LuxUrban Hotels (LUXH) 14 May 242024 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome, everyone, to the LuxUrban Hotels Inc.

First Quarter 2024 Financial Results Conference Call. [Operator Instructions]. After the speaker's remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator like Director the of now Devin over Sullivan, Managing the to would call hand to I Equity Group.

your begin may conference. You

Thank Hotels everyone, us you, Results morning, you [indiscernible]. joining for Conference and Call. today First XXXX thank LuxUrban Quarter Financial for Good

Robert today and Chief speakers Executive for the Chief be will Our Operating Kothari, Officer. Shanoop company's Officer; Origo,

statements. Litigation XXXX, the everyone of that are contain Statements certain may forth we Before not meaning the XXA Securities this of that forward-looking of begin, of Exchange Section amended. I'd as Act like call of Reform Private Section historical in of Act purely Securities statements the as Securities set amended, to within Act XXE remind the XXXX forward-looking and XXXX are

limited Forward-looking regarding strategies are statements or intentions, include expectations, the beliefs, but future. regarding not to, hopes, statements

may, of might, believes, projections In other identify the is the would forward-looking. any but and forward-looking assumptions refer not statements, possible, are or forward-looking circumstances, intends, characterizations expressions absence projects, of and anticipates, not could, similar should, addition, words that Generally, including that a may does any events or underlying continues, mean statement statements statements. potential, estimates, projects, those plans, to future predicts, words

as caption cash of independently, example, ability properties assurance factors efficiently be quarterly the ended call I'd company's Shanoop, ahead. openings, go continue company's Kothari. turn undertake and measures to pipeline company, with its be not can financial updates XA operate X the public and any well concerning reconciliation on anticipated potential And there transactions have the of those Form current Risk that can or and on SEC, the forward-looking working laws. the filings franchise the lease subsequent statements to ended forward-looking to these filings annual Forward-looking statements, risks, discussing or and March These the anticipated. applicable de-platform actual statements SEC. scheduled their closing be by XXXX, made the commercialize may growth, With the Management will in including year number improve which contained that include, lease XX-Q are with Form for XX, The of with profiles, statements update metrics. on in securities are XX, our developments to the XX, XXXX. Form properties for report its to the with and company's comparable XX-K the ability release. to some property balance for former months the also capital effect from company's set other based future found a including implied leases under beyond and SEC statements revenue flow in set expected Factors materially or its A results information to profitably partner except future. and control does closings as in these any may in or developments for non-GAAP successfully XX-Q organic statements those reports December and forth noted and May of with and be that herein, uncertainties, the over press are ability now forward-looking deliver our of non-GAAP and Item additional information future forth These ability respect to XXXX, sheet date Shanoop those or of expressed in to properties its its enhance that from forward-looking those on the and like cause at of assumptions filed to no financial forward-looking most GAAP today's our accordance company said, as measures will on be the public expectations to been are statements are performance beliefs to that leases will please forward-looking their other as different on and/or subject our referenced and

deliver our executive in Thank operator. you, We as as new our an under in that are operator, of taken details most Management every everyone, franchise us documents the you, value. Devin. to encouraged and ahead. and XX-Q our our of we operations, going and properties his on mutual state concluded properties for an filed in relationships, our a I'll every in has our step acknowledge accountable that will today. look recently our highlights trust hard results. Rob Rob each what date the our in and terms. of the and remain update in issued to to challenges at of After process. March business Both Operating lie Wyndham and LuxUrban with independent these contain unwind We're served operationally our systems efficiencies, to back to release moving running. turn to Officer, yesterday agreement company fully business in significant We're and insight way. With de-platforming conversation independent those over weaknesses, and his areas. and from better focus of this progress we selected aspects are will joining including And collaboration origins. key term, In rebuilding long role, fully construct Board He's certain we've that, remarks model Origo. Wyndham. Started We joined to accomplish appointed with provide stakeholders with hotel our our go over back press financially the initiatives early with better path hold his able address mind, the ourselves laser-focused be aspect Thank The the a on of on our on listings on an our my prepared us enhancing control. significant afternoon. team for of board, and process plans I'll full the decision that and our been Chief is long-term enhance days to ground new current to our date, while hit operating to first XX the

We expect by be completed to that process operational May the of minimal end disruption. with XXXX

surrender XX.X% increase Let's XXXX offset rent the the seasonality RevPAR, greater results XXX due driven mentioned an other year. impact by portfolio on to first of rose average for versus current impact from revenue million available total Net discuss our properties impacts operational above. quarter. the $XXX to to declined rental RevPAR partially from of the by seasonality and $XX.X of the to and to units $XX.X lower portfolio million Total from in the our prior $XXX to

reminder, threshold. property well estimate still a we're above to As breakeven be level at we so that night, to $XXX per $XXX

costs, that as look we XXXX loss of expect gross RevPAR quarter-over-quarter the expense we surrender to compared XXXX, $X.X General profit of out compared million rise and to higher in expenses million, relocation property million of gross As surrender for properties. profit $X.X include, other greater lease of that costs the certain $X.X reported the of loss costs, to reflecting associated total related an employee and included QX among in charges $X.X Brooklyn, the remainder non-cash $X.X will The administrative unit without expenses costs. to a a commission increase million We of a items, counts were to year. million. items and and and

of net including first was year's non-recurring our compared to quarter. partnership exit G&A Total partnership.Total consideration XXXX first expenses As charges, the from non-cash compared to non-cash to target in XX% non-cash rental revenue our QX for $XX.X full of net our last G&A last the quarter on million items, operating the items, items G&A comprised rose $X.X percentage $X.X quarter. range expenses, a year XX% with million rental from non-cash XXXX costs with the for first million million revenues, in due $XX.X to within including excluding margin year's franchise XXXX. primarily $X.X associated was of

above-referenced compared loss and plus a was rose interest $XX.X year's first million costs net by was Adjusted $XXX,XXX last EBITDA for compared to of non-cash operating million together $X.X million. $X.X of to from costs the quarter. million. for Net loss of Our and the approximately included loss items, which $X.X loss million, QX million was XXXX quarter $X.X financing Net cash taken $X.X financing $XX.X million.

XXXX all of to expect Our our by and EBITDA during goal margin impacted continue in the quarter the has been recently, stated initiatives taken margins. rise to margins EBITDA XX% to significantly we've we

Moving reevaluation and approximately XXXX. properties as cash and welcomed down cash due in our first XXXX, sheet, to million. million XX, not We're $X.X accrued the do Total payable million of increase current agreement. extension with million With average to rose from properties Accounts balance with rent to XX.X quarter. of XXXX, to XX, approximately primarily was expenses accrued XX, leased we operations. our any as total guests The December approximately to further. XXXX, $XX.X portfolio, related our available is compared termination to options. equivalents company and accounts the to X the XXX,XXX debt in $X.X $X.X of as to increased at terms units March December of including XX, to for compared lease this XX December expect million. We of compared respect and debt of surrender XXXX million years, $X.X partnership property point, payable XX.X the from portfolio Brooklyn reduce property expenses the $XX.X At approximately weighted the and years

capital for be with We and of and efficient raise pursuing in opportunities us shareholders continue in believe best that opportunities to these are long-term our interest mind. there a we the to will manner, strategic

Origo, Rob? Rob an of I'll turn our over and our Officer, things Operating provide properties overview operations. Now will Chief to who

team you, opportunity hotel March LuxUrban say into all. very me, help to joined new, organization morning Thank a agreement manner, world-class in a transform new and company. intriguing the successful I good to the lease estate deploy different found in X, to real Shanoop, management to I master least. On the a

with engagement, landlords their saw to opportunity depressed and many in LuxUrban's join impressed We I are owners, with -- aligned Many today's different. financial And urban post-COVID outstanding are a approach landlords, whom looking faced going with story. financial owners an transparency, an I alternative was something are and and to with them. And deliver to term, talking that motivated providing LuxUrban. developing, highly selling third-party my path, to economy, solution flat markets a deliver know of values. maximizing in economic with realities provide group want and economy, at for with have more of today's companies and harsh I've implementing an high-cost of complement spanning in XX of lease years results. not years, hotel future. we've operational very to with a longer become options at business large the solution a partner a agreement master Owners traditional And using flat, XX to seek structure.In management real last we're success management management is successful as and a organizations energy, them owners operating professionals MLA the and relationships in to build the highly to coming able spent that designing, a show platforms. career, enthusiasm in estate that They the assets company been

hotel create management of like alongside management.We the tools a team endeavoring company with to new we building to the to a are We because create organizational future organization and the working industry structure experience. and developing our systems [ current with close systems to will our best intend But our experts approach by most a potential, what our ] to to help be with profile flat managers the look redefine management ground easy allows leaders both up. importantly, easy will be with a guests, And generating memorable operate. input and are owners landlords, our use, and and the from to general from a

more bringing life. in-room platform spending give assets culture We to QX, have on by concepts, to developing will life expect the all we impact marketplaces, with the such next expected in as ancillary LuxUrban to place we Once be grab-and-go the to today, dining revenues. opportunities valet, back that new X months guidance X even and income

early are this and it in process, will time. We take

market our LuxUrban's key is including potential. to is is our Our revenue our designed progress realize financial profile. factors, to approach our management advantage we dynamics and what of But to will of believe strengthen to ever-changing depend on a a future take the to number revamped that goal the ability RevPAR

the us to will back in and new developing to lines, bright, our new competitive end, urban styles, allow be going unique allow drive style, future revert we as new markets. our operator, if to us we and looking organization. an we style believe we an process for and SOPs as own origins are As an at thought something To that I amenity us growth independent guide are I new to here more a sense to independent in be branding uniforms, the of are evolution of be and apart The arrival, going and set SOPs that our is otherwise. wouldn't that

the striving that both one are of and management only a third-party master lease to be tailored companies We a agreement next-generation offers option solution.

And dedicated that in to I'll arrival very We service. culture deliver be a our mind. our supported blue-collar a within energized, by Our things in white-collar Shanoop. the platform bring exceptional is We turn engagements best be allows to hoteliers back are build that want sense employees excited refreshing a us markets simple. now an to proud, and to action of group want and to to of and

Thanks, Rob. the operator now to the questions our ask call I'll open analysts. to from

now session. will Instructions]. question-and-answer We the [Operator begin

first comes Greenberg Our question Derek line from Maxim of the Group. of

guess margin be considering better the more previously in new color unwinding terms and the Wyndham with of operating decide higher that as operator, I the of starting you'd I of partnership, believe you of this could funding, were led off a with to an provide that XX% stated you partnership deposits? little what independent the benefits just

Yes.

I it's sense. both be But we think was with lot based said parties financially, at So our them. disclosed mutually, agreements A and make in just filings. on got didn't careful what look, it looked to of just it our

to point. So were that some think out as financially, that don't got and laid margins, impacts there metrics I were how to that we

to that, follow-up if a let's one. on So there with question, move is

Okay.

provide in that that million was other the progress line I Just over incremental you little in terms $XX the increase? of could how And the in you income just to year? more quarter. expect that kind if expense included detail a item was the in wondering do statement of throughout what's

Yes.

first costs, mentioned significant of amount as the with in the significant surrendering the costs, quarter, of So which et cetera. properties. additional There's costs, regard initiatives surrender costs, certain the a well impact to properties taken labor commission were relocation unwind to as you've OTA costs,

volatility, that time was, QX. significant we've So sort obviously, return we'll impacts. things of of overall the from like the like of profitability which in it, some revenue There's you'll of with terms higher and of are QX And back I I've a highlight. is kicked digging being line. margins we One that off And would the in of to impact look, to SOPs we done amount able overall as Look, to couple with initiatives of through laid where get feel that, then of it support year EBITDA revenue different QX, the laid Two wholeheartedly an of this EBITDA in perspective, guest metrics. Rob navigate is the terms potentially management back through a management. is, the And call even out. a that, strategy see once bit last spent starting we of experience. revenue, a he little both ancillary overall, that impacts to in not out with in right? The of are just some

$X.X of just to, million, ongoing? a relates be the also you expected non-cash. it considerations more that's Okay. think explain what this little And was can And statement, partnership new I stated on income to the then you if

item of So is? what the this nature I was just line wondering

Yes.

to it's how look at associated the we So accruals it.

non-recurring. non-cash, gross it's So

no in million -- in add-back payable Okay. just income other of and your of taxes this is there was around to taxes calculation a the taxes last for the income EBITDA relating Got the provision located as well my what question, is in balance on specifically? quarter taxes taxes. as none the just adjusted wondering I income sheet, is And then it. Provided $X.X for

Yes.

are aren't until, these typically, well, in So that year paid due in advance. we the taxes late property that

as the covers. expensed amortization it's payment period opposed to So upon over the it

Jones comes next Matthew of the from of Our Erdner Trading. line question

quarter-to-date the insights do in any Wyndham the all? that expect you revenues that there? you can transition you to addition that, then seeing at affect platform, there to occupancy and And of guys are what Are provide on off

-- first Rob So have and I'll the then I'll question talk take the occupancy part parts of as well. both about

occupancy XX% on period, this based But changed. I a So for was an got right? couple seasonally It's February last things year, impacted. mix pretty our So impact. to more versus year QX, a little of combination But heavily the typical. of that's bit was of things, as a think drastically we it January

no overall, So to with to properties in in in York-based Rob, rates Overall, room properties. and say what regard is -- occupancy And would to core with I in you're impact mix talking New about markets. of more taking portfolio what areas to seasonal if revenues current surrender of With the underperforming don't York mind was that. regard high forth? in XX% There's extremely impact just consideration you which seeing or no the revenues. so New and terms softness partnership, then,

Yes.

transition opportunities. brand a Wyndham, traditionally, ours. was there's York. in we partner But New Wyndham from know strong strong are May all a and the very With other perspective, June, of of

-- in in New especially last we the some So valuable of York may have know most transition business we high-demand key, that the with is the these that lost all the markets. key

upside stronger is the than much potential loss. we So the think

into by looking we're plus on foot see early right pedal even do we than the overall for the think things through Everything And and New demand, continue X% October, now; transient year-over-year look we York. September, probably X%. not or on, see better off pushing to So anyone I the seeing summer.

was this confident at right So time. the right decision we the feel very that

the talk you pipeline? And agreements? any agreements, half-loaded? current are back should thoughts what timing about signing around on can new of expect this we Or new to kind then And be your

Yes.

we've of to for a to couple announce at our think pretty opening, before sort not of approach We're that clear we were So changed one, going I that, months So right? announcing, right? ago. about

Just is pipelines to the out, that of through overall, set some got there, mentioned get laid we've the We've communicated. Rob initiatives quite there. we've opportunity obviously,

almost communication we're we're it. at full done of with think looking where the of I sort

guidance specific to So just look, I half-loaded, not say back we're but would give there. on ready

here the pleasantly is I for point. view lead incremental to I at will think it positive. this think with We'll there's benefit don't us to be the everyone surprised when happens, with lead results. [indiscernible]

Thank you.

comes the line Chokshi Our Northland next question Nehal of Markets. from of Capital

Curious, what's going be away going be Opera? to that property going given from Oracle management to system, the your new you're

Rob, do take you want that? to

Yes.

going back entire developing which that platform And also we're had Cloudbeds. right we IT So are platform we the to to was going our be in place, now.

concern And transition X about within it to was happen -- and The the whatsoever. transition to so any didn't days. us, team seamless was cause able make so the

but And it that's good major the so a wasn't concern. great question, news, a

bookings the of an an through OTA Wyndham perspective? of and going quarter mix was December as March percent from effectively -- What

that. not disclose Yes, to allowed

factor going now. is what -- us, number which not Just working that financially but specific not really give to for

was say February Investor of that the at did you though, were realm least? and correct, You that at breakeven X Day, guys at the XX%. Is about breakeven

That QX-related. a much QX was different more was story.

there about sort right? month, though, of not lot think to is it extrapolate, [indiscernible] of obviously, really But a it, got right? changed not January you but think it's -- So So February great about data to a

that Thoughts on changed? why

our agreement. With regard to

So that. to sensitive we're just to be trying

be with that agreements? cash received? the that's the returned about key of Does termination What to need been

Yes.

of there's the [ is that a in accurate accurate. liability. is internally got But we've balance accounted it it their ] ends that. how it's up sheet, for aggregate a on TBD. So is way So that right? to on accounted embedded the booked sort discussion as is Obviously, How with for goes accountants the

-- though, it's going though, right, bottom the your it, a to But drain weigh over it's you point return the going on to at next on cash, in when line, time be the cash?

course. of Yes,

how you give to any I guidance. color sort think that? And us actually hear of Q-o-Q about Can any here didn't on

overall, little of still for in navigating we're right? still Look, the RevPAR the through I there's we've I way reasons initiatives So we're mentioned, both – mean, it significant part QX. portfolio, movement. increase taken was The is seeing the in a things

a XXX we're we Rob daily the I lack sort numbers. to some bookings. is call, -- of near got in team -- booked and the of got where right on there's just And max seeing So comparability before were I've We're point show some but going the through based release we're York occupancy RevPAR is New talking going well occupancy and or to on above up is something this capacity is so of frameworks right? Obviously I'm the that. if specific not not, they just room, specific improving out asking for you've So tough to getting period. on momentum can of got -- give there. thinking seasonally Guidance-wise, guidance,

And has of then declined. kind the in what that? you hinted detail you life Can assets mean Robert, you by that

sorry, sorry, you that time? more can I'm repeat I'm one just sir.

Yes.

didn't bring but to life assets say you bring back said later You point, at to and explicitly to assets. life more said one to then back that,

assets don't statement life implicitly in So is I the has months know, some declined over, in that basically. that

color implicit could statement was is bit just saying if I that give as more so a little what And to wondering you here?

assets? The saying what licensed saying, Is that term you're sir? you're is

Yes.

about is the of run a think have approach, he's invigorating Rob's guest -- I of lean welcome experience, different change sort traditionally et customer to a experience talking cetera. sort sort pretty we initiatives approach, of that Nehal, and

was think don't it I life. So lack of

it's more food guest bring the of amenities to et valets, experience, right? service welcome experience, cetera. additional I life, think So

that's looking So I to expand he can Rob, you more, think for. what

that But at at partnerships, revenue sense we're to apart parking at. the dining have But and management platforms, and locations. want looking looking with hotels opportunities, We're arrival valet -- venues. utilizing local hotel set coming program as there's catered market square opportunity looking fee building, so at suites structures Valet some hand-in-hand and new we're looking definitely programs the other work different many best that another then we're ready inch The and really The there's market is the were use rich parking to just include now New will look each adding getting that every we we great the in we hotel. bringing very other incremental great of marketplace our at of opportunities highest of and that from differently there's operator. piece Yes. to us on, -- in-room any looking We're any York revenue so profitable. ownership. into and that at very implement meeting a the I really space is grab-and-go gourmet -- there's think partnerships is to hospitality vendor,

of adding So quality color, more taking existing but a profitability it to new it's level. more space, a just to

implement capital I also necessary to there's working these incremental implement? incremental presume And revenue to opportunities,

No.

net we've deal they gourmet negotiated the actually pretty parking provide, and us profit. a paying the vendors, again, they they for use net do The they strong the In garage. marketplace, and pay the the -- material it's us that, do build-outs, profit complete supply of ordering they're

a years parking conversation, lot as not getting were but bit better. a to they're open back, now vendors So few little

So there it when but comes will we a looking be substantial. that arrival, have there. now, right sense relationships everything some it's at investments we're to of nothing strong But

within But level. hotel New York in things be next to going to going a comes So us I are that first. prioritize take lot going at that going strategic to that we're we're the to partnerships the doing help be of what think are

Thank you.

line Daniel the Kurnos from comes question Benchmark. of next Our of

on Quick one, that. to Rob, up just follow

and As actually any advancing improving the is curious we like making some either the from you would gate? their stack guys., goals to I'm your the or experience initiatives an thinking think out just of to the how of from integration in and advancements tech own further you you're about hotels there automation about partnership tech help guest that if with be

end Actually, June. high we're right the ahead at lot just And of getting Amazon platform. a we're kind with of Alexa into in focused the tech

with closely going working So to be we're them.

easy bringing QX, most fan at room. but the And QX, into probably I'm to that Something simple, the for contemporary little that but for sometimes customer the technology technology a looking guest near early. of think use. is the is that's platform the on still it's using I is technology reviewed already us, and a people think in in I Amazon jump bit something something future But we've negotiation. big too

The able and the to I've management the for other of and that it company customer been the designing do consistent. associate is past a is feeling and is designing the using part technology experience easily is good is in it's that executed what a easily

I can be overdone. technology think sometimes

not And sometimes it's executable.

we consistently. very sensitive we're to do sure whatever works making and So well

mix? much sense. No, that your makes total you expansion get color. more bit in and issues else, sort of love how Does And past half-loaded on of it initiatives, a here? to seen what new just little the obviously, we point who change change target? pipeline, to just potential we've about potential Shanoop, in the think it before. talked do the terms Does Rob's And back about, influence everything sort you of from how Just SOPs,

Yes.

want to on. of impact We just ] be throw things And offhand, want opportunity sort not to revenue sort of out Rob be to, kind of numbers working we out capital. mentioned to focused very potential, a actually So to look, digest we guarded going much but we're how as Certain also collectively. to really expansion. too, of [ impact we and wanted which capital, impact, roll big the set, decided we're can sort working Nehal on more

lower-hanging underway. mean, are I fruit So initiatives the all look,

we're As incremental requires much capital, more second it. methodical much it We're more about being focused half. on the

half, of we mentioned the initiatives year second is first really the earlier. on half of focusing really So the we're the sort

what are growth. of of, combination to the is to So revenue sort opportunities call opportunities going be regard out with built our what it, with we've laid of secondary potential

Zacks Our Research. next Tom question Investment of comes Kerr from

my questions have Most of been answered.

money any if sources on that there color not is to was wonder could or million. more ] [ surety development the potential financing the for lease bond besides provide $XX development, you deposits now up options Just Wyndham lease solid Are surety other available? bond, the

Yes.

So Tom, the for question. thanks

out there's other surety that things are there. other at. they're work. bonds looking yes, in some There we're So Obviously, the sources,

disclose at ways well. nothing to other So financing this But of there's point. as

are look, table, through the it just can But through would talk stuff, So is the thinking to look, announce it's it timing. and other what's there at way on I all not it, that right what's point where say the we options yet. the do right

closing you. questions are time. Thank at I back will to Officer, the Chief Kothari, call no for There now remarks. Executive over Shanoop further this turn

Thank you.

with We to So much thank the focused We're half The our as our -- of have do, forward. understand and year. define new we've the you in work we've right? date. all business path the to progress stabilize for actions there's taken So work first the got the helped really pleased call. on still mentioned, joining

a consistency time, we remain the we committed ago, rest As on short have our our said will your understand be objectives. and proof of the Thanks your to results, we again great day. delivering time in for and of a

concludes We you Thank disconnect. call. you. for you may now today's thank participating, and This conference