Park Hotels & Resorts (PK) 1 May 242024 Q1 Earnings call transcript

Greetings, and welcome to Park Hotels and Resorts Inc.

First Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Ian Weissman, Senior VP, Corporate Strategy. Mr. you, Thank begin. may Weissman, you

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

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

in from differ SEC, statements statements. As obligated cause refer XX-Q with and expressed and are from filed to those results those our from actual reports are materially cause could to with the outcomes the those uncertainties and differ performance, the Park or XX-K future not could forward-looking and in Form expressed which Actual forward-looking to risks statements. differ identify that recent Please by in filings revise publicly most on to future contained subject the described statements. may these numerous results important SEC, risk these update forward-looking to the specifically we that documents results factors

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

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

Additionally, basis. on operating unless otherwise results hotel stated, presented a comparable all will be

sheet. our year Park's balance on Dell'Orto, Tom QX and morning, Sean results, performance quarter first an and color guidance of Financial will Baltimore, XXXX on and update update provide review outlook. additional This our on quarter a Chairman Officer, and Officer, Executive full our provide first you our will Chief Chief

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

the like to call to that, over With would Tom. turn I

welcome, Ian, you, everyone. and Thank

a American, Park wisdom know a like I since remember all family, January Lieberman Senator I Park and will Before the condolences to of Board acknowledge the missed I Lieberman, great Joe my team XXXX. integrity entire member to convey a moment his we dear and begin, and was to Board the Board friend. who heartfelt served wonderful wish on greatly and and that I speak to be I when Lieberman would management Senator a for us. former take say by

to on groundwork portfolio report XXXX performance to West, in Orlando demand returns prudent laser-focused with made across marked all trends I quarter Key bolstered Hawaii, by over past and We strategic in am in outstanding incredibly across another investments other successful addition on invested the as pleased segments, by our the we've our for made achieving outperformance and few beyond. highest the providing decisions pipeline years. our capital the remain ROI improved

value invested embedded last strategic nearly in we significant million additional seek investments $XXX are to portfolio. within $XXX we unlock $XXX our year, capital the to this of million as an year targeting Having

excited And last million about returns on our XXXX, we believe and focused Through the hotels improved the we continue in $XXX year metrics to last able are balance sheet capital Park. exit efforts, our potential Hilton for We and return decision the momentum portfolio shareholders meaningfully operating the we also narrative to shareholders. X changed were year. of our made San growth in we these to for as Francisco and maximizing

the range QX reported tough upscale over in end high quarter XX comparison by Turning Travel's our Smith performance upper also given the increased first RevPAR quarter X.X%, XXXX of to points. first is basis results. an basis and was XXXX. exceptionally above nearly growing RevPAR year-over-year with performance XXX guidance points sector-leading which strong exceeded XX% This a QX

of our RevPAR portfolios airport growth suburban reporting quarter, hotels reported increase aggregate with X% portfolio, urban resort X.X%. each broad-based our an in markets and also while RevPAR driven of potential experienced and the portfolio We our the the resorts. strength during across and These key across calendars, travel and our our particularly ongoing trends upside strong by our over business convention urban in demand group results resiliency positive highlight continued

of beyond. XX%. first driver quarter demand key This while in year-over-year expectations and an Park for by a in over remains by revenue elevated room catering by XXXX grew the to million, banquet evident and which growth was in as increased rates revenues demand as exceeded the $XXX our drove Group XX% increase group X%

to New As activity for from and benefiting of and year, healthy nearly year including remain in up over March resorts, time demand expected pace our revenue strong Bonnet as in-house the activity in complex full look very Chicago New we and with balance the York, group XXXX, last same strong XX XX% Orleans expected Orlando. the citywide convention is Creek of to booking group compared

the and gains Orlando In active New primarily during for in nights XXXX year approximately concentrated with incremental the very remain accounting also picking York, for the $XX Hawaii. for portfolio year, of million bookings room XXX,XXX revenues with up quarter, the

Turning to core several our of markets.

XX% pleased to and XX,XXX Hawaii, a Overall, year, O‘ahu resulting solid impressive XX% arrivals X%, inbound report versus led an nearly of Island. by domestic monthly strong supported Hawaiian year. with X% increased Big nearly travel and RevPAR of the to Hilton Japan. which growth are passenger We compared the achieved of increase quarter to airlift last year-to-date inbound Village to another steady the airlift recovery in way nearly in February from in growth by exceptional Japan previous RevPAR

ongoing by XX%, the are airlift we lags by still Japanese While very encouraged improvement. XXXX

quarter, the history. Group quarter bookings the daily highest hotel's book rate in increased marking first rate the daily nearly XX-year driving to XX%, $XXX, which to -- average push nearly the to by group average occupancy first during helped XX% while

over XXX we yielded quarter quarter, the while basis by an higher performance RevPAR to XX% Marina strong points impressive in in by quarter. increased over leisure in to West, drove during the transformative demand by meaningfully XX% this XX% hotel group primarily made occupancy increase first Key and driven first expectations. with Casa rate, Resort our the investment exceeding At results has during the reimagine iconic exceptional

May As a a year. quarter-to-quarter quarter of last as the reminder, until comparison for was first clean not resort the renovation is closed

this opened thrilled beachside expected are bar, of the The XX to further helping prior revenues to highest at trending new and the and banquet has the up the by the with iconic with XXXX operational our Durata fully Overall, period. beverage to potential ahead been resort achieved is quarter nearly Casa resort which on QX. April beverage The revenue the of offerings record, drive underwriting. year current food of restaurant XX% food compared enhanced also projections and we end introduction for the about of have

RevPAR Bonnet includes during to the for ballroom Waldorf impressive improve quarter. At the complex a meeting the the the during Signia the completion XXXX by and over which nearly addition the Bonnet its resort increase comprehensive Creek index asset hotels the for the Orlando, Creek versus contributed in a Astoria complex, space and achieved of our revenues group renovation quarter, Signia, foot In results X% RevPAR increased following of quarter. square XX% waterside XX,XXX helping X% by expansion.

Creek we by revenue look team. month, pace over of the group our at Looking is many revenue and best-in-class to will showcase up We forward XXXX development this XX% work upcoming over where while pacing you property welcoming is Bonnet XX%. our up achieved capabilities ahead, XXXX later the tour group incredible

solid their international of to results as Shifting portfolio hotels. continue demand travel towards recovery. a delivered both We urban business and path our full

with York XXXX, the XX% recovery exemplified group first in country, of our urban nearly the quarter revenue hotels' one RevPAR stories to of be XXXX New Hilton by continues of over the exceeding levels strongest Midtown by XX%. growth

at Asia, hotel points nights basis with above significant period As potential transient XX room a below improved occupancy in occupancy points, seasonally the versus demand. upside transient coupled with a There rebound result, remains we XXX low by in while prior eventual nights expect XXXX travel XXX with XX% to during overall with sellout occupancy still improvements year continued trails quarter. the XXXX business embedded the gap close a basis from

the generate RevPAR Hilton to proactive events the with decline at Riverside Orleans, exceeding New drop solid in for helped results our set. in-house efforts group a citywide growth X% versus comp given during Hotel, drive the first significant XX% quarter In to

to RevPAR with from group in contributions XX% While production in helped XX% Chicago, an a and segments. increase our hotels increase X drive transient both across citywide in

we the improving acceleration of remain portfolio. out of against we we as the supported year demand, strategic well the the group travel optimistic of about throughout including a growth our over consumer, potential by continued backdrop year, and As execute favorable priorities, balance we resilient sustained macro positioned look inbound international U.S. growth expected to our remain deliver an a

this year. the on on As reflect earnings first the will are increasing deliver more quarter year. provide sector-leading to growth and outlook year full XXXX a for result, performance our the during better-than-expected RevPAR improved remain our track to we and details Sean guidance

a From we capital. focused remain very allocation invested perspective, capital on maximizing on returns

in potential assess X-year be a believe to value, to phased of renovation, firmly continue expect Village, part time keys renovated during the rooms year Rainbow second XXX as renovated the the with the the Tower during additional we embedded acquisitions, ROI holds Hilton we expected portfolio half seek being room projects. nearly being next rooms XX along same targeted unlock which with commence to year, to While remaining At through project. the with we of significant of half that we Hawaiian this our added

XXX-room to this Palace half year expected later of at be plan being Similar to an XX renovate disruption Both next expect renovated of with In million Phase the project. of Tower with and we renovations to of $X the of Hilton balance year HHP, as disruption. basis both anticipated XX from keys year, added this Village total, early the in part the expected date the rooms of rooms to for with Waikoloa nearly EBITDA in points begin projects only RevPAR completion August are XXXX we I. along

which rate our resort average are Tower on that by reimagined $XX following Hilton at and Village, we success premium these other year, renovation last will to rooms excited results types. room the generated impact of the the wrapped Overall, up daily a Hawaiian Tapa very have

approximately In entitlement Oceanfront tower XXX renovation core to ground-up currently on for Hotel at in projects for with a contemplated South process addition, while Hawaiian fifth Royal the making major among add rooms. development Hilton a we including comprehensive which our to ROI continue is Palm, of Beach, our evaluate project Village other significant Miami, our hotels, progress XXXX,

want for strategies long-term confident I intensely create the our that company growth shareholder remains we which team and focused executing our position value priorities, on success. capital and reemphasize allocation long-term to will are internal

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

Thanks, Tom.

QX resulting we with million, the revenue $XXX over X.X% was by hotel very the margin the occupancy were in $XXX was basis was increased impressive in million up share RevPAR quarter quarter, during Hotel year. XX% performance. adjusted quarter basis rate period XXXX. QX nearly an same points points XXX and hotel pleased higher $X.XX. our Overall, XXX for to first same FFO X.X% above per and average XX.X%, with year-over-year and adjusted $XXX the million, period was EBITDA EBITDA EBITDA of adjusted adjusted last

in West, New Key First in double-digit our quarter by key York, New ongoing drove Chicago positively results RevPAR while Hawaii including several strength were impacted stronger-than-expected and markets, results. gains Orleans

tax In by also both aided million outperformance approximately million Hawaii properties. at refunds received our margin Boston our of was addition, X grants awarded unemployment and $X of relief to $X of resorts state

margin items, hotel EBITDA XX these expanded Excluding basis still points. quarter approximately by adjusted first

sheet. balance the to Turning

Our including billion. million of debt current billion, $X.X liquidity is cash, currently is while $XXX net approximately $X.X

just basis remains strategic XX-month to sufficient Our shape maturities balance initiatives. ratio trailing debt extending with optionality execute a adjusted net focus near-term has on improved excellent Overall, a sheet to liquidity significantly to maintaining while EBITDA and in X.Xx. our on our

our quarter $X.XX of With to yield annualized of first XX. record be dividend, paid quarter respect XX, on June as dividend trading cash And X% Board dividend our July we of per April of per dividend XX share on translates recent a on second our of The $X.XX dividend paid April to based levels. an approved share. to to stockholders XX, on

for expect would into ratio the adjusted full guidance, an of top-off range quarter, in translate based XX% to dividend year, the targeted of last which per to our our end current payout XX% share on the incremental FFO we at year. of the stated we resume As

Turning to guidance.

at points while a margin X.X%, XX to versus hotel to the improved basis XX.X% adjusted XX.X% during the RevPAR As are Tom new at midpoint representing of XXXX. EBITDA our to or X% of increasing XX points forecast our by the to down XX a year-over-year basis new basis XX XXXX range $XXX given stronger-than-expected results to we to midpoint $XXX noted of quarter, points basis by first range points up growth forecast earlier,

Additionally, of approximately at stronger-than-expected new we Overall, share $XXX to the adjusted to we midpoint midpoint performance year-over-year continue and to per adjusted are to year. $X.XX million the a million range X%. growth of by while increases solid adjusted the million, the our new at EBITDA EBITDA growth per given $X.XX of by the $X.XX the AFFO increasing during $XXX a representing our of forecast range per first quarter, guidance share, FFO share expect of deliver X.X% to to balance our RevPAR portfolio growth over $XX

preliminary growth QX while is X% through between and Year-to-date RevPAR X%, April range X%. RevPAR forecast growth up over to pacing we

transient along Casa urban performance was improvement the performance solid base group coupled with XXXX, comparisons disruption April to driven impacted by impacted in and by of Marina holiday portfolio. we markets we in and which renovation year-over-year Key into are lap with May accelerate across our continued May beginning While Easter shift, June anticipating in West as leisure typical the demand Hawaii, the

our the In and the from RevPAR back which this in of at hotel XX New will tower half main during X,XXX with at disruption solid, basis where renovation our addition, time the low expected renovate Orleans Hilton be rooms looks the season October. Hawaii XXX we above operating the of includes during of through July growth to hotels, of year both points X.X%,

This concludes remarks. our prepared

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

from Floris Van of the with comes The line Dijkum first Point. question Instructions] Compass [Operator

of here flow your has to things increased, good really cash of not on report, the the the a EBITDA. back you're market. fascinating by getting, But and guidance, obviously, find but little levels reaction So here, obviously, initial I one based expectations puzzling still XXXX that EBITDA for same-property your

EBITDA the talk about upside on be in of your I latent maybe XXXX? this talk not where where surpassed occupancy talk some EBITDA potential appears I'm your actually still terms -- basis. of your to be on -- upside of appears lagging some if to in year mistaken, quarter think recapture same-property particular, Although first a XXXX you maybe Can urban assets your about the

I is lot to the but our think It's a great seeing first there, I example. hit Floris, you Yes, unpack -- head. on think quarter nail the really look, a you're and

you acceleration focus markets people in sort sometimes think I on overly we in our obviously, sort had of and both and really but as of urban broad-based Hawaii, noticed, resort well.

plus So And that in we're pre-pandemic but still XXX basis points we're below, minus I across or to accelerate. encouraged. as look believe, occupancy portfolio, incredibly continues levels, we from the

out our as of we see softest there May look I to believe, our real is X.X%. April, of concerns in I sort sort But and year. And It's about as April sort June, well. addressed We're April in some sort acceleration. obviously, that X%. But a of now. we of of that's about about really, that entire know isolated second is group are softest that some trending negative you the and to probably best month month quarter and

pace but closed, range; it clean May if and Casa, Boston, of X% to group XX% the kind about Seattle X%. a Chicago whopping above sort comp at RevPAR, We're since XX% to you a probably we're at not up D.C. was up in X% X%; in Looking looking in think XXX%. kind obviously probably June, of of And the X% X%. XX% to being to really in

portfolio. is and broadening, to it's continue it's is in think see our we your and that -- that question and in embedded the the recovery I accelerating, So acceleration certainly

we response of confident to frustrating early in the very we've out given the in think for dig very, sort look feel look good X% obviously, as in quarter, market. and But at here the XXXX. guidance A X% second see out. And I that. balance about we're to better, the understand little people once we little as So very a we are encouraged of

And I Hawaii. follow on Tom, Great. up if maybe can

if the but a -- not of talk mean, $XXX think I obviously, I Hawaii a of of X tourist that and about you to rate driving that, assumption, $XX I of EBITDA occupancy the fair But produce million million see asset. mean about there? gain run that. how annualize on that the You first EBITDA companies close demand, you that uplift do there? you had much at is Village, some Japanese That's upside you're air think some And quarter. more in

if in question, of been for near let's X great But back last record up we Floris. -- a sort have years look, performance. another second, Hawaii It's the Yes.

look to X.X% travelers to to We it Japanese X% continue, you XX% of X.X% gets of of they likely We year, if about year-to-date year, X% pre-pandemic, year. and XX% expect this this only is you it's revenue. were that if back revenue. And the Last think for look revenue. at accounted this year about probably to

upside. huge So

the have obviously that and international well. despite U.S. that but fact in increased -- part the generating we're market, we still just So in as penetration Japanese traveler is of back, markets don't other the also

are bullish Hawaii. we So on

that is to thing would it's note we additional near other The impossible supply. add

we fifth think to when huge we're and So upside working that hard you well. backdrop there, as add obviously, about a think, tower there's which very

encouraged entitlement Now but the very certainly done look not process, out. as with we're we

startling, observation is bet Hawaii properties when thank So bet and EBITDA you anywhere, but our you you're think if we to the the of more for bet. candidly, most your It's Hawaii we both comment a solid add generate than going questions and about in peers. in

the Smedes line with Next Citibank. from comes Rose question of

of the more sounds Hawaii bit that of it by terms in And I'm kind I've in you've course like look, the kind about the It because I spoken to in this kind leisure, more trends the have like might that it expectations sounds the maybe a And you're susceptible a about in leisure wondering, point? market and companies. slightly of be they're a thinking your middle-market how you work sort down lot but already the little is segment strong, sounds the larger trends of a that maybe factored but consumer. but we just through that travel, at a branded ask or like fair I'm talked a color wanted amount, a you of thinking mean, over as tick this of just tour in guess little I I just might more not, on little year? think year. expectations? are I very about keeping Or Or weaker of correct -- in property, you're of trends

would believe that were X I weddings. it this that But doubt X,XXX And nearly XXX certainly of that's think not reason comment about quarter, say, rooms. probably low so in that. about of averaging incredibly if record high-end years and Hawaiian of the no think we're direction Historically, take the we luxury, digit, we is we first I obviously of Village It's over great probably lower-end mid-single certainly is X%. for last year one and couple trending and ultra in in the last I'd as you near this One, the done appeal, we It's about has a about years of the mid-market noted, property. and is think EBITDA what of the example really north part year. continues to year. and Yes. And saw make Smedes, part a the not this balance think, Hilton well.

O‘ahu incredible of solid. took looking really to recovering, and and is an continues be but strong at the blow Maui some trends leisure are obviously, and Some

in especially focus it primary that add group your source leisure, with while citywide in specifically, has -- property your is calendar, this demand if QX. for Village, May end, great we not the in very the in and Sean. might the pace, also good XXX% And component quarter QX on year and in June. Honolulu in Smedes, on is up calendar this this the I question convention a Hawaiian in a XX% -- per mean our strong I look some but the business se for consider again, hotel of focused too, the in we've it's at strong But got market.

So the while certainly is I group well. important certainly think there different layer we as to the a we complex, leisure have in layer diversified very with -- feel that

stock contemplated? ask Massachusetts X impacts Great. positive And Were more? maybe reason things have maybe in and you we're in think out, Hawaii. with of are of guidance your with a I those sort You the course but of should kind any the and is little think the just what this struggling maybe comment, the a expecting the over wondering that, the in one And full bit I employment there I that initially other And is backing can the just I the did are embedded? quarter grant more year the have that refund year? people was of as we be like

would Smedes, February, so We reimbursement we March, did in have we the SUTA which those Massachusetts had the grants booked $X.X have that Massachusetts about guidance. our in in not but is million. the Hawaii occur -- we

So or think EBITDA, we in fee sorry, ultimately of you change $X you there, it or shift the QX. the what operational obviously in so just $X.X million shift, off think million about SUTA, includes as from but cutting the about Smedes,

Yes.

thing. just full outlook, in mean, we wouldn't if that even -- just necessarily kind because your first in -- mean quarter I on -- of I Okay. it the I I hit Massachusetts would have think known the year was

naturally think back are I people So of that out. kind

So I a kind little what's bit. just that's think going maybe on of

strong just Although, than quarter, But that that's of look, kind comment, a it's a it taking even -- more a guess, I more was than question. stuff I -- out. obviously

of with Duane line the Evercore ISI. question Pfennigwerth Next comes from

little an market, the go opportunity plans. is saw about renovation like that met, Miami your Tom, bit in little a When bigger maybe pushing a last here. we and sounded talk timing right to the it can you bit you to

you see a talk about analysis and little just you the can there? opportunity bit So the

to is an cases opportunity Casa. it about we've think done great it's We South it's see many the seeing a June I but it property, iconic in of think we in you -- oceanfront, that RevPAR, looking we increase in I only in to see up well upside what that already kind with Casa, great iconic numbers the we'll were second And we not and incredibly May It's that, Beach. in at real we're expect XXX% out asset. reimagine Yes. in liken received throwing quarter, if be would just and again, estate. what a

sort So of figuring it, and it. about continue to about but certainly are excited investigate there we construction, team continue X we're working and buildings. out. Don't local it's it's out study working It's approximately. scoped it's hard yet, to out something look Carl really best-in-class, as have and Mayfield, heads -- with rooms, all design XXX we our his and architects he it

And And completed done in that wait when to continue that talents we in there. just and average you to was if the course, script, increase work just And Creek, in that you team already of about of we a we think seeing fact we're really rate. as Bonnet think Hawaii. about the and can't daily then, what extraordinary the invest in $XX mentioned we the the there show Tower Tapa

the or XX not considerable strongest have can right the a plenty upside there's when in we're see been in next markets, at markets certainly it Hawaii to what And space strongest Miami last you and would about you when too. level, been obviously, compete at level. years, we Royal take really X the contemplated, that So beneath Palm X of being certainly lifestyle of think have are the that hotel look the envisioning that projects that but we Miami ultra-luxury

outlook would It's love a positive hear would for for balance a for frankly, follow-up, thoughts just while surprise, the a been your the thinking a your love maybe for York. surprise, pleasant maybe of year? on And New the I to now,

plus you second seeing obviously being -- X%. city finally there they you're XX% was RevPAR And think new been quarter. issued down if supply a no XX% I and about in first is 'XX, up were And is December or I have think through that regulated. Airbnb council permits And up of back Well, think, minus. for in of We since XXXX. the the York New

lot a certainly the illegal supply. of are So not in hotels

is York if than York certainly more markets. And minus, compelling XX among plus years it or been. the New today back market look was has a you historically, So look strongest New

I would by the say, is and and look New begin encouraged York, portfolio. but really very evidenced as markets which Park the just think, sort of portfolio, thing you're recover, obviously, you urban and a across broaden I and seeing benefiting certainly we're good York, not to So New

Deutsche Chris comes Woronka Next from question the line of with Bank.

Nice quarter.

So I if drill to could. bit wanted down little we a on group

I that second your pace quarter -- XX%. your think you said up pace

guess, 'XX the the can through still mentioned you're those? these -- increase you strength What on of I and it's for kind new on As whether -- still are you in increases and for inflationary more group a assume able go I negotiating of catering, right? get some above contracts, ancillary, price rest, not push also lot to rate banqueting, in beyond. room You to but 'XX,

Sean. 'XX to -- of XXX%. you another is on where actually group of look as kind about The -- think rate side, Chris. think we're And is to we're 'XX This about paces as I at look as up pace, 'XX. we yes, general kind XXX% the the answer over you

quickly with year last 'XX, dynamic XX% of and and as what of to more inflation seeing kind as was out, being I booking like of went groups came things to a we XX%. think then now realized we again what seeing I strong we're had through about clearly, as the and the was kind And this see look of pivot I to now up benefits kind X% rates, they they operators but to seeing be COVID charge and ability to quickly come roll we out mean saw I I coming as on more. we do think rate forward so the happy to So -- pricing. that continue and 'XX we're think the for of year

the been spend So we ability further out-of-room of pretty And drive on think with well. to that, I seeing the top are robust as has price the groups.

As we and we pricing. noted for banquet that continue QX, to I drive we had catering, XX% some think

The kind of follow-up on question side. Very good. Okay. is the cost

on or year, I the onetime. we the performance are that's union insurance for of I have conviction across know I do some whether you utilities if unknown have? pretty adjust anything have that but to labor, the portfolio, the or guess, it's you visibility kind much for is quarter you think even whole or, you think contracts, -- How else? margin in of the is good there anything rest

don't I unknown. negotiations have for the anything budgets like Clearly, marked on think CBAs things that. planning people the noted and whatnot, and you there's

say, did I would They certainly they last domestically. potential no I everybody year upside major reinsurance. least So -- got improvements at from loss some from with -- great a rate think potentially

that's favor better think than I bit little a in this changed a So year us, insureds, renewal of kind of of have the to tables kind the year. so last

continue we'll of So I rate that I think actually think a that's at than to budget kind level higher actualize. something we

could that a going think be positive I forward.

real forecasted. year appeal taxes, up are continue We which estate to this over XX%

But one-timers. get -- some counting we can get estate appeal the them, on we about the cost good So real benefits We wins if but those you the manage we'll I achieved side. X%, some can and on end, think looked all per we kind not -- controls, probably a the X.X% to tax great operators across there, think in, get adjust going feel some of I we in those. as and occupied operating expenses the just around doing mentioned even for over if working on that, X.X% room job teams, about those cost maintain

QX. benefits some saw we think in I So

hope as we'd quarters, added. see think to grow. the And to I markets think we'll said have QX. being see But occupancy much certainly again, some that expenses therefore, X-plus grow we'll in I We couple still of wouldn't next won't growth in positions carry into we expect nominal as and QX, occupancy goes, we've percent expense either.

Anthony the with from line question Next comes Powell of Barclays.

range level elevated projects. 'XX? you of of maybe in to seems expect wanted ROI CapEx this couple Hawaii be at like for the $XXX be spend years. in and a drill It Miami, and on CapEx looks bit renovations million high more with may next the kind I to an your in the Should we to 'XX

of Yes. I range X% of been Anthony, in historically, say that sort would we've revenue.

think I focused priorities, and we've or said, as we've we selling to sold the billion. we're that of spin, on capital disposed believe reshape south about still portfolio. non-core of that And $X assets really just since the about allocation XX As continuing think we listeners we remind

value. And we're we've than a So concluded today of really is for it reinvest competitive really making to And real our top about different where very money XX was. sense assets what the then makes where there it's it advantages. portfolio account XX% and are

talking A what So Orlando, as the from sort about Miami. that clearly, we're in too catch-up of bit is pandemic. thinking an Hawaii about example, little of

to course, another know So we'll but tower, we makes that sort given I don't million want million the and of doing. $XXX be million $XXX sense consistently, we're that the what can -- the range Hawaiian what We Hilton and at priorities in we're to $XXX another and Hilton results of do Waikoloa Miami both Village in Casa to renovate and you in the early want getting see Marina. we transformative project and

Now performing and in without really best West think Key the question asset accordingly. probably, I don't

Got now it. you terms assets, in the for asset whatnot? follow-up and pricing the on market just And demand sales. What are maybe seeing in a right of

various fabulous the process. at a stages We're out team of choppy. going not in our Tom Morey, seller, it's disciplined. we're his Investment marketing be Look, And to and Chief But job. assets discussions are doing we're Officer distressed a and

been outlined, to we've and sales done asset sell we'll those this use reinvest given think back proceeds I some assets, certainly to in been to able track again, we'll able -- or year, and depending record back buy that debt down widens, year, demonstrate the trading, pay I the get XX remains gap back, obviously, bought portfolio, buying and last stock. NAV on we're we stock. clearly shares wide will or if where We the and million back be we've

Katz David of from Next line Jefferies. with question comes the

just a that? what's the and Hawaii heard currency seeing small just it? and just the overshadows Are And wanted Japan instances to piece a kind cost. across and rest going you drill Hawaii positive. down our we platform inbound any is further I been on relatively commentary to where Or by it has on have of travel is challenged little of of seen quite from because

fuel has XXXX, you and think $XXX point. to you minus, fair or Yes, think if about I it's dollar. that weakened. it some it's can deny yen I mean don't U.S. per back I a certainly surcharges. the then $XXX plus think was today, around there's And obviously,

Japanese XXXX, visitors pretty X.X traveler. it's you years, or XX for So probably back to recovery think, about long That's of the had -- clearly pre-pandemic, gating, minus. We Japan. from about if consistent XXX,XXX. a last was the think plus about million the it's I been

So about XX% down. you're

management and about We've is credit a to worked to operators huge XXX,XXX year, asset hard to This reliance. team. forecast our less have XXX,XXX, really our

to pre-pandemic Japanese efficiently selective the really certainly -- While little traveler a certainly we the be from transient level noted down revenue for we're we to XX% to than traditional the perhaps X.X% and anxious as still back of and XX%. Japanese levels, the a about little were yield able traveler do waiting in past. more coming more earlier, I from And to travel is the the Japanese can come only

EBITDA million think tailwind and a those assets So we that record total row that, tailwind, of as we're of $XXX in despite continued growth. terms performance. know, year third you our -- we're really approaching a as a in in to overall towards that $XXX see last year, X million. And future perhaps I trending But

given the going new among or certainly the to outside. anywhere, in Continental think supply, bet we the lowest, you're Hawaii market if is And solid on in U.S., the any constraints you lowest as not if So betting know, a bet.

to I follow-up, hope the of Understood. feedback And on okay. as if just that you my touch me and may. labor, I I on cost hear can side, wanted isn't my coming

can hear We fine. you Yes.

Right. Okay.

Okay. Great.

to activity, dynamic. Are some sort there's obviously think is of of which past, there's XX the result lot the there? it, as least of further a over a what relevant -- in gives So X months appearance union labor factoring I being at call been, a costs of out been you of or expecting

that can to I would just XX% to recorded obligated relationships. as not got a associates going Yes. the this, line. of enjoy our It's on fair say contractually negotiate, we're are we obviously, about strong CBA, very certainly business you appreciate, question. that a And publicly we've

We industry have Hilton, ongoing always pandemic. particularly protracted largely I so been -- operators, through able when battles, don't to work exclusively strikes through that this And think those. primarily or Hilton. wants the not but much confident Obviously, we're suffered much the we our do environment, anybody in that through during

budget? account to question And through would overly so are some and cautiously got, I we to sure. David, not earlier overly alarmed, that you overall outlined for we But when optimistic have -- think be in earlier the As cost it, and not Sean for we we about encourage on it. concerned built we're listeners

the hope I the appreciate question. you context of

No, no. Fair question.

Next with line question Morgan the from of Stephen comes Grambling Stanley.

consideration redefining the from demand versus of take consideration as into your follow-up upside as and non-core a deploying the even success Anthony, changing how taking -- positioning to at the seeing, first or change of does portfolio you've been Perhaps a you look core evaluating also the but out portfolio that you're assets? to into that into dynamics, renovations, from response as the question

said That's in position looking of venture. And non-core, sold small And we've couple and that the is assets. constantly at or going done a great a a question. XX majority Yes. minority and the were Again, the were disposed yes. through we joint vast portfolio at that. of we've We're earlier, answer as I

want look we're about in an we interest. to think a at San where we money constantly interest we be huge Diego we the example and our portfolio and where there upside. there's I making XX% ended selling as where at Sunstone. But We didn't think to up look really

that Hawaii hence, and we've and there's there. others that huge in West, upside believe feel seeing the way contemplating. we're we're investments the made results obviously that we same We the and Key Obviously, about the

piece, and forget, you into you've million I you've got If think got Orlando about XX about gaming have done million Vegas. what entertainment you XX Obviously, into we've visitors and but actually and there, the visitors Orlando, Orlando. people think

new a acres year. billion, next You've of hundreds got $X the and opening Universe, park Epic

looking You've as got X, plus Disney years. X XX all a of to invest tailwinds talking real about convention center top and the well. see coming now billion over that are got next real out and Orlando $XX that you've top And we benefit, they're in

and to upside. not use we're certainly markets, we but those we're those looking in assets ones unlevered an considerable a we're we have, asset And multiple where markets can new our certainly see a assets in that the for as examples, returns, in paying investing we're in So add own, investing sub-XX mid-teens we and investing that to we compare at versus multiple. trading XXx that and where generate necessarily EBITDA we portfolio

kind discipline is math pretty move I think to as the shareholders process use benefit will is and thought we continue forward. and mean, that and the simple, we we of to strong, pretty

And unrelated or pressure things underlying assess are leisure the a It looking particular? whether in you to there way, leisure bunch, the ask the Maybe be the in around some consumer out question concern try you touched different follow-up. seems there's what would as that in maybe a on of consumer. for an to lot is to but like this deterioration a

Yes.

can't a all, think look Stephen. one at size I you fits

lower if it. think if the at seeing I and of no you the those framework -- are end -- most, there's socioeconomic the that doubt struggling you're

credit seeing You're metrics. the all it in

mean, at but savings. another their that You're to $XXX,XXX our that class, incomes is seeing million. and $XXX about more stat I -- quarter, it I personal fluent, upper last over about it minus, And resilient. in customer think look base spending or consumer is still as and patterns was middle at think look plus you

I X.X% to about down think disposable of minus this income. about it's $XXX million, quarter, plus or and

healthy. consumer the still is So

about we think from is look and X.X%. demand X% our we out think mean, as we're and softening. I to patterns seeing when So about not guidance that think standpoint we

that's of our again, of pockets is for month we softest But see down it. You Obviously, April the us. year. believe

You've got you've the slower shift, obviously group. got holiday

in got significant. You've out and May it's pretty we was in April, June, but as less see transient and we reacceleration both look

to are on bit will, you sky. the We worries, if overdone. front, -- the going And I to trees leisure don't over think never -- the I so were a grow think,

And all trip. the going as the trips urban going leisure because that product. of didn't are to don't part of again, also well. -- seeing we're broadening some seeing through seeing type New as that so growth it many that of areas, some those But it in York, that for leisure we're that had, in going seeing of those had for in A of of it to group. are kind not peers saw in and when -- we the see We're you lot lift our and normalize. we're We our have embedded respects, in Many people business.

with from Next line question comes James. the of Bill Raymond Crow

important What given are I'm your that to the really importance importance to over not. month quarter, month relative achieve of guidance peers especially need expressed month some the the for biggest you June that maybe the focus to ability And of kind on your with the the of is weak we demand the year? in -- April, and point Is caution pivot wondering, June, leisure entire in on? the did

our of When look at if couple things. you will. you A mix, Bill. question, great a it's Yes,

about we obviously tough at group XX reported. a you had X% we XX% XX.X% if and up think as about third probably trending about quarter, XX%. -- We're comps. in second quarter, to quarter we're First also But

high group I think alone, got of in Seattle. all then for June you've Boston, for But kind to June, mid- then where us. And D.C., I to earlier as May X% Seattle third digits seeing is X%. stats strong and RevPAR May and and some we're X% digits double or probably in So it's And really around of unpack the quarter gave the you single just range. pace case

reacceleration. to your that that tailwinds point, and So us gives really

sort answers that patterns, encouraged looked saw of out of our and April for the bottom sort your demand at we So of we but was you if will, us question. out. as as look barrel, very the

A that. I'm just improvement to question, balance now, net the sheet. appreciate actually, you're in right EBITDA. at on the curious, congratulations I Yes, X.X follow-up for debt Sean,

asset everything the going of that be that point? kind projects, capital As that build CapEx to think sales? tower the going on path funding Is Hawaii, the to still at in we're on, we're you you else the that want this of likely it additional with is

that's it, Bill, balance between more non-core focused certainly part explore that term the we the sheet of the that to are sales asset continue capital redeploying ROI I near think in way certainly and that as projects.

being to the that's near assessment still future through kind I we're and everything working for that's, Obviously, the discussion term. the in we're shovels a think fair I a get tower, else, that. the from So entitlements and away ways as ground, to of how think, in capitalize but we

away a It sounds probably any acquisitions at are point? ways this like

times Yes, in mid-teens earlier, XX a say portfolio as value just we is portfolio the in versus returns we -- made for Bill, I ways unlevered think great think a something comment it's look really think shareholders. the Tom here. to buying would I I at field, better not way we create I our can away. just at generate reinvesting where playing a investing and

is on a and focused take and in going are assets. reinvest alternative shares non-core continuing to cash, that out reinvest, also pay buying back the and reshape back portfolio, buy debt, than portfolio We better down the sell

our that's luxury one of is it that -- out Bill. can't don't And So occasionally of to think accretive. and we and Tom make be assets. are just we've continue worked to so we're underwrite, peers for look, it's pay some to got well Morey the also economic underwriting, team sense see up got bidding, and but the -- my We seen view, I and do it's some

from of Wells Next Dori line with question Kesten Fargo. the comes

this should the in I X the is -- the Phase put underwritten fair you've then, to that renovation next Phase offset EBITDA it what's we projects in the say I guess, stabilization? if year? Is to headwinds Hawaii X tailwinds just growth And aggregate,

get renovated yes, delivered saw And part, rooms, rate newly did we So Dori, able first renovation. as we've on I with Tower, we X-phase we're that. Tapa a to premium would the say a the as

big there sought rate, the highly you beach. think driver is So It's the especially about after. Tower, on Rainbow as we're obviously right

Phase then and then a take them, renovate a I So rooms, rooms have come with premium -- start through the we'll to disruption line higher the this next think of others as some can off we renovated and year, I the the we have charge offline. to and bigger out take year

that kind talks on I that. thinking now think you're right about what of

less I phase. wouldn't about next year this on being mean ROI-type EBITDA renovation. that premium. we to looking be -- disruption to just about I'm renovation kind not that expect to to of at I any we but $X probably expect think getting this it of discussed. pure IRR, we certainly numbers that I for any -- But of this million give talked that. be as really kind Again, wouldn't return kind to a recover, kind would underwrote as look I And we'd of we a a rooms decent certainly I certainly we say point

line with the from comes of question Kornreich Wedbush Next Jay Securities.

I guess just one question for me.

improvement portfolio? going which in still as X% I pushing guess, urban 'XX rate comparable wondering, compared do to quarter, I'm the getting the of is opportunity for the Just back to segment, at upside well? urban But there what occupancy progresses? the of occupancy to, from sits yet how urban maybe to there also, quarter the you for see RevPAR And the year first any saw see as goalposts are XX%.

breaking were a up bit you there. Sorry, little

trying you're of what kind can to... of you kind if briefly just So repeat

Yes.

first on still grew at XX%. RevPAR commenting the quarter, sits Just in Urban urban urban upside yet occupancy occupancy X%,

to urban to as rate much additional as markets on how well? if urban upside there's occupancy the see So opportunity just push and XXXX you in curious

Yes.

'XX we're but think kind ADR how about is of points second over. for basis 'XX, you a I portfolio and overall still is if think about below occupancy, just XX% XXX about performing,

the So to opportunity we've occupancy. front. but markets, disciplined drive faster proud team an a I the there's on from that pricing than are I'm accelerate occupancy to some definitely we -- more Obviously, going and there's fact the been look, others. upside still of standpoint, believe,

supply example I fact got and better And regulation York an of that really think is obviously, taken seen the New you've we've that out. part off. is that where given take

we will a host reasons. haven't to a other of recover that we There'll little markets -- given whole But be be slower up. for

perhaps -- abandoned certain some markets. Some have

it been, I think certainly last but than is example. it And is over several more fully back today compelling New where to York approaching a was, great certainly the a has it years. market and not it's

Obviously, City-wides So only we having great Chicago use had record. a year, that. is a

New another solid Orleans we're certainly we be good city-wides, the first saw quarter year D.C., Boston, to continues -- and improving. and

two second Seattle a There that there. markets for probably L.A., have are time. other will that challenging very strong some San to are for quarter Francisco lag should but out remain there and out markets us, other are challenged. there lag continue

of Next JPMorgan. Lambert from line question Ryan with the comes

for on Greff. Ryan Joe

of guys or to Just industry whether or occupancy and kind you kind just look frame how of wanted full of wanted tech there manufacturing the have kind do make of those a occupancy -- how a bit recovering frame little question differently. those you any consulting, across for sort occupancy to you to on segments, When it's are are meaningful recovery? color

call the to still side, of that think as demand aligning say And as mean laggard of you business one think a been about has been negotiated certainly those I'd I that's and of kind of I ultimately, demand. from related, groups, corporate XX% specific you're certainly kinds with relative business transient, subsegment 'XX, XX%, transient. you think obviously on down, about type the we're in that's it,

And negotiated in think, across including government. some about quarter. We're XX,XXX was X%. business of are our transient We up that improvement negotiated back demand as side overall. corporate as expectations for we've I board, We first that, seeing in seen and outperformed the were, come local and the well that room nights the

QX. that and a of it's kind certainly still. good through think PwCs trickle we are it's seeing services, certainly QX less traveling there's So look and the world, we go sign are as And we would is to kind to professional and slowly helped return the and we it, X% ways of a demand will probably for don't corporate the of Deloittes back really expect coming I -- into transient. certainly said, be really to like ultimately know of business Remote think I and But back that is that a call there, in future. point, the been too That has ultimately overall that segment I end, fully bit little this foreseeable work at But about, historically. office negotiated recover. the say --

say XX% So of if it was, to the I it's in drag portfolio. ultimately a big it gets overall back wouldn't it's --

I aspects group. think we'll leisure or overcome whether that other of with it's

sort discussion the past, maybe difference on of That's kind large helpful. the talk And and management industry following small across to in starting the the at between from up assets about of earlier. seeing wondering capital environment we've heard the teams markets and your or less be is with you're now, all that in if what if rate difference changed right view? that's meaningful In

Yes.

hotels where as driving a in larger. little market as as depends There are market, are constrained rate be supply like rooms, got individual it might I anyone. example smaller, -- right? of you're and a a the in many we're mean already think Casa doubt case, If we've an we've West on our I you're strong Key that XXX that

larger the to -- we've got think more demand, you've demand can always business smaller the and that efficient. layer York you and you've and transient the sources a As generators a markets, in right going multiple think if about is but anchored thesis and New I obviously, is box, and got group of then more got your be you that efficiently, where balance always -- that you're with got, hotel tailwind other you're demand you've supply meaning

of more story. a would to our perfect high XXs you're sources throughout and well result I we cash quite that demonstrated a think we that. pricing if revenue. us, significant And yield hotel of we done has portfolio. In that And XX% smaller as that for got about X,XXX theory, north you've It's Hawaiian and think generating rooms, where that think not and additional have occupancy, integrity, it's Hilton run of but can you Village -- you

are think dialogue I and would question, really that good love really to invest, a depends and that dispute that. hotels Those it's So to but circumstances. vehemently facts in it the about only argue the way engage a I on that the smaller

to -- to you. this we time. further Thank at no now it? you There from more question one would -- do questions like have are take I want

Sure, sure.

question Farley comes with Robin UBS. from right. All of This line the

line's Hopefully, wasn't this my -- X call. gotten from dropped times this

what guidance. So original I included question think my you was in already your answered EBITDA about

there you right or mentioned scenario budget would in done for need One asset this met? CapEx be anything a need is, be you clarify also, rate there is you to for that then some you particular at Is Miami? all that things. Just can Or XXXX? X you in Any your would now that? expectation sales interest that to happen expect for not be other your year. And to spend that on anything

The on predevelopment Miami, architects, would other as costs design certainly you imagine, engineers, work.

year So 'XX. would this in there's that, like I work but dollars say not significant spent being

Francisco of in the we sales, San pandemic assets X conditions. to Think in in back pricing sold at the middle asset record Regarding the sold when early we've all pandemic.

point, start you'll certainly of half least that. target is much Fed seller there the that it's enemy sort over. seller. sales the final believe year rates. debt confident We've tightening we're so of will on sort we'll think, think more lower we transaction side. to buyer to help think about the markets. want But the distressed -- here a not Clearly, a the asset the We'll in is uncertainty Fed there's And cycle second in We're be to all begin makes that liquidity at I it. will some decision-making. million activity thoughtful I for this we achieve at of that the see, So set out $XXX That year. of both and And its until decision, the of

you. closing are this further for floor Baltimore comments. Thank the Tom I like no There time. questions turn over at would to to

and help thank safe and at Operator, seeing you, your travels. week also you and many for and today, you look next NAREIT forward thank to of

today's teleconference. Thank you. This concludes

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