Park Hotels & Resorts (PK) 2 Mar 182017 Q4 Earnings call transcript

Greetings, and welcome to Park Hotels & Resorts Fourth Quarter and Full Year 2017 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn the conference over to Ian Weissman, Senior Vice President, Corporate Strategy. Please go ahead.

Thank you, operator, and welcome, everyone to the Park Hotels & Resorts Fourth Quarter and Full Year 2017 Earnings Call.

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

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

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

available year this with our well of yesterday's with brief together our information our morning, review directly find to our Chief XXXX This can fourth additional be provide pkhotelsandresorts.com. in recycling Tom sheet You filed Sean measure Officer, establish our as Chairman CapEx Executive our efforts update Rob President and on well update quarter further provide financial comparable will our information projects our supplemental Management, earnings operating most reconciliations the a off and in an X-K financial GAAP our Dell'Orto, as color the Baltimore, fourth results, results to detail Q&A. on an and on financial full XXXX. capital Tanenbaum, and website our balance quarter Vice as SEC Executive as release our on XXXX. at and Officer, will Chief for guidance Asset of we joining on for plan will value-add kick Financial in

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

and Ian, you, Thank everyone. welcome,

of company's as a Park Hotels couldn't achievements. marks Resorts' public be earnings anniversary I quarter X-year fourth call Our company, and our prouder &

a maximizing value. Hilton portfolio with unique months, dividend faced investment, management levers, Southern assets on spun last compelling disasters focus yield year, its attractive as about year, was an most natural off iconic, Despite with have accomplished offers the our and call notably providing for number shareholder year growth attractive the last successful company. challenges irreplaceable we profile. a a and the size throughout unwavering shareholders. an objectives successfully Park by Over we liquidity, a XX and with an growth of some for and from inaugural And stand-alone in Florida, year I'm key of On earnings first our we spoke a the California, few a milestones. along XXXX Caribbean pleased meaningful South Park

while that with aligned achieving of systems. Hilton we've is off principles our also successfully To excellence. built operational objective first management operating best-in-class Our end, of transitioning team, guiding a

in We of peers. relative also delivering our closing gap the made progress great promise on to our margin

past third balance than liquidity of year. In a results have net prudent program. terms recycling to With allocation. sheet on early second would this And execute debt implement We sub-Xx week EBITDA amount significant the guiding principle of strategy. team active the conservative of $X.X low of levered respect work available earlier show our tremendous capital principle, to of by our we our the an with the guiding billion capital announced we more transactions to our over said balance and maintained management, of

to remained we dividends. XXX returned In a cash form And Finally, $X of set. XXXX, shareholders return and we shareholders. returning total the peer XX.X% to our most on we laser-focused importantly, stock in than or and points capital have generated nearly higher billion basis

I look objectives. confident ahead I achieve our in to As to am to continue ability our XXXX,

the rest points remain margin cost help which improved deliver some economic the business facing. and recent encouraged of we offset will XX the XXXX, to on XX improvement data should the relative into and by the of sentiment, most translate industry basis of believe next which over We stronger to operating are We fundamentals pressures months. are in we track

In the announce sales asset looking nearly sales term. with we potential the soon. proceeds $XXX on With approximately for use in recently of additional are non-core available, addition, near to we of million million $XXX closed of cash

am year point Turning disasters, overall to the been the X.X% with Rate in year, contribution accounted were the both portfolio's to led fourth which during results negative we rate asset initiatives I with RevPAR If quarter the acceleration to our our and the RevPAR midpoint X.X% increase a basis the during to EBITDA quarter our strong the a was a of for Comparable comparable points of and XXXX. impact exclude pleased exceeded for recent for of increase. natural for growth of the for most hotel-adjusted XX performance. an our growth, the X.X% growth basis guidance quarter increase basis X.X% growth have QX. of margin quarter. management year. RevPAR This would in with of XXX team, XXX points full along

margin XXXX, positively revenues, XX EBITDA weaker in declined the points year. convention in up New year Overall, just slightly calendars for expectations. impacted X% offset than increase full our Orleans, San revenues the ahead but also for a For for group portfolio basis comparable quarter York. by in and by the hotel-adjusted QX was more of were X.X% Francisco and XXXX, the New X% corporate group

pace call. in very XXXX group the improved to X% pace, are versus during the noted for by X% than less pickup last we which we encouraged However, recent has quarter's

by transient transient revenue was in X.X% profits, very year, On segment, strong spending. year. softness in business increase environment low comprehensive leisure quarter and down quarter. remain in side, increased the macro continued the by revenue trend X.X% for witnessed boosted nearly segment, we the have by a uptick unemployment strong reform, supported with Despite broader continued all encouraged in seen and corporate the tax the the a investment demand weakness the the transient for and potential X%, which by we XX% for corporate corporate increased the in This increases offset business revenue fourth

Orlando strongest performer, our far was core RevPAR at posting our Looking gain more across a quarter. the XX% closely for quarterly by performance of our markets.

due XXX the XX.X%. X.X% our demand, taxes, basis driven hotel of well to and Waldorf a growth EBITDA Hurricane The our asset from Our bright point by demand Hilton some exceeded Astoria stronger increase expectations, complex to transient continuing with remains Hawaiian Hawaii hotel-adjusted as Creek residual as very the led a during spot portfolio, strong at Village RevPAR outperform. Irma. revenue with up with quarter RevPAR the recorded Bonnet coupled of during quarter. group in in group margin real for lower hotels operational hotels to estate market of demand Overall, with rising the far performance, XX% growth Hilton

top hotels group I'm Key first island, activity the improvement flow-through negative and our to strong to the dominant market a the were closed year, days as slowly outperformed hotels supply points West, in X.X%, outlook encouraging, Combined very continues to happy for our XX group although the citywide of hotels down should QX. operational. Key of higher our at fully with we strong Hurt demand giving posted that performers year of onetime an West with margins much the quarter with the unfavorable RevPAR calendar. this new is hotel. a be and comparison Hilton undistributed improved for through a last performance transient report that favorable XXX Village now related And in in in performance Hilton strong across of Irma and our X.X% the the Hurricane X.X% slow Not bit positive transient posted much just Key X.X% RevPAR are Key our RevPAR the for year. a quarter X,XXX-room more in our with our to a in West Offsetting basis Chicago while following on demand a a a West decline Given to disappointed points. citywide December among be January strong the healthy was while to Hawaiian and work a surprising, Marriott expenses to opening XXXX. decline been pickup and were Marquis, quarter throughout better food to much recover, minor by expected the very the position by XXXX our fourth performance, basis promising X XX% which return. shift demand during during the XXX QX hotels fourth our as be expect continued quarter remediation has increased beverage in

Marquis. to results However, will the the at supply year pressure the absorbs market our full as increases of impact Hotel continue Hilton Chicago

Francisco. San to turning Lastly,

the the while While Francisco Union Hilton the had at the growth the the during down complex mixed with RevPAR fell of Parc quarter. San XX was Parc hotels short, results, of down in X.X% XX fourth quarter, X.X% market and Square X.X%, Hilton at our

the which forward anticipated Francisco renovation pulled we points approximately guest these quarter, been basis $X or due Union Hilton of of to in Square growth roughly positive a accounted rooms for XXX last XXX RevPAR displacement X% final noted we renovations, QX, in would the San Without As the of quarter. at million our have room phase softness higher.

to generate room significantly Union a and to set nearly is room million single-digit be RevPAR both nights while in in citywide for nights low citywide our year to to XXXX, Overall, the ahead, are in several XXXX. XXXX renovate Looking expected growth be nights. Square expected XX% XXXX anticipated with roughly expect better room hotels with up comp outperform in up to XX%, X.X hotels hotels nearly we

a $XX.X job internal properties, XX to XXXX. with team across partnering of Hilton growth incremental for Park's in improvement our cost-saving million several of strategy. revenue EBITDA Rob margin opportunities sourcing of and his into or points have an key approximately terrific Turning translating basis and Tanenbaum done both

staffing approach sustainable pricing; resorts his most EBITDA. our including include team's yielded have including and across million. an our a new have improvements, retail instituting in $X closer room has of best Importantly, premium are savings million income instituted management $X on fees, hotels of initiatives nearly several portfolio, $X by streams, practices and of initiatives incremental Examples at generated onetime increasing has The of parking, results over just various million; resulting of a taken team room not look gains. also strategic focused labor positive needs initiatives, in categories these and revenue

higher. Additionally, providing been fresh to strategy drive perspective a several properties, replacing senior helped of the further margins team has operations, to at which believe we our in has leadership a proactive

ability ahead the look to remain I currently exists at chipping with confident our XXXX, margin gap our in that continue we to As away peers.

basis another generate XX points to in of XXXX. upside expect margin We

Moving initiatives. to investment on our

progress several transactions, our EBITDA, including our X quarterly we X noncore XX the Since call, last by in have separate have hotels of thrilled the efforts. are made total capital We assets sold a recycling last over we international projected months proceeds in another with the million cap accounting capital of an gross next at or weeks. the accounting times $XXX of anticipated average when over rate for closing for several XXXX for expenditures, sale potential approximately hotel XX.X X.X%

approximately expected on few hotels next the over CapEx these savings Our to XX $XXX estimated be years. million is

in a EBITDA. our CapEx, our exposure metrics the of All portfolio. multiple Excluding by of quality capital meaningfully points a basis international and deal XX.Xx Overall, just we were have to recycling said cut of XXX efforts respectively. just cap our X.X% X.X%, upgraded total and rate have nearly done, of

to improved evaluating include by use with for provide near we one-off on net at trade which discount our average acquisitions cash have buybacks, to CapEx. internal or could to With continuing asset are hope our of $X potential deferred million will in a to $XXX the while We future. more $XXX, meaningful options, respect portfolio eliminating proceeds estimate. our value to more maintenance investment of color than Park We RevPAR proceeds, stock

in infrastructure supporting Accordingly, from where through more which reform, longer. XX including full yet help earlier. witness have in corporate to EBITDA driving many a we indicators, XXXX positive our X macro XXXX growth dollar, X% hotel-adjusted of are are better basis in could all guidance. That backdrop than today. will materially There spend positive year RevPAR take months management a toward into ago, fundamentals the support XX a addressed have tangible of XXXX, evidence operating while account margin weaker stronger the the we guidance bottom should just and to initiatives key RevPAR U.S. line we the improved an which tax with of if points extend Turning XXXX, cycle a pickup that said, is fundamentals the of are are not number points, higher asset negative a establishing range comparable material of for demand, XX variable which comparable plus I basis to a and

million, guidance while the $X.XX the in XXXX, $XXX earnings range $X.XX. the that Sean further and key our our million sales like details to be from on this Note include to per turn FFO in we adjusted will remarks adjusted For does not And EBITDA over in will full time. redeployment of be his range year to assumptions anticipate of $XXX of that, other of I'd at asset the guidance. driving call proceeds with Sean. the to some provide share earnings

and welcome, Tom, everyone. Thanks,

and at share. approximately our of FFO Looking million reported adjusted $X.X adjusted or results million we total million, $XXX $XXX a On share. year million fourth of diluted of of million reported $XXX adjusted EBITDA adjusted for the per billion, while $X.XX per of revenues our or FFO was $XXX basis, total quarter, revenues diluted $XXX EBITDA we full $X.XX and

our metrics. Turning core operating to

or $XXX For an of the produced year portfolio increase X.X%. of RevPAR XXXX, our full comparable a

a XX XX.X% of slight occupancy or decrease the Our year points. for basis was

$XXX rate for an hotel-adjusted resulted EBITDA of or increase daily or was EBITDA hotel-adjusted year. These from of the the point margin top our X.X% comparable portfolio, XX prior trends versus $XXX million basis average decrease was line XX.X% year. in Our while prior our a

an versus For reported quarter, of the fourth the of increase comparable year. prior X.X% $XXX RevPAR or we

at points margins comparable quarter X.X% for was ended hotel-adjusted increased of These $XXX to resulted rate XX.X% average quarter our of line XX.X%. or increase XX top higher, occupancy EBITDA XX daily trends in while points our or million, basis year-over-year. an Our basis while the the $XXX

been points, our while and to impacted negatively comparable RevPAR during while by impacted $X.X would were quarter, the hit by impacted points. relates up negatively Therefore, the of was by by margins margins have negatively impacts XX basis share. an by the our reported fourth fourth X.X% per during have the that on basis results, impacted points. would negatively EBITDA million it basis XX South been As backing From the out was earnings hurricanes RevPAR hurricanes Caribbean, Florida EBITDA hotel-adjusted XX growth the while hurricanes quarter, $X.XX the comparable perspective, FFO roughly

high-yield until to is December, maturing repaid we no XXXX. very a a Moving manageable balance bonds, sheet. forward our us schedule maturity major which in debt leaving that coupon, carried well-balanced maturities with In million and with $XX X.X%

X.Xx As net just to with of QX, leverage on liquidity ample stood plan. strategic at our execute

to Turning dividend. the

which sales. from to of earnings respect adjusted annualized paid in step-up April With March of with of adjusted ratio fund clarify, we just we As the fourth to FFO revenues our potential to XX% for declared With our XX% Similar million, of in FFO, quarter, XX% guest-facing we to within our last year on on our payout January. pay XX% dividend year. during And we of are invested in asset share $X.XX this as dividend of not it we paid nearly of last our record quarter. the proceeds $XX $XXX of Friday, the per fourth And million out year, coming calls, with is to full XX% CapEx, beginning expect expectations, spend was the targeting prior full we X% to our per to QX of of be a board year with hotels, to stockholders paid share the areas taking be $X.XX our noted targeted top-up first north do XX for an just the CapEx intention of year. at to to as hotels of quarter dividend QX to a in a line XX.

also X rooms renovated. room Hilton February. fourth early million we in the anticipated phase given last added we Francisco completed project, was the San which been renovations weakness city. of quarter, final now the the in keys, The quarter, All forward have at $XX the X,XXX As guest noted pulled into

year. We are Francisco the the well with positioned in reopening for anticipated this of San rebound later Moscone

Regarding the room of future restaurant. improvements a the project our planned full The Parker Double Hilton finish conversion Hotel Santa the guest of includes to ROI meeting project and million middle projects, is in to lobby $XX.X have the by we the second The Barbara. expected renovation the to space Tree-Fess of scope and quarter. remodel, commenced

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

Turning to XXXX guidance. earnings

few provided remarks. and Tom some a details XXXX EBITDA Just more his of key our assumptions guidance in on the FFO driving adjusted

X% in which to down to EBITDA We hotel-adjusted between his and includes basis XX plus up are range asset initiatives of comparable XX be management will Rob while points by points basis the basis approximately XX range to RevPAR of team. margin forecasting X%, points,

adjusted includes recently for the and and interruption sold periods last guidance the fall. of impacted that by proceeds assumes $XX the FFO EBITDA hurricanes business are receipt for Our of adjusted hotels million the stub assets we

Our restoration Puerto last Caribe hurricane in currently undergoing devastating Hilton which Hotel island extensive the October. hit the is Rico following

that less X Key We will for hotel properties for year our losses before the deductibles and are both this reopen and in West. will owed recover asset the optimistic we of that business end insurance our from our the

change I'd we're on to Finally, making one we are EBITDA that regarding hotel-adjusted issue that housekeeping like to address margin a metric. calculating how

or within adjacent we hotels. how receive expense Hilton services a that Vacations timeshare of our that The we implied for for notice presenting of XXXX EBITDA reimbursements basis XX.X% of hotel-adjusted approximately quarter. to XXXX last was midpoint margin are provided we rendered higher related from presence points guidance largely the our the range Grand is to margin absolute XX have have will You versus properties higher certain

calculation true operations. from a are get we these Given of the margin reimbursements, pass-through picture our nature to it excluding of property

not In excise as consistent sector meaningfully the be outlined. made in close hotels, adjustment XXXX I expect the adjustments addition incremental to basis well, increase point just out X margin. are we to XXX point concludes with is with an to periods the changes years annual we remarks. our that's an impact our to peers calculating leases TRS our our point for $X tax margin that million we levied to year-over-year so excluding when next for that comparison. prior peers, Hawaii Note margin It's basis more over EBITDA do within important the on That also applied XX approximate consistently hotel-adjusted hotel gap that the the prepared

open now Operator, will We first the we question the for may [Operator Instructions] line QA. please? have

Yes. Thank you.

Our question is from question. you with ahead Evercore. of go with Rich coming Hightower the line Please

Hey. morning, Good guys.

Rich. morning, you? are How Good

good got you. am I Tom. on I've repurchases. question Thank quick share a

but know And there clarification night? the that So Park from I'd It from of last time. like repurchases a where out directly the limitations to some prevented from I are exactly spin coming given that able clear, secondly, HNA shares that being buy wasn't Hilton you we filing were can of in do for some on sort little evolution.

registered to subject Hopefully, that in add presently first. or an Rich, question color discussions of this then requires will HNA them. that, as addresses and Obviously, offering for we Park, requested at and note on and we well, public the all this further that will to that I early the participation let on registration, note you comment matter. so HNA And say are the listeners -- yes, those me address call time. no have for with want the I a

our we to stock. of it are use activity, to proceeds a but of back relates disposition able there from limitations, a buyback the Regarding are -- the potential as ability buyback buy

have I'll comment. again, no HNA, Regarding further

question so in economic Tom. here, that's of within improving then just the Okay, And RevPAR light and forth. the backdrop second fine, my

to companies give to they of feel sort a sort body range most point quarter likely. Some been this to have the that X%? offer of Would flat language be around in within willing willing that of the is range you

that, our than it. we would I range. have other that years practice have the additional of than I many, say, guide for is -- And middle and to to Rich, on been no Other comment typically many talking the

Thank Okay. you.

of Barclays. question. next question Powell the with comes state Anthony Our your from line Please

morning, through I good that. I an they can just want Hi, to but offering? up go without need your to do on approval Apologies, for follow with to they have approval? clarify your clarification. Do it HNA one Or

Anthony, it try we to address upfront.

is clear, pretty I I your and question. think it the think addresses statement

it. Okay, got

was the add performance How else York, due and getting urban added or Just amenity in the across these you where you've there? the can And to portfolio? New kind fees much RevPAR. of also revenue quarter the outpaced resort that kind of RevPAR performance the improved fees to of

a Tanenbaum Hilton. as a our think, say, backdrop, New First, are doing and I'll progress management in job I partners we're Rob partnering team York. good look, making, his at very superb with

a of know, you situation As were New long-term that's there, certainly added given believers in been supply complex amount York. the

it's I York performer. to think say New going strong to certainly isn't for fair cycle, this be a

think to fees, and a appropriate, proposition it's I they certainly it customers that As necessary other time. value-added We relates resort reasonably think received and being it's are a modest urban is well this at by having the impact. and fees

one great, it. January? would Thanks. in what RevPAR growth that And Got trends more have I too. was guess, February, you year-to-date, be the if is And

was to below portfolio. thought ahead were and be slightly the slightly where better January performance say a across All I of March expect than and we for things would strong expectations. February we'd expectations, was be quarter the

it you. That’s from me. Great. Thank

Please Patrick proceed next Humphrey. your with Our question question. with SunTrust Robinson line comes of the Scholes from

morning. Hi, good

Good morning, you? Patrick. How are

XXXX. Is thanks. bit, you customer I am of pickup sort seeing A in wondered group this it is the you're going there? group? a to be business corporate Or to little it hotels? that of you drill a little of bit the if type for I more was that? regions a well, segments I interesting, going specific are driving thought question about what Any that down or group's in be talked leisure

in jump a Rob A couple here let I'll of and think, things. do in I second.

less. We've and seen north pickup X% were is -- we our call, last our group remember X% for now a sort or is of XXXX. you of pace nice trending If

I great team we're Rob And that. of think by encouraged very implemented know, Hilton. that we're would with out candidly a we've dedicated lot out of a had partnering you initiatives seeing been again from So And the as and no broad are sales referring we're it's I as think that that working doubt stronger force, some that has much than business to relatively leisure standpoint. transient. hunters hard do them been his

of really been combination business Rob, want leisure as to anything it's So group and a both add? well. you

an we business Patrick, our they San have Francisco, HHV it in in there. to, group Bonnet alluded Absolutely. and saw markets comes increase Creek. the And different Tom as all from

One in in that's $X is nights room million we million we're time that X really results. in we're for over X. that an of excited we're partnership revenue and the for our complexed, $X.X X,XXX future seeing the getting hotels, years, And the cross-sold separate incremental they've which -- complexed things that's booked resulted properties short that that resulted between the being been Hawaii, [indiscernible] by. in groups X XX And which into

the modeling just a question Should for anticipated then million. $XX X on And the just break Okay. out ways technical we receipt year? that of

Sean. this Patrick, is

I fair. that's think

Okay. Thank you.

you. Thank

is question JPMorgan Please proceed Brandt next your Our of the from with Montour question. with Chase. line

guys. morning, Good

how thinking the you're round and ambitious of you that what fulfill then be? what first kind laid mix round on sales the will of can about help your you about -- anything of what next And tell set versus out us how So year?? out sell? understand of question this. last asset a can transactions And as you sold to you Does you this you us

U.K. to capital-intensive. progress, portfolio around. assets, and Well, in made to where be we've very out completed. Suites the as in think for I below counterparty the we assets and a get about that Again, required at transaction, of his not seasoned $XXX. in the noncore XX% us investing and Park. and the recycling had issues Embassy of These to and -- was I so assets, were lower want with obviously we've RevPAR was were, complex The were portfolio The that our assets Matt sold our many plus set aggressively versus to or broader are X to holdings team Obviously, cases, very Sparks acknowledge assets process, international. significant team get future. X far, the noncore and We RevPAR. $XXX plan a goals worked core average that about of They that partnership the in structuring just some manage minus, for we it are XX, here

XX to very sold We assets. hotels that, been home our also you we hotels significant distraction were it going we about when proud, goal. that the so XX recall, management can other to does wanted made knew and require have resources now some term. against of deployed We've out the progress is when to pipeline, and less near asset great now I we distract get have multiple with we said bring focus. Europe Africa I'm you're another of of we've XX. in those in resources and There as against management could think we others, in think you that managing also, And capital South and do and in

You identified been X, expect sort provide and assets to continue additional add additional no this at not yet of those but we'll have would a Phase time. color non-core to that that

Okay, able do great. is that of kind we cash know use portion And of forward. then go proceeds $XXX on us as more on information give available, a million you'll there proceeds of I the the -- that be you us with? you you the can portion help XXXX would a wouldn't to to have sense that understand maybe that? Or that versus don't make But

probably exchange $X with cost, incremental able like-kind if a you're million, the The we incremental a modest headed, If like-kind be million. exchange, are or to the and cost, would suited like-kind dividend, about elect -- we're most and vehicle, tax special tax Embassy to for a $XX about again, we elect not approximately the if both exchange. XX%. proceed million -- use that probably Yes, about $XX there's Suites where was that's is

want to say again great were congratulate we with program ahead do. what not that our hard say And transactions spirit, you've done. think again optionality we recycling easy to here, also we to outlined. So we hopefully, our I'd seen But capital I going again, team. the These we're we on have do schedule we're work get and to of

Excellent. Thanks, guys.

from line with with comes Citigroup. proceed question next your Please the Rose question. of Smedes Our

Hi, ask ask the to -- wanted good I you to morning, just I O'Hare. I wanted Chicago just about

in renewing the noted the of Chicago XX-K lease. city won't your You that ground be

million a little does mean But come number. go with So just I that you Or or back what's $XX some detail around just away? does huge million EBITDA. something property. that like It's I it think not happening that's -- maybe point? to it's $XX a at of Or

question. Smedes, sure we issued there previous the lease current extended. here. expires calls, we've think I opportunity Yes, make be for good but address an end not was has And of it at an city The The in XXXX. essentially, certainly rights to leasehold let's the RFP. said And

do here that will -- expire noted, expect beyond and of is will we the should opportunity so about you expect of the overall So the portfolio continue not at our not end that EBITDA into XXXX. X.X% listeners And the year. as that,

the that in maybe many you the year have 'XX? about space out Waikolowa. of wanted in ask have just how come know sense addition you property I ones But have came Great, at okay. you, room's numbers updated to And the do out removal -- to do you I would this of an rooms some

Smedes, this look converted will months so XXX the Those in be over or or to We to renovated the or those and Sean. minus being ultimately XX are units then we'll October. -- and about sell so. is or plus next moved

then go this, we kind the over rest. and we always would thought we've they of once take As that of envisioned kind

final towards now, at of XXXX 'XX. so end little kind kind space. XXX another -- So would of insight depends bit go the but a We of the rest end of would we've at away. over shelf the where XXX earlier. have kind it or of always don't be could outside But It lot point of a on a this -- go planned of

So it's X-phased kind of a approach.

rooms additional 'XX. no So in

Thank very much/ Okay. you

Please America. Kelley the proceed from question. with your Shaun Our with line of of next question Bank comes

Hi, guys.

prepared I So want to Sean, the just of back remarks on tail end go your margins. to

kind just that bit kind clarify little didn't quite And of to I you little just put restating how actually an appears with I line on that didn't with yourselves about of bit said struggling You specifically, an -- apples-to-apples talked gap I'm think basis, a better? peers you're follow And but case. some items. it. you could of be think, I rebalancing report that be to it how a the just or would how the same, the more specific

an normalized of necessarily in year we've Shaun, prior kind the to peers. not apples-to-apples comparison So

go up basis our nominal XX by actual So would margin points.

So at this you XX.X% could have ended present XX.X% ultimately but it's it now. as we year,

not ops. again closed little the we really margin. that level. XXX the taking then -- cost the clearly It's So It's but It's presentation. have core within gap, -- expense with the basis hotel we've in at points. and closed level we're to down very a for These credit the not revenue reimbursements just flow come

unique we kind get [indiscernible] some what hotels, so of It's isolate. within visibility wanted It's what us. legacy and arrangements of of trying kind And just that's to to that to remove we're that these ops of are. hotel structured kind in show to

it. got Okay,

So the basically, comp to peers now is present is it sort about the it? really a clean way versus way you of think

Correct.

there long one-off? lease or similar could is it of ground like crazy as been a a there's a kind this? then here relates that any properties? very ground level. you around issue Or mentioned renewal Are Tom, a the Are lease. other And in just Chicago this just at just maybe time. legacy great. high where O'Hare some risk other I face to mean, any there you assets a for properties have Okay, obviously

things say it's say of they agreement -- in about an is operator. wouldn't an we it. I'd crazy certainly as leasehold EBITDA. that our one a Shaun, hoped would accept management mind. that a I I XX% City keep a Chicago. has had as our operational would for with account agreement We opposed to assets in made that or to XX really of and to one-off. top It's pursue continue couple know, decision you knew we a say

assets about of accounting XX% top XX EBITDA. for the are Our really

of barbell sold. assets strength that's I do the top further, case, have we've some you And XX of the benefited given in So think, this the effect. that given XX those assets,

other so? than leases there or have they're some meaning overall but or are really X a duration, less Yes, there, operations in years that X So shorter the XX to insignificant the of company.

very Okay, great. much. Thanks

of question ahead van with Dijkum from The is next with go question. your line Scattergood. Boenning Floris the Please and

your -- top expect you I of higher growth. the rest to assets being quarter, about we any were your forward maybe your and of X% those hotel And smallest through the terms value of post there portfolio? assets To If growth. growth that were comp detail Should highest -- on in biggest historical And XX assets the your can the point or XX to your is appears top for it growth? growth drivers XX numbers assets your Hey, maybe EBITDA down. in the then follow-up relative the the growth going had and look actually Tom. your have more ones give the the

and this you Caribe Also, the the When was had by look hurricane Rob. driven (inaudible). the impact the to is to Santa at the the of Barbara majority renovation reach closure. XX decline Floris, of leading Hilton's XX,

is that at interesting quarter when this Now look of you part it. an

it. Got

look in get? Would you what your normalized So top more that it would with would like XX be on more basis? line the

Tom. is this Floris,

here know the this term, think secret, extended. so markets recovery I is an underperforming year fair we're certain probably in supply Couple supply hotels certainly they're things position. to and cycle XX we've tax this expect the there. get this all as that have many XXth statement. long-term, a of reform. fortress we would over I fact believe we as the Xth the you going given getting iconic, had somewhat been this points. we and more no absorbed that's mind. anemic cycle, in There's month the XXX urban that that cases, -- XXX and They're keep over now growth added we in to in to been again cycle in certainly Obviously, but to think tell And irreplaceable. But fully basis a long deregulation growth top that's of are been gets in the the

we're improved XXXX. that should also better And We performance a seeing XXXX. translate to think a into which we better certainly believe

Great. Thanks.

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

Hey, good morning, guys.

how are you? Chris, Morning.

color us, on margins. I to like it appreciate you're I down gave thanks. and wanted little of, drill sounds the the do bit kind forward. a Good, you ask, moving

think So points XX of Rob's you're basis I initiatives year. you said assuming this from some

XXX of what you And I be property margins I some initiatives, in else So roughly guess labor, of impacting then math the down that the that about buckets midpoint. maybe assume bps identify? right? Is are that that will are implies terms at and without can the the anything taxes of kind

Rob and take me then make And statement. Yes, details. global can of let some this -- the first Chris, drill part a Rob into

strong is really year, important were but effectively in labor-intensive And RevPAR down particularly think we and this up reclass, XX. listeners Sean is for so first particular. portfolio basis you the mind, really given obviously pointed out, when environment, in about down I our down, XX with for that how keep really points. it's in I submit to would our you X.X%, think performance the respectfully as

margin the $XX.X -- set think a of you Last a million I making improvement. we're So XX. XX to if bps, of a at XX. We really stretch got look of year, goal we steady progress

we you his moving has seeing grinding Perhaps were partnership in our and a again, if basis effectively asset year, state, XX and down working combination when of about you think X% about saying do team outlined this peers, But again, points. with and strong we said great look that I management are are $XX we're Hilton approximately making from another a this which everything in And under margins cost. we're doing XXX a the look year XX really former As team million, really and revenue of seeing on about both one opportunities. of would out regime RevPAR. Rob with midpoint bps, really up of at margins, basis effort heels finding points. comes And Hilton the those exception takes we we again progress. to going great to That

the We're able XXX It's next deliver year I growth incremental we're of of tell the top in you, ability strategy. again to year. So points into be an confident integral on our our would XX internal part this. basis this to and

So you additional color? Rob, why don't provide some

perspective pricing opening thinking driving consolidation types, as differential of we There's in get it Tom our our as we from sales as driving and initiative. rooms really that Sure. teams it room about categories. additional EBITDA room there. and remarks, about I well new down said $X implementing comes our we're spoke incremental to how revenues at from different million alone to as our earlier buckets Chris, we're X a of hotels. And look how his premium

but side business results about it, when to for inventory. looking least, rooms we've ramping development we're Our for us. business booked stage the in X-month a future. just great during period in to really the added the of not think up, X we last of some that to consider people add rooms portfolio we're future million setting $X also our over And XXXX managers And if X the you

be really we and going Francisco our So at to outlet ordering and revenues, multiple to looking at everything that's maximize X We're And renovating pricing, adding just outlet. is could top we're that a (inaudible) we're fantastic in when And year's management and parking, services benefits charge cost, with our EBITDA specifications is for And to we in and cost-savings of and reducing rooftop our analyzing opportunities us. resort and in something looking West. seeing vendors we're this We've now, million a contract food the Hills as XX us as Short the But and comes and And of renegotiation. great programs Key the get interesting. software that rate added teams on offerings of that's Bonnet and and (inaudible) third-party parking engineering. providers adjusting allow further rooms renegotiating grab our I'm beverage utilizing both from our we is additional our our our then to -- going for which Francisco new services. in gos and Right also perspective, XXXX. consolidating San table. the another really our that's given increasing And we're Hilton. last We've optimal our also Hilton. Creek we're And banquet cost. perspective, as From food XX rooms fees drive at the then added our to renegotiated and on a to our installing rooms. complex menu it at San We're program our continuously installed benefit well refine food outlet us. $X systems. for early that's offering,

starting June, identified productivity will the additional we've leasing out fade savings, in that purchasing linen, additional away cost operations. and selling of While opportunities including

as total, in So alone, $X.X million get there. we to productivity another

have going forward. feel confident really very we So the opportunities all we that about

kind think of The roll to is the part how much how 'XX that recognizing I in 'XX? you're of million might interruption next of interruption what color, you great really you're that 'XX? relates that business assuming That's Quick 'XX of that of $XX into question appreciate just the it. housekeeping 'XX guidance, much expect of Sean. in And for in

that we're of business is to a of pretty forecast this of saw kind said of of interruption it's while what and hotel number, As impacting. kind we where on kind -- which kind we for to kind full looked $X EBITDA is going we that bottom of line cost kind kind we've year Chris, look at our million. where interruption, under around that business equate the basis carry to renovation We assume at of

of getting we're So part up 'XX, back to not the going to we knowing that proceeds get probably QX into 'XX. 'XX may end

looking a think well BI that's to we're So months. going at extend XX north I of claim

bounce it to going that way. we're So

thanks. Okay,

Please line is Grambling the Stephen question of question. The from with your with Goldman next Sachs. proceed

morning. Good

follow-ups. got Just X

were capital allocation, acquisition? to previously dilutive potentially the potential assets dilution? to in assets terms for discussed had some if about do you First on what and for you of take on at How some market And near-term current near-term even limitations transactions think some Thanks/ in on the portfolio taking point. terms you view repositioning the of are

real Stephen, as you a prudently before outlined have we've it this We for allocation capital that obviously activity. from had think when disposition our we look is available about And of the are equally the that as fundamental capital, -- in us. of but want it's to remarks, and both of in importantly, cornerstone redeployment might looking slight the we to tenets, I dilution prepared And not significant and very our one at. carefully we're accretive that be it's at near we've question importantly, proceeds deals over our NAV. be pipeline going the balance long-term term, while certainly sure in one making that there there FFO and a intermediate most to

you're look that sort at an we're we're when buying at you it's north discount. when look NAV trading at. one we'll probably trading and today of XX% assets we're of trading from where to And comparing where So

compare disposition some So certainly versus stock to those our buy those of to the got with you have opportunity activities proceeds. back

that assets we'll with are again for So and our continue conditions, and we'll strategy. to monitor to continue evaluate look prudently compliant market

markets As on and the said, -- focused improving quality and premium overall the we've in resort assets XX really we're upscale top upper of adding luxury portfolio assets and destinations.

as year I'm cylinders we think where all and of So team that think really a right today and all now. we candidly, on do. we're second got we've we proud we on the sit the we'd company excited stand hitting And as things we And our optionality. we we're said about where begin public

the follow-up I to And and the just guidance, just color I appreciate second want be earlier. clear. I margin a guess on But

of better in we is margin do is get underlying the Or same basis the in give points a just for aggregate?? inflation On RevPAR to acceleration any and margin what XX of little relative peers kind growth of sense bit sensitivity that's of wage if just you basis? expansion, RevPAR? can kind an a maybe us on that And

sure, of is that -- talk facing about Yes. like pressure pressures pressures that X property everybody sort of I let's for sort I wage think -- insurance.

will dealt of midyear. think the property peers. many of increase course, of pointed we Despite this program, the we third than tax Hilton's probably we as to clearly be actually the less we've renewal of out cost with some earlier, on then, seeing get first that side. us of think pressures largely a stay additional which because our global The And peers, I our that are impact do candidly, is the in Rob year to half year.

or example. we're taxes. probably You there increase of million as performance minus, Accounting Chicago in $X there, seeing one property north for increase plus the a XX% certainly the take

X.X% at you revenue for So to rate margins need of hypothetically growth flat. would all sort to in, keep a be growing probably

progress that were that being think points year Again, before of we're RevPAR the we're effectively midpoint, XX margins the at up I obviously down basis And and look our making. only last only looking looking year, basis but this points. X.X%, the with reclass reinforces strength if great down XX%, the again XX. we're when really team at XX to you

our this time. we we're provided baked some Now new into but we if run comfortable that's really candidly, we just have the with guidance ahead at renegotiations think we've this analysis. And very do that year, of where

question final the comes Robin Our line today of Farley UBS. with from

Great. question I just follow-up wanted to -- (inaudible). it's a

you for would be of wonder proceeds amount of liquidity proceeds much sort I have. that is how to the -- that available repurchase, could The of you dollar quantify other combined with be used first just and share if the

dollar share would use available what be consequences? total the without for you tax for repurchase So any to amount

have transactions. do would kind said $XXX like-kind to There million. of related those to Robin, approximately were if operations I we the incremental entire costs exchange, earlier, a As some effectively we be and

XXX be $XX elected But million. million would about friction special or of exchange, would about approximately. a for a million costs, and dividend, probably it by not certainly potential net we both use north impact So have we $XXX like-kind would to $XXX XX%. Again, taxes if -- about the

So $XXX $XXX that million probably it be would be would somewhere approximately and between available. million

where think that guidance. other the that assets, much equal, to XX you're then on business of that's is assets is pieces some equal at I insurance, sold just maybe basis And piece But of margins, is your that improvement just Or much of getting extremely year-over-year through by year. you're And changing is EBITDA your properties question, lower-margin the those the in selling removing impacting baking the I of chunk XX other would EBITDA When circling the it all else about insurance words, also -- that that point margins. look this would the assume to -- are the would which how EBITDA is XX be the -- your interruption being how assets? you not, the in? high that if would proceeds I of margin back were kind great Okay, run margin to way

-- in factored so And is basis I into -- that that to your guess improvement? is again, how degree what point

stage to bit Yes, there. Robin, set let me the little try a

of million approximately of of EBITDA hotels. $XX losing points lower selling portfolio in had of approximately much here RevPAR assets, before EBITDA those obviously out below noncore Let's basis that we've average. mind the assets keep margin XXX so sold, versus RevPAR, $XXX the average also $XXX XX.X%, of the we're portfolio They about an

for we'll redeploy be confident improve use a certainly the we in that, to today. asset potential part So whether portfolio. that that given proceeds disposition trading we elect elect think we're buyback, an accretive to where buyback, we're the proceeds If we of overall the -- will that

closed, insurance rate outlined, when in look it Caribe, rate EBITDA. been run the $X run you recent has $X if million in the Sean only last -- the was as insurance, the contribution Regarding at year effectively, about Based million EBITDA. the on

$XX cost. to million goes lion's So the pay the of share the really carrying back

we $XX just that to have not would and some -- clear. paid to the that there's of manager. math no we're incremental so of that about be There's make there's So million here, fees then cost, funny carrying operational course

close you're the reopens to when scope the really a in overall her the she XXth the the that one We're that later Caribe we're will the hotel at get this $X lost. way, we've the new year. anniversary, one portfolio Hilton the which that of So by of to given replacing around of brand. and effectively very going renovation be early million overall And hotels oldest and confident, the is

excited we're So about really that.

and most long the and see over we term. So creating being value accretive really the intermediate that over importantly for shareholders

great. Thank Okay, you.

for the floor At Baltimore I this remarks. will back to closing time, turn Mr.

the forward at call to the very our And of all early forward to to Happy future. you May. late spring in Thank discussions look taking many seeing I you for time. April, We future our in look near everybody. next

conference. today's concludes This

your time. your lines Thank disconnect participation. for this may You at you