Park Hotels & Resorts (PK) 7 Nov 192019 Q3 Earnings call transcript

Greetings and welcome to the Park Hotels & Resorts Third Quarter 2019 Earnings Conference Call. [Operator Instructions] As a reminder this conference is being recorded. It is now my pleasure to introduce your host; Ian Weissman, Senior Vice President, Corporate Strategy. Thank you Mr. Weisman you may begin.

welcome XXXX the Earnings and Resorts Hotels operator Quarter Third Call. you everyone Park to & Thank

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

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

differ may filed materially those future the in the differ performance, XX-Q, results Actual important factors refer reports documents statements. and forward-looking forward-looking which in the SEC, recent risk to Please from and that by from those statements. Form most outcomes expressed with XX-K could contained on identify results specifically cause to the Park actual

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

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

our guidance. integration Tanenbaum, summary third on XXXX Tom of XXXX efforts; Q&A. results, and earnings Rob guidance. will Sean Baltimore, Vice our an and our Dell'Orto, be Officer third update Executive Officer provide Asset will quarter our and Management financial our earnings for color our further detail update of on a President our Chief morning, provide joining Financial additional an on of on Executive capital Chesapeake operating finally acquisition Chief results, an quarter the This will Chairman review recycling

for we remarks, will up questions. prepared our open the Following call

I the fact only focus results portfolio would legacy Tom. like Park note the over that turn the XX to due owned to for most that call the Please assets With in days the to quarter. that on we Chesapeake operational

everyone. And Ian. Thank you welcome

billion our executed company, quarter quarter years was long-term for towards transformative the Less successfully progress than Chesapeake launching our by goals. Lodging long-term acquisition that completing several third we the strategic a after accelerates on of three transaction $X.X The achieving plan a Park. Trust,

provides First, to diversity. bolting on brand, Park operator geographic instant the and Chesapeake platform

it of Second, quality overall our portfolio. improves the

larger providing enhances and while it base. our with scale diversifying asset a initiatives us our to also best management enact platform practices, Third, earnings

the fourth, to rate, asset-specific basis portfolio-wide And for levers operating points us growth we growth pull factoring XX $X helps to net of to underwrote, strategies. in the when add Overall acquisition group approximately increase XXXX. strong growth our synergies to Chesapeake's coupled we portfolio overall Chesapeake's giving RevPAR with million expect calendar more in

several is Chesapeake softer the and outperform to trends, liquidity benefits term. accretion scale, opportunities Despite portfolio long take on positioned basis the Park advantage while industry-wide we to create of identified value of over well relative and believe the reaping value very a within

of generating remind over I including by on of years, executing spinning of Hilton to highest two our out over in track while strategic last delivered that growth the billion sector's evidenced shareholders Park XXXX. listeners has returning as capital superior record margin established the among return solid $X.X total goals the January a since

By significant unlock that playbook to within we portfolio. applying similar value Chesapeake, a management to embedded expect asset

to XXXX, are relative and also As this we we remainder plan in strategic create on move and the but confident backdrop, of year execute ever-changing we the into value. ability cognizant through macro our are of our

previously de-leveraging in Chesapeake the synergies authorized various stock in following: our X% the process; the underwritten stages at Xx sales a key priorities with significant on those the buyback quarters, hotels; integration and the million With the a the evaluating attractive sell stands finally seamless $XXX that, next over made one balance or yield. at and include assets two Board and very approximately executing currently acquisition of $XXX progress with to sheet to dividend of be plan EBITDA continuing completing million Chesapeake protecting to which of non-core realizing the which the transactions

Chesapeake management remain reviews the conducted creation integration, team has during hotels which our we the XX all Chesapeake in property extensive confident our Regarding identified opportunities asset we value underwriting. across

of can of of an $XX spite stated exists in that opportunity from we RevPAR portfolio we a ability savings, group our proven million different look generate G&A Our million EBITDA conviction incremental environment. that gives remix to the and of drive operations of revenues, incremental in the inclusive mix with $XX XXXX, lens believe simply up, growth us demand, legacy the at low

we Turning times. our $XXX to of non-core the portfolio. six to reduce currently gross at XX million recycling sale for expected earmarked have Accordingly, total leverage approximately multiples approximately contract for which to north hotels non-core capital hotels sell improve of $XXX efforts, overall we proceeds is quality continuing our million remain on laser-focused of of under and

Ace include: the Los Angeles. the Sao Hilton, hotels Hotel, Dublin; the Conrad, Paulo; Those

In Park aggregate addition we hotel with approximately million higher. two expected be non-core or hotels marketing Chesapeake are legacy and $XXX actively to a proceeds

stock very material And NAVs any stock Overall, to evaluate private excess especially street continue pricing. witnessed discount sales Demand we proceeds at time additional with if and versus over to non-core market hotels the have valuations. is in for we a pullback potentially continues used trade strong. these buybacks asset if very for little

on results will for recap performance. I that I let's investors provide days owned the just we assets commentary the high-level operating remind also legacy our XX quarter. Park third portfolio during Chesapeake's quarter. in QX the for some Now the

we are our Chesapeake We have with this been laser-focused portfolio the quarter. on our pleased outperformance relative and legacy throughout transaction

global to slowed mired concerns proved second was the and expected while growth than since trade we the and ongoing quarter, business U.S. which as investment challenging slow war confidence business impacted had in more decision-making. be dramatically by negatively backdrop economic geopolitical The

quarter. X.X% Park's headwinds, positioned legacy growth was the X.X%, the comparable RevPAR with for during our increasing Park despite well total RevPAR But portfolio portfolio while topped

in our today's portfolio points coupled across no share feat basis we driven XXX Smith small Travel economic we solid Orleans. the climate. markets by choppy outperformed group points XXX by were XX both performance basis in Overall by and and Results grew with top New strong contribution Hawaii

also margins are Comparable low the growth. success catering points ability continued of environment. margin ancillary and in in aided group-related adjusted and hotel our particularly food and focusing XX We which to on high-margin to EBITDA in XX.X% XX.X% revenues by Food up strong this topped driven RevPAR revenues quarter basis high-labor cost increased revenues. grow proud by the beverage were quarter, and banquet beverage XX% revenues our during

with Chicago, generating and the Francisco, San revenues by the for double-digit at York, increases Orleans, Waikoloa equally XX.X% Looking increased in quarter, quarter. revenues at corporate New least business mix all our fueled group for convention-related of demand and group New

Hawaii In our with pleased said revenues which to terms declining leisure several core of demand. quarter legacy our That million X.X% transient performance for than continues or with particularly transient transients, in generate solid in $XX.X markets across demand the of was overall we are portfolio. expected weaker Park's

quarter performance, by third in weaker Chesapeake's demand well X.X% declined transient San as and as on softer driven fundamentals Francisco RevPAR San Miami Briefly Diego. in

while group such Francisco a our Chicago, group in Florida top includes Despite fourth another group group taking X%. Chesapeake very moderates to have will full bit pace pace quarter and pace. both X.X% Boston both in Looking will San to softer as with group double-digit approximately and strong markets which performance year pace increases up now Orleans XX% quarter New forward,

Florida projected pace the For we San pace flat, portfolio. Boston, XXXX, benefit generated generating next although Keys, York, overall Denver. however group convention-related offset the by from in year-over-year New core is declines Miami, double-digit Diego, XX% This business. to currently is Francisco include gains stand by Chesapeake's group Markets San year and

If exclude at XXX this San X.X% time. basis group Francisco, you the to combined for by were XXXX pace increase to would portfolio points

island. to following to with Hawaii demand flights is comps RevPAR recovered our the Island a main Hawaii benefited expected multi-week year's from during which favorable Kona at direct nearly XXXX. Big our continues early than portfolio. XX% bright group and a easier markets. more volcanic coupled Southwest new on Hilton to increase Waikoloa begin core was the outlook the quarter as Turning year-over-year for buyout the with a for in The expansion Airlines to as posted standout property last appears have near-resort to was Village spot The in activity

our hotel driven transient Over quarterly with August occupancy over of solid including RevPAR healthy of strongest with on a Hawaiian Waikiki, by X.X%, quarter had XX% achieving its a in posting Hilton hotel Village demand record. the

Moving on markets. to of other some our

a transient by softness. Francisco was strong greater XXX York assets our quarter quarter Street strong to legacy and our Francisco basis Market group Due Third San outperformed both two although expected Francisco the base markets San both San tracked New Park than group points. witnessed for

decline by declined Reach the Times West XXX hotels, Midtown our of Bonnet of Florida, although, outperformed anticipated Key by at The rooms RevPAR conversion the portfolio X% displacement In Hilton Midtown York our basis due also was across to New much this Creek. renovation West Square at Hilton six points. and track our the renovation

on calls, opening of expected hotel the Xst. the with date closed we as Xst brand with As December Reach prior is underway full renovation a noted and conversion an at August beginning

RevPAR the a the the Creek, had impact quarter performance Bonnet property. At for renovation rooms' XXX during Hilton basis point at on the

from XX If to for Florida growth to Park's basis third be back higher you overall were points quarter renovation results, displacement would out RevPAR the the comparable X.X%.

impact Key the West Dorian Hurricane $X.X approximately for with and negatively the million of approximately basis on also total which by Orlando XX drag impacted points quarter. a RevPAR was portfolio negative comparable Florida for a both or placed

from our results expected key RevPAR for and includes the strong the for Hawaii, acquired San we Orlando, with the to Francisco, including outlook Denver Chesapeake, Turning quarter north of markets XX aggregate. several X% fourth now these which hotels of growth we continue of of to our expect in in year markets out the remainder

,will flat will New the New basis, three experience and markets to we Offsetting weakness to Chicago, however RevPAR during be expect are be Orleans declines side on quarter. On approximately transient combined these the York a business weigh gains, RevPAR forecasted fourth year-over-year. which City, which QX continued on

includes by the full midpoint to X% basis on updated which to Chesapeake are lowering drag for only, point the guidance guidance. our X% XXX points basis will accounting on a additional our range fourth for performance. quarter Chesapeake with details at we XX provide RevPAR XXXX Sean On year

firmly I Chesapeake management that the call aggressive Sean, that to to and meaningful expected results believe initiatives to continue the within our about creation asset the value to the will portfolio are long-term. want turning reemphasize confident drive over Before help over we

reduced to which a year, and platform point positions industry, As Park's superior for of internal of headwinds, growth. create remains team markets executing next Chesapeake high-quality impact lodging external may growth improved we relative the overall hotels Park. on advantage our exposure to our Despite secondary focused which look company strategies the for

turn With that, now to Sean. the will over I call

Thank Tom. you,

we reported $XXX million Adjusted hotel $XXX quarter, FFO third Looking million. share. diluted at the total revenue $XXX our EBITDA of per results million for was and adjusted of $X.XX or

a Turning exclude to core comparable quarter or produced X.X% our of of the increase operating which Chesapeake, $XXX an of RevPAR compared XXXX. to metrics the third portfolio

rate the topline These for million year-over-year. X.X% comparable our quarter while trends occupancy our of adjusted resulted Our flat average was for EBITDA $XXX $XXX up at portfolio. hotel was XX.X%, daily in

was prior which the over While EBITDA our margin improvement XX comparable is XX.X%, hotel a year. adjusted basis point

In full remain Tom addition expected for year expense XX% earlier, were to a the discussed negatively the insurance impacted quarter premiums, third X%. in is although increase choppiness results overall by XXXX around to growth

continue respect indicative to pressures growth including resort ancillary and and property tax expense wage industry-wide drive out-of-room income control ability to our upper we With insurance growth and Further rising mid fees performance, to revenues. parking single-digit in despite costs. to of

noted, Tom as food While by revenues quarter. this increased XX% and beverage

on share to are new XXXX to at we given include closed the to a seeing slightly several $XXX while XXth. and midpoint share per $X.XX weakness Further per guidance our of million year to new on of $X.XX which range FFO across are we million guidance some our earnings increasing Accordingly, our core the of $XXX September moderate adjusted range $XX million Chesapeake EBITDA guidance, adjusting our we're by full the acquisition markets.

a the at Additionally, our basis guidance we points Chesapeake's overall. point trends points, negative range XX drag XX margin by reducing basis on new margins year comp primarily to to demand for by of a than while midpoint expected XX negative accounts weaker are full basis QX XX driven inclusion

a for discussed X.X of debt at Turning four our healthy low leverage range very factoring XX-month ratio times. achieving while forma We sales Tom coverage ratio in third net anticipate by ended reduction target debt also a from We the mid-XXXX when earlier. stemming asset planned times adjusted to charge net the pro EBITDA with our the balance quarter to times, fixed trailing X.X sheet. is

With the paid dividend, cash our share. October dividend respect $X.XX to third on quarter of XXth we per

$X.XX dividend $X.XX share currently approval, inclusive range quarter yield. a to $X.XX subject than top greater $X.XX and between of fourth off we per remains between the expect a Board to to translates which X% component and our dividend While per of share,

Despite our intent protect our of the returning dividend above-average yield, record it track capital to continue is the to and shareholders.

years, the last of three industry. highest $X.X returned in of repurchases, the the Park Over capital over form stock dividends and the billion in has

question prepared up operator, to like question our this their of asking point participants may open follow-up. one the remarks. At concludes the time, Operator have and response That questions. we'd In to we're to please. to one interest all we limit first

you. Thank

your with the question-and-answer of session. be Humphrey. Gregory conducting now line Instructions] will a comes We with question SunTrust Robinson proceed [Operator from Please Miller question. first Our

morning. much. very you Thank Good

Good morning, you? How Greg. are

line on for Scholes. fine. I’m Tom, Patrick I'm

revenue is which commendable question can historically very high our in strategy. respects. view high management on in First be Chesapeake question occupancies, level had many a

your push profit growth. shift could be occupancy then to but to some there However, you be overall therefore opportunities rated able perhaps an drive both end with loss, and higher RevPAR customer from may mix to some

assumptions and especially that revenue this you today's in low do are reasonable, these growth assuming material view how RevPAR opportunity So incremental environment?

Seattle we management in now Greg initiatives the and all about Chesapeake great the mix. And a Baltimore, and the and were beginning a after up, we our if operational should prepared the remarks about you going see basis great from D.C., great grouping we question, about High Boston, -- from And think studied It's also to And team again Miami. talked the coming intently. renovation growth. on Checkers Tanenbaum step the and assets that Diego, announced in think back we fundamental the Diego, asset tailwind one particularly and categories one San the those we're There's Hotel, points Emission incremental talked my favorable remixing convention Indigo certainly are We're team operators. Bay. with met budgeting of of very have that there XX Chicago, about Hilton and There's Denver that San deal, process. we there tenets calendar Rob

revenue strategy. sort management In of, addition,

to underwriting. So this a all of question, that want isolate and that out of thought also into on process your -- in there's and while point to lot I our want I work

remixing achieve So that we're underwriting that. and upside, a the component we've that is reaffirmed mix confident of the can we of which

want you incrementally anything that? to Rob add to

able -- October. over and Greg growing looking the XX%. while occupancy hotel our hotels rate one Sure. reducing past X%, of were this we we XX% this And at we grow share bought were over early of week, to by in

there's hotel an This week So believe but one to the we working what in it's we teams, available just partnership us. only of again see with our example in opportunities portfolio. throughout is

in follow-up in are is asking demand the various of question. California impact guidance? the seeing the Great. And Is from if -- your Thanks any very a quick questions you a from any number of there any all investors buyers. for this reflected much that just hotels? We've in so there color. impact about is And got markets

The had minimal. was I for picked about incremental but It's it's away. Sonoma think certainly some XX No. miles portfolio. We not demand up our significant Doubletree

very much. Thanks great. Okay,

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

Hi, everyone. good morning,

Hi, Anthony.

Hi.

your transient given initiatives about mix or that just flat appropriate growth an mentioned is imply environment, next kind of on some next assumption? you remixing result flat question group potential more overall your like a in that kind RevPAR the for of to of the Just year of growth weaker XXXX, pace does was what year

great question Anthony. a it's No,

now both a and high would the of bolt-on. I X% guidance I on certainly X% land right Hilton behind to incremental given would I provided of as that end Marriott the that would think obviously we with probably the say expect rhetoric wherever that part that I range of think kind be X% Chesapeake expect Park the or X% we reality the growth that to range. higher

given As fact of obviously the there's renovation there natural commission a benefit initiatives tailwind also on footprints, also assets. given mentioned that there's a their of I are number series a the

I So X% seems reasonable. that think X% asking to range today,

not As we numbers. those into too read think about group, I much would

I'd lot recycling phase internal think strategies both back we it that cycle. is had the to all-weather listeners projects whatever our of an we really logic growth in success like margins step a are for improving capital will we've remind of and work where and ROI up grouping and strategy

think we don't relatively we're are cycle. verge think the peers. to cycle. recession as that to on on in look we view well data XXXX prepared So at of the think cautiously obviously point we based outperform late don't We interpreted of we're is Park that end a still our we optimistic We and this as a our in are

company around Do Got due mitigate it. incrementally gotten the you what issues nation worse agree those Thanks. challenges? Francisco, that? And environment maybe homeless a can that technology San If to market? to average. than issues seeing be could the demand in an weakness transient of as in have do It more some you more And starting transient and worse that. press summer bit you're that with the in seems indeed to

York. probably at north have of actually you New don't both know base back think up obviously of were this Yeah, group we Francisco, that the quarter think that X% all if Francisco us is would San X.X. San our given we and and guess ended thinking that best about thinking the in entered and I really going ended this expect say be for city-wides. that be million quarter we where inside in you demand of step terms if third about up in of sort obviously the We would $X.X at ended year point. it And I actual we to about

in slight a on see did falloff York. We group side more the New

careful. thought Business only candidly, as cautious San clearly New confidence I has involves, issue an we'd And the about urban minus side. but think more been and bigger more it be was but transient there a impact And markets really probably to think sell XX% around is certainly softened. Francisco, down on key York here well. another I in it as not being we businesses investment falloff or a it's plus business XX%

on growth San have bullish Absolutely. still good that long-term working to the San Francisco are we're lodging we in it in aware a it. faith City-wides the for Francisco of We business to address we certainly entry, we on that in there particularly region conventions So side. grow part the huge to among markets? to want job leaders that market other we continue growth, and think the are the working plans that it's economic there the in. that understand other we barriers some leaders presence there, and city. of that Francisco, on and know and huge invest that with a in Are and social know believe they San And challenges in are that they're

Thank you. Great.

question Our the with Hightower next Evercore Rich with ISI. proceed your of question. comes line from Please

morning guys. Hey, good

morning. Good

Good Morning, Tom.

dividend want on to policy of go through So some the back some there. just I and the maybe mechanics think try the to of to comments

free the into sales the against of spin-out And higher know pretty got kind get And some Hilton. that maintaining thinking I'm where average ratio. ratio is cash the capital equation. has from just of the high you've relative to asset then you in flow. Chesapeake allocation of at vestige, So buybacks relatively but obviously, up run Park I assets and to payout trying the about enter going square historically, idea that? than basis historically But a a to reset this payout a

parts So in of that for even policy just moving that investors trying of stability all think dividend goal to really Park? terms through whether in and a to of dividend the those of terms matters the is

There's a issues Rich. lot of there sub

of on things. Let me couple a focus

already day in said integrating end the marketing another prepared the two one as remarks you At is I As of we're of sold number the those we've know priority three. portfolio. assets -- were our Chesapeake

the XX So core end at of with end the about we day up assets.

is bolt-on us to assignment This assets. able to obviously XX eliminating not those a We're the be G&A. for difficult

very out So confident we team Rob already in the are front. and feel

naysayers balance I complicated. to very Next in is and to international the sold Dublin two we complicated that assets we've remind get already great a in U.K. sell. we have when those -- XX shore which listeners joint very progress. that an Brazil. are sheet assets there again several Amsterdam of didn't sell who the Africa, Germany, in of could were non-core the the in venture think assets: making also were were contract to XX that up asset South These we now a XX lot

and So everything we we've do. we do said continued would to execute that

So as get assets, Those and I Chesapeake, leverage. the sell again are the Sean four both prepared we that remarks down confident priorities non-core that to integrate reduce we're our in can said times.

NAV the the that part driven dividend in that you that we're capital look a at will is huge given in there where slightly dividend. bit Part that protect the payout prudent trading. discount know today discounts and yield We of looking at cash, is think it's We high by a then excess is trading. terms as if allocation we're particularly that opportunistically, of

us us the by that bolting basis. gives to allowed on. obviously optionality increase Chesapeake And

something we have manage. So that think But important healthy return for a Park tenet of we an and capital we more do there. including as flexibility dividend

confident has dividend. we've based Now certainly XXXX, we're little we if on performed be But able maintain that address we should that come based outlook how that a our in that. to will to on for

And gears a Okay. That's helpful, Tom. for switching maybe second.

And brand? for portfolio. is what take on just in do to Marriott trying Chesapeake the of that your terms with Ws three I'm inheriting are guys you So curious revamping

we've discussions, Marriott. And with question early great a had discussions It's Rich.

that that $XXX continue buying I brand. million think saying publicly north and Union then paying Marriott want biggest of they signals for reinvigorate that to Square and the to asset

internationally. and doing We certainly a -- vision their in that. if they're will. I committed It of are I to well relaunch about with need what you plan Ws incredibly a meet excited the know three and refresh know and we them that have. to that is learn W it's is

see again incremental this it's that portfolio. You for upside

matured. refresh But would is of particularly The add that W order. brand. about opportunities. also at I out I are in it's you little Ws And committed XX-year-old there think think in I'm in I also a also a that the we have us. that confident of when Marriott bit is they're front It's think near-term team Chicago have underperformed.

that the opportunities an in even new opportunity new see was W plan certainly We that we for before performance. vision upgrade the improved the the for implemented, here have near-term

Okay. Great. Thanks.

Our next Please with the from of David comes with question. Katz Jefferies. question your proceed line

asset wanted I to everyone. morning, of remarks asset Tom, where aggressive but your back are? put adjectives talked kinds around And you drive kinds go you're side? assertive about good levers some strategies to on to asset it of I management love management. value detail or you strategies opening reference thinking those made what what want of about the around to more management some I'd don't here. Hi, pulling to

phase the of we on internal projects, demonstrated up. cycle our grouping a give view Rob strategies and recycling lodging this more at strategies That listeners. passionately, this any for again capital can and the improving look, made and that think is earlier me will I David overall ROI little believe we give margins that. But that comment and important an growth then let These reinforce granular. I work of you again is and have you that are

bolt-on first We very a number could there Hilton of of respun converting to a There were we to Barbara sold projects efficiently that going sell didn't DoubleTree. we do naysayers, the them as attractive lot at a pricing. When sold them, Hilton We're believe were Santa underway Chesapeake. of that a out ROI non-core our continue we are lot that assets. through who in from

We've December lift going We're -- another that. We've XX upside think expect less said get to the hard reopen we here be And days closed than excuse Xst me will getting and and days. we're lift XX Reach, achieve from there. we're which a that. tremendous we in to working

year $XX.X margin the I XX two. year in million margins incremental front out the box the On there, we of and improved first basis think points

another We margin. picked up of basis incremental XX

fact the were that the that So about and success has been made We our and to things we're able moving the benefit using we're with These our are of few grouping passionate the think real playbook and the also to last to concentrated years. these we up. that that our strength we performance were move Chesapeake. over needle that same that going decisions continue up

end and assets XX two done execution Chesapeake not the two up with selling the focuses because day sold end the of three. -- we'll This Park At we're difficult team another we've is delivers sold like be to if and the going a we've in past.

flavor of side Rob you a of In that. little terms of the will some of the on bit revenue give more granular

hotel very terms about drive give be we rate, one really the guest. can XX that at types there's available on occupancy's rooms recategorized. David to higher-rated premium to specific spoke burden reducing hotel team allows But incremental us the reduces Tom room the revenues found with to as of offering a -- examples, some in drive us you

At another further hotel be check-in that we monetized given that have operation And Resort customer of forward fit small go opportunity this there's really the the us changes point. – of specific flow-through to can think in needs. have time at Reach a me, believe here. rooms hours the as not really upselling the throughout we tower even We been increase plans at gives types in of realized to our we excuse

that But have what we pricing, properties enhancing our and the coming very paid forward. hotel. retail. We're each individual There's maximizing increasing what our looking these parking, that altering opportunities partnership at we're with really has so is about been far within going received well menus, so menu our excited we many we're found for

either Thank or holes you After for be And opportunities a about from trying that to as may the we at see portfolio what perspective is portfolio perspective? Would the are or in follow-up. might that. are if it "set" today my fill there you sales scale I the or change geography it think non-core right? as brand And point? done

way. the Chesapeake got portfolio It's you this XX bolting question. we've answer I'd great on now think it When about assets.

we Our about XX% include XX top the for EBITDA, XX to will assets joint ventures also will joint will account XX% XX account down ventures Dublin. XX that sale about top that for of that after will our be of complete

that about My is as ends. said, we talk strategies never capital point that David I these recycling

non-core we will assets continue sell and shrink be assets huge there'll that don't those in think we want core that to to to hold. be So work to markets we'll really any I missing. gaps footprint the

continue to believers, in of as grow. player the look assets and We look family will scale. opportunistically a Hilton brands, to Hyatt. both think as continue formidable Marriott well to they're we and obviously, We for We're of will very strong

won't pressing We something ourselves an the before. itself that our it. were were to did we Chesapeake portfolio attracted. continue for stripes seem the very execute, The to us we bolt-on have this, and We get need to credit market prove we for but present unless doesn't like to want and M&A integrate give earn today,

off accept we Now our working it got to and challenge earn and tails we'll we've be that to deliver.

Thanks much. We very concur.

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

Thanks. Hi.

morning. Good

wanted just on outlook year. I morning. Good your to ask the for

what Park in the about we the contribution quarter? can Chesapeake you expectations fourth So, the from be expected your quarter to what are a is little fourth implications. for the Could talk versus portfolio obviously, back into bit legacy

it's of Sean. much I talked This bit little flattish be about pretty zero. We Smedes. mean, may kind release kind kind better. quarter, a is in And of overall, Park a combined. for legacy It Sure, really, of our

pin put a around only less of X%. down probably number Again, kind it's contributed of about to kind portfolio. and than of want a you a Chesapeake's little If XX% the

end rounding a combined in on it's So just quarter a just the it's of kind sense. RevPAR portfolio the error really and for flash the

XX of minus Chesapeake, of we transient look So, the up is everything said. is think Smedes, X.XX%. I agree What quarter with that group as fourth about days down we've But probably we're a you out. combining if Sean side on X% plus seeing sort points. about couple other or got

of Those still we're in the to in Chicago, strong, And growth because we and up big Francisco that going a San New coming group York. we're are a the again, see San lot that on have -- obviously Francisco, XX%. side softer;

reason see now. softening continue flat think Hence for the that said we about transient, the fourth quarter. we that we it's As right to

just Okay. total? And ballpark mentioned I then, asset would while sales with wanted you those be have to ask, the of do sales, of much EBITDA $XXX you how in kind million about associated of

$XX Yes. It's $XX approximately million to million.

$XX to million. million $XX

in guess, of And some is guidance? Okay. updated I that already your

in of assets all an in. including all or XX at are guidance own our No, this we interest the Yes. that we time

month $X So going that we should is be to that only this Dublin likely will adjust The quarter plus incremental million that's close million minus. one to the and $X.X asset are the completed. any extent sales for or fourth

it's So significant. not

All right. a Thanks Thanks. lot.

Our with next of Crow with question. line question comes Bill Please proceed James. Raymond from the your

Hey, Bill.

to do than X% and better appreciate for focus next What I X% do gave growth Good from the the you Can morning, expense the see embrace Tom. year? X% on side? you all kind of like top you next year. line We to

I great watching macro the question now, transient directionally to unfolds, and don't want And I how we held sit I of we'll where fourth quarter on reasonable. to right be X%, look, -- That's don't based signals X% think Bill. on the to a see seems all want particularly the We'll to side. be the certainly

with team, large conjunction our and our finance I Hilton asset want and management also to team, others. team in partners, congratulate our our working

I think, think RevPAR low impressive. at is given I this X%, keeping the expense growth environment,

to our to going are continue tails to able to continue maintain off to be that. We work

I'll you that able that's inside Perhaps, environment. but if X% in good can standpoint. RevPAR pretty margin, we to you margin we this achieve to on Can tell of X.X% darn When -- a minus come plus the on be or that? breakeven the historically of

Yes.

majority side, lot want overtax owners. of of a as there's These going those I up the vast don't then portfolio, insurance of know taxes sort on pressure municipalities to a wildcard. who Clearly, continue were see were be that to you we've the and And continue to sort but the property set of labor renegotiated commercial through away. contracts property

is on year transient deterioration Francisco, but horse just you appreciate a I pace down dead the San that. on follow-up If beating sharply for here, the side. I but next Yes. group that talked indicated in also about could pretty you

you overall, from do market maybe negative differently see market, as than portfolio So your the next a or year perspective, positioned that just RevPAR more exposure?

Yes. X.X San think million, Bill, approximately don't I X.X a was minus. I earlier. although as is think see nights be as the at I we negative strong a million from said going that don't all. still or million Francisco you're to the realized, plus Look, market. Certainly, looking still that down room

be where I pretty not in up is would digits single San year. probably is We we're as end I X% end low year see But this X% year, we strong certainly where to to mean, going as will strong. the which we're Francisco. Probably next -- --

me. you. Great. That’s for Thank it

Capital from next question. Our Please proceed your One Neil Malkin line the of with question with comes Securities.

Good Hey. morning, guys.

morning, Good Neil.

lot a Francisco, quarter a exposure Your Hawaii, significantly a swing of or how three a biggest San ways of lot markets, in Orlando, there year can and goes.

I could you into just, we know, level of wondering as what three markets how detail, maybe those if head you're of but So about don't year, next kind give I thinking Orlando, of any of some again, the a renovations Boeing it's be kind would of of on NOI. large given your because issues just that some just, help was the percentage great such in

Yes.

again at is talk First, Waikoloa an Village mean, indication. I Hawaii, think about running Hilton if quarter occupancy. we I XX% last

markets lot East If Hawaii. various you is a and the Bay on Coast Southwest, in Area reallocating think to and the their focus Southwest equipment moving of from largely about

we be you and that's to well to demand, as Waikoloa, expect the think grow that will that. rooms, only that. to balance incremental benefit the know, as of we positioned And back given going XXX-plus continue from you about are

up $XXX end with we'll So million.

I think the there EBITDA EBITDA, million. I Sean is approximately me, the $XX think can correct but impact

Yes. XX.

have the in not will Yes. had will to this But, be the -- look, expect we we at me next there. Hawaii, don't kind a Obviously, of longer Waikoloa. no also That well year. buyout, correctly multi-week about are -- we our not that are excited comp will hotel opportunities If buyout hotel year serves we growth love there. position there, positioned memory

So be it won't standpoint. that from impacting

They're up Francisco we're there. position close on end making I And that a love Chesapeake approaching about remain our Orlando, in with bolting looking direction. XXXX to We'll big in growing now bet bullish. visitation at $XX San there. rooms. And million and

we to we're We're Waldorf, Signia. to the XX,XXX over course, foot years. incremental to the And be Creek, two there then square upgrading adding think expanding and be there, both we'll be Bonnet meeting Hilton space world-class. at that of next going the is ballroom well as going the

San San that's Florida, our if those So of markets, you that's are West. about lot of EBITDA a -- think L.A., Orlando, Key Coast but Hawaii, Miami and then XX% West about there the Francisco, and Diego, including

one benefits that So operator geographic we again, Chesapeake get brand both footprint, our exposure. the diversification, the the lessens it bolt-on of is of and -- of but

from go from about Hawaii we down to XX%. So XX%

transaction another the the again, the platform. for sense of long-term So, reason why this and Park makes intermediate

Last one that. Appreciate for me.

next the that think companies positive, could business been election and and rhetoric the what tariff you still it's an actually what Just see trade year, has given about traveler look fact election? weak incrementally given that environment the business, wait to year continue just for demand things maybe do that recent post like remain the

you'll the coastal higher demand about elevated you're guidance. you also, end the considering what Hilton comment impact guess could supply? I gives you have larger and travel the most on then And and you where RevPAR Marriott from markets be confidence that international in

there's questions there. number embedded a Well, of

to both Let me address international. try

flat. think about million down think international minus inbound, you If or $XX I about plus it's going to remain X%

the next million. now growth north plus forecasting or of years If taking to compound up minus $XX growth you we're of possibly recent annual the about X.X% some five that look at rate reports, increase this at rate for

portfolio, you look at about X.X%. are international If our down

if inbound war that reducing standpoint international uncertainty, trade address. So, and think we that the will from that helps that an subsides issue and

of I the urban part seeing think for issue XX both in markets the what markets. top we're

start that remove improving can see women that anything positive, So, to in we be to and invest and business as getting confidence it. men uncertainty, leaders a done net to

I fixed The biggest us. and around room two demand negative think have spending. see catalyst spending, really that quarters. be see can that it's for And a been non-residential concern between the can we positive turn, business in that improve, if investment high really we I last If will correlation is investment that

far our again Smith than far better you has most X.X%. than of So Park back quarter even better and the this why comment to certainly is though of outperformed it's legacy Park? Well, at peers When Travel. look

this in across bolt-on Chesapeake initiatives for as the benefit that's renew our walked year we I Rob some and of When incremental through, we XXXX and number as earlier that new basis are at of incremental Part of that year now in up got year. owner assets We've confident end calendar. move We portfolio. that said XX call, we're Chesapeake, the lot a favorable that renos the a they entire is in the is the on renovation points of forward. think convention that as that this a sets a us X%

you. Thank

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

Hi, Chris.

morning, Tom. Good Hey.

for you do been some front year kind mean there could guidance some next which level initiate margin this question to little how hoping Chesapeake have has transition potential disruption what initiatives of you bit a XXXX? the in disruption of as was there portfolio. be have I any your pushback from very customers. margin is never uplift And associated contemplated kind in margin to And dive you is know the you -- I margin of conviction So implement I of know of that into on these recent? the on -- the which right -- or with any is uplift year begin there kind

of reaffirmed. I underwriting G&A bolting million listeners, deal have We as of we conviction soon XX million. those have to $XX $XX Obviously, Chesapeake. a our XX by assets on that, be elimination incremental of from which the great remind the is

of degree standpoint. we have So, confidence high that from a

We underway forward. Again, also tailwind a XXXX. from a don't of the portfolio. as anticipate in disruption move as we had renovations They Chesapeake of we in that see a lot renovations number

decisions. there the in course, that going be are pluses be to I execute. We'll strongly of in, that continue dig to We'll companies, are and say continue and make any we team the to we'll confident. management some we We're underwriting know minuses. can't have evaluate But and thoughtful. confident Rob enough. prudent we As to

we to stripes, in to we're got have that hard challenge accept and to and that demonstrate earn working deliver. We've our quarters. We coming the

then been Okay. for W And the at considered time not a Lakes couple the those or Miami, pivot another update just maybe an there just thought too I over of to maybe always that alternative long were Hotel I option that in Chesapeake your hotels. thoughts Fair for both then, ago on of on assets, enough. know ahead wanted at had Chesapeake Tribute was And branding think one -- use. there's

will that the of Again, so that of up, in terms grouping earlier are large the don't the down quarter. in improving a I margins third think we was I'll those referring on comment back lodging sure is to initiatives W, we to we'll capital look right phase you're W. if that playbook opportunities operational recycling cycle part disagree more at make and alternative and XX% of that. are strategies and my focuses any uses. think That we ROI But there use now we assess The upon,

and improve beyond. We beach. estate bull's confident are a think eye performance that We head XXXX into real mid that we we can it's as

that. to about ship talk could and working hard do we to the right we're we today the branding, be Before need

very Okay, Tom. Thanks, good.

with Our next question Robin comes question. from Farley Please the of proceed UBS. line your with

and just assets the mix? forward? how see does And you guess of is what's on group I for upside Chesapeake portfolio I This combined Chesapeake portfolio Robin. with mix going for your now? kind Jake from focus to on And do to continued ask that compare group the the grouping what wanted right combined up,

And XX% We've set basis Park approximately. combined Sean XX% XXX The that in Yeah. goal at to to about XXX group. a about points. is a will to grab Chesapeake second. XX% is move

bolt-on weighted the So portfolio as probably average entire in the which Chesapeake. those group across XX%, we XX% two, the is of

business parse transient? That's And can kind weakness, leisure and that helpful. of far the between as you transient as then out

comparable, the side look down X.X%. And at on Well, were if down the were leisure third and you quarter, obviously down having business one X.X% those X.X%. we

that in say now transient X%, seeing in fourth the what think we towards right now I'd we're the weighted more business As quarter.

Thank Great. you.

closing the our call turn to back like session. to for concludes I'd management comments. This Q&A

travels. really opportunity NAREIT We and seeing to appreciate look at forward to visit you you and today, the safe many of next with week out

and for gentlemen, teleconference. this you today's conclude Thank Ladies does your participation.

disconnect You a wonderful day. may this time, and your lines at have