Park Hotels & Resorts (PK) 3 Nov 172017 Q3 Earnings call transcript

Greetings, and welcome to Park Hotels & Resorts Third Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. The question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to turn the conference over to your host, Mr. President Strategy. Vice Senior Weissman, of Corporate Ian Thank you.

may begin. You

and everyone you, call. Park Hotels Thank the earnings & welcome XXXX to operator, quarter Resorts third

I under federal that flaws. remind made like I security are of today statements our comments Before everyone forward-looking considered begin, would many to

revise to future we in described or results publicly from expressed, and subject to not with and obligated uncertainties update these statements the differ forward-looking As risks SEC, that are to filings are our statements. numerous these could cause those

addition, on we call, adjusted today's financial information, will non-GAAP In EBITDA. discuss such and certain as FFO

You the can in most yesterday's together available at website supplemental with in reconciliations measure, directly as release to filed well as on our find the this information, earning our www.pkhotelsandresorts.com. financial and comparable SEC GAAP X-K with the

will Additionally, results our management you provide well that Rico Dell'Orto, to a update including closest further forma financial Chief after update basis, XXXX capital operating in post-spin and to Reconciliations to for structure, takes fee annual our recycling GAAP it storms quarter note quarter Puerto and the pro Tom detail also financial guidance. Financial for the recent provide devastating hit results of adjustments, as are into of portfolio the account situation financial well Labor West on as on which earnings stands our today. third new Officer, year were it's color Day. measure review which which important all consolidated results initiative, on and region more found pro morning, Baltimore, the adjustments, be and XXXX as provide on as our a which outlook kicked activity bit most third do Executive combined an contain a results as Chief on financial will will our provide our forma may back off statements, our basis Sean our a these information the Officer, of financial website. brief in available the remainder both September. following supplemental the the in not and carve-out This our Chairman and Tom prepared presents on Key

In our President joining of be Q&A. for Management Tanenbaum, Asset will addition, Executive Vice Rob

prepared up questions. that, I open the the remarks, we turn our like over Following to will for to With call would call Tom.

you, Ian, Thank good morning, and everyone.

very possible. to California. a their [Indiscernible] third partners the General at as challenging recent period both Managers properties as to thoughts Puerto along and like the the time. disasters commitment quarter to for my pass members, also this ensure I safety of express have all Caribbean, John natural first to difficult affected. prayers the efforts Key guests hard certainly associates, our and and and quickly West Northern commend get was as particular, entire all while my work would [ph] of the in reopened including those of gratitude Pablo Rico personal also I I worked with The Gulf who to want our pushing teams Coast, team and our hotels, Florida, and want Torres and well In to responders their as to during the tirelessly Hilton our of

and quarter, which the renovation performance. results, of events EBITDA to I comparable margins consolidated operations disruption comparable the for with for our hotel just holiday all hurricanes, Turning the impacted including our portfolio basis, adjusted calendar XXX portfolio on RevPAR our Overall, basis points. portfolio the Jewish pleased declined our roughly declined currency-neutral a shift. the overall considering am during X.X% while total

displacement our XX approximately by quarter. basis calendar points. during our X.X% points. for points, have reduced have while declined basis reduced Jewish comparable hotel-adjusted were holiday Recent points. the the margins up EBITDA XX RevPAR basis, by quarter approximately XX shift at on six while impact comparable RevPAR by of basis increased the by Overall, items, hotels RevPAR only group comparable a Renovation revenues these seven RevPAR would Excluding hurricanes basis would X.X%, reduced normalized

quarter Our related particularly portfolio benefited guests at of from Hurricane much hotel, by displaced Bonnet strong Creek in Hilton that group the pickup, with pickup our to Irma.

business to X.X%. fourth We quarter group down expect the in be

by revenues, across attributable a quarterly in quarter, On as well not the the X.X% transient enough by into side, transient nearly leisure few Square strongest business the million We translates of revenues, deeper initiatives domestic our the with to were business increasing RevPAR X.X% just supported strong which as increase two corporate markets, place remain and in San corporate management revenue for to with to uptick are revenues. in parking down of also into corporate in Digging the offset fees unemployment, Despite the encouraged corporate and asset one core hotels. in environment resort message X.X% the with in beverage the increased the and increase X.X%. low our tenants, performance report food of XX% revenues X.X% pleased our team. his markets. as was in and Union put broader continued $X revenues Rob nearly profits, Francisco demand These examples transient and QX a was of other X% declined -- increased additional in in by which X.X% were macro weakness spending. softness increase investment we a

of securing amount Francisco however, challenges phase room hotels of with job final not we for next expect to the by properties outperformed this revenues XXX softness likely renovations the group our the continued XX%. up in pace XXX market in group quarter an As improving quarter an take do points. amid despite growth basis San by two our our in-house fourth for at RevPAR market at the the Convention last group due Francisco advantage our to ongoing renovations conditions Francisco San Moscone Overall, accelerate Center, noted turn bookings, year. of at San continue, Hilton impressive to We and our team rooms significant did to negative with quarter, of to decision partners compounded the our

success. million. Looking We nearly is room hotels, XX% visitor well-positioned Hawaiian driven space remain arrivals very the in strong are XXX,XXX room in posted projected increased of XXXX bullish $XX.X forward, for record our X.X% nearly by RevPAR U.S. basis meeting Overall, for with up to which growth Hilton points. submarket remain Fundamentals results and the with citywide at XXX XX% we by quarter, rooms village, state two over a outperforming Hawaii are up and with pleased year over X% through both Waikiki our nights demand citywide up healthy, mainland pace of the city to billion. X.X from long-term to August, long-term combined, to be leisure while to XXX,XXX Japan, XXXX believe for city year-to-date the and X.X% spending X,XXX square with nights, nearly feet the is the the while

recently as fourth healthy the additional are announced including beginning from late markets accelerated routes or from be direct in mainland, XXXX in for flights quarter, well to RevPAR remains the select have Airlines Japan from outlook the Southwest due service expectations new start U.S. on early as of direct single-digits. U.S. XXXX. the XXXX our For the the market to growth, for The for hotel the upper likely to

results increase points market exclude quarter which performance displaced Hilton, X.X% with Offsetting up international EBITDA quarter, which up attributable coast Europe. was the comprehensive third to disruption X.X% across strong a drop adjusted of our suites of down X.X% that worth was September. as which RevPAR much in quarter, XXX drop third highlighting of during strong although RevPAR quarter, particularly Paulo, international would hotels, of was the have during were portfolio in benefited Another our driven residents for New up quarter, a from renovation Sao posted growth If been this we witnessed X.X% down XX.X% which the a to in X.X%. wrapped we the RevPAR York and during of Orlando, while the is for of Florida, account RevPAR by basis

the mix disappointed drive business we during of meaningful and beverage to there food believe a improvement with hotel were hotel, the at forecasted the this believe from performance better we to While group, XXXX. XX% opportunity we revenues. can at by dramatically more for guests least the hotel's by quarter, is catering XX% while In we doing goal so, increasing up business and targeted from yield a our transient shifting

Resort, million. results; point and Waldorf our accounting property XX during time. and hurricanes Key structural third quarter while two of XX on Waldorf While a third comparable negatively hard be properties days, note quarter, total hotels deductible Key demand will for various impact adjusted hotels, business that the major in on Key West, account was October some both support including transient anticipate the of our the to approximately our assets. declined for strategy residual total nearly that shift hotels $X portfolio to an hotels a Ridge on contractors report collectively XX.X% on the want Accordingly, fourth base, million not for Rico on we $X West and Puerto XX% is take business drag quarter I quarter, approximately in is Key a estimate will standpoint, impact impacted provide which while slower to personnel approximately additional I'm teams RevPAR damage. closed this Key at XXX-room From with to And the $X XXX-room is Marina in hotels both impacted West RevPAR basis the West. service. X% EBITDA. nearly the interruption. ramp-up on rooms team and In EBITDA group efforts EBITDA expected The accounts with our all the fourth ground, outstanding the two operational our of by we million. Casa for we both for build our the adjusted business, for and after color back be happy in which XXth the West reopened We own group by our working in avoided

situation Rico. the and challenged closed which the XXX-room Maria remainder is far Hurricane damage closed Unfortunately, throughout the hotel, of likely most remain our XXXX. from year more significant will Puerto and to of Caribe Hilton sustained at Turning remains

and to personally weeks I continues our and ground for doubt be First full was on the situation for recovery devastation; safe have I encouraged across island Rican team of dealing commended over very Puerto teams dedication I the thankful am widespread remain work to hard need difficult few island. and and to no by people the the a the of time. Puerto of a struck much make the resilience by although Rico traveled will are ago and that and for with be accounted all, a their guests all members what most

was rooms As company noted, than in XX% significant of some work. the of need space require damage repair I of to majority the the with extensive will public a more and

our although the with $XXX,XXX, quarter $X impact teams In million insurance roughly With anticipate the during We X% year's virtually estimate a adjusted hurricane we estimate third just damage. with basis business quarter are be far working is accounting million. approximately impact to our to largely by But is impacted adjusted come including expenditures, just up and points drag $XX on negatively with various EBITDA of of FFO. quarter, consultants total, currently having exceed on on season or comparable earnings impact expected we no RevPAR to while -- total for adjusted this of EBITDA, EBITDA third interruption, immaterial XX under design fourth an deductible. Caribe total the

recovery As with adjusted to the Note slower expected $X.XXX anticipated is FFO approximately adjusted these quarter, from and $X be to or fourth a share have Key the incurred. Caribe ramp-up. write-offs impact exclude asset and EBITDA on it the to to closed remain storms relates amounts per cumulative million West costs

be of amount damage recognized of was property sufficient our and that Total expenses $XX to in insurance the Irma hotels. deductibles to portion estimated proceeds the quarter. to inclusive are including final believe with we damage will associated third million Maria be million, Hurricane cover have the While significant insurance $X to out-of-pocket the the be of yet the determined, a

our Now, a quick efforts. capital update recycling on

for which portfolio hotels, average. process are for simply assets $XX we of are in just the long-term last pool non-core of is the and Embassy CapEx points assets EBITDA. resources. consists the and group These accounting a goals. to hotels nearly XXX discussed average being than fit for As portfolio one-off remain of which quarter's international at million we RevPAR, of lower RevPAR average while markets, of portfolio basis not lower-growth strategic hotels, portfolio drag our The a Furthermore, XX% of of marketing on call, several a Suites portfolio the on average is intensive below have started million $XX $XXX, do marketed a corporate $XXX, margins are below our

look once proceeds I assure to proceeds, we sales we earnings are drag reinvested. redeploy investors do As on anticipate a not want to that material fully

will G&A our and recycling margins, metrics, shrink well expense Additionally, efforts portfolio our our RevPAR operating help improve $XXX of savings to too are abroad capital and on we no these report and to excess is reducing there process all footprint million. in still on assets. while produce we ultimately we of including the CapEx is as and we guarantee expectations, early early materially It in will price that caution transact

process the We in will update you as months coming the unfolds.

perspective Sean, to U.S. economy strength GDP investment healthy view profit and consumer growth business over call including X.X% growth, year, confidence. the next encouraged on some expected We low turning the before XXXX. our by remain provide I the want spending, ahead to increasing looking unemployment, in Finally, corporate to improving

year Additionally, in XX extended well on next the over basis Sean check unforeseen top setup third two our points spend, turn demand who the years about over lodging on and full supply more most you remain looks supply XX facing year optimistic remains or XXXX markets results, an roughly with peers. details provide to shock, average you across below I markets now X.X% quarter guidance. portfolio, the an update our will barring growth will the as next cautiously approximately CapEx for with as we Overall, our cycle. among favorable of call

Thanks, Tom, and welcome, everyone.

our at was adjusted share. the adjusted for EBITDA million $XXX or FFO $X.XX results Looking quarter, third was per $XXX million while

increases strength As disruption two have $XX the were as of mid-December, as taxes, we same-store assessment held that hurricane between was billion until with running which performance to our and the leverage credit two a accrual the to in QX flat of quarter. San positioned our Orlando hotels off by during year-over-year side, $X.X primarily more at as in just Chicago, margin X.X Downtown by Tom RevPAR year. helped our well decline real in in growth no offset items than driven last of available a an the comparable aggressive sheet lapping Chicago Francisco bonds elsewhere noted, offset true-up cash million more in the XX portfolio quarter strong where with same of times. assets to city our resulted received a changes The Airport hotels results the Very fortress as EBITDA net of generally well portfolio, in million impacted pay for $X.X largely our these than $X.X basis resulting periods, on and We profoundly within to sheet, balance nonrecurring expect are by million capital the our hotels a in true still from significant major well with roughly Together, Atlanta attributable briefly in to of liquidity estate the contributed prior our points no XXXX. our quarter. remain balance revolver we on of end. as margin quarter, Other structure maturities impact available there quarter at

paid we On our dividend. dividend share. third the of October XXth, to cash $X.XX per Turning quarter

around into with occurring Park share. year-to-date record pull our luxury renovation the build-out of QX XXX $XXX the $X dividend, property would and Tom of included step-up rooms for spend renovated XXX hotels, And fully dividend The space. board commencing to payment a a to rooms the at The to taking our we for prior $X.XX during year-end an nearly on noted, million by elected January with of final our meetings Hilton mid-December additional the the rooms to $XX York, renovated the in fourth for dividend be Francisco date we middle QX property five of QX third quarter year. More we in as which to XX% ourselves basis, out on the As adjusted an X,XXX XXXX. better of phase our range fully Hilton it FFO, CapEx, San from which which was rooms forward some pay of of invested in XX% QX specifically, to date guest-facing $X.XX the relates per the amount will at quarter, XXXX. a XXXX to intention upgrade actual of now a QX New respect to within completed to of into million with investment and suites approved With to next million. areas XX% position remind investors annualized we has a CapEx translate

of $XXX,XXX hotel's basis points quarter. XXX quarter disruption the fourth in approximately the approximately expect for We negatively impacting the RevPAR by

projects, Regarding renovation project scope we in our remodel, have full Doubletree includes XXXX. at by lobby Barbara. the The improvements conversion $XX of project Santa planned future the the QX is finish to and and in expected restaurant. space Hotel a of ROI Parker of The meeting Hilton commenced the million guestroom

XX,XXX is competitive in XXXX project with scheduled meeting underway, with the complex's late more completion start for XXXX. taking space to due line in our by meeting nearly total XXX,XXX set. Bonnet QX feet of a platform Creek and we square expansion, Finally, space meeting construction foot will diligence should include square ballroom, the a The and

points tightening points. a basis our basis new challenges Despite maintaining Key RevPAR XX our comparable basis are the X%, to margin annual of down of to XX our while full XX down guidance our West, Turning range by RevPAR to midpoint points update an portfolio, to guidance for we at on guidance. earnings facing up and the flat

to given Caribe of opened be XXXX. we the this will of range this per only earlier, for guests, are million year, full resulting $X.XX of Overall, decreases taking earnings million $XXX expect translates we to the comparable $X.XX we for into portfolio balance the adjusted property to to noted hit balance adjusted EBITDA approximate $X the on ramp-up Tom the share. year in $X.XX. when an uncertainty Hilton a new which account for Consequently, West of EBITDA As to drag lowering out by are adjusted $XXX Key our guidance XXXX and in our of FFO per a to FFO while share million, disruption, hotel our Caribe

rooms Village Waikoloa by our the begun. Finally, has another transferred In transfer inventory, XXXX. XXX Hilton at July, will XXX of XX out XXX of Vacations early October. end were rooms of and rooms transferred in hotel Grand rooms remaining be with The taken Hilton the the

As estimated to remarks. That EBITDA noted impact our year this the is be $X previously, approximately to prepared million. concludes

each address We that we will the we call to now To follow-up. limit for one and question please? open your questions, yourself of question have the one ask Q&A. may you first Operator,

this first a Donnelly with Jeff conducting you. Wells with be session. comes Please question At Instructions] from proceed time, question-and-answer Fargo. [Operator we’ll Thank Our your question.

Hey and guys, question. for taking the thanks

How Jeff. morning Good you? are

Good. Hilton in the with to I York. want kick-off just New

little I the talk how Can what's a I'm curious, time -- long You it have Or that hotel frame be along you of guess mix the it? set on little closure way? on your mentioned adjunct bit I bumpy And a guess what would guess should during been a I eyes? Waldorf? from bit beneficiary remarks linear where from that like in process the you mean, where it would maybe we a And the take that, much in your you to that like maybe about what Is that shift I talked you little to our it, but it a fairly an just will process? shifting there. expectations could of be

is but decision both we a we've of the meeting We position, it long-term see the dependent that And That's success your portfolio think success that obviously that feet there, to keep plan up. The hotel. going made there quite be to in insight. X,XXX nearly in at a the square long-term look, fortress few we team believe intermediate space. Jeff, the rooms, XXX,XXX there. it's questions at embedded Park obviously love in on We always is Park and grouping and appreciate

at supply, in look market, you when XX% increase New know minus. you plus As York nearly or

given with hotels kind the capacity. fact of We of have that a competitive the one few we're advantage that there,

probably Rob Hilton. group XX%. having we'll range. at base We to with at the terribly We his our in fully low the finish working So, base kind team of that important us. began is right have with year expect excellent to a job partners an done around and year the group the mid-XX%

probably fact changed, least on ultimately, and the closer us said make that, allows we candidly, XX%. again in think allow better That that will it our of as top be at sense, to we market take grow I and the need our to As our catering remarks, then given prepared And transient, to food revenue really yield it to XX%. may and really dynamics the to beverage us well. have

look hotel will you time. well. a situation. look The Hilton about to so sort booking in our with of as the encouraged We're it pleased out. assured size, lead it about pace X.X% results in we quarter, I for a kind with if off extraordinarily the of take are quarters, does there unfold. should look you that is hotel but may take was the group time as group We're the not we few did we some conjunction recall far. base going grouping we really X%, as quarter. So, think -- that the -- of Jeff, and first tails take long as it's improve the Candidly, to working Rest to

strong So, we really move important forward. there as group base is a having

basis And third of you we'll points So this if negative performance New York sort drag. were get take of hard, out the by love to the hotel, done. about it really XXX our quarter, working was

X.X%, almost X% X.X%, down up been So, really of would have we instead RevPAR. of being

we're continue group working. to time we will asset, It up. some take as great So

incremental Regarding But correct so stats side, just my business about million grow it's were that food XX% and Rob can we've $XX beverage really we we continue if the got. coming business. to that think catering on Waldorf that is of he I me effect, north here, are and wrong.

will have over We we on we're and time. plan, deliver a confident the plan,

just there's above just a markets one, for top XXX historical occupancy there? hotel quick But over industry conclusion answer to probably low which one many at rate, is been are And it. in basis points quick are to maybe the have running XX peaks hotels that Why U.S. levels XXs, the years. I guess were what managed is you occupancy think cycle than this for more my XXX

that then you profitability. there rebook look policies. and role allow technology we think Supply are, rate but considered of Obviously and that people I and think to has impact think a been to Marriott things to look optimistic. certainly you in with we pretty had variables, point cancel when I When even really as remain a you see cancellation relatively to sort think that, muted, one advances all Jeff, people back growth of played But where cycles. that certainly at think help. revised prior you and in Look, allowing number negative are on about Hilton supply. bullish as Yes, will -- that I I the can we former a which

think is it, goes. unless shock, geopolitical. she really So, we're not some as of call forbid you as steady But it sort here what God at major risk about a would of I

are year, is at I next I'm confidence north up, of think business to that another encouraged to XX-year investment expecting year, X.X%. profits spending. it last X% Remembered year. forward. by improving got negative negative a we it was this Consumer be to high. X% continue press Corporate growing. We're

there's If initial backdrop. a reform launched of a framework. tax think nice So, kind again, the really they happens, I

the time there the I in and leaders our get But something get that like take women some will to probably now seem it and many Washington, twists are done. that sausage will hopefully all working we and hard turns. think And know made. does men take to begin

can I I think certainly that be also and catalyst, well. as deregulation can a think help

that little really remarks, There extremely in less and So, our it and our of peer points a got more We've about a supply pricing the our certainly XX not our bit we're seeing is many, in average. as has out we frustrating power. little not CBD than a And been well-positioned. of prepared markets. we're pointed peers. it's better We two think than than exposure if half basis all about portfolio probably

in for like really term, we we're we've think as But like performance. throughout to given of forward. of the the and will long opened, positioning assets, the our as country, encouraged women positioning and and both who amount To with XX noted. hard overall, pleased move we the hurricanes the really men happened have Key our given Puerto devastation So, worked credit so I time, vis-à-vis going and there. Rico our devastation days, the what given some mind, got keep West be out service for and

guys. Thanks

with proceed is Barclays. Please with Our Anthony question from Powell next question. your

everyone. morning Hi, good

Anthony. morning Good

XXXX. Tom, you talked your about view in

growth comps improvement Hawaii some favorable your overall some year? in you easier San Given the Francisco, accelerate expect RevPAR expected XXXX markets, do the to this versus and outlook in other in in

margins X,XXX certainly we EBITDA, what high when I'm space, XX% encouraged and industry Well, rooms in range. Hawaii. nearly are better running nearly space, a in retail see feet by we XX%, square and still acres the about of meeting not XXX,XXX XXX,XXX of candidly north you asset feet of oceanfront, think there's XX% there our XX in square again sure

we high supply feel to RevPAR constraints there. pace booking in look So that that good expect single-digits said, we the I feel about quarter, love as have good we asset, a very in strong as about the out. probably We market. fourth

a clearly us. think to that's positive we for going So, real be

up renovation the said looking of as a that that's know as have know again, in renovation And improve well XX%, remarks, think obviously to year. you again, quarter. we're Francisco will I next year, from Francisco, XXXX, probably San of room forward during I've XXX,XXX we about nights. fourth the bullish the million. final low XXX,XXX at very phase the you obviously -- prepared forward, think talked and to as pulling for as As San obviously, about we're about record the look And We city-wides my about peers long-term. at think this year. is about many X.X to

So, that move forward. our those for EBITDA. we to XX% fortress Hawaii, when love sound at -- distribution, position love That's you look of San XX% that about a Francisco, accounts as

choppiness other strong certainly that So, backdrop, I even still with markets. success think, have continued from we'll and pockets of

As New I process the It to me, really anecdotal. the we're ramp and the begin hotel. York see change But to probably mix to initiatives; early feels we until as there mentioned, and X% X% benefits still we really now in RevPAR it's of right up environment. to that will candidly, all budgeting a looks that's continue for the just

and the our partners. as say call scrubbed work really prepare earnings we and have our we more with in certainly So, We'll the and for do XXXX February. a as operating number meet team our to early in

hotel's tax in What's competitor recently. your I been your Got for Sean you more it. of it? market increases. market difficult tell think positioning Could peers. Thanks. opened that mentioned up me within your And and a the large market view property Chicago? It's A about many of

thorough Chicago. comp a of year. there, a gave I year. that won't in didn't back, think tax I couple property a kind think given go in We XXXX challenging there. I were and issues onetime of of city-wides this Series last a obviously the repeat a very of kind There assessment World couple things of loss Sean of had

we we is Chicago? more but Chicago know, clearly Rob, we than fair term. market Chicago So a where get generally, there's absorbed, it's candidly we markets is like outsized get new it years, again, if you'd to has anything new look, every conventions, one of expect Eddy. that square long-term. you we get large of those steady meeting like few that there's don't like Marquis we'll supply been I circuit clearly rooms, see supply for that our otherwise X,XXX on space. The but long performance, being Obviously, added. feet being love certainly asset the XXX,XXX there, with share. the Chicago our and

during a profit just Team drop food basis our and even margin Anthony, in from over a beverage by though our XXX improved contribution perspective, catering points. group had we Certainly. quarter, the business increased.

and So, we're doing in partnership with what excited us. team is the very about certainly working

for the Thanks Great. detail.

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

folks. morning good Hey

Good morning Bill.

on Tom or decline? second mean, can business on did order question of Rob, New known Hilton take following just of York in the it Waldorf, could up X%-plus on earlier a And like York, that us -- with on the magnitude way, of kind of I NOI by Jeff's part have decline more of give they your seems closing I'm of RevPAR and that, that. directed the should And if the New the question, the fail? asset then curious your you been

there. Margins, EBITDA really would Yes, down about let about down, me make -- of jump jump basis X%, and in can Rob the believe, I Rob sort or we decline renovation give points. the first as there. Keep X.X%. down can in this X% I XXX add. so you Sean I can statement. we're disruption, have were said, mind Again,

Our aligned. working partners are are us. Hilton, at with tails They off they their

in have this and to we We And investors particular, ship success want turn we are around confident reassure and listeners that will I long-term that are confident. we'll there.

position. be that's key transient large a not asset, to a The fortress as run to it's wonderful is a reality box group base, that real success. a have with and a one We

by I but X.X%, on were Could Park when collectively marketing dollars real up fourth -- success. And believe with You team being on more with obviously been that's I think, spent in quarter this situation. solid pushing including have by not in up the groups efforts to a could saw New We, pace I'm X% look group mirror. delivered certainly key The a we results, we X.X% the the better that at see the rearview to pace there. the quarter side? group owns quarter in third York. in the first about you'll growth quarter believe one

as We we significant for will value are confident that move we along. shareholders create

the held and executing it. to a accountable have and We we plan, we're plan, for expect be

what else proceeds Could of contribution and consideration commitment somebody significant Tom. cetera? the your asset, the to I there and really is et appreciate be to of the any follow-up management's perhaps given immaterial Puerto rebuild from seems returns, My Rico that, time property? capital is marketing rebuild, financial taking

as Bill, it's at looking question, fair a something It's we're but not a team.

iconic only the that want partners history his Pablo I Hilton got reinforce responders, deal first have have if We tragedy. got job. family, but of team, and did risk We've many phenomenal and long within own just this first and at associates issues to hotel, there the remained others have a brand. there. to And lives We personal Torres foremost they is own their an think Rico not who you with there. and the put here, Hilton Puerto at our their into look to really opportunity continue our that again, at that They many

we right need this love love circumstances some So, we three kitchens? to hotel get -- the the insurance of opportunity efficient? space? proceeds. is really that we There more as are effectively renovation Can you think And candidly reconfigure the know, an of close kitchens a Can Do potential. the you this, We meeting like it size gives set new a make three with the that to asset, us there. unfortunately perhaps by-product of the hotel. major

we and know And we we better shareholders renovate only when the EBITDA in portfolio. think own but with that it. XXX at we hotel a to So, for rooms continue value long-term creating footprint, that X% improve generate it, for answer to really more not is than can it, would look

we're of. It a And of of the of as great noted that better be Rico deliver team, the will Hilton product the confident time. to will time. island proud is there all associates much But a So, team will management's Puerto you slight the will take be Park and in community distraction, that challenge. the we up the it and

I Thanks Great. it. appreciate time. your for

your Our with with UBS. from Please Robin next question. proceed Farley is question

you're could guidance [Indiscernible] know if -- I I RevPAR you wonder Thanks. Great. not giving specifics to the

I'm hearing Robin, time you, a having hard you're--

know But points guidance your next given range. been -- I Hilton for the below you specific XXX about haven't RevPAR if year. you've for basis Sorry,

we use year? sits RevPAR level what feel Is like flat next that if into that keep for guess, range X% that year. of would range you to -- RevPAR I year? X% that next next so your you something kind do And margin

said Yes, not came at a out we're couple it's Hence, can we've as own the looks to that imagine, done look say position for year. of portfolio. really I you like feels things. the to of having said at clearly X% At X% a a anecdotally south. where it without in X%, guidance ground-up reason to and Robin, been when Hilton give this I range. next I X% point, you anecdotally our work

the we have. plan we're in Also, mind great which are used, I in a that in upstream, we whatever overall continue that recycling specific buy ROI I have obviously what of very to metric. keep the active there, how some on Depending also take we Florida in that improve markets encouraged of are to Hawaii. noted proceeds initiatives Francisco. noted program. have those We we seeing the we San success will

proud are I team. as -- have hotels we're and done includes running West at you women than got there, XXX it, extraordinary And but essentially give and would being but basis and X.X% you that we're we two RevPAR, about the of a in team Tanenbaum job. points, an that we're Key backdrop. the less I XX say men there we those we're service to the think days. really management down in still and only out So, an of that for Yet, environment. Rob When Look, our guidance treat that margins

there's plus basis we that mark far And going about or up and to continue we'll Hilton year. about so close those $XX points XX million. at partners We there. with And confident picked to we this find the are year XX So, work another get our that opportunities points improve for will minus, probably closely next we're and that set we basis margins. about we're to to confident $XX million

the maybe being and on that wage the points? do sort Okay. margins Or of think mean, Again, XX basis about result the inflation delta I as points you year-over-year? basis other that net saying would being offsetting things XX points we basis maybe are XX not in

to Certainly, XXXX. Robin, We're it's process more the details be combination. specifics to the we'll working I get certainly to of going obviously of to get And as and we don't budgeting part provide want that. through have a into

Okay. Thank you.

J.P. Please with proceed Our next your question question. with is Montour from Morgan. Brandt

Brandt. Hey

Hey for good morning everyone. questions. Thanks my taking

kind if without kind this, might know missed where to of tracking but So us in have pace I group San and give are for you I XXXX, you're position of with don't Francisco?

then that up I going this you right take say And flattish. at now a about pace group if to we're if Yes San flattish. probably end think you would XXXX. the year, we're that's year X% Francisco, in And it's

feel at is low to about next would indications be we to But obviously we seeing that seeing year, Francisco about now, what the We and again feel right where look San obviously flat that in tracking we Hawaii. we're right our I'd are As pace early now. improving. single-digits very say great good is we're group

partners from the And form cancellation in discuss All just then where you with policy the associated maybe traction right, that recent well you. on as front at that's you're helpful. cancellation seeing as change, trends with Thank of can them? fees Hilton,

pushing peers reservations changes, I all impact. seven had was rate a my this. really I to saw bighead sort pretty a days. because just zero New for along if cancelled say and in we XX%, would being you these probably almost that of of prior with that And of York, take to

a inventory. option others hours implemented either that to in commend appropriate. our Marriott, have reevaluate. some that over in XX continue markets, will considering or expect think is We and I Hyatt time implementing. Hilton, And free I have So, we I can't

that. customers all flexibility I to the ought situations want The hotel sense. no can't are make and reason an advance There advance, the same. prepared some an pay purchase advance us, or where of to for do lodging industry that retrained really and think If airlines you there's be deposit

is pieces not have the all working regarding far from we are the resistance indications early lot So receive really that, that and but that of anecdotally of customers it's Again, a enough forget. encouraging. to from data don't Hilton I

it. Appreciate it. Thanks Got guys.

with Please Hightower question question. next proceed Evercore. Rich Our with is your from

morning Hey guys. good

Rich. you? How morning are Good

I'm already, answered doing questions A just one. got lot well. Thanks of Tom. I

sale, you're How capital? what in us do for XXXX hurdles, return seeing tell long-term to assets cost shake on your the out XX that could scouting exchange the for back I the stack on the you marketing presume there. you're side think with you against about you're do out? all current end acquisitions? of I How also as to Park's mean, So, that's up respect market assets buy

recycling Yes, right a the focus I'd the always Really, really on Rich, is capital. now in question. say, great

ways you up think our The here know, team this are said in say I energy me to improve growth we projects back strategy, terribly obviously underway, you've figuring to our internal on the grouping about return Recycling heard talked with important. capital, again. out investment has spend his times, many story As year. which Rob which first and Hilton been margin.

resources RevPAR about our XX% of about average bring versus that there home markets of the savings $XXX, closing on portfolio drag that was have obviously, thoughtful XX that drag do had in like believe in some or margin capital-intensive very by going capital, recycling reallocate. of there, So, that Nine to Again, there were the CapEx are those certainly assets. north we $XXX we about we where of assets assets certainly are million resources. are assets. we'd identifying $XXX international to save we're deployed so various The we

been from that the that's So, really focus standpoint.

tax U.S. subsequent to years As be the that will required five know, a the building to you the it likely relates component, first XXXX, gain our spin. those is for given as

I We'll are be going and to the brokers, So, team we're more in to talented with sellers. it's the very with time, an frequent deals, relationships for don't contact market. [Indiscernible] At have on really same in issue working our my think we're always report. others given us. finding that. hard

be same Our upper-upscale hotels want XX looking the strategy going destinations. to to those for also and want those our AFFO. overall little quality going sensitive in At IRRs XX% return hurdles. that are payout. we the invest And it accretive all meet balance high we the range. We're are premium We're confident assets, the to resort portfolio, that to and -- luxury to the NAV that one, top as to is relates to as and that. can balance again goals. and in in returns to sheet to that We're them dividend as markets XX% unlevered have sure improve time, of preserve our want We possible make of we dilution protect we

So, we're see confident. attractive of We'll be deals. find judged any to don't issues accordingly able being and real

Tom. different results see process? at conversation Do that anything of be we this color speak that can of kind to I you XX would this you timing you the for Thanks think point? there the mean is on whole months now having a this; from as

next this of to of year. end well by look, but the capital I take would in done expect expect time. we the recycling the are to response, of it will these We're And We before XXXX assets would end and we're before active. encouraged have certainly phase us XXXX. fully trade -- first

Great. Thanks Tom.

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

guys. morning Good Thanks.

you? are how Lucas, Hey

So, XX%. question village. is know Hilton X%, I RevPAR Hawaiian is Good. How first on my are you? revenue up but the about almost the up was

of kind I'm what upside just on drove the curious So, the line? revenue

Tanenbaum. at is I'll let chopping Rob bit. Rob the

and again, opinion. my hard on in one really it of working It's kind is been a humble he's a gem. So, in this asset

through several side, comes One And is the did team there through over other. the third million through $X up F&B, flowing and amazing were through is job Our through revenue from rooms that food in just From is an looking beverage categories. rooms we and revenue, revenue. the actually all and the quarter. second growth

XX%. and our food our fact, was rooms was flow-through In XXX%, beverage margin

revenue Vacation came to the bit other Grand is The Grand Islander, without of which Hilton building. due quite a

revenues received pass-through. it's that and a direct with building we associated servicing So,

it. up So quite profit down, we comes made whatever on comes a and

there was what the that's revenue So initial growth driving

And while helpful. on that's group touch got production maybe you can I trends? Rob Great, you,

the has and with U.S. what one It of really really Village And Sure. that sell group very sales thrilled itself. sustained together. Hawaiian well Hilton with and our group Hilton another combined we're to in Village, benefits we're doing. Village the We

-- if on don't we hotel, can have we on in have space We it another property. move

we're reflects that benefits the by Hilton and strategy. working So, collaborating, seeing really together village Hawaiian of

you. Thank Great.

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

good everyone. Hey morning

morning Good Shaun.

You try guys I'm have going covered plenty of one. so to ground,

when of the I was level, of initiatives. the obviously, if in out later Or year, came Tom, the balls the based was Sorry part you internal you have it guess really in of the there up you And I of hurricanes different of all? and we incremental margin been at with operating has anything curve still beginning think much on for this could do idea that sort came a absolute big got just that at year sort take, guys couple But kind repeat of obviously of margin question just much changed you're of some that ahead you has you've you? of how picture yourself kind is way. high growth? whatnot. And versus achieved making

the team we step Dell'Orto, Sean Yes, build we would year remind me me was three for would remember And and kind half it's rejoining Sean. was back, here. a is almost I where of Hilton a you question, having think you out and tell ago listeners, and the billion I the with Sean are and our our jobs fair and could I minus. the interface again, that company, we've partners they be at company, a operating rhythm Board, team is the the or plus women prouder as public men Hilton, put a year having have not with that a together, of way $X jelling,

all, number off that there. in a GMs. made sales starry what were perform. to want to And were we're to already well XX taken story. operation looking out year, figuring a I there's out costs. through about with say, we've We've got start. earn the been the I really number $XX Priority as Hilton, XX really at we've portfolio. We've thought working opportunities one think as think as first internal at positive. do of fair changes really the accountable million are of both priorities? that stripes. We you growth people I across margin And Rob on the strong this evaluation team. we've to think has got to our Candidly, again, eyed turnover very got was built as out Not part there front. excellent in an

about XX that points. basis think I equates to

would So, erosion. we not done more had that that, margin been have even

progress We're solid confident going on that that think a I'm of of in There to the XXX year. high with great there. control, do, got massive foundation not The we easy kind capital, have what a XXX macro our project be priority plan a as the next those We've ROI basis but to two we really do that said setting I recycling basis cautiously are are identified, So, front. Again, these XXX obviously issues curve as the but the that to points we've disasters, It's underway. points. got us. target few seeing next years on work various there. all we're optimistic made beyond XX we of we're place. -- we in that, for said, We've again, was to the initiatives.

ballroom expect in take Sean adding mentioned As that to here Creek in Hilton best will the second remarks, square prepared Park in a Bonnet quarter, converted we time. foot his the XX,XXX XX,XXX, Doubletree

break the up, those top boxes. know, we're We for we've that XX just there that, obsessed seen evidence this portfolio, year. is ground for expect to because Grouping next game-changer we've that with particularly

our got So, that a These Rob's hunters. we're concept dedicated sure drum-up of for resources. the to We targeted we've working and assigned women who closely the having hard and the Hilton with our We've in Hotels portfolio. really Park of that really portfolio sales bring for group with business partners and there. at Hilton a are Park got portfolio under working encouragement specifically team to to us men are additional women and make and men did are

jelling. where all done I plan feel I'd big our they're to but good earn stripes and we're before, continue force. be. this say just things well. really that is with how first say confidence [Indiscernible] this a about rodeo, and of considered, We've where Not earn got hopefully And than thought slightly team investors your as and we'd and would respect of that's I ahead So,

Thanks for the update.

with Deutsche your proceed from with is question next Woronka question. Chris Bank. Our Please

Hey good morning guys.

of -- for you upscale obviously these they some of them What's you've your Hawaii We've and some Morning. industry theoretical, them Francisco Are And supply this want Tom, than of these Hilton-branded, a while. to else. talking really do been not. San New that? think markets? think these some quarter. of in bit some in new creeping maybe are on I peers, hotels, a of about heard but three-star and maybe kind the little four-star York your I so is some on not of much, ask the kind quarter question last kind opinion you in are but of everywhere of more urban

Chris, formidable don't are that doubt any they -- there's I think products.

hotels. offer experience. good good of Some product and guest They cases, a stealth sort they're full-service

those rates. XX decline I'd XXXX. if I what had back XX% look would probably incremental of call if York So, really you super-compression probably day, drive correctly, me no XX%, memory days north as threat. doubt you an think That XX% And you New XXXX, if if a to XXX think example, a XXXX, New it's we take York where down and to was could could to rooms serves

going back, So, that think grouping no to and is part, we portfolio doubt as the doubt XX position. this a XX a bull's-eye a replaceable. years space. I if that strategic They're XX% it's look New the of so build back extent, is fact hotels how know There would And iconic long-term think I real think, say to so -- believe select other it's there's hotels. given to in incremental with to would there, meeting today, given particular we base. model that we had of service hotels I want oversupplied. that's got natural There's that real in competitive a XX today York XX%. everybody, us I really was for we have sustainable an one don't as us and or got group I undersupplied you ago No And roll. if is insulate hotels you And reconfigure the for again why the have of saw move aircraft I'm in shareholder. from that there. we to our carrier, asset the operating assets. of some some I our that's we confidence helps for up going amount that is wouldn't important you sense be advantages be for that than the We've out uses. added this were converting operating there We've top opportunity the deliver got is using the supply and portfolio. myself We date that business. replicate us to to more gives base going think the use we that that estate to to that's surprised And our feet those the advantage. transient with Park said, mix but advantage square more if long-term would being that XXX,XXX say here, We impact. this think will

Okay, Tom. very Thanks good.

have for point, closing we Mr. end the the call I'd like Tom to reached of gentlemen, session. and Ladies turn back Baltimore question-and-answer to the comments. At this

to Year all New you we I wish forward look Park in Best of Thank travel XXXX And with fall. to for taking wishes. a beyond. all Please wonderful you time. of talking the and Hotels. you

concludes today's conference. This

you at thank lines participation. for we your time disconnect this and may You your