Park Hotels & Resorts (PK) 9 May 192019 Q1 Earnings call transcript

Greetings. Welcome to Park Hotels & Resorts Acquisition and First Quarter 2019 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. the President-Corporate to Strategy. turn Weissman, host, now Vice Senior will conference your over Ian I Thank you.

begin. may You

Good morning, acquisition and a welcome everyone. Earlier this announcing Trust. proposed Lodging press morning Park's $X.X Chesapeake billion of release we issued

results. full If CEO; morning, results you or both Sean Park Chesapeake's release Asset of as on accessible released press our Baltimore, and are proposed Park's website. This also Rob announcement, website pkhotelandresorts.com Tom first the will the with Management quarter well at discuss Park's XXXX at with EVP as Park's financial our detailed we supplemental available of the Tanenbaum, website acquisition Chairman presentation detailed CFO Park's on as well for and package of questions. the yet discuss transaction and EVP haven't downloaded the and benefits be release strategic on operating chesapeakelodgingtrust.com. Dell'Orto, quarter and Along also as will first available

we made today like Before comments Securities forward-looking under statements of considered Laws. to that Federal many begin, remind are the everyone would I

specifically With As and described the cause financial these in to cause to I from measures which that XX-K, More we that over Tom. these with on in are we results documents that on statements important reports or X-K SEC, actual those update measures. to be refer SEC. in with forward-looking will filed expressed revise filed documents risk not non-GAAP results future those to differ reference found today's materially and outcomes uncertainties to from could financial statements. by Further and forward-looking with may could turn Form now call regarding the numerous SEC, call, recent to the non-GAAP the certain the future differ company the obligated can results our Please information performance, most the statements. forward-looking may differ identify are statements. subject Actual expressed from contained in and Park factors XX-Q these publicly filings risks the those

Ian. & Thank discuss us everyone Hotels acquisition the Trust Park Resorts. thank for joining you, you of Good Chesapeake very by to morning, Lodging exciting and

with earlier will approved this companies of earnings business and highly compelling Directors combination, solidify strategic our As of to position transaction our On of the a expected company accretive and combined we pro both the further diversification to have morning, to forma Board plan platform. overall as quality ownership basis, nearly this key three announced sell hotels a and prior improve enterprise which the to is unanimously lodging urban which be advance our Park in pro and the These the Chesapeake's high-quality of of assets New forma we expect of sale resort metrics York closing. assume second-largest REIT City U.S. two an throughout non-core assets value $XX in markets and each and the legacy located billion XX to

a were little the morning, this for bottom-line performance, on I will top-line quarter the results which and announced later. outstanding which also Park, with We both touch XXXX first

incredibly Before to all discussing has process want the involved. that details, been positive I transaction this note for

shareholders. XXXX, while have generating and hotel team Trustees forming returns with Chesapeake of Francis, have respect admiration well-maintained Board company accomplished the estate portfolio, Jim We real tremendous what the the in since a and solid assembling for high-quality

team for our reporting We results will even non-core back next formed Park of in have process. have valuation well-covered consistent over balance from Park hotels, and create plan, sector the protecting XXXX. points by our throughout sheet the net value. spinning enjoyed years. gap nearly in Having dedication for discount tremendous spin. capital by is two executing discussions our business to By XXXX stronger approximately our evaluate superior for a success. stock our I of discipline this basis REITs our value in billion returning and opportunities has executed we an our merits and materially Park with asset am several XXXX while we now and and We've the since to successfully dividend. just Overall, shareholders, proceeds not seamlessly our couldn't the great be returns accomplishments the have that over opportunity on peers goodwill pleased significant $X capital X,XXX improved years. by significant Since lodging in be at early tirelessly performance the Phase our sales we buying a and the I and prudently transaction Hilton and allocated strategic teams And at distributing collaboratively leading of for enter worked plan, and This long-term and achieved hard operating we margins XX setup have more the the out shareholders work with of of of the narrowed outpacing the During recycling I maintained in a both Park we this delivered entire hotels prouder could and one two plan. confident

opportunity quality our core and compelling including remained long-term the our is combination the accelerate our Chesapeake improve our we upgrades on and brand importantly transaction geographic of margins of laser-focused enhancing portfolio. continuing portfolio, While operating diversity to to that sourcing a several footprint goals, most with operator strategic a within

combined We next further and size dividend core to substantial we our over believe have to continue expertise, to similar years offers as Our several Park's earnings and value drive help support risk-adjusted diversified base we superior the over long leverage additional demonstrated shareholder management success growth, the FFO the should company more increased asset within upside portfolio. the run.

the look our markets XX% addition to believe including Denver. and target Miami operator the Chesapeake geographic we is and portfolio we Park's several of footprint Angeles is located their in coastal our Boston, of high-growth Diego, to San enhancing expands of markets As complement Los across diversity. the exposure REITs, of perfect and hotel full-service landscape brand, Over their portfolio

San foothold arguably the the gain in Additionally, hotel very even an of in Francisco, we are country. markets excited one stronger to strongest

expanding We excited Marriott count to mix and are be under and Hilton, our our X% Post-closing, brand brand be just will Hyatt. XX% room by operating equally partners. XX%

will have also nine operators, We portfolio. across allowing deploy to from us each practices our best

over reducing combination improves portfolio, fees lower-rated within very below per which contract several Digging and enhancing portfolio. food to space merger productivity. the are destination a projects, into at energy portfolio by Finally, several and specifically points We the metrics the should higher execution transaction. Park's across More EBITDA deeper and respective margins on in driven repositioning higher conversions capture next the and projects those drive including years. few EBITDA there RevPAR, quality hotel expansions, of ROI adding line, as presentation. with select the upside business group removing this Chesapeake's on transaction the opportunities underwriting growth running meeting approximately additional believe the management overall seek rate to potentially space, basis up EBITDA specified as included will hundred of as additional we opportunities improving of revenue Bottom and in beverage keys, believe expect including mix potential; the cost key embedded several by the XXXX, of $XX several Overtime, that be not we note is the increasing of key note drive hotels; by million. million are XX of the fees XXX adjusting efficiency growth basis G&A have ROI XXXX yield upside We of points; and we levers as EBITDA profitability at we page revenue of $XX margins ADRs; improving underutilized mix as underwritten meaningfully deck, brand in compelling $XX savings our these select Key by baseline additional are approximately include: properties. Chesapeake's million acquisition. grouping we of value-creation including up

this expect footprints, further which partnerships an transaction, outlook. be and brand growth We to Park's enhances accretive quality,

attractive acquiring or earnings, XX.X for our portfolio a approximate XXXX of on at forward-looking XX.X a on based EBITDA XXXX. We equating top to are an multiple assets very valuation, underwriting

We we which plan, will and achieve and couldn't experienced have the a Park’s asset We about spin. to portfolio construction plan to we talented combined bench deep management as since laser-focused design suit excited that the our potential opportunities, resources. clear been value more the of have and be just and unlock be of

markets West, Francisco, and impressive metrics average. reported points, turn a With I our very basis call at while up X.X%; XXX the the who we quarter. on group our increased provide earnings. X.X%, briefly Key will of additional detail Before up over during well peer New will I Orleans, strong X.X%. ahead to margins coming up Top-performing included the San quarter an XX.X%; both again, Once first in growth RevPAR quarter Sean, discuss transaction,

While increase to our footprint, benefited to -- at gained in given share right an the XXX points. overall credit proactive XX needs We share from the be our over of comparable the efforts XX we domestic market group portfolio. clearly having of during hotels quarter, up resulting geographic to also basis an share

renovation benefit recent with XX% revenue group as in result, revenues, led our which the New Creek and Bonnet additional XX.X%, hotels, group well by group from at San conversion. a Santa which saw Francisco, Hilton and to strength As Hilton up our Hilton Barbara, increase a continues was the up-branding, an Orleans impressive

the year, the very we healthy. we As of the health as out of good feel economic business, look balance the key indicators remain over about

in especially while remains at with year Overall, the we quarter quarter the That XX%. weakest of the quarter digits, large part low mid-single-digit over comps, the half year-over-year the year, group expect RevPAR remains be group pace due unchanged are despite quarter, range. back be the group to to negative strong, year group pace third While, in the second pace growth said, for difficult up the still fourth anticipating we in our the in to pace. exceptionally XX%, of single looks

Finally, turning guidance. to

relative XX up X.X%, margins As X.X% XXXX XX basis -- our basis points and basis of go we performance the to result plus-XX our RevPAR points. to expect by at increasing guidance points to of are plus-XX over the the by points a balance strength we the year, strong to while basis mid-point

note $X.XX future EBITDA million our the of while do per Chesapeake Please FFO by As mid-point million, or increases acquisitions forecasts the that not $X.XX to other updated to hotel dispositions. share mid-point per the $XXX or a acquisition result, to include million $XXX at $X.XX our share. impact the any increases $X at to forecast

call transaction deal fourth updated some to closes, the the of the will walk quarter, We provide early or after that, turn I'd through over Sean, late specifics. you With guidance to like third will who quarter.

dividend. I'm the affect the financial how of everyone. some to morning, good of the to and the Tom, they earnings, going balance elements sheet, address Including my comments Thanks, and tailor transaction.

the approximately consideration was in total noted for release, billion. As Chesapeake, $X.X

We cost. that mortgages two well Chesapeake's approximately have the year assume, pro a $XXX along remaining plus million a loan, portfolio $X.X commitment, transaction combined financing component of XX portion billion Taking the forma cash leverage times $XXX including to are totaling to repayment the $XXX into of to million Chesapeake's hotels. mortgages X.X million of finance secured with the and as Chesapeake's to set mature next for of as the expect enterprise, increase full account we this term would

used addition of However, non-core the assets, assets investor Tom $XXX sell from X.X these prior Park legacy million, the we both sale our in approximately City three and times. reduce note be Proceeds New debt leverage to are five as and in York down Chesapeake's, expect forma as we estimated be noted to deck, of closing. at/or to which to earlier, bring to will assets pro to

would two leverage And expect to about robust. within non-core are after to identified assets market pursuing as million $XXX also that individual of hotels. X.X a closing further ability $XXX asset to additional times. to we the pro Chesapeake forma have million, capital for on acquisition We significant sell our reducing approximately these there's amount the sales, Overall, we portfolio confident execute remains

outlined synergies to we at/or FFO our for is approximately to XX% XXXX, to execute for sell prior of FFO the share XXXX, portfolio. to slight of strategies Despite be X% management pre-transaction within on X% expect to closing our dividend stub expect and expect FFO Chesapeake million by maintain first projects continue to assets, the post-closing these we pro ROI period for guidance. XX%, in and dilution we asset accretion five our share to our and to in the accretive As forma increase the expected in G&A our implement to in to we $XX the adjusted approximately full year. current of contemplated transaction per as target X% per presentation, operational earnings, The

the Directors. dividends Although, to of I will remind Board you, that our subject of discretion our remain

regulatory Finally, as with is Chesapeake’s fourth or of I subject that late October date transaction this the please That shareholder quarter subject this vote, acquisition before outside Operator approvals is approval of want before, conditions. such quarter XX. note closing closing that concludes our over call for I third to highlight turn as the SEC to the Chesapeake's closing But remains customer clearance, for questions, mentioned and year, prepared early to other our shareholders. an remarks. back transaction this targeted of and also to

answer So might we have able may you all the today. to questions not be

we we'll additional proxy the of We Park. will information of file statement that With Operator, question the that transaction. may our first include a And about proposed please? constitutes registration a contain will prospectus have statement Chesapeake that,

Our W. Instructions] from Please Company. first is proceed. & [Operator you. with Thank Baird question Michael Robert Bellisario Yes.

everyone. morning, Good

Good you. speak Nice morning, Michael. How with to, are you?

taking my for question. Thanks

you the and of you of making the overview whether us Just broad-based us Chesapeake's through, portfolio give portfolio assumption are comparing your you made ones, more synergy of to or an about operational walk assumptions there? upside first the maybe you can kind and went kind property-by-property particularly

There that looked G&A in it $XX I friction is $XX both on say all you platform otherwise there then the on the think able We're cost here portfolio costs. Park the that's synergies, XX is we those about I of taken first of deck it's on Reality detailed the obviously million broke page that say as if strong at confident at I on categories uploaded. identified we the given think near-term the eliminate into million. Michael would this to Clearly, we the revenue here have course $X believe side, it there detailed I'd that you're think really be we're and million we'd that given on about buildup. $X note worked would It's a these we rate. XX will to the to our and asset team as it was more women as going doing the costs and Prop run side a say by fieldwork. much But last on permitted expense incredibly property insurance asset savings. – by property the than their friction be first men who transactions obviously will slightly types million weeks do pass. I hard and important really probably not Tanenbaum several really a Rob done feasibility of

not in think at track our this we're these will is record, fact that number. given we we the able baseline confident So be to exceed least meet if

done done that the So underwriting. it we've market Park. we we're and at look detail across today. work underlying comfortable our up, question, we everything do the at the answer to the To don't It's the like in with look that's dynamics as your buildup we averages here we'd level asset that of it's we've at build way here

the on one just asset then and helpful, non-core sales. That's

and there those of dispositions? of and pricing how us the the quality we First pricing kind should better the three we can quality think understanding CapEx PK dispositions Chesapeake current pricing sense just about those your the assets And should on how you of and of the of give multiple? about maybe versus think comparing trading a And legacy the hotels potential a needs? kind around

required times so moving so RevPAR bring brand York $XX non-core two sold would the to attractive certainly assets expect of not multiples that three Yeah. are incremental listeners to trade that I $XX be expect a range. million good these XX those margins below we've of over remind those that higher. much of portfolio we that those the well for times XX on assets assets to somewhere We to three and up the say we're contract. that years. selling Those much some in couple are of under need New our very will I'd noncore They assets to those obviously million by capital probably capital. would to they're want be really not to XX% say question. to we is I Mike XX – average probably that received are last the XX% lower the It's management, first the will standards. assets sold a gross assets, expect portfolio fit And marketplace. regarding noncore Clearly, Park in unencumbered those would in the are assets could forward. clearly be multiple assets dissimilar

That’s helpful. you. Thank

Thank you.

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

guys. morning, Good Hi.

Rich. Good morning,

to do I these congratulate the the like long all, few last this. first in process pro a came in last summer I comparisons want getting of and could we lessons some situations comment don't just years had so very to want last mind? always about with you And but from about the you look forth and company the you on Pebblebrook of that. so a what in at care what obviously the learned high as for deal deal way to happened M&A where be obviously involved also summer in that the to profile the And cycle careful risks and for this want throughout point with forma you all to you process? that through a generally Tom if Park create ask and even congratulations to of sort LaSalle leverage what are point respect you investors back at some maybe the and other of

Yeah.

you Rich your for First, thank comment.

listeners we third remind important in are the I journey. think this here it's to year of

our more the energized. those using the be more capital what back we days, I assembled of company the up here. outperformed actually Recycling from our of to put out two of I offense – kind for and years the pivot plus/minus our capital, been two proud to X,XXX years, date That be and the we've right. peers hard sort asset think were us returned finance spin management work a in sector three could that we've across that really has teams have accomplished significantly you teams could it not and of by proceeds on we're where obviously in be RLJ we and women and left buy in grow to fact and We've phase go $X Hilton to our portfolio. to basis back stock. short rejoin points the on men over this I billion accounting In XX performance to another position Park. not that we'll to design discipline When construction.

So should no talking lodging -- fragmented I happen. It they're am talking have tends be CEOs we peer that all been happen some with to highly consolidate. we're to the time of sort things segment, be secret. for time unpredictable. tends It my or I should a meant episodic. to when

I Regarding think different be process, from worked and the the We value be to -- repeat discussions see say regarding away drama. the the of Chesapeake in stay way. be a that of not sides careful, that all both don't conversations as I sure as but details am could same diametrically possible far the team the I want of Good opposed. on feels through the to we proxy, prior I that will to this LaSalle, of would aisle. and shareholders create obviously situation professional want more Pebblebrook committed We've and with parties disclosed that

know, leverage and disciplined. have been You we regarding laser-focused

sheet. sure and levered excellence, and got prudent principles; is operational guiding As a we we here, as third delever, when we're laser-focused still of time that low times. map our that a X demonstrated having it capital as X both we've you again, course, balance clearly Sean beneath we're And which know as are we've time up quickly but did road disciplined allocator, making times to about a team. times that but are to Again we levering slightly X three a

of two So into range, at much manageable, be pro down basis at in the our out five lower be selling we'll selling on announcement; many than we'd very additional assets we're we quickly leverage peers. really at so then X.X forma that a X.X times X.X. again assets And break

So excited we are this. we where in very about I'm feel process good and about the

of We also operator have our the geographic right we we put ourselves to add this think worked to brand diversification addresses right it we ROI opportunities quality; the We're it's hard margin and counterparty, it's excited and many really that portfolio the strategic upside think really portfolio and embedded think from and set diversification improve objectives in grow. position. out continue

we where about process. good are really feel we this in So

All its Really comment, Thanks here. right. Tom. that second a for the quickly just turn head to on maybe leverage question for

where are argument terms think forecasted cycle it's mean comment may -- how well? a the in the under think couple about And current that FFO You that? accretion as flex sort NAV And little in huge on investors do back. of around there's in sort given wondering of a then hop parameters FFO I'm accretion shorter I separate then we mentioned certainty in you of I'll could if it's the that number the you of years. the term more how maybe not a you next if accretion want

If sure your question understand question. we is want your would I make the if up I lever Rich, --

numbers head aren't hypothetically? it's that maybe more to what incremental the maybe again investors accretion are reported on turn its what's question Yes FFO earlier appetite leverage if looking that for for the

to nowhere were Xs down, not near and we're is comfortable want that that that to But with as takes long-term investment this we more levering bring this get want low really up the we we at point. we grade as Yes, that you know to time aspire point. at today leverage contemplate something to

Right. you, Tom. Thank

you. Thank

is question next with Please from Smedes proceed. Citi. Our Rose

Hi. Good morning.

Hi.

Chesapeake is per they key. of but that with group less wanted -- to the part on -- to I space portfolio have a the that the of lot just on ask up strategy meeting

space meeting on plans the any there per can without is do basis? investment of incremental group something Or there you key to So a space? more add same number are amount of

sort sometimes I'd of nine the big meeting question. of we're have of group is because perception that all that observations it's hotels make of feet We couple these do a Park of XXX,XXX greater Smedes, obviously than are a houses square Yes. great space.

XX% that assets we for XX,XXX, XX,XXX, think Our of square space. by top EBITDA on this of XX,XXX We other portfolio his team have a do hotels points there number XX%, group there opportunity we as we at Rob XX,XXX, and feasibility is our obviously, an Chesapeake, XXX about meeting far, done feet with Chesapeake bolting that pre-merger incrementally work -- of to up portfolio XX The XX.X%. done basis and team have with but would so think have account that well. our at about XX%,

then yield seen transient. the X.X% in again time we've our And benefit every first that to it efficiently XX% your to And that that of anchoring So we Park, very you've layering contract that your RevPAR. shown more to XX.X% moving Again, is of from allows that success that the with group, and by business of with we've sector-leading business great in you think again, done with quarter. performance achievable.

for As our pace we be looking up look out to to quarter, group third we're XX%.

we think climate, that think second, for a our mix, management with beneficial in look Hilton, partly this so to we've So and say, to with doing advantage stripped as with a that the for our been partner, had likes his I which can, steal partners we really phrase us. sure expanded remix making forward Rob has group I’ll we has real this to in case competitive really

-- just interruption where Does next interruption ramp proceeds guess side? so. on the including the that Okay. ask in your Caribe, the you insurance up? to there, continues on or week too opens which the Can how stand business in reopens I that guidance I of does terms business as -- Or Hilton contemplate

Hey, is Smedes, Sean. this

year contemplate operational will does be kind levels Our of to to well last the open, kind proceeds, business equate receipt so about $X now as we as well, had million, as year, interruption storm, that it of it's did to it EBITDA been that this that’s contemplated. prior guidance what of profits

Thank Great. All right. you.

Smedes. Thanks,

Katz proceed. from question with is Please David Jefferies. next Our

and morning congratulations… Good Hi.

Good David. morning,

…everyone. the I deck. you this one are to exercises or have any the detail within or that Is there plenty question portfolio us anything certainly just of that morning a have rebranding occurred the any changing as in of But possibility? around contemplated in there? brands

a upgrade. things about question. be brand it's to like there Yes, optionality. -- think We that that really brand great one the of opportunity opportunities we the this is David, really changes will

think that well. those we've areas again and will the there excels. I branding that we'll manager the that Park Again, time. evaluate also Think changes are over made. be success as opportunity where, about We think, branding But really

If taking up working now DoubleTree and that We're a a Hilton. you San to to DoubleTree Hilton. Barbara, going look our that in Santa at a convert from Jose in we're to

that we we will be So there look think forward. opportunities that similar really

We about getting and with into now the be Hilton, we're One partnership supporting the but back things is into expanding. portfolio Marriott relationship is across into of of at give none and the with upside, that We've and think building us would as we eight some and new got -- also back -- operators, see those the excited to of taken underwriting. that well. back that incremental as and exciting best our new practices look Hyatt apply in and Marriott our Hyatt in family brands. which and with love relationships to the opportunity We

move So weeks and more -- transaction months the hopefully ahead towards as to closing. follow in we, the again the

you Got it. very Thank much.

Our Humphrey. Robinson Patrick with next Scholes question Please proceed. is SunTrust from

Hi. Good morning.

Patrick. Hi, morning. Good

here. Congratulations

you. Thank

quite seen process? that certainly, competitive rushing getting is initially I'm it? to of curious it wondering, we've Question the REITs you. you selling out for York seeing of the City hotel What but on in? New of Thank how characteristics the bidding buyers? I'm properties. York, of you some are How And are New who the get is the potential

and we night It's or great which with being know, one the with capital could be we just will but located very morning, this signed And, debt York quality of that brokers you obviously, two cities There obviously New all world. this as a last haven’t is as and to engaged a these and is, perhaps We the potential and merger well as they're the of domestic can buyers capital management fair document-rich both capital. well. given of healthy assets, available think appetite equity also both imagine of buyers is foreign question. any the still in being appeal announced potential the

again we we being low that able these Again to anchored to we risk to look with happy be allocation it sell footprint, at Hilton look very execute capital delever We're assets. They capital the two with the want portfolio. should a So allocate Midtown. from we and elsewhere. a attractive as in sell see we asset and to our as to standpoint, love assets

much. Okay. That’s it. very Thank you,

next question is Please with from Goldman Stephen Our Sachs. Grambling proceed.

morning. Thanks question. for taking good Hey the

of to about was With a had so the you from spin, initial advantages and of Hilton communication. one the I you that some close with the being to line flexibility enact of able direct I being think think competitive talked change,

As you benefits brand change? their brand, that do diversify diversification? And from potential financial the dynamic does how that away from balance you assess or

but strength well that's of to fair brands, as Hyatt. XX would past given not I as peak, platforms that Marriott we and operators think all other operators. operating I only of actually those were relationships, you Because Hilton, best understand had a worlds. think tell you my And at through It's the I get those Steve. the the and with really brand -- also life question we large independent

Tanenbaum Rob that. of Management know a as So that and lot well. our I Asset have does with I experience

having think sort going management owners So candidly of us to managers that sharpen make knife. more the make successful. they to pull believe level. make and going only by by long-term We better that's operators that discussions we only that at That's partnering better push we that and strong the occur companies us with we think

positive. a So multiple long think We net we them a platform brands think it's across having of makes diversified term.

the Okay. maintenance the the I've the then And what's on the over at then past seen combined -- you but few business? for don't next what release know I not, business longer for this And spending, capital in XXk the years? thinking years key five expected CapEx are combined or per you Chesapeake, if about how the over mentioned term CapEx

been our X.X%. strictly a public are our Again than meeting that we've generally have X%, X% more probably rate in given Now most space. most conservative X% of got peers full-service the and probably We're run our more in larger the using of expansive to peers.

on in probably basis. probably is portfolio an what We in safe X% we're PIP X% associated range another We of maintained. attractive Chesapeake be opportunities, X% is at for here the Now well lot to lot which portfolio. return don't depending a a that again Park. The There ROI you’re are on go-forward to asset as and will CapEx us. thing be see will those but risk have a the risk of doing

think very ROI As a CapEx? scale follow-up, are going quick projects CapEx maintenance forward any of economies you on as about just front the there or general

I up who design Carl question. our Great opportunities. Huge heads think and Mayfield construction best-in-class.

with but We with only power. have this the many purchasing benefits our of brands, us power of purchasing lower not but of with again gives as -- think We capital one vendors cost scale benefits, well. this

as this underwriting baked those I we net know not know benefits or are into as but a don't the well. do candidly all candidly, see positive. So real

outlook the dig from into think time. as the transaction worse only we gets So not better it over we

thanks much, Helpful, congratulations. so

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

thanks. maybe Great, that's seller? of this that out that more was highs that do color timing? for about consolidation terms What it this could their it just through? REITs in Or so the you now you us are why and timing made think on of give came about why -- a willing kind know down some Is talked XX-week of from REITs little would the for it about. that's I of this been among there now something the while sort idea you've maybe

say fair this to this It's be came that just I question is point. me responsive, together let just but as want a to know M&A that be it and uneven episodic -- a little Robin. at you tends one

great We detail. disclosure say will answer the will much we to have the all questions more in proxy weeks and in in those coming

can at I'm not appreciate why answer able think I to point. that this question you

in at and of of think basis help XXX you points terms about of the margin? with I with XX strong you growth I at guidance in much XXX so help kind your occupancy rate basis think that about here will us And Maybe that. points midpoint full points than to and coming kind at be or basis guess basis at what or look year your of rate you us that that of midpoint? year follow-up margin? can rather increase, full Sure. of point occupancy guidance. versus on then how the your the Can X.X% this that XX think Okay. just question it rate guess a in results points from RevPAR about coming that XXX much from When -- especially QX why about gets

we're me -- Robin given encouragement with at team. this working a think Let from we at the revenue point partners conservative. growth Tanenbaum with and I our in where our management cycle it's job are we doing yielding significant of Obviously, generating RevPAR Hilton strictly also strategies, are and great asset and closely at management wonderful we're being say and Rob

guidance we very feel really strengths. about the in our this being good so really business helps portfolio to group we've So, -- plays anchored much

So, we're and we point. if very this year of signal back the anything would the provided that half at guidance I confident very, the with

looking maybe it's for maybe guess rate of driving to a what's basis of think sensitivity little that was of a of margin? I basis if about kind XXX the XXX I to margin just points points versus occupancy bit

and it blocking again good we've just what our cost initiatives, time Park, I good able and number pressure. with here think demonstrated on But that at productivity don't Rob we're based there's have clearly and doing. look on partners call it that analytics mitigate work tackling of again. doing And a the time we're We call based we team that data that. Well, been to

you. Thank

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

Tom. Congratulations Thanks.

Thank you.

it. Appreciate

you not portfolio maybe -- get mean in selling curious assets portfolio to assets Just you've from announced; the more kind assets you cetera? to the expect active three comes markets, going selling that from further on certain we little core et a continue just once the concentrate two order you. sell non-core to five refine of I churn? in are deal more them, this Should together stuff

rooms so to The is critical lifecycle evaluate business this XX management over trends, our think a we learned exposure love years in anything I've and continue many the it's resounding by we on question. portfolio answer yes. demand obviously If is at their bolting basis up of assets Francisco. Park. pick in looking Great in get CBD Denver, footprint obviously as XXX XX Boston in have footprint markets. But XXX we'll good that our assets basis that that you goes assets. additions on markets Chesapeake and to still We we in hotel up the -- think have obviously the non-core Clearly, there. will points about points. improves Los it But legacy Francisco the San we Miami, up X,XXX of San one top We we pick Angeles, the this

for think you we But value. top portfolio, to XX Again time included our as have capital hopefully divesting and those about XX account and out over we'll As that of XX about well. be that assets are assets now. ventures the in of Park remember continue XX% retool joint

and continuing the tenant sense. portfolio the where markets stock, continue us there a doing or managed clearly of growth if we're a dislocation that that So, certainly see at recycle work you higher is makes to back the here fundamental capital But buying will good is in Park.

first other -- on G&A transaction? items quick impact Great. related And any the quarter to or this Sean follow-up the from

transaction. material on nothing for G&A this No,

Okay. for That's me. Thanks. it

Thanks.

proceed. Donnelly Our Please with next Jeff question from Wells Fargo. is

Hi, good the first guys. And you for maybe question morning, Tom just

morning. Good

morning. transaction On what are able cost And for what the deal? breakup Thanks. the is fee transaction? just is maybe to synergies, for the you the Good share maybe

fees minus. believe believe information your already peers is has And filed. or been the merger all $XXX publicly may And I a agreement have Yes. Jeff available. of transaction million up, costs I plus couple we but disclosed with picked that breakup regard

markets? Great. walk then QX quarters specifically RevPAR on those through QX maybe to best at this be -- maybe you progression is point? the lay Is some thinking in for for Hawaii, the but us ahead San Francisco of the it And that and for Hawaii operations, San the past maybe back for strongest Can its days your how about of should Francisco. two we say through fair

listen continues you in mean QX. San we as I know Francisco Yes. up were -- XX%

be we about As expect to fully year year, first at high We clearly the strongest. the quarter balance finish the the of think will single-digits.

year. the pace We group throughout have very strong

is XX%. So XX% in about XX and QX pace group QX over both -- year again the for

continue share continue and and let in Hawaii Hawaii. in growth parts strong. Francisco San well will you as as give as to on you there, assets we significant outperform two be So there there some know there but had jump moving to our I'll Rob

Yes, Jeff. was great $XXX. and did a XX Hawaii team job, it's up points RevPAR basis --

that coming down so in expected this very group over amazing next we're drops production the X%. Our seen transient here. driving into as Airlines in Boeing we've grow, we're Hawaii XXX east market read fantastic months continues grew XX% property. job demand. did our seeing the and And forward to encouraged to fare But we Max by team Hawaii FAA and far good service they We while for once additional the what issues. the beginning route the quarter, is Southwest service which go very now about few was generated feel at Really flow-through and

guys. Thanks

a We Rose Citi. follow-up with question now by proceed. have Smedes Please

It's Michael Bilerman here I'm with Smedes.

Just talking about the.

morning. Good

Good morning.

only or them, June but appear exclusive is for Chesapeake you've and about talking talk sort bit of process rises a you when early the of long went doesn't maybe can and go-shop, of it a the little month share share fee call just million to been -- $X.XX that sort you with it break a any lower one about them you about of with in terms sort rationale have break? how $XX.X month Can of sorry $X a and they XX $XX.X -- the million then or So for thereafter. until

Mike, our I'm questions point. Mike, tough of advised by us to it's questions. did being for answer great in a agreement team position this know have the that review of counsel those not obviously at as that you able all a quick a it. merger done We file a already deal puts members me of

those parties are to it forward. timelines complicated we We are discussions proxy. both deal will look very agreements the is it organizations moving and both about merger follow-up a excited through know and this and forward As fair you think process, with we for

spent little of from give integration far have bringing with of sense to negotiation us get intense last months? bit an Just couple the over how along over couple integration of where of process give standpoint this I'm you the up time us perspective you a on? in an in the hotels How this a just a sort Has of sense last been them trying came are to weeks? much that? of on the

a we provide and timeline. color will Michael, Again

you that that to at and possible know disclosure S-X from the very Park be provide here and at will will filed all in don't it hip. think we we've that the - we we in shoot the next But leave here proxy tend the disciplined I that. several be I'll weeks. again

a that not allowed there to right just official the is it's correct? that where able - break solicit break to process is fee Now would fee, we're a reading a just was is no the bid be shop someone set want lower I it they'd sure is of the proposals, part there make with fact they're in make month go lower for to

You are no correct, shop.

of severance put of How its it the $XXX at total lawyers, transaction. value third And is $XXX X.X% of then the take The of the million bucket of million is much million to X.X% is and bankers? least about Can into it advisers, How the sort it about $XXX team? your transaction was all cost other? much composite parts? management a of you

through market-related that of at Michael. buckets -- well and involved financing get of have those others are whatnot into component. we you point. fees. -- won't and much Hey there's you fees have fees then -- I clearly obviously kind here. ultimately, can of a all there's there's But the estate kind advisory Sean proxies as kind cash severance too real can transfer in trading if Dell'Orto we of this involved determine And there we taxes

what it of you're things just mentioned seeing. at So bulk of that. pretty four are leave I the we're the kind earlier But just much

not cost of amortize to and You're there? financing them going the roll the fees the and financing

what there captured. is They will be, outlay a that but from standpoint cash we've

million? them put You've $XXX the into

They’re uses, in the and sources correct.

right. Thank you. All

comments. have question-and-answer closing the I would conference the our back like of Baltimore We to turn session. for to Tom over reached end

you. of today. appreciate all taking time you We Thank

taking We couple Thank to are and days of next time discussion. you the today. with headed of forward you meet many for we look to over continuing the

about excited addition results. operating the both at are our transaction to in strong future Park We this potential with Chesapeake,

Looking soon. forward to talking with you

you thank gentlemen for Ladies today's your and This participation. does conclude teleconference.

your and day. You may disconnect lines wonderful a have