LuxUrban Hotels (LUXH) 25 Sep 242024 Q2 Earnings call transcript

Good day, and welcome to the LuxUrban Hotels 2024 Second Quarter Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Adam Holdsworth, Managing Director of Investor Relations. Please go ahead.

Thank you, and good afternoon, everyone. conference Financial discuss Results our Second LuxUrban joining XXXX Quarter and for call the to Hotels Thanks Corporate Highlights. today Mike Officer. call Officer; the will Arigo, Robert Leading Chief joined by James, Financial Chief be Executive

risks remarks indicated, Before we to which uncertainties current contain results like and cause begin, involve the differ including inherent statements on from of uncertainties to today that the the that based could in remind forward-looking expectations company's may everyone I'd the our those management, risks materially described and actual filings.

place cautioned not the undue are change forward-looking the You any and statements, made speak to at of any as reliance in time future. only on any may which date

update these do Although whether the so with calculated of to information, I'm the accordance We references Reconciliations financial pleased non-GAAP principles or measures a those of report quarterly in over available accordance refer call law. This measures that, statements, Robert from new that we result generally measures. commitment financial as financial as accounting includes most also are not company in GAAP acceptable and generally to presented non-GAAP with calculated events to the comparable in turn required SEC. With CEO. company's filed the voluntarily by to certain GAAP. except now revise measures accepted or to to or call otherwise, future Arigo, time, forward-looking to the time undertakes with no are

appreciate Thank everyone joined today. you, who Adam, and our we call

of our and we've team. hospitality the brand management corporate operations as new up XXXX, enhance outline hotels of LuxUrban XXXX, and our a our implemented with Hotels necessary existing as to leases to the properties the through entire the veteran we well refer rentes manage. in comprehensive on hotel sectors LuxUrban changes significant Directors. We adjustments look management and long-term from team we for we launched current previous highlights initiative a and the Board company's management transformation, will X.X. This addition efforts the of providing business which experienced as to management overhead. basis our forward Board and Mike, the regarding elimination hotel recent following the to and discussing professionals from and nonperforming includes finance transparency which addition operations, composed of to team, rooms hotel and refreshed second success a the targeted CFO, of And and the includes call, quarter strategy our strategic our discuss of operating I this Lux X.X the reduce of During our initiative properties review Directors

a third in manage work New prepare Orleans, and all remains, of agreements. as currently the XXXX, yield the fourth believe the the Brooklyn to long-term X Manhattan, we intended under quarter significant benefits. We Lux While in X X.X quarter of starting is lease navigate for X and we portfolio in

date this available this rooms rent we hotel X,XXX across have of As our portfolio. report, of for

the potential months, solely operations have cash generate the reducing to U.S.-based and Over domestic we're portfolio the properties focuses X past positive on strategically flow. that our

As joined in Officer in -- Michael the James sorry, hotel experience as bringing significant committed was Financial Chief expertise. officers financial and financial in the I'm extensive sectors. industry, of in directors the transition, management and of while part XX team our I to recruiting talented operations X.X are June of XXXX, our a recent month, and with bringing we of hospitality by same years of years enhancing appointed number over experience

technology of We hotel veterans are Directors. to Board welcome pleased the also Schaefer, travel Elan Blutinger in to and Kim and our

mostly in areas across properties, am a tremendous management include and actively affected can Hotels. confident existing company recruiting my new management and of strengthen Our and to be utilized. With efforts experience operating operational I reallocating successfully LuxUrban in areas hotel and the personnel management the for our that to all variety ahead opportunities expertise ongoing of extensive skills where lie

positions moving to us forward. generate positive Lux Our strategic flow cash sustainable approach to X.X

This including being team, a are inventory, point. One QX resulted was management write-offs, of but accounted previous our rate hurdle an of a to at challenges, at average in the I quarter presented $XXX.XX. in we decision XX% from presell we significant inflection believe room which pivotal funds room collected

with at XXXX. XXXX advanced projected quarter expire expire us the I will repeat report allowing which I just $XXX.XX, is rates quarter. these to room in However, of enter within sales same that to $XX am of sales want advanced that. increase XXXX, to pleased that at the same of These average will end end a the period,

are hold that future with foundation I potential as the a enhance provide LuxUrban financial stability solid transformative market. leader changes positioning company these initiatives for We a growth. will our about and excited in implementing that am our for the

results. Mike financial the please it to detailed here. a to over call review the turn from will provide I Mike, take Now of

Thanks, Rob.

for costs acquisition and for WiFi, decrease company to commissions and a XXXX, relocate core to XX, of for existing is to position improvements decrease lower As units our X these The properties. Total properties. Gross well to the X and financial financials cash presenting our to to highlighted, exited primarily reflect months for costs ended strengthen our average company. ended for June June the in decrease XX, cost was million we're operations, The interest for cost ended cost Wyndham. Total the XX, properties ended XX, an of months XXXX, months terminated expensing the is XXXX. lower versus and the for $XX.X is pertain XXXX, labor, months compared June primarily June ended from X and June in expenses unauthorized the X terminated RevPar ended as of $XX.X the that The surrendered June Despite as reduced, which the of relocation our that the million in as at XXXX. today XX, ended from for T XXXX, in forward general X months the impact RevPAR, decrease and available outlook to per increase X for expenses as formed $X.X $XXX,XXX rental guests with the leveraging to or of to revenue during XX, guests the challenges, properties rent in to operational $XXX ended June XX%, for million XXXX, XXX%. transaction. resulted the at for the for second share the the result $XX.X as surrenders as months net decrease quarter rental to properties the decreased relatively months how rates quarter to profit security ended alternative credit assets to we of as financing in the initiatives June XXXX, XXXX, our operating from foundation with the XX, attributable properly XXXX. This compared period reservations months focused of of the the million current a after result to room expense X increased from to was months during for the year. the of XX, ended versus alternative an lease for due June the acquisition during approximately XX, a rooms decrease booking XXXX. was X ended period during X,XXX $XX.X cable, June ended XXXX, increase The months compared the deposit the by compared rates XX, moving and primarily X related our by period ended the specific the we at are to and available months of $XXX the properties exacerbated us decreased It's months XXXX, surrendered positioning $XX.X ended X X,XXX from property. Cost write-offs have million ended the which on X months the look were the XXXX, for X period as to exit and revenue $XX.X the the accounting portfolio. million driving months the June revenue June as X strategic unamortized June a the predominantly figures million $XX.X decrease XX, are X deposits to revenue June increase related to decrease, utilities, from revenues low the of million the lower XX%. X ended cost XX, financial -- XX, results the incurred June related during the the XX, in the same the X processing months June for prebooked last other or adjustments XX, important the $XXX,XXX reflect year, partnership detail same the the XX, XXXX, was same the from necessary security note XXXX, the months properties discussing success. costs company as sharing are Net card exited Of of a June as guaranteed The administrative stayed of the were offset X were million preselling Greenle XXXX, to well months guests forward. I in fees, that in commission deposits the lease prior the T of XX, $XX.X ended expensing result forecasting

[indiscernible] -- XXXX, December As assets million XX, XXXX, the at deficit XXXX. $XX.X of June June was million were $XXX,XXX $X,XXX,XXX June compared at The at XX, $XX,XXX,XXX to as June as total at $XX.X versus deficit XX, cash at of to XXXX, XX, XX, and December equivalents a at were XXXX. compared cash XXXX. XX, our December capital current working And

optimistic alongside strategic we to now X.X transactions as the cash we fourth team, our the the Lux capital-raising explore previous to back continue pass the well will company's and to the improve as investors XXXX. I positive bankers recent that and quarter ethic management the work strong initiatives knowledge our for over Through change call Rob. will and into from as changes are the and position. business We enter

hotel and typically the performs about Mike. a yield impact changes Thank positive our we daily room future generate this to in focus strategic company, during anticipate our rates. fourth direction. revenues on New our that particularly results, made optimistic the expect operating personnel of the strongest its higher operations, the will period. With light quarter of on optimizing overall average market We our at as significant especially at York the we've I'm to you,

with As transparency are committed maintaining we our implement to we our shareholders. strategy,

moment in informed press keep company's we releases to including it that, questions regular media that of opportunities ahead. is over history, will to transformative and communications, our the through the about the We lie audience. turn you our a excited from operator and will updates. This are With facilitate I progress

first question [Operator Instructions] Meadow today comes And Old from our with Jon Investors. Long

deal battling and work, Robin, hard your for other Mike, the first, the it feels coming close you've through tough with. to thanks out Appreciate all issues side. we're had all to like

putting you're clean still to gone, with the are So slate margins starting detailed XX-ish, when could next EBITDA $XXX look all like is the rooms what XX-ish. in year forward be let's all and RevPAR range it tough give step but don't I want fresh, the sort know aside, to you maybe of -- feels the projections, presold

look a what like Just can. give to us as clean to might the you first extent some year that guidance

I you wouldn't Jon Without for to the could -- be your investor I one this. want if support. we Lux Jon, take support Mike, X.X. thank

below the I'm the presell this to substantial sold being point, were say or ability sell. this know impact there overall had going to that at to is times $XXX $XXX we where at And $XX on So a were our rates all market.

same-store know our released. RevPAR naturally, to year. in substantial the be next going will just So inventory that fact There's that be we growth

We're of year all realize strategic very going these at of most operations not is that Management, changes. company. XXXX. extraordinary significant. in in knows this he's to increase to excited our inventory, We're have ADR for going as is be have They're about new hotel. great of hotels we been the QX for control complete also also be XX and market we're through in to the a repricing, have talented the portfolio provider been as So gone the segmentations who to We've time a OTA entire well of in locations. The beginning since all going resegmentation the Revenue We've the properties. VP our this, going what's one I the people, of our everyone that the say They of an will can happen looking years. sees

highest the be we've that the And wanted the we on not that's see quality results. after going narrow of New on at focus to do reason And that. But wane we segments York. the to ADR approach. demand -- better are see. is We have changed the going hotels going field, We deliver our what that to demand through gone good lift, heavy the and York to with New within based we're some with the York in New in we what we the lifting why

legacy are great be housing our a the With of we've had elimination XXXX in to XX,XXX from. to portfolio riddled New over in migrant What's of not audience we the is start going build by us keys, in valuable, fantastic Airbnb of have the we're to going to for challenges lot the be keys XX,XXX a York keys, operations. for of extremely and

substantial have vendors. of tremendous with We We've our reductions labor. made headway made in all

are great that We in vendors us. the standing closest are with to key

see heavy lifting. XXXX promise. a not It's an opportunity going already what naturally, the tremendous growth. in because But happen So to we've it's done is show to we

Now need your see to I results. question. we the Hopefully, just answered

Okay.

et that? be should $X.XX, a ADR based et now on sort hotels, would market So cetera, right ] -- cetera, be what like comparable something $X, [ like of number

doesn't booking that the I've to It's dramatically, that the I this say which always numbers York seeing soft. market going this, What we're throughout to investor people incredibly we've New meetings weather, because key substantially. Xs. in think that to factor allowed has a -- that be we'll say to feel -- few before. say reviews to I the confident in change have in ADRs of where the just going to has if we're to a York and never weather seeing in typically year. QX New conferences QX. Moderate start QX you're we're it's seen -- historically been safe in out grown low QX other moderate happened mentioned now

see we that QX in before. we've a So tremendous seen never opportunity

seen were the home nights the Thursdays thing the where The because [indiscernible] They already have and market, Sundays. Because opportunity other we've do that hotel are Sundays travel office hotels the people great office the traditionally. and many shoulder new or not in people of Monday that selling Thursdays Same location those to from on Friday, becoming nights those and night in working Sunday. are industry getting Thursday location.

those missing days. travel So they're traditional

is to we're of seeing which which to allows and So a out us compress occupancy, flattening charge. great,

shopping it's I'm I just to QX, be. see became I'll say you, over what XX the And used that X years, Yorkers, perform strong QX, know years it think So well. we're in bold of ADR And New many QX. going weak. they on, about and to become growth that week, again I very last the this, ago,

as of activity tremendous There's vibrant. in a opportunities going well amount on New other York. York is as New entertainment wise

at confident in growth continue we'll see even through it's maybe least see, XXXX. that maybe even we'll So XX% XX%. I'm ADR, -- And the all saying QX, way

on a cleaner for I then without time Mike. Mike, much a the tough can for the as up And to assume it's one noise forward? thanks and date all I Great. know third but expect been given Qs getting issues, all quarter we quick going

put goal out my a time great to That's be and #X on to product.

So we're for. what going that's forward, looking

Our question with Group comes Instructions] from Klee [Operator next Maxim Allen LLC.

characterize which expenses? just operating much you the was what quarter, onetime for review -- you would Could as Yes. how

you and is. I what don't that but that number right work could that have I get now up available,

Do think Okay. that... you

restated QX. also We

you in year-to-date QX the when bunch look at of a the numbers. were So expenses

onetime bunch QX as there a were expenses in QX. So in well as of

you do for Right. that side the are run I forward? starts excluding was there's would curious you'll doing this you like just of the costs, both on the going things that be costs XQ onetime them do other rate expense helpful. at comfortable you're point, but with? the think of mean, Or is I onetime you be feel

on part by which reduced lightened then that into to other it other up by labor, dollars getting and the individuals the few was a properties rolled of part, back the We've of rid cutting part just we were and the million overhead other due on. COGS

thin running we're a business. So lean

for So And the time. cost future, should then the stay relatively some as quite people low going scale we to forward. would add we

or there's Do X you you think you you think that sell -- now. have number? more Do to you that at said good you'r feel about that properties that that

No, about number. good feel we that

to that recently a leasing a hotel of could expand owner products spent them, I the third-party the a be who relief, to a in of designing management in that product well hotel going the a to deliver bunch -- management that that, industry. said today's design with If hotel us as our we're their redesigning of successful success to is there's in program sure I X%. We And of of I the X% of to -- lot option. transparent want forward to we're companies, historically for lot gross kind build new are that to very time fee to leases for we I've economy, revenue charge sat make able with on product, And front that's is owners. everything parties. owner a are to -- is And taking seeking hotel owners of interesting. both ability the

opportunities bigger The forward. very focusing in for has many is is us. we sure we storm perfect is the in there have going we couldn't is for timing efforts New -- sure is But markets. formula. -- make to owners. New the And want interested well so formula the demand works there. But York. our look And look we a we now right we're opportunities The are the before of there. our make the reality there lot the other future formula right people why So That's to at want to believe York

We So about we're the excited really are. future.

of there litigation So of, leases you've is liability the left terms gotten if that to of property in potential out for that? related what's any the or

reason them recently They high exited L.A. -- were we've performers. these the was keys. They XX of were than hotels strategic. less I many than Florida, we've not assets exited Florida. mean were were less The and not why

been Florida, don't costs, has and we it's is legal be reality resolved. but to some will believe that going some that of the costs So most be settlement There substantial.

things to are those through. those But future of to So don't we're change the foresee results working company. I substantially be financial going this

I think many the not them was them as way giving that too were solution designed right that of the the owners realize we for well.

to see hindrance in So a substantially I don't it be the future.

I last XX-Q, did of it and question subsequent looking at -- section like the it of envelope. is My the I if looks I'm back me event your this related wrong, got tell Okay.

raised end. capital we the subsequent is said You've million me I right, let deficit quarter that -- million. you And $XX know guess, ballpark. that to around think in net number net is then And working little $XX then do about the how over so a

of So how do kind you factors? feel those about

a balance burn burning I $XX will as for is believe about off -- had the presold rooms revenue that QX. million on fighting $XX.X million quarter, uphill would month. battle just sheet And million we're number off burn $X yes, So off an June about unearned the that, unrealized the of we realistic the a

get year-end, that be we $XXX,XXX. So towards about will as

focusing reduce right that quite positive flow looking to million. continue bit. And work we'll we're getting going and number So to the cash We'll liability. in, let's say, there, take company a $XX.X down on that

over you the... that revenue cash unearned -- will the that in be So coming

We've already that collected cash.

Yes. actually that spent. been has So and collected cash

is ] the [ number million. So $XX.XXX

and spent been collected the stay, it. come earn that's as when So it's guests and we

guest the when when shows So revenue. that that's up, we earn

-- then that collecting they before, $X from were we it to preselling change at same-store remains year, that $X a doing we then the since expect out you're million. rate each that million be that roughly next the doesn't standpoint, So say, higher, be they were accounting month, assuming rooms if it burning let's be we're would GAAP same rent -- exact those we're drastically. sales, discounts doing, would still if cash. But not the let's off, the then say, everything same, to would like marketplace we And

come And our Mike question Wells, from last will Investor. Private

the handle how Curious NASDAQ you're going compliance? to

take that, I'll Rob. So

the do will reverse do to dollar So a we'll of NASDAQ with point million, that business then that. And cooperate the and the And us cap turning project hopefully, get kind up point. the properly to above price the we compliance questions now, looking we'd to at is stock stock around. we're be $X.XX we're $XX NASDAQ to the right what answering of We'll above the probably it's at level. in split on stock market the be which will how level, above get that the

Timing?

sorry, say it again. I'm

your What's timing?

The if that's days timing that, we to going out. proxy, XX be to probably were on a file XX to

lot have We hearing a and know that with a October, we'll NASDAQ meeting. in set after

to Robert That concludes back the I over our conference to would closing remarks. any like for question-and-answer Arigo turn session.

that is LuxUrban people on today can team in and afford absolute have within the at that needs. excited we during level. Hotel between top and say X.X. excited with a the Everyone They I that the the what with this to at of the level. around working most They're future. that this company with about so about call, of confidence economy they vendor are we've formula taken challenged. And Lux was the support. can managers. property do companies, to ownership brought see to is well franchise positive turning asset getting groups say I longer owners exceptional. cost many embattled some value say no just And changed I'm They a X would the relationships, management that know They rebuilt companies have behind want positive really level like text, the been leadership been that talented flow, the the we've we that cash company that I as everyone company in us support. months, team see entire the the third-party --

with sure Mike opportunity being we owners it third-party We we being not strength are ourselves we in The scaled down this owners. want is And owners, X we difference to to exceptional market, us for what do hotels use to So the make in strong and when be and hide do, that partner, book, we focused, had historically. They've and right. this We own estate I are the had companies everyone opening within that themselves how forward present last operate have a run the we finish management to an and honest for formula we when that's are a to in and -- their reason. we're their P&L or ourselves make and the should going of We're transparent. he's working months going that's what statements. together, the we going future. real is formula been we're are to that

real heavy hard lift that But makes course, owners and, X the great. much a great. our will months. to say, and of QX to will as Lux been a be I'm the it's never show you they So as that team it's the excited for see mind the of results, as gets guests start X.X hotels.

Thank you. everybody forward for we look and thank their for we So support. future, the

Conference has presentation. you concluded. today's attending now for Thank

You may now disconnect.