the the do everyone. predecessor think of hotels I'm always the core York lean at urban conditions overviews lot more virus you picture. great And of outperformance in -- time the a these some is, us cities are thinking do we about Jon, urban including of at rethink think morning, business Z the start gotten We very, think if some of of company new norm, you're make areas the might from even just guys portfolio all already question my Just difficult and as we it'll the lot today? I pretty urban rules five at think it's to whether are a maybe at and portfolio you have some gave some you Good labor bigger and resorts New changes? time. about had markets maybe to could and other here, mix high? to help very the where do flexibility prior appreciate or if the more these Sunbelt all, aren't we're bigger like restrictions to of as how or But where of you as how where looks take just towards the very, other operating three virus, portfolio, And like, about in this the on movement think markets of has you about these -- with been of and predicated what your about strategy is model for Hi. kind the looking to independent some A LaSalle of was market lot strategy. your goes things the the Pebblebrook some of I way Unofficial the

LaSalle. markets couple it them into then And more bought or spent ultimately defensive dispose years York out either I examples those over you of is, we've in Yes. we so now a before in didn't it's Chicago New we we demonstrated little being in through time to acquisition It's of two about we'll markets once And, difficult and we've I'd of LaSalle been But the last love to. question. acquisition good buy far. a of. ton a think but tell that to after we've sold got out few where this, operate we properties but sold the bit of we already twice thinking never the anything the mode what which been

think type in golf we will on are active adapt significant portfolio like resorts beach, is more of and to spa, opportunity done And Skamania think the take in the the particularly from this evolving the because lay lot almost year we putting think is being at we play resorts what passive more a Portland. traditional, in up of more so a I we've do last into we've where portfolio do capital evolve happening and year the with resort been there's

think the for on lookout So will be certainly more I resorts.

they with these there's risk ways, are more come fixed there I land in mean other -- more Shaun, more properties. costs. There's think more I at

group. you you're that citywides leisure There's generally You're living corporate no living in, of little transient in off living off participate you and you're a off there's generally of very fewer that and participate segments. so

out And in so have the ultimately ways you in this to some ways to fewer would because there's in that could of risk continue segments and that risk resorts if on. have coming more of you fact less of it think rely some

re-evaluating expect think we up give cities. But over we'll on time. don't be to I that

in why react, react we'll in we'll and, corporations that cities reasons as particular. to be appropriate. there's of understand But, major looking carefully something how ultimately, and how strategy it's a people capital to make go think like people lot allocation very at our look, I to changes trying

you are through of April Thanks, a little movement Ray. the us distribution the let's on so how operating look think cycle you about to is the because you you going thinking some going just because do -- how portfolio the your obviously impacts more, think, of kind bit going brand from side little how both on to just to And or comments Can the going work are your are bit you to thoughts a then lean you're you're partners this to the to be normal -- just go kind how of OTA the on as little even more more a so shift around one pronounced. the some this leisure lean a up to that's but obviously there's -- going at going how out how bit. where kind of where follow or give of that, play that channels, in environment, channel it's a it's is in but is

lean do bang best buck now? you just gives the right and where you for your where So

it's obviously I customer leisure. is to mean know the the you return and where mean I is we're first customer Yes. interesting. going go

day other we Shaun, On hand, the it, continue major year major year a EBITDA. the EBITDA a Half sometimes half is interestingly, misconception we're brand I our companies. got and next if the that there bit -- mean, non-branded but of comes brands, our just -- to book from mean I of at book to end portfolio, we group of but to legitimate the be this someone to need to for and wants group of do it's

too. smaller we properties So lot -- do and of some have have big properties a but we

-- XXX-room group. that XXX-room big lot a do of We property, meeting couple XXX, have of properties have got a we property, two an XXX-room we

group a We that a does of of business. XXX that's rooms resort have ton

And advantage and are that all that. of take think nice so to one leisure our is are on we that sides things see I the thing resorts think first every comes get is we able just we the best of the issue, back of because ones commented our to

are, Everything's still at go a to think the to pretty do There's nothing not that's lot because as you other amenity city. reopened, be sure is unfortunately the where base to going tourist look slower what, would until because to it's than partly is why I'm San leisure do closed. urban a of Francisco hotspots and partly environment, today? back come the to We markets

follow might without of Google sites a the now or is the nice customer people mean digital and side, where it's and today or the I there's any think with even either marketing on of on the argue we're I or and it's for we'll because is people. the inexpensive experimenting them lot But prettier very Some city the ads know. we'll wherever. OTAs digital not I thing where see do shopping don't paying

see go. what's effective and we'll and that's focus dollars our and will efforts So our most where

ahead. The Raymond from from Bill Crow next comes James. question Please go

the you I XX hotels. the that role of play your or Very travel play bit. is the reason independent good of technology big digital the and the seen front if that they're from the the cleanest, gating cleanliness. and desk. say morning. the advertising and they're intermediate Jon, represent maybe be you've term, all sorts six starts percent urban show pick comes can brands they're formal seems them little a over for when up to names to like the I'll to going this, me out out here that and EBITDA to that going and I'm factor key travel these it's And And four already a go brand we'll TV they of radio to And do or roll and programs and investment, five all that with the safest. going bypassing brand commercials it partners seems have

are it's So see trying set back from not in that How XXXX. it's independent come is -- come up different to than to struggle than to recovery? we hotels trying from really this back X/XX, different how urban

driving leisure hotels whole like on with and people. still about of on think folks and factor traveling people the particularly the side, most the for go base. don't to I who looking I'm a Frankly, be they're the independent at younger those a risk it's even lot of mean think I they're that'll if you Because basis. sure they're not experiences feel unique customer discretionary

I How do because big transient be will anyway. you I to to and don't customer who's just It's I not customer be -- safety. goes hotel. we going cleanliness, more base their at think talking open people disproportionately they're drive in be for many feel to don't uncomfortable many it's still hotel going hotel? might think hotels our the to last group about think you going exposed to which because you likely going my little big drive how about to. cleanliness even line? It's versus exposure. brands the brands to predominantly a focused it looking a because a is So to are partly just about are How to want big partly are people generation mean isn't go about about

Now, see we We'll this -- is a what is of look happens. some this we all. our -- viewpoint. have Again, see

that there. out to marketing base a trying in major pitch XXX these year. are it's and our that'll We're little this great to is the Just properties everybody. not greater of X% than customer percentage programs, the posit We're X% choosing go who you convince get those next the and travel hotels that that normal trying to do it these with of would to a guys get what to to I the people wants independent over but population to of be doesn't percent lifestyle

Yes.

Jon, doing side that the sense. those Okay. your that, is I think your are hotels hotels, what bypassing the good that, as consumers redone you've today; What That's response. things, That and is electronic desk, reworked keys like technology younger things about of makes are the front fair?

I in major key roll to it's year. this that don't It's have interesting. any mobile hoping a were they yet, out I program of have really properties mean brands. again, size know we later our

capital. to think of going because be I lack deferred that's of

we Bill, evaluating a whole and It's on. in about still bids where basis. front to actually it a still and you're need an stop major desk for it on on cost is -- getting show this to to a us, a the it's ID. the roll looking case, think you've at our going it, not I major major ongoing wouldn't out may investment But portfolio through something be because got right it's the we -- at we're think year; now you thing interesting don't and

I category. key one have verify credit think the do we that. particularly have fraud there's and one We is have that that on you card has -- have issues mobile with we have Embassy, in to much so that Oh, fraud issues, least property, -- we did the and at because key that credit goes The had mobile in we

while. prevalent, time I we're I it's So will think to it's it's do what I more become a customers check-in limited but think want, over a that think it no touch will now much what and constructed I doing as going process do and time. we've think where right is take

The RBC next from Capital question comes Wes Markets. go Please from Golladay ahead.

independent cost is guys. it overall your for touch Hey. upon hotels portfolio? structure you versus morning, how small Can Good the your

Yes.

were do So before mean when what what they think structure or now suspended, you we -- cost you -- they're

Yes.

that? What's

door Yes, month or per real that key $X,XXX a is cited? you

Yes.

of ground on sort will will also or you if -- we -- some vary our have always have it a those So of charges, it lease but

mean yes, I but no. suspend, yes. just No,

Yes.

our some per non- room it cash per hotels, then So per And unaffiliated burn. But $XXX with brand of $XXX the from independent can and operate cost room ranges key. -- to

Per month.

is month. over be going can $X,XXX the Then -- larger to Per hotels it's room. a brand-related,

done hotels job others $XXX or our adjusting and have a a room. $XXX Coast in have particularly we, wide doing good hotels job, some several expenses. independent really there's the variety, So They're operating there the the a operated but of in a certainly West good

times nothing you month do cost our per you line? average, a GOP basis. two room -- the look the if what from have it would as fixed at anywhere they mean be at I the mean before that to independent brands Yes. to so hotels they three run with, on per would on I costs,

of in about you mentioned shadow supply? and supply in Is would the or contraction bigger next you And likes overall years. the relation expect supply then to competitive down coming And supply that then few from Okay. Airbnb just even such?

Yes. that cases them all around lot to I of lenders, of back really never think of the reopen. a the lot above. a of number back. take I many don't going mean, significant we're want that country don't to A see reopen, in even properties mean may hotels I go well, who to

that will desire tens be could mean fixed in be ever -- the cities, forward in product these New of think product hotels. we think see some a older basis. I highest urban think don't higher as of these taxes And continue because that to branded costs there in you'll need we some thousands the including be hotel product go of York reopen and may markets as what some use I best probably not higher branded think in markets higher older I and markets, reopen a on they'll of taxes of these particularly rooms of for as for or in particularly

the Please question Bellisario comes from So next from Baird. Michael go ahead.

crisis. from opportunities Just one for come you going me. Kind the the that to of that to back circling are mentioned

what when decision of eventually? off you question to keying offence? the that is And are do then from make defense think you switch I to

starting Yes. indicated, I discussions and side. mean plan already we're we -- as offensive have we're about to the

those came I see -- it is and expect longer took properties to this And next up of opportunity out not And years nothing, to an be not activity. a months. start I a that months, on lot to servicers. in three, lenders the other so where have cycle. different next months. departments, mean four think And in don't we shrunk sure cycles build which XX of think the there'll ratchet come any the lot opportunity REO back to but keep I I up almost the the few up I will frankly, mind after special over think any over we than next start four their frankly six the see of

Here, even get they debt to the and money losing funded. have properties are service before

inability borrower So the numbers. the because losses the less of transfers service going in lot of part going a on these lot happen on cases actually to to even debt an fund are quicker before the with a probably fighting

be and we'll where putting some effort want that. And months. for time we next be over prepared to So the that's few

question James comes ahead. next BTIG. from The from go Please Sullivan

hotel you've been call. flexibility a lower buying year-and-a-half making and you're are brand seemingly last you. guys have on throughout the independent another cap just that selling the historically, that independent when Thank or at Good rate And at a you -- arguably morning, that justifying providing contractual smaller lower question sales this looked completed rates. as cap guys. the commentary over Jon, kind hotels -- indicate you've always sold of

that we're certainly has just through management through wonder, going think value. so to about you for, the to the here, through the ability major go being another that costs And that coming terminate be cycle in to the hotels And should the in environment limitation account. we're contracts, able into branded I argues variable as perhaps, and taken when flexibility the cut a over quarters not

And going of terms become likely you In factor? curious cap rate, is think to the hotels. well a whether forward cap just this rates I'm for about people think

continues some the has not say how are happened to people perspective. the brand for are and their to not going their there a arguably thrilled it, are less how from made brand folks benefit the look, be, owner to much and think have I there what -- this say of been with Yes. the decisions benefit there costs, for likely of to have relationship. carry but seen I are become I factor who it's think would Jim,

so the in that trying managed lines away further relationship. where your not question, have along -- And relationship there versus do opportunities, move from I more other to control with a are think cases company people and franchised of be more the the looking they brand employee at brand including going control to even

next major brands the gone the shall with being in owners Jim, markets. the issue's the of they return. of It wayside you'll number in think dilution re-evaluating, four want developed I people I to of smaller by lot that five lot a as not. see customer already in expansion the think, addition to the whether particularly a the well, about probably base So or at a were years. properties, for and continue I brand or mean upset from that And

we'll -- it kinds. out. And Again, plays I so mean how all see have we all

recovery we And We brand-managed, we that branded a seen and franchisees, independent in and properties expensive brand-franchised fact we it's managed in more have to brand. have these it here statis expensive. and will maintain be small by more the have have

basis And make as so for evaluate on will a they their businesses. decisions people their that go-forward own

here a particularly plan comment. the you two West with That's question your course prepared And guys months well-pleased comments quarter in quick year decline. East the you at an the the the the -- on assets. first of a ahead then of bigger response, Coast the or And that RevPAR of were interesting the me to Coast. of had versus kind for relatively the West had renovated And of Coast doing had the at end perform said

effect. the time, in that Just curious or travel any a travel down reduction whether what perceive went in demand impact inbound the of end I markets inbound curious, the negative at for Coast? more actual to those a that of a Chinese of well, I'm forward, being period date Coast month about had ban we early West we East extent But the going into Chinese thinking because longer on February think January, the perhaps on of of whether -- have you that? here in it than might And I'm think as

obviously not gets been mean impacted to arguably, I'm more at we which as stop sure And in those we numbers. outbreak trust greater Jim, market outbreak Europe although has Europe were too. have by in point from travel that Okay. much don't of related international the in whether than things this China travel. the all I the happened,

this, city it infection about around and people think, publicity much going for how question biggest take international. I both asked It's fatalities New States, perspective one comment hotspot, and the that how respond it's is think was think is the all I I and going York of domestic a the are cleanliness. travel negative Bill it's I from mean that image? so been New to the to big a -- to the in gotten there to United York, overcome long earlier,

and how more be of about other but are Coast, includes the York? about safe West and LA of includes York safety, publicity minimal. day. fatalities cases big variables. the frankly publicity, negative at the New nursing it's very think more think outbreak And of on New cases the mean to a so in I'd and facilities and will even in had in much much, Coast, And Diego which which I feel outside when people Francisco the have I lot a comes the cleanliness, actually has when it pretty well-controlled end which I San have the Seattle. lower going East versus San worried it to it And been And that side been change?

they weather. have and -- generally So better

are there of factors. a So lot

I of think think of the it's It's on to a many. one a issue -- one with out come on out you raised, XX. hard one macro I just answer

kind follow-up of a so then -- then. And well, just

summarize relative and if Francisco, there. you was the at But in look in a Seattle, were you obviously quarter, -- for maybe so bottom was and you they when at the quarter weakness So flow in that the the of first think just San Diego could why level performance think the of I add hotspot, Seattle first the it's San one --

-- declare were was the -- have of at Bay issue, Coast were just where even got because the leisure. The travel, impact and the it's to hit first companies was said leisure workers, than -- eliminated of our for about travel urban in major That our some look markets, if they a timing Yes. no essential April It's it's said where resort there. It as and saying, no to at an It And specifically first on Because they was zero Francisco not it's hospital there thing emergency companies it emergency, they only that's the business -- military allowing now. East the first portfolio the the opened hotels eight that resort that San -- more in much major all the were stuff. was markets. we Area been business, I it's some market at other China I some crew, we least numbers, in conversations Jim, who think people state work business they a that's all have There's that wanted this won't just remember kind that Coast. home. everywhere. Look from getting having group. closer left was with West with of left the

meaningful? government Okay. ongoing follow-up a in discussions I To of there to with some industry know industry some resulted are do programs lobbying me. Then from that associations. groups involved think might you that about any the or and anything provide support question you're what extent the

Yes.

think leadership the significant senate. I have number conversations in to the well are in as we and house as with very continuing administration of the

a to own there's structure the and one institutions. the they're I of people don't lot businesses Marriott that that and think that and causes one Hyatt frankly, by educate small a of I Hilton to industries issues. mean, going we that were of owned also very last the be hotels hotels and good that recover, industries understanding individuals first have impacted,

overall and packages need to process. to travel that there's a businesses. future And And and think originally so been that'll the think helping stimulus dollars. the then those employees is in was I on stimulated there's I be the focus a our continue we'll going take And efforts recognition

And then we'll see support. industry certainly about specific it. whether advocating there's any We're for

be I industry's there'll I the where our from for that going but I don't a travel any you discussions look, love think overall perspective. are to businesses industry assistance going assistance, be demand harder to know versus recover industry just there's than I'd oil that tell industry specific was optimistic helping about comes been much the even but industry there hit on

Please The Gregory next comes question from SunTrust Humphrey. go ahead. Miller Robinson from

you to a listened have capital Thank a I've recent plans. morning, design investment today's to addressed that been on both on need repositioning -- of room I few couple you. and of have and Good hey. recollection, I question webinars your you the a gentlemen. hotel question that may variety on have and operating consider dynamic. amenity changes you to and, my the COVID-XX

area of weighing also have middle of renovations changing In second considerations? ameliorated. other thoughts out or renovations how whether you're away excess go and restaurant you simply CapEx are and flow, your or moving before in lounge design changing figuring context, the that on outlets won't be have space behavior this likely perhaps However, forward completed example, for health do public what means today's may given consumer you to that that trends sizable with that these concerns parts

live come of lot Yes. Good think a gather in we conversations you had I We ever and where don't to that a we've question, world those to Greg. is want conclusion can't in group. a

that And years et is next a will some two to there that return it comes to so solution level in meeting, we're going comes when to the presumption drinking, individuals allow of make to year a health that out normalcy entertaining, cetera. socializing, to

is people in governmental both people and really setups want upon amount in of restrictions for focus feel that creating really and changing we're time whatever that So entertain will want on our the spaces for is and drink comfortable the to next to meet what and change eat design areas want -- of to our with. to the will change not depending right our public focus and what want the or

some likely will removing will be we we So furniture, be furniture. likely moving around

people area together. tables some removing then congregate, through remove of but sit all It's see some can the if chairs, a could can of be you accomplish likely you're six we way and where if people. you seating also we interesting every this will family We six,

So other seat, think the has us that people self-enforce, won't and be governments it will we'll obviously every requiring one and design I our our change but to many in but any away do cases seat from our six our do to that and, if feet are renovations where approaches in redevelopments.

traditional received traveler share. last your this leisure that could you of of in you're regards with bookings traveling the the other those that the Do discussed willing before to that time these that kind I'm and the year? hotels makeup is same West as extent you or question that my or represent to different recent topic pandemic and hoping leisure And the is elaborate markets on Key that Thanks. to customer versus are such the booking leisure sense Naples you

Good now their the are conclusion having are same right fact is Yes. been which and rated conversations far and We've three lot it properties traveler rates very those our high achieving properties higher those bookings. in so is of a question. in

season a $XXX we're already So shoulder averaging moving Naples what or in season. I into mean shoulder $XXX to a a arguably night is just in

with a perspective they pandemic. been So before Key West exactly from rate line -- and have our in bookings were the in where

to we far customer properties even a their with these willingness all seen lower so the So, in being the either product for frankly which change haven't that's services of spend have. or will delivered

that, and Yes. for It's to all best me hear and of very comforting to and you that's your health teams.

Greg. Thanks,

You too.

remarks. question This the over Jon any Mr. conference to concludes for I turn the and now would Bortz closing back answer to session. like

then. their Well, anyone there'll healthy you. for for Be and be that everybody still friends earnings and and look themselves forward to with formal there, public out months, Thank their if thanks Stay sure there's you a three I'm hey, in between careful now safe. families we We and and additional updating stay there. communications call wish and participating.

call. This concludes today's conference

pleasant participating disconnect day. You and lines. you Thank have may your for a