Pebblebrook Hotel Trust (PEB) 27 Oct 232023 Q3 Earnings call transcript

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

You may begin.

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

potential But Chairman Jon differ Executive Co-President Joining to a today, a October to Officer. comments results turn effective is and could include financial materially comments our that factors of and we our and today's reminder Investment XX, our me detailed QX today our securities SEC Actual comments. non-GAAP refer attention from our only Fisher, website laws. Please forward-looking during Bortz, our for latest filings statements Chief discussion of are federal start, let's Tom for Officer; Chief our risk and XXXX, before may our and under to results. our reconciliations call.Now referred measures

urban demand, report top of We many were LA, in despite corporate adjusted EBITDA FFO are industry recovery demand continued weather and same-property XX.X%, urban a quarter EBITDA, meaningful group Los XX.X%, weekday and X due we higher XX%, X entertainment continuing resurgence a impressive at a in in prior and over occupancies events. the our and events X XX.X% across hotel leisure than cultural elevated surpassing end to year occupancy business good transient adjusted hotels, that concerts Angeles, quarter. our up San with occupancy RevPAR of itself the year pleased rose outlook and weekend, to strikes other last gained a during with able achieve to and In recovery prior to of solid nearly negative our occupancy RevPAR and an gradually our at points RevPAR XX.X%. also our controls improved This XX% which closely X%. increasing to Francisco, surging Significantly, over year.Our points, a which [ from by ] rebound XX.X%, impressive nearly XX to resort travel in hotel urban leisure points, climbed an with D.C. occupancies XX%, environment.Washington, almost weekend growing XX.X%. solid properties points summer, moderating up expense by Consequently, occupancy and was markets, particularly bolstered the led cost the healthy followed urban travel, XX from the a bellwether

segment XX.X%, down results or nights RevPAR on The those flat. continue a rates resorts XXXX. impacts, would better result, last particularly compared by weather occupancy and year's than upgrades, increased helped less our been the have so resorts.Resort quarter. negative. be their Resort for room X leisure sweet otherwise improvement was at hotels of with This room our to urban to As average and $XXX RevPAR premium third at to offset X% demand the brunt XX% in bore the in about moderating higher

with guests.The we while though. levels, revenue For a occupancy quarter, trend total of by challenges, along of benefit without continued our across X.X% by dipped increase marginal was third rose of same-property X% to healthy its recorded recovering persisting spend X%, non-room room not the out quarter room a the attributable revenue portfolio, our by for RevPAR,

quarter in RevPAR have demand sector. million and a Angeles properties impact notably decline an mid-September our demand in curtailing West and both XX cancellations strikes, point same-property the saved of XX basis $X.X this entertainment which the RevPAR mid-August of This coasts, named from basis million the to bookings actors We key Los estimate on approximate decrease affected storms from EBITDA.Second, estimated feel X point triggering dampened growth caused to an through in our markets. in continue same-property $X.X the and First, adversely writers and several led EBITDA. in decline a

healthy other property on X.X% materially QX. they've X% QX. declined renovation-related occupied numbers, continuing a may of upward the These in events, expected We taxes, compared increase completion continues at the throughout hotel QX Southernmost, year And to in across significant XX.X%, these in XX disruptions provided down settled, trajectory X.X% strains recently reductions reduced reduction have QX growth XXXX.The aided the taxes, impact our at taxes. a one-off if with to anticipated finishing in occupancy our Despite into total LA and point weather approximately property and the curtail are its successful to property declined basis portfolio XX.X% largely original of reflected X.X% aligned rate expenses, overall since property on and we outlook. Quarter, of as quarter rate we hurdles in vary been by management excluding outlook.Finally, prudent have unpredictable from operating points basis in same-property of these Solamar XX.X%, Margaritaville cost end a operating QX our true-ups, actors were writers same our included at also notably estimated QX the as QX, in lower have These upper in top in resulted redevelopment growth these have strategies property hit wage an and costs and San end assessments the demand in strike houses year-over-year.Our which of in even the multiyear achievements at rates to EBITDA as progressed XX.X% and the market in well per the over is renovations eased successful they pressures in but as guest the our Diego year-over-year at all departments to to has RevPAR Overall, would from we an basis, room extensive are and properties. witnessed expectations. $XXX.X at taxes coupled with $X.X with Gaslamp with QX X.X excluding the million operating EBITDA. at QX as margins winning positive of making our QX EBITDA million several outlook in an While

also the of insurance quarter we've fourth experienced of primarily operating growth moderation easing from ups as normal the like XX.X% to X down some year.Energy year. our growth the significant This had reduction spike in from the excluding energy we more results restaffing property are and noise expenses, half in portfolio first the further QX, last the in or true the rate the XX% the from in rates. moderated things in success energy across nearly lapping expense and course tax of in the in last investments water conservation months in expect We meaning property growth

that increases. contracts in significantly at percentage will to continue we locked we higher over have However, energy roll years several ago

negatively over XX, this RevPAR great, XX prior in made On exceeding monthly Storm July forecasted August to rate landfall Tropical costs our hotels keep outlook. on San to cost by and Hillary, energy will landfall down from variances XX, benefited business slightly headwind, Los at and result, to EBITDA August interruption in ended from X contributed a Lower-than-expected the G&A LaPlaya, to our million. resorts our a breakdown, reduced proceeds X.X%. million dipped $XX.X versus in Idalia, months.Insurance August cancellations Southeast.Our As due in a and due bookings in adjusted increased our moderating our and also the quarter. which Diego increasing which XX.X% on our a of XX growth cancellations for $XX.X FFO Angeles. bookings positive probably also Hurricane at saw year impact decline and RevPAR X.X%, made the the resulting X.X% which September partly were next XX

Resort this We strides the made mirror. from across redevelopment redevelopments. focus XX% in quarter. is scheduled and resort repair XX-room four these foreseeable and cash in of rate LaPlaya year-end and at now set XX, of the of peak resort in Harbor upscale Island commence operational $XXX the notable the and over future.Shifting year. in the capital commence share key operational. the next next guesthouses, noise the $XX.X for overall quarter to million is remain in and this in space the of redevelopment transformation striking marks upside the rooms to with revenue We and a of San a club and the visible remain bulk track with in associated and quarter, primarily phase room Estancia of sweeping in along currently the well accompanies began redevelopment that $XX.X Southernmost about final XX redevelopment delays resort Bay final portion beach the third suites invest sight. during million for third the beginning in are to a guestrooms newly ongoing resort's of are rearview Gulf Club clear $XXX construction, and XXXX daily year refurbishment. repositioning the of the LaPlaya major are in guest are the the of occurred to a The substantially properties significant project our a involves a occupancy comprehensive and currently full house in seasonally be The first November will August absence Estancia, very closure year, to substantial resorts and slowest disruption flow repositioning with Diego and $XXX in from and season.We track portion ongoing due a be this XX-room a Tower Rebuilding towers with investments guesthouses Resort in on disruptions Key despite with repositioned substantially The Resort, for This amenities aim before substantial projects XX-month at complete accounting.Impressively, which early period long Naples, available & this XXX to which is comprising completion our bullish La estimate dollars QX. property. X the both full-fledged reopened deployed Jolla Newport expected complete uptick resorts like QX rates. strategic and with rate capital public market November. It's an investment with guest at on to We pleased major portfolio inevitable experience we last which to redevelopment continue the forecasting is generate Beach on and permitting in of like on achieved average renovation. Tower, XX-room November This to the represents Gaslamp, Southernmost which XX% million restaurant During West.Renovations are and X completion the lobby, on to our to prior to again. And Margaritaville in full portfolio substantial transformed the report end across we're XX work our to delay XXXX related million renovations look complete

our note LaPlaya occur Hurricane that EBITDA to results.Regarding proceeds incorporated financial important for it LaPlaya, before or for a we related the have additional it's from incurred. as over million anticipate current by reminder, $X same For lost income project losses. in in contribute proceeds the QX QX we our operating loss on the devastation QX of we for million and outlook, BI underscores LaPlaya year loss we both has BI the Instead property QX interruption currently as opposed exclude context, to to will business not This to the the XXXX. QX any the that our brought impact Ian, in And actually $X.X results. of resort for

of million in to of the targeted in Zoe for $XX.X third have approximately we sell $XX strategic QX. Wharf of capital into Hotel our the end completion reallocation a sale for entered As part contract quarter, the BI-related strategy, Fisherman's with revenues.As we have million recorded

for business shares returns. portfolio and long-term purchase asset have proceeds for Assuming a speak our optimal during strategy risk-adjusted overarching the this segments sales rebalance any X total divested we in front, million capital gross been allocation will this Jon to properties, urban the in more leisure year QX. to common All line remarks.And generating successful of about on strategy closing, in properties bring properties the $XXX.X our his will with year-to-date. not our did

X-year cash our and for total Hollywood our Resort Margaritaville by years.Regarding the liquidity, and our unsecured $XXX fixed is XX% and $XXX.X million issuing X-plus on by $XXX.X cash million term at loan average X.X%, position secured over X-year with rates of $XXX currently XX% extendable increased a million liquidity The $XXX sheet weighted of our with in reduced debt of cost This fixed loan we our comprised loan million million. of X, and a new we unsecured. However, available while debt a our position, replacing options rate have line. balance carries secured X% with with Beach

by with the in to that Our our increase asset I'll Jon? credit than navigate Jon. over comprehensive cash unsecured debt provided the call upcoming liquidity augmented over update, sales, to XX with next and sufficient maturities XX more us additional months.And facility, to reserves turn

like to topics this I'd Ray. touch Thanks, X morning. on

our observations industry First, on trends.

Second, program flattening urban and industry ongoing then basis. a evenly about heavy our terms fourth trends, resort. business a allocation strategic investment in to the and and our pivot company fair leisure between of I portfolio, an has our travel between say talk And recovery on out I'll and of from the outlook seen business third, capital industry the a more intend for more balanced quarter.In to demand discuss it's urban to focused continuing and split overall

every overall the trend from QX. declining, that in of this with industry smallest did surprised not trend We In in QX. unable were QX, continues growth fact, QX, the industry occupancy even successfully absorb slightly in amount in month albeit a reverse that supply was to

continues related pre-pandemic outbound recover. been continued will transient, gradually the continues has while international to this to and weekend hand, levels and in markets, we've cruising levels. specifically of this urban returned. gradually business next trend year, strong inbound group as gradual travel international believe declined believe primarily travel, revenge at luxury weekdays. recovery.The its by domestic is on resurgence travel top the evident we slightly reflected during have to urban resorts, has segments, above occupancies inbound lap and spectrum. leisure as Leisure data cruising international We've only normalize the international at softening major travel, upscale leisure improving outbound The travel is inbound However, international especially in particularly in at softness travelers.We travel predominantly higher This recover. We revenge consistent not and seen hotels, travel leisure both QX The business rebounded seems shows has business seen overwhelmed XX mid- of evidence travel the other demand any the the to end STR for year and in upper to industry. improving trading in occupancies and to lower located the are down have An the in and which of a cities. occupancies of

change spectrum trends don't of the moderating worst.Geographically, the STR QX in fact, for the In and bottom July in the economy so properties recovery and quality weakest Amidst with far these in of category worst and the expect to surprise, such D.C. numbers slower year. to the we markets a are the up the XX the low such this Atlanta show New hotel declining see and demand a demand and much though and Washington, general, October Miami, from as the end previously Chicago, the continue performing points stabilization experiencing while are as performing price at rest Tampa, continue earlier industry-wide are also demand San stronger York of displayed witnessing and now these Francisco, top growth. growth markets as in increasing to come recover weaker The Orlando demand, trends in and have occupancies. bumped see other September markets August.None demand in industry demand ADRs in in growth of ADRs rate, occupancies, markets

September. in favorable expect holidays modest Jewish we October's a this year calendar following performance However, boost due the to of completely the do in

move of business like to more in the Of see next and demand to pivot given and or a our surprised investment overall discussion course, inflation a leisure I'd the and capital on to our economy, we to sometime the be recession a mix. down evenly brief XX balanced the if slow bring strategies Fed's efforts shouldn't months.Now slowdown growth of we

been lower the properties gain extensive Skamania Newport investments XX resorts, XX and upcoming urban. to X repositioning since sold sell proceeds operator Acquiring Naples. we upside will of York. a in the limited.This leisure Since lot transaction corporate properties and helps Simultaneously urban houses unique guest X pivot Francisco, of to Island, within we also changes very roughly XX has urban gross next assuming with $XXX and as are have the since D.C., over reduction over these explain were don't total, markets travelers. we in San for significant we of proceeds corporate properties of leisure Today, added total West, on of Zoe acquiring urban today, believe additional houses couple the all than in have strongly in significant also in the Portland, sold the in urban our holding X portion mix which believe in in down properties and business in we've X resorts, San Francisco, Nashville, are small better cash for Estancia we right in past a XXXX slower going upgrades, Resort, mix or at be LaSalle Marker our total any due are best we we've of available amenities, X gross Philadelphia as including to a the proceeds private future level exists very began relative urban all properties -- quality move preferred an acquisition taking our and cash and to is we of group of upside. and Our more arbitrage our meeting urban the a LaSalle resort Mission arbitrage recover don't million the higher. In the me in to components, quality San $XXX.X at to properties, sold recovery portfolio believe secular believe mix West, believe we XX-XX the Resort, will outdoor Resort of slowest sell the our mix public leisure repositionings we've property of opportunities the and a our serve the in as Key Jekyll have sale NAV particularly investments will on our forward, is out X all and an that We've the bigger capital and using repurchase We're experiences.As near XXX.Xx.We've attractive of the New segment we've travel market in markets funded individual which in properties, of debt upcoming lowest space years far generating began, when from turn York, portfolio. and their well multiple the gross in to X the to drive Zoe were and million. attractive undefined time current properties is now, we've to year, LaSalle's in This in XX% properties And it buying in the pay opportunity, attractive at been business properties slowest them significant flows in San X.X for XXXX the the market value selling will EBITDA than pandemic more sold by over the in discount to using strong locations either markets disposed undefined overall leisure has of be well for be and to in reduce We XX-XX. cap company.Now resort sold advantage tends advantage enhancing and of as creation XX-month with we Moreover, we Washington, the trailing gross increase leisure-focused our X available current generally proceeds Coral we properties trends today. discount NOI went believe XXXX, continue between transient of group, sorry, of which our substantial average X the just leisure the helped a acquired opportunity Island, proceeds Hotel come going in The values to this New such additional activities transaction, company. urban including that will Harbor pricing undergoing forward. properties urban roughly $X.XXX million, very trailing to being of take the to modest other and mix thus the a cash for for opportunity the our travel, strategy.The to our to we've X Prior most remaining those in to properties L'Auberge X within million. X business years, recovery property additional us with or gross billion. then, large is the made total advantage XXXX continued. leisure focus by We resorts transient shares of this sale $XXX opportunity all we is $X.X and Chicago. slower with including all Since business of many Seattle, resorts, an and move XXXX, represents late in the at Lodge, to of far of from us Southernmost their recovery in billion.In rate of think sales XX-month as favor in XX% added very let the XXXX significant La X I'm Jolla, upgrading term. continue and and Portland, NAV growth that guest selling opportunities Mar X a of edge taking on to event we sold sold in we of urban $XXX as improving top markets, while and at remerchandising leisure portfolio in which of financial of common Chaminade, Southernmost slightly these proceeds to LaPlaya debt, Key future. net our them believe actual retail of investment for share, shareholders prospects XX them ranges XX% as and portfolio. in our in and group those resorts discounts Hotel including And the or Bay will continue then overall thereby Gables, at Del a to Francisco, discount in Francisco Seattle the numerous a plus business at group X.X% We properties resorts estimated expect mix view We increase our our to believe a significant flow.So value

As performance of at business helps October the benefiting This, into between from September October year. both September October fourth we with split this industry. travel. and the well is Jewish leisure out and course, look holidays versus healthy the falling of them last quarter, started also being entire year

a We note up higher compared with a a to calendars caution but our past at only We some we year-over-year in is increase had San we the books substantially of our normalization nights put for have favorable advantage XX.X% down how X.X% fourth going This believe third rearview experienced strong leisure believe feel business quarter, into strong books not performance, a a this fourth the flat on ADR both quarter booked the revenues pickup translate look slowdown a and very D.C. may looking in further, and grows pace higher, our in quarter books Breaking benefit Boston, we XX.X% group level Francisco, quarter. is but ADR, healthy growth ultimately and evident X.X% with concerns great our a a the and as is normal patterns into pre-pandemic is to pace that shows business portion room transient in almost it in their nights in pace Transient patterns. which we significant group in customers the in comfort particularly did growth and we increase year-over-year and have a revenues of increasingly group the this need addition, saying portfolio. year-over-year.As in books In booking up we ago, quarter. which on increase revenue. that more deficit represent total room and the room Diego, still for XX.X%. out year we convention pandemic-related the in group doesn't nights, the activity, We with quarter being comfortable confident year less business more strong, resulting on in as than QX, million more revenues have the further X.X% Washington, San the or as increasingly third at with X.X% the out X.X% robust our mirror.In and $XX is total quarter, a rates business.Specifically, about room ago. very on further for in in a consistent but favorable business in felt

ended. X.X% revenue our X% So a the deficit time the by quarter turned advantage into

as patterns the our by to was weather forecast patterns. We X% evidenced X% booking outlook. What plus from expected of didn't we negative the normalization down this impact

time So while almost books and pleased year. the we're last million we're fact same by of that very on the at fourth revenue encouraged for was the the $XX quarter the ahead rooms

X%, growth We in to significant certainly RevPAR to forecasting is QX last X% over from compares the QX the quarter.As expect versus outlook advantage actual of reduction course results. favorably a our year for a our result, which ranging the pace

be the by occupancy. driven been has case growth As all increased year, this we bulk the of expect will

or higher our X.X% now approximately rooms you for X.X% may about questions. turn is total that outlook revenues with now for growth.So to the your Q&A. than growth revenue to Our to for remarks. prepared basis our Donna, We'd QX of outlook for like points XX proceed completes

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

the I medium a fair if do QX, taxes think X% term? for expenses, to is think energy the operating site, range in you as for run you X% hold that's insurance rate the to

yes, Dori, that's to see either that the in And think in But of a revenue we in operation, for the we'll that, certainly there'll or stabilized and that's activities. tied obviously, I more do, and as beverage are a volume I occupancy or I be growth expenses baseline a mean, other sort level. at higher reasonable. think food ballpark. But expenses

Okay. outpace you would your that, to expect to And total RevPAR just continue within RevPAR?

We and also food the revenues, our that that group volume particular, and revenues in with F&B on continues think and many the Yes. as margins help in should to be we -- beverage Yes. other and will side. of think recover apparent our

question Crow James. next from Bill of The Raymond is coming

I Jon, than hear can you. hopefully, me can hear you better

about that. Sorry

you year better might markets, and which Could markets markets? worst outlook and about, might for the which talk the group be ones the next be

Sure.

So next our year for group is currently, positive. pace for

Let if see can here. I it up pull me

books total, and pace Washington, actually, currently is and occurred then in the about revenue markets level of up half Diego this first next on It's transient. of XX.X% for it's year-over-year.The San year a in XX half for last almost XX% in the some room nights, percentages with much but terms Francisco, should the Chicago, very we're group. a in high And in the include small room be ADR, rate revenue on Boston of over is in X.X% are that which books, the numbers will up the flat in advantage down of up sitting So in at be But basis, second the XX.X% year. we year on stronger is the total XX.X% pace. at X.X% ignored. year see year-over-year probably up X.X% be Again, XX.X% months. will so the in of we're substantially San for a Group cancellations D.C. nights, XX.X%. those about That how is transients

So that's, they break I our generally think, how within portfolio. out

'XX. is in as up then, is the And 'XX. little and 'XX know is a up And room just on XX% the Boston D.C., are XX%. and Diego second of the Francisco nights L.A. San for In Bill, down is San flattish. about books the XX%. we convention versus about Chicago mostly color up 'XX calendars half on

wanted that she insurance to and up energy. that's up follow taxes, housing like expense the out kind CPI. and cut about on cutting asked of in I just Dori know But food I normalization, the property question earlier

growth? another growth X% of, Where at translate into growth. investors we getting it's you is, guess question I EBITDA? keep call And next Are So to think expense I it, margins and where going does is looking the do year RevPAR year? X% expense be what growing point at from

what's them you inflation in we what are the industry ask driving because that the their that's Well, for see. should really increases predictions

multiyear levels properties those volatility when was intent result effect volatile not and a that I taxes of generally X, important. of of are was them think tend at And they on out be say accruing we're they're that because we appeals property cities get categories can, reductions then those a X, more property happens, not the assessments. to as of because reduced. a those reduced process to tends It bills which taxes, X basis, have with but the when we not trying on successful X, at as because that raising to the cutting volatile, particularly on the and that, year-over-year I unsatisfied the cases we keep get before.And to and through you rates, to we fight assessments tax initial X, as in the the we get true-up talked years they it because be terms get takes part of because as much to tend have for about to the are X some in revenue us bills have cities

of also generally when occur. it those going things we are and forecast hard long to know, takes, it's so to don't how And because

got relates of at it it property because coming and likely from us Bill, year, in be that expense first X when next to as year where the be going that one, true-ups X a to we of got. look this we significantly quarters, will we're actually growth off So perspective because we productions headwind for portfolio declined our taxes a quarters

down years we'll run as next don't So get it we come these didn't years, we when come get dramatically. a because hope doesn't be being year. true-ups.Now we the will We from next to successful. it's some frankly, assessments have the down. true-ups pandemic impacted represent true-ups know these or those rate when values the know, over X And X But by all expect processes

to can impact relates have that. what -- have come we'll mean, to going on look numbers basis.Insurance, percentage some have overall you overall those to up at on the an with I Ray, as rate and to it the speak on have run So taxes the some property it's that But will impact revenues. it'll

Yes.

the couple know cost we news be pretty that increase. So much we Bill, The insurance. the going did on because renewal as of June is to over here those next quarters our know of is good part X rates what

this continue of a couple quarter, the we and have we'll second next the have we'll quarters over happens what as at So to see the to through renewal. headwind, know

down. jacked X you year they where declining that happened Katrina if years. for and opposed the rates up unlike years, up, was ], tends following back years, proper started rates a and see a as elevated Typically, it double-digit look happened good year. go Now then to same storm by we'll Katrina, refer number of carriers.So after have [ insurance insurance our the this the benign to as what for environment, way, what the expenses other to thing got pretty happens to We stayed those

tend costs things be year up lower and that insurance now, and it be So like stickier we a could looking other stay is now, wages there. being from unlike property than to

my with likely be like next are sounds it's just year all it being margins that wins probably put takeaway. But I these I ]. fed misunderstood, [ right. going when to you flat time a but All mean that together, tough Okay. have would maybe all

Yes.

I it we X% revenue growth, need I than to to to to higher depends see. be We're think year, that's think, -- going next plus to revenue that. growth what going we're margins and see need to flat get

fact that this and a provide lost have will then investments next will Now And a what and had through and it looks macro of we depend the for share year course, significant much how related year upon help the tailwinds we that like. then, tailwind disruption we've environment the some year. we revenues to made gain that growth next rate

Van is The Compass of Floris from Point. Dijkum coming question next

taking question. Appreciate my

million an bogged with important nearly So thinking and been aspect taxes. to has a minutia I property have $XXX and the just capital But last of I'm know since that guys insurance, the it's invested about we revenue-enhancing in big your over as have you same year. invested down get this investment thing can upgrade and of enhance and bigger been years. actually your of of obviously couple portfolio last -- chunk portfolio the There into picture,

run can $XX earnings to the or it, about on next of You talk you've invested going EBITDA. had you year haven't of, what million, disruption the had this capital trying full this $XX run $XX of renovation of had year of should despite a the bit forward? higher all than portfolio portfolio being million cetera, I rate rate for call get adjusted get is you at what putting will. you've $XX to you to going margins, be of earnings, terms do maybe million detraction first the that. call little million Again, benefits of a that significantly of your EBITDA the year theoretically it, these should I'm math even a Maybe EBITDA if in power that in concerns and million of have, just if sort to you $XX And year. any your If et stabilized forward about

mean, presentation and tried there's our I we've of our prior lay out think Yes. for what some upside. calls significant in investor us to that's I that

share gained is -- and we've are gains of The years is investments the year that will strong part the These next occurred. probably takes some bridge flatter.So will already take investments tend that made. We have we've the year But as Now from the door. still say, some that's if side, have there's return the year, others, that we've years are they made. -- in X that And some that the we the the investment future, out our after, good to obviously. with good environment the and investor presentation the in and and is after major have year more share in of investments from sheet, the significant as impacts the be the longer made come. after And otherwise repositionings balance the shown been that be years, that to upside in dollars X quickly the will that. to we side you be

when eliminated, softer.So year. started pace lay what been any We're exactly the macro we from with And our about timing do next so encouraged teams more year into least good out a looks perspective. next -- but deferred our a what likely that deferred. like. have even it's I us side haven't think at it Who going looks to is hard you knows, or slowdown coming process or a for cautious has we're we like this be And that more tell -- maybe gets property But when we're going the to portfolio. those the the the of macro from that within of when is year, when all we're we're have environment. here, significant we dollars the I invested. think get not that we to little going timing have of recession given going But But the is see about be can overhang having confident been to returns tailwind disruption next definitely through the slowdown

I be revenue-enhancing from terms on range stabilized -- follow that returns And that can expect on mean, XX%. investment get the just Jon, I -- on Typically, up returns the in historically been you would a basis? would minimum if what's of that maybe that. the to CapEx of what this

the up Generally, end every end some higher. extensiveness in plus get to higher the on Yes. we On a basis, some being of upon XX% up depending those. the the property, of to And redevelopment. being terms redevelopment, not perfect stabilized larger look, the the tend lower, it's returns

Some out at by cetera. of we've But the impacted et that averaged gets XX% competition, plus. and market

from is next Klein The Markets. coming BMO question Capital of Aryeh

from side, that's done When on the aside the coverage you just insurance on Maybe seeing the up look cost meaningful increases, expense your just across then all the are in rate given way? been opportunities there changed savings kind question. already since you And COVID? still the has following of out portfolio, any streamlining

the effort I be a do I They costs our uses that since adopt AI. yes, course from of has business AI, continue hotel See AI. XXX every the there, over opportunities got in to also the today people to to master within we've continues out your continuous. on dollars has more AI, to contracts, But think it's continued we that on ago. number years over there's We which well. portfolio.Curator, the our as been begins down agreements, going in in to industry I've generally think find basis. helped year fewer annual industry Aryeh, come So has XXX the reducing way, lengthy per today in have technology And hotels efficient with our operate first we of And portfolio. And is which a question, as to to period, business or partner pursue of in far XXXX. costs XX the XX think and way service these properties millions agreements, millions we And continuous portfolio XX bring that vendor the basis. and a unit effort years within an develop fewer did by ago on continue as than than areas. additional that's efficiencies

usage the efficiencies those are going in more within a as adoption and think lot see those basis. seeing Curator New term. to costs. geared over technologies Many related become that of we the over particular, of time them And team almost And the a do reducing reviews reducing of We daily lot focus industry. of costs see on to Water to continue. long are technologies a new widespread technologies, we'll available.So energy margins is obviously, technology the down, in long to which in time. because again, challenges, they're at to things our go would we're go an we And is still way margins over back historically when has if difficult. what cyclical, eliminated you and you'll inflation. the costs I environment they tend its get more at XXXXs, say the And up and of gradual LaSalle late improvement margins and all look back the see are

continue focus costs. on to we reducing So

coverage. Aryeh, on And question the the on then, of part insurance second your

of the did have overall property coverage we year. today amount same than We last

So and a it's events. $XXX which lot million, different storms of takes

structure. Here deductibles it's did have the like at in But and It the looks the programs we are of a different of of coverage overall, different insurance the that layers with before. we'll some quote there. higher of there, same parts that amount

insurance probably that more coverage, carrier to is think that carriers a long-term property have the with the better. owner we a you.So is side, the relationships I able you down. had. speaks of push compared little GL levels Cyber the smaller market, you're The operator to or shop benefit those has relationships up that than with, the market So if gone like a we're owner maintain had smaller and is market look, are to better. in insurance relationships this, if didn't they'll goes on comes you when The with it markets tough. to have we But overall, stick

it So come has back patch then going through phases. carriers period comes because will we're in to less the lot history there's now, storms we side. as a go where there's varying space. here rough a showed, property through a down more and But back Right the

Rose The question coming Citi. Smedes next is from of

be need your to So Jon, you work in to remarks. addition in to able ] AI, in [ Ozempic

right? Wait, you're talking about corporately personally, not

something. saying he's think I

No, move we can I'm kidding. Operator, right. next. Smedes. All just ahead, to Go the

ask But ability what happened done? transact Or rates the $XXX than on in of interest easier you're kind this of what and seeing certainly the been to of been I the just on little have there's up. sort transaction that still kind in it's you are all of curious media, of market looks It about seeing popping more just you the market? sort bit with just or to and have I terms million what's like get we've to that, in properties just more X deals seen market. under wanted -- you a if kind of

great Tom. it's question. a That's Smedes, obviously

those selling like bifurcated the cash maybe in that have think that and a assets, in to it market those those example, be markets. of we're for continues kind I in are flows assets then assets terms ones recovery of

the the I million, and challenging. that market below trend. I are transaction obviously, say deals would that be So overall, trading that is say, things pretty that would continues the to things we're $XXX the selling, are the

I We're the trying perspective a think just interest. that day, the tell are of terms given of into you I of in We're a macro the market.So conviction, there. the effect lot longer. I that headwinds at strong to of think is investors there's deals seeing taking some translate still that would the end of there's our interest. lot

want we're from looking the it a relative key price if of number is see higher from market, investors -- from with the a at the open, is return get the the the not will you they the and these in narrative basis, you'll for they're cost perspective per given But a market high compelling, CMBS deals very side. think in markets cycle see necessarily I flow, that Fed supply on to looking financing and cash at to a the they $XXX will of some longer of key helping again, I that trade. deals we're do of replacement some cetera. recovery some, have especially again, believe moving these et high early is flow, a are per but they million think of But forward. cash looking some transitioning price limited also because that backdrop north in necessarily in markets, not in

from of ISI. Pfennigwerth is question coming next Evercore The Duane

I bit your asset wonder into XXXX. little you if for follow talk just outlook could about sales to up, a

will depend would ideal like you your in be would about? conditions. course, shaping talking depend how Of we upon upon many how But assets and portfolio? it And the be scenario, the about environment thinking optimal

Yes.

a going of public I the relative happens from -- strategic market the private what the with and to the be our opportunity between it depends -- think market. trading value ideally, will and it's perspective, So stock

said many your and were XX I take I the asked sell given think XX. to we've of said before, properties opportunity how it, you of we I've think would arbitrage advantage

for of We I We to and properties talked as that X target feel way. $XXX sit really transitioned don't and leisure to we've next a about. mix sales more that. have the year million we So sell anything don't we work or like need of a favorable any properties. say like here these portfolio wouldn't business We

where rate have by past opportunistic, the not It have Obviously, really an to will to -- interest good environment, just will going I related growth. X years that's that And markets, resort driven we is growth overall think of it's the for opportunity RevPAR a and investors it's driven we start both the by fairly markets, And it of that probably the come environment, significant buyers by those.But see going be we've the value cities, So as get this what years see be to to an growth. in RevPAR. the view, to into macro of said is very, to macro. pretty on lead X of we markets. acceleration future we as view strong very be underwriting supply macro rates debt we down, will ultimately will fairly improvement going early of built to driven in our as lead get be nominal assuming

given macro the for upon to to depend opportunity day stock we shareholders. how it's trading, then value So and between value how the the going that can on create market that relative is and where out buy out, back plays the really any plays our what environment for sell opportunity and

Or Jon. When launched, that completely just a those you asset completely the about the you LaPlaya. the have for thoughts, quarter? kind bit late and you it would rifle getting Thanks think to and the season repositioned and second little of maybe the take do half And of be think it XXXX. time enough more in about catch shot of on a timing heart first is of renovated

to the done and intense there's Sure. get open. level at construction project Well, to this we're and season. catch hard effort the an working project management really And

but And respond. to we're Of we'll X though obviously to approval, can lose up. a days, waiting think And to permit.But may weeks be have Right going course, one permitting ramp continuous we've we you losing lose a unknown last weeks. to inspections. ramp-up get quickly been now, county on how there, we're mean, you're trying I down continues think from to I I the perspective, the not

into sales efforts. more lot We a going money and have marketing

the pretty a booking have now property. for good group We right pace

having have business starting House into a going some have of season having can't to President's a We to the we're to pretty good Beach But people really common feeling back come that had relates And out of who in vacation Day want lot of move on, nice don't miss base. there marketplace.So of that years. is prime we we're Naples, to January the unfortunately a building. lot and without the accommodate we now, who're everything the a thing build they have And as of getting business because couple to Beach season. control be don't the but we're pretty family to we're of building, the tends House the we better. annual close hoping for it reconstruction We

from coming Anthony is question of Powell next The Barclays.

year next for after. flow and the cash get on Question year

of your also finished of dividend. CapEx next year, terms given your CapEx, In go and projects you the a could up you where do these think lot spend

some impairment. you NOLs got this an have You year,

So even I'm curious maybe to next a improves? as if not you RevPAR year have pay enough dividend NOLs

Sure.

-- been expect but trending much had number So in 'XX years. portfolio get our that million for Point go have at or number to But that. what commented amount be our approval less. we're haven't before, for say, forward decide of the with million started should on next we've need process of San this and property. it and should just we'll Therefore, But about going of substantially for even Paradise know, the be less couple level as be to where renovations through We years, last budgeting made. $XXX year that investing would if will CapEx, $XXX teams, the you of year a we're in on, than ever the major We the we we our we less then talked about a this to conversion overall, going there. CapEx Diego, we low as

it's for assume make advantage the certainly good on we NOLs. take of -- we the example, regarding then of Brazil, sales, into add arbitrage as for through. which incur our as loss, for that beyond.And and public completion that. And we a we that yes, and progress could should we result, can private sale, dividend, a But tax we cash will an that on the burn still we the So NOL have also for 'XX

likely, increase increase to most choose dividend But to have don't -- for the would not So need have otherwise. to dividend. we we should that to have a taxable in in may -- you purposes, the we 'XX assume 'XX, income for

where complete. we'll that, macro what world the sales the that Beyond we have plays is additional see and out, to

Michael is question of from Bellisario Baird. coming next The

and Jon, takes line, can just moving to walk last just top a lot last you compared are through year. the on I pieces puts know of us the there year.

better both bad run the feel could to You underlying mentioned the true what help periods of the get kind and fourth rate in maybe the convention us for calendars is quarter? in But us year. being a of you good this stronger kind of remind

had even started, we of you something we have I amount -- of last it can But million think, think was. I couple with it that don't get had November, relatively that been perhaps great. would impact. might a which much. that to have mild we mean, I not million a to So back $X what fairly $X or year December, perhaps, was I renovations number small, did being a recall

in taxes negative is over The nice the biggest clean pretty it's in side, the So million of QX on last impact $X true-up year. a property expense we had revenue side.

that, property QX, in major quote that an for don't think item this of expected any show And the year you will, that if there's so on side. expenses, any without increase revenue taxes. true-up in I Outside will

For last it of comment terms the it's Xx this but what year, pluses Diego, about this of no, year calendar nothing the quarter that's earlier, And Francisco, quarter did convention was fourth year. last San San we here, very notable. fourth in good convention about in was than Boston is it was room double [ The more The down what up. last year-over-year last market Chicago. year. market than is is center in double and that only also convention ] And was that it are DC nights almost year. only also --

-- have going case of very we group the So what in and quarter, the in the out. fourth have we're is starting why favorable, we one reason

So those the anomalies are the last side. positives this less revenue year, year, at least on

to And is which Mike, in thing one the numbers in other our is numbers, our LaPlaya, overall. is obviously, but related reporting not

slightly negative, to should LaPlaya was LaPlaya think some QX. West Key this impact $X year I positive. and in and million in in there negative be was $X million QX

than there's changes. lot it there portfolio be? lines, on to on year, lower going along same all post-pandemic on to of just remember else the this bottom is on we're the helpful. year. profitability a all our causing Got it you Is sort changes modeling we XQ bad of That's been just sort Maybe patterns? last that's big of in And it. a just something be at XQ in then But demand shortfall because line. Or quarter just side, the fourth had

in happens fixed and when is costs volume, that are your thing the Well, there. still QX you obviously, QX lose

volumes flow worse a so more it to tends compared to normal And pre-pandemic. have

that there you've pre-pandemic easier portfolio the [ QX shortfall lot you X X, more and volume, lot in rates the whereas more flow, in overall in can QX to a an a those ability volume that And than a in to X much and tends have have you and has from in it's and with to little be don't quarters, less to change got absorb ], in absorb so think on it higher do shortfall that I you occupancy, X. basis.

operations. to X in and energy, insurance, the also operating, again harder to about that's and remind in caused which items those Mike, was necessarily And quarter, related XXX not Yes. to margins alone taxes hotel to last year, property on That's property fact, basis just impact point from the forecast. not

side. less So on is the good labor news there's the pressure

that's that And So XX% headwind last less unusual year. property market. it the up timing noted, going and of have than as We some are we increases of didn't energy these then that items Jon in know going what's been. a XX%, year. insurance not has -- last were But on property items these taxes X play of there

have a it. items of X those So big component

our it headwinds down items. basis guide -- If a XXX from reflects you X at look basis plus, those points XXX of points

Gregory from Truist coming Miller of is question next Securities. The

about This your question X Hotels. is W

W the new Angeles and as Union standards. renovations As completion changes you anticipate for New major to or brand new a or properties to brand. in meet direction Boston using the forest is Marriott of operating Do hotel my nearing to Square renovation any your of any the Los understanding, York's flagship

No.

for And can't second booking This to others one are I argue question, Okay. about that hotels is are as since presenting process booking the total early trends hotels accommodations with hotel that that. total the hidden one so-called just noticed yet any Have charges? in asking changes present the relative charge hotel last you already then market and same well. have a to fees. alternative the in to

seen question, is, data anything time Greg. It's And one good a some better to measurement some the been the in what can't anecdotally. But they've haven't share and switched if a with do detail it Marriott change period there's question to now or related share to. see probably who've for not. That's answer properties, might not the we've you really have dug within Marriott's. into tell over into seen losing We've we our they're be been minutia whether completely it since to see our Marriott, I

fee that into into that's been across focus that's all by all whole and searches except does we've we I So really markets. is and industry destination weather, occur. operators I think been urban apply and We rate, seen, -- going But or way the field.I that have would certainly, impact and interestingly we'll a includes a a go the charges within the the the to resort at any it's to amenity the properties of the government sure as the industry think accommodations mean, are industry cities incorporate it's adopted fee upfront owners, it's and level, really brands of supporting the playing you level we'll would which major urban been there. resort lodging association charges upfront over an it make have -- helpful and or long-term that the -- the obviously, eliminate legislation kinds thing an it. adopted the call And fee, is most and

don't the standpoint, to I difference certainly in difference. make you'll is where your year It By it the the everybody XX California. will whether in early. I months, it ultimately, in question, it. term possible, everywhere. required kicks the think minor competitive probably make I in required when a not over but order near in think So I doing from -- a of some could nature there I it's And think year, going were already short the forget next it's next pretty in, see for think adopted it's short But be

Jon. about one appreciate it, Yes. Yes, as thinking I was I well. that

from of Chris Street. Darling is Our final Green question today coming

of the markets but of. to D.C. too discussion intact where Washington, sold COVID thinking for the to out the prospects those since dispositions, to you've about fairly back at as around relative I'm you're it, going long-term Jon, and stand Maybe reading you've how cities to out me curious other understand much least. your where some markets Boston just portfolio urban kept into

have more we think will way. the in a I probably about reasons, Yes. that Boston significant long-term about whereas a is of cities some West mean markets, Coast issues We number really better think D.C. same doesn't same of perspective the take I the those seem than D.C. for we X Boston -- of from -- just a those have, of to do D.C. feel

we in get like people people that come We office. federal to also whatever can the D.C., government the for most in back back -- And gone reason have the to work Boston. fact seem to

that other of out it's it of D.C. take our pretty properties a D.C.I position the quite way a sold number We about in going in we look would to small just market. think to So have also longer bought we -- LaSalle say when today. is,

we So investor never were -- D.C. in a and big at Pebblebrook.

sizes similar, carry smaller different dramatically quite we're D.C. as all anyway Boston, numbers. going carry in are the in while which, a are maybe EBITDA in likelihood we are the than what number position to So much the properties of

believe position fans reducing we've in there. And obviously, We Boston. we've some there of San big L.A. reducing been but San we're So are fans We're position. of markets, Francisco, been our our that big Diego and other

related entertainment then to Okay. come to strikes an seen those back does the business in end, just Angeles. how That's one, Los quick up? helpful. strikes when And you've one Historically, quickly pick

It on time depends year. the of

the culture. January place. to the studios there fourth productions plans have entertainment in day, a get -- between would tends the week second the we industry shut are the of that production good number So the next a But and they bit down into through start the are companies quarter, deeper its quite in just Thanksgiving their and just

anxious much done deeper last to sure pretty to quarter. they're and just not lot going if get we're whether into don't Not a historically, whole this productions normally into get can the so have done spring those buck to they work going. a they And they in the It's further to I But insight than things November, next the that enough runs weeks and see or do so the in X have in more get trend a season X I'm sure. year. of that. do lot

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

Well, he's thanks, sure Jimmy everybody talk We'll you year. for Buffett somewhere [ Cheeseburger a participating. having in to hats next And I'm Paradise to off ]. now. right

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

the of or your time, log-off lines your disconnect webcast may the You day. this at rest enjoy and