Q3 2020 Summit Hotel Properties Inc Earnings Call
Good morning, and thank you for standing by and welcome to the Summit Hotel properties Inc. third quarter 2020 earnings conference call at.
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Adam will now senior Vice President Finance and capital markets. Please go ahead.
Thank you Sarah and good morning, I'm joined today by Summit Hotel properties, Chairman, President Chief Executive Officer, Dan Hansen, and Executive Vice President and Chief Financial Officer, John Scanner.
Please note that many of our comments today are considered forward looking statements as defined by federal Securities laws.
These statements are subject to risks and uncertainties, both known and unknown as described in our 2019 form 10-K and other at Juicy filings.
Forward looking statements that we make today are effective only as of today November four 2020.
Undertakes no duty to update them later.
You can find copies of our SEC filings and earnings release, which contain reconciliations to non-GAAP financial measures referenced on this call on our website at www Dot that's H.P. reach dotcom.
Please welcome Summit Hotel properties, Chairman, President and Chief Executive Officer, Dan Hansen.
Thanks, Adam and thank you all for joining us today for our third quarter 2020 earnings Conference call.
The third quarter was again challenging for our industry as leisure travel continued to serve as the primary demand source. However, we were encouraged by the continued sequential demand improvements, which led to operating results that were considerably better than the second quarter.
Revpar improved each month of the quarter across our portfolio and importantly, this trend continued into October which provided us with some level of reassurance on the sustainability of demand in the weeks following labor day, a period of significant uncertainty heading into the quarter.
Occupancy increased each month of the quarter, peaking at 47% in September which led to third quarter Revpar, a $47, 63.5% decline year over year, but that was a significant improvement from the second quarter revpar of $23.
Market share gains were substantial once again in the third quarter as we finished with 151% Revpar index, an increase of approximately 39 percentage points compared to the third quarter of last year and an eight percentage point increase relative to last quarter.
These gains reflect the tremendous work done by our in house asset and revenue management teams along with the tireless efforts of our management company partners to capture the limited demand that currently exist in the market.
We have clearly been successful capturing our fair share of very short term leisure demand, but our results have been further aided by capitalizing on certain unique pieces of business and small groups that book during the quarter some of which were related to the damaging wildfires on the west coast and the storms in the Gulf of Mexico.
Preliminary October results reflect a modest continuation of the improvements we experienced throughout the third quarter as October Revpar is expected to finish at $50 with the highest 80 are of any month since the onset of the crisis running or $10 higher than the rates achieved in the second quarter.
Occupancy in October it was over 47% across the total portfolio more than 20 full percentage points higher than the second quarter occupancy and flat to September.
Despite the strong labor day weekend results.
Excluding the five hotels that were either closed or consolidated into adjacent operations at various times during the quarter.
Occupancy was more than 50% in October.
The trend of weekend occupancy and Revpar performance continued in the third quarter as leisure travel, particularly in drive to and non CBD markets continued to provide the vast majority of demand across the industry.
Weekend occupancy was 56% during the third quarter as the relative outperformance compared to weekday results accelerated each month during the quarter.
This led to weekend Revpar that was 40% higher than our weekday revpar, primarily driven by occupancy is that ran nearly 20 percentage points higher by the end of the quarter.
Despite lagging weekends on a nominal basis, we day rate demand in the quarter increased commensurately with weekends on a percentage increase basis as occupancy and revpar nearly doubled from the second quarter.
Weekend occupancy at our hotels located in markets, we consider as drive too was nearly 64% in the third quarter.
Extended stay hotels, which comprise nearly a quarter of our total guestrooms were also relative outperformance again during the third quarter, finishing was occupancy of more than 63% and exceeded 60% in each month of the quarter, while achieving a 51% revpar premium to our overall portfolio.
This trend continued as our preliminary October results indicate our extended stay hotels achieved 65% occupancy for the month.
Our suburban and airport hotels, which comprise more than a third of our portfolio. Guestrooms were also performance during the quarter posting occupancy is a 58% and 56% respectively. Both increases of more than 20 percentage points from the second quarter results.
These hotels achieved revpar premiums of 27, and 29% respectively to the total portfolio the core.
Urban hotels have continued to lag the industry recovery, though occupancy increases for our portfolio. During the quarter were in line with all other location types, finishing the quarter 20 percentage points higher than in the second quarter.
Revpar growth at our urban hotels led the portfolio on a percentage increase basis relative to the second quarter, posting a nominal revpar, two and a half times higher than our urban portfolio second quarter Revpar.
Our hotels continue to operate with extremely lean staffing models with labor resources being added back on an asset by asset basis strictly based on improved hotel demand.
We are currently averaging less than 14 fts per hotel compared to approximately 30 ft per hotel prior to the pandemic.
Despite this lean staffing model our team continues to demonstrate a steadfast commitment to prioritizing the health and safety of our guests.
Ever changing health and safety protocols and local ordinances provide unique challenges to our business. We are grateful to our brand and management partners for their constant awareness of and compliance with these dynamic policies.
Optimizing the guest experience has always been a central tenet of our business model and that has never been more important than it is today.
Finally to preserve liquidity, we have continued to delay most non essential capital expenditures for the remainder of 2020, along with common dividend distributions, which combined preserved approximately $30 million in the third quarter and will preserve $30 million of cash for the balance of the year.
Ill, let John speak to the specifics of our balance sheet, but with approximately $255 million of current liquidity and a manageable monthly cash burn rate that has been further reduced as our portfolio operating metrics have improved we are well positioned to navigate the recovery.
With that I'll turn the call over to our CFO John Center.
Thanks, Dan and good morning, everyone.
We've been pleased with the continued efforts of our operations team to diligently manage operating costs at our properties in an effort to maximize hotel level profitability and minimize corporate cash burn rates.
In the third quarter, our hotel EBITDA retention across the portfolio was more than 47%.
Which resulted in hotel level profitability in each month of the quarter positive adjusted EBITDA for the quarter and a reduction of our corporate cash burn rate to an average of just over $5 million per month.
Commensurate with increases in Revpar, our cash burn rate improved sequentially in each month of the third quarter and finished September at just four and a half million dollars the lowest of any month since the onset of the pandemic. This.
This represents a significant improvement from the second quarter, when our cash burn averaged $11 million on a monthly basis.
Revpar in cash burn rates in October generally tracked in line with September a level at which if sustained provides the liquidity runway of nearly five years.
We currently have $225 million available on our revolving credit facility and approximately $30 million of unrestricted cash on hand, which combined gives us $255 million of total liquidity.
Today, our weighted average interest rate is approximately 3.5% in weighted average term to maturity is approximately 3.3 years with no maturities until November of 2022.
Well, we've been pleased with the gradual improvements in our results and particularly October metrics that on a preliminary basis finished ahead of our pre labor day expectations, our near term outlook for the business generally remains uncertain.
We continue to operate in a very challenging and limited demand environment.
And the prospects for a more robust industry recovery are likely linked to fewer governmental and corporate travel restrictions and significant health advancements or the passage of time to mitigate the effects of the pandemic.
Though we remain confident the headwinds of our industry will ultimately abate.
The timeline has continued to be pushed out and we now expect a more meaningful increase in corporate and group demand to occur in 2021.
Historically November and December are slower travel months, and we would expect modest declines in absolute revpar levels from what we achieved in September and October though year over year declines will likely remain fairly stable given the seasonality of last year's results.
As we said last quarter. Despite the many near term challenges we face as an industry. We remain bullish on the long term prospects for travel related demand.
The uniqueness of this pandemic has forced us all to challenge the pre crisis status quo in nearly every facet of life and travel, particularly work related travel in a time of unmatched at home technology is at the precipice of that discussion.
While it's not unreasonable to conclude that the events of the last seven months will ultimately lead to a systemic decline in travel history would suggest otherwise infill.
Emphasizing that this is one of the most resilient industries in our economy and that people desire to gather in person and travel is an eight.
Prior to the crisis, we were witnessing and Fortunately benefiting from society is undeniable shift in preference away from the collection of material items in favour of experiences and services.
And while the pandemic has created an impediment to this progress we believe those long term trends that were significantly driven by a younger demographic will again reemerge as meaningful themes and the new post cobot normal got has been so heavily speculated about.
Here at summit, we are blessed with a terrific portfolio that has been recently renovated continues to capture significant market share. Despite the difficult environment and is poised to lead through the recovery.
We have an experienced team and a strong balance sheet with considerable liquidity to manage through the crisis, all of which gives us optimism and positions us well for the brighter days ahead.
And with that we'll open the call to your questions.
Yes.
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Our first question comes from the line of Michael Bliss Areal with Baird. Your line is now open.
Good morning, everyone.
Hi, Mike.
First just on the demand front.
Hoping you could give us a little bit of a breakdown of what you're seeing on the ground maybe.
Maybe what segments have.
Improved the most what segments are still lagging and then maybe your take on what piece of the business is a little bit more temporary and maybe we'll need to get replaced next year or whatever kind of were in a more normalized demand environment.
Yes sure. Mike. This is John look I think from a segmentation perspective as you would expect leisure continues to be the predominant demand source at the properties as we.
I mentioned in the prepared remarks, what we have had some good success, capturing some of the smaller more unique tight group business. Some of it I think is more sustainable we've got sports teams and other social event, that's probably more normal type of business. We also benefited in the quarter for some kind of onetime demand items related to storms in the golf and fires on the west coast.
Some of those that that wont necessarily repeat I do think we started to see some small signs of return of corporate travel not in a meaningful and I think youve somatic way in any way, but we do have pockets of demand across the portfolio, where we have good corporate demand we've got to hotel I'm still in the suburbs of Portland on Hills.
So that that's still runs very high occupancy and most of that is corporate demand. We've seen good corporate demand strength in silverthorne in Colorado from some some auto companies that do high altitude testing out there. So there are certainly pockets of that demand I mean, clearly that has been and continues to be the laggard and thats part of the expectation for that to start to recover in into next year and.
Our normalized demand environment.
Got it that's helpful and then.
On the Capex front can you maybe provide your outlook there for.
The remainder of this year and then as Youre thinking about 2021, I know, it's still early but maybe what flexibility you have to either spend more or less as you see fit in kind of your initial expectations on capex spending for next year probably.
Sure, Mike, It's Dan I think Fortunately.
We have been good stewards of assets and invested about $300 million over the last six years. So.
Our portfolio is relatively young to start with we do have the ability and did this year to significantly reduce what we had planned for the year, we still have.
Maybe five and a half million left.
This year to spend and feel that we can flex to spend more if business conditions improve.
If they don't because of the high quality in the recent renovation at most of our properties.
Oh very confident we can get by with a minimal number as we did this year.
Thank you that's all for me.
Thanks, Mike.
Thank you all.
Our next question comes from the line of Neil Malkin with capital One Securities. Your line is now open.
Hey, guys good morning.
Morning.
Hey, I was hoping if you could give an update on sort of your conversations with the brands in terms of.
Any brand standard changes operating model.
Adjustments.
You can highlight that are meaningful that have been agreed to or that you see.
Really.
Meaningfully impacting.
The the model or the fixed cost I guess no burden of.
You're already pretty efficient hotels.
Sure This is Dan.
Ed we're in very close contact with the brands that we have had great dialogue.
They've created working groups of which were a part of from top owners and management companies to really help.
Our design cleaning and health and safety standards on the operating model. Obviously, we are adapting our model to eliminate the cleaning a stay overs.
Offset by some more frequent cleaning of public spaces and.
The food and beverage offerings are now running as mostly a grab and go model and starting to have some limited menu offerings in selected.
Locations.
Yes, so I think those type of as it pertains to the cleaning to stay over isn't modifying food and beverage I think our two key things that we are hopeful we'll have flexibility in tailoring those too not just our guests and our locations, but through the profitability the hotel so.
We're optimistic as you would expect the brands have been been good partners and hopefully we'll be able to find some some ways as you pointed out we already have a really great operating model, but.
Little enhancements will certainly make it better.
Okay. Thanks, and then I don't know if I missed this but you talked about I think John said something about.
More meaningful corporate and group demand into 2021, it did that did I hear that correctly and then if thats the case.
Well, what what gives you confidence in that.
Is it is it maybe some smaller regional business demand from some clients that have kind of articulated that to you that they plan on being there what what kind of gives you that confidence or or makes you feel that way.
Yes, sure I think the comment was really that kind of a timeline for when we expected that type of demand to come back has has really continued to be pushed out and we now expect that to return more meaningfully in 2021, I think what gives us some level of confidence is that as you mentioned you know we are seeing some sporadic.
Pockets of demand, it's really more leisure or is that it's really more regional type of travel from a corporate perspective, you're not seeing the big.
Additional accounts the big technology companies the financial services firms that you may be otherwise associate with with corporate travel demand, but we do believe there is some pent up demand for from corporate travel demand and a lot of whats inhibiting that today as restrictions spin.
Specifically corporate restrictions that overtime, we will believe will be lifted and once those are lifted again. There is some pent up traveled some corporate demand that we think will ultimately manifests itself in increases in corporate travel.
Okay.
Great last one is actually on Orlando, that's pretty good size Mark for you guys just wondering.
What what your sense is for wind.
Disney and Universal.
If you are in contact with them.
What they are kind of plan is for.
Reopening getting to more of a normal level and obviously that will have a fairly big impact on your your portfolio there.
Yes, we think that we'll start to see more traction from the holidays and that point forward.
As John pointed out I think leisure travelers.
Ben fairly strong EPS and resilient and we think that will that will translate into positive.
Positive and growing numbers and are in Orlando in particular.
Thank you.
Yes.
Thank you. Our next question comes from the line of Austin Wurschmidt with Keybanc capital markets. Your line is now open.
Hi, good morning, guys.
Just curious going back to the demand break down Im curious what do you guys attribute to the strengths and weekday rates and sort of the post labor day trends.
Holding up better than expected and then also curious if you have a sense whether an increased percentage of your gas are flying into locations is the tier say data as has kind of taken a leg up post labor day.
Yes, sure I think as.
As we looked at October I think what we saw was really a continuation of what we saw it take the labor day holiday out for a second but really what we saw late into August and through September really continued and dive into October and that was.
Our stronger performance on the weekends and that we days far stronger performance in kind of a non core urban CBD type type of hotels. So.
I don't necessarily have a great insight into how much of that was drive to our flights you I do think it continues to be much more heavily drive to we certainly see the TSA travel metrics I think we're encouraged that there continues to be slight sequential increases there, but I don't think it reflects a significant change in the nature of the demand I think it really for.
Reflects more continuation of what we saw off late in the summer into the early parts of fall.
Okay appreciate that and then.
Turning to kind of yes.
Dispositions I mean, we've seen some of your peers explore dispositions I recognize you guys have ample liquidity at the current cash burn rate.
But as you do think about.
Leverage and restrictions on your credit agreement.
Aside from the obvious benefit being a recovery in fundamentals what other options are you exploring today.
Yes look asset sales or certainly a very good option for us and something we definitely considered.
We're just not a distressed seller as you pointed out so.
No. There is a lot of capital out there I think our type of assets are in high demand.
As we pointed out multiple times you know our hotels are generally younger renovated in great locations. So definitely I would expect continued interest in those and should those opportunities come.
Come up where where there is a.
Trade to take place, it's something we're definitely behind our list.
Okay. That's fair and then just last one.
You referenced the Revpar index I think it was a 151% or so versus your concept is there any risk in the ability to continue capturing that relative outperformance and and is that just a function of the mix of business, you're capturing versus peers are you running.
Fairly meaningful meaningfully higher occupancy rates as well versus versus the comps.
Well.
I'd like to just to parse that obviously, we've got great asset management and revenue management team that are driving it.
Incremental business.
A little bit unique to our company having in house revenue management that can look across the entire portfolio and and pick unique spots to.
Dr. drive revenue.
Part of that gain admittedly is also coming off a smaller number.
So there is a.
A point, where it is inflated because its coming off a very low base number but.
That in any way into it shouldn't in any way point to the lack of hard work and effort and high quality of the portfolio. So to maintain it I think in this environment, we feel very good about.
For for that to maintain for multiple years. It gets it gets a little bit more challenging.
Okay. Thanks.
Thank you. Our next question comes from the line of Danny Assad with Bank of America. Your line is now open.
Hi, good morning, guys.
So I've two questions. My first one is more on like the operating model. So.
What do you think labor looks like once we return to prior peak in terms of occupancy. So if I heard you correctly, you think we are down to like F 14 ft ease.
How many EPS.
Do you think we would need and normalized environment for your portfolio.
Portfolio.
Dave It's Dan I, It's a great question and I think it's a it's going to depend on the type of hotel, we do have some hotels that have.
Very good bar business and.
We'll need to kind of re staff as the as the demand comes back.
We also have some hotels that run very high occupancy that we're going to need.
From.
We're going to need to get the majority of our housekeepers back.
And if there is a.
Property that has a lot of.
One day stays that that doesn't give us the ability to clean a stay over because they're they're checking out every day so.
I think each property will.
Be a little bit different but we would expect.
And the vast majority of our properties to be lower than it was at prior peak, which we think is positive for the industry and specifically our operating model.
Got it and then John maybe this one might be a little bit more for you but.
You've done really well at managing your liquidity and we're now coming down on the cash burn number so.
What's your thought process on managing that liquidity runway and how does that factor into your and your JV partners.
Thought process on potential acquisition capacity and the appetite for it.
Sure, Yes, as you said, we've been fortunate that our cash burn rate is at very I would say manageable levels. At this point. It is something that we continue to manage very very closely as Dan referenced from a capex spend we're still spending kind of the minimum amount that we can to make sure we're managing cash burn.
We just talked about labor and fts at the properties and so were still managing those line items incredibly closely to try to get back to.
A breakeven level, which we're hitting on the weekends were not there mid week or kind of for the full week, but we are we are getting there on the weekend. So we don't need that much more incremental demand to kind of push us over to a breakeven level I would say there is certainly an.
An appetite from both our from both us and our JV partners to at some point in time take advantage of what we think are going to be some pretty attractive acquisition opportunities.
We obviously have some constraints today from our balance sheet and our in our bank waivers that will need to be worked through but we do expect one there to be a pretty deep set of opportunities into a fairly long window to execute those on so.
Today, I think that we're certainly watching everything thats happened in the transaction market and there hasn't been a lot of trades, we do expect those opportunities to become more meaningful as we get into next year and beyond.
Thank you. Our next question comes from the line of Chris Woronka with Deutsche Bank. Your line is now open.
Hey, good morning, guys.
Good morning.
Wanted to ask you about the about kind of like for like rates and I know that if.
If we look at 80 are right now in totality, its just because of mix shift in.
So much more leisure and corporate but is there any way to kind of get out where you are on like for like rate.
Especially on some of the non leisure stuff that you are seeing kind of mid week in you.
Having any what are you hearing anything through the brand companies about.
Any kind of corporate feedback for rates as they begin to think about traveling again next year.
Yes.
Yes. This is again a great question, Chris I mean, it's something that I think we've we've debated extensively internally is what is a more normalized rate environment I think with the data would point to today is that rates are down even within the same segment I think clearly what you're seeing is a significant.
Highly unusual shift in mix.
Towards as you mentioned the lower rated.
Leisure demand away from higher rated corporate demand and how that looks like and how that shakes out when we get into a more normalized environment I think is still very much.
Up for debate.
This is not a traditional RFP type of seasonality, you've you've probably heard that multiple times I do think we're hopeful that.
I think what we'll see from an RFP perspective is.
Accounts wanting to maintain some level of pricing flexibility to be able to price from on a dynamic pricing basis, but hopefully.
Continuing to use in many in many instances base 2020 rates would hold into 2021.
Okay.
Helpful and then.
Yeah, as we think about kind of that operating model question and I know probably no final decisions have been made yet but.
How do you think about the stay over housekeeping.
Being either.
Permanently eliminated or making an add on or perhaps it's different based on already category or something like that but wondering what are your longer term thoughts on that.
Chris It's Dan.
As our kind of the thoughts and we'd like flexibility and and I think that as continued discussion with the brands and how do we.
Affect that change on a model basis going forward and what does that mean if is it by request only and is there a cost for that and I think theres a lot of different ways to look at that so I think that that the.
The question earlier, we talked about.
How do we look at staffing coming back that in and of itself cleaning stayovers will be a big part of that Fortunately, we only have one union hotels. So we do have a lot of flexibility right now we've got.
General managers mopping floors in changing sheets and that's.
They've been been been gracious and had been working hard, but we do need to get team members back to their fully their core job, which is driving.
Sales in revenue and keeping guests happy and guest safe. So we do think a lot of that comes back and that in and of itself that not.
Not cleaning the stay overs or as requested I think is one of the unanswered questions that you know as owners, we're still trying to find a an elegant solution for.
Okay, Great and then just finally can you maybe.
Give us an update on where your portfolio is on kind of the.
The keyless mobile entry and where you might hope to get through in the next couple of years.
Yes, so it's a great question thanks for asking.
All of our properties with the exception of two are fully operational with.
Keyless entry.
And we will have the remaining two done here and before the end of the month. So it was a commitment we made early on to finish up quickly.
To be consistent with guest preference and having the ability to use it for as much of a frictionless experience as they could so we've made great progress and be completed fully here in the next.
Several weeks.
Okay very good thanks, guys.
Thanks, Chris.
Thank you. Our next question comes from the line of Bill Crow with Raymond James Your line is now open.
Good morning, Dan given your role owner advisory committees and various brands I'm just curious whether there is a risk that you perceive out there that.
Maybe one brand family whichever one it might be might try and gain significant market share by now.
Either promising.
During the state route clean or elimination, we're short fees or something it just.
It is a pretty good uniform views on these things across the different platforms.
I don't know if I would say, there's there's uniform views I think theres uniform understanding.
I think they all recognize that.
The their partners, which are their owners.
Are in need of enhancements to the business model.
And these were discussions that were had prior to the pandemic. So it's it's not something that just came out of the pandemic. So.
I think there is some consistency with an understanding but I don't know that there is.
Common view.
On how they are going to implement that.
Certainly one could take an aggressive stance early and become.
A brand of choice from an owner's perspective, I think that's a very real possibility.
But I don't know if there will be something.
Something that will be consistent and equal across the board. They all have their their unique brands. They very much focused on guest satisfaction as are we.
So finding that elegant solution to be able to market behind and keep guest satisfaction scores high is is certainly top of mind, but.
I would I would say that there is a clear under.
Understanding, but probably not exactly shared plans.
All right. Thanks, John one for you and I'm not expecting a whole long.
The answer but can you just tell us how.
Your discussions with the lenders is evolving over the last few months.
Sure.
Look we continue to have a lot of dialogue with them given how how things have transpired and again as demand and the recovery continues to be pushed out. We certainly stayed close to them. We recognize that theres been a number of our peers are a couple of our peers any ways that have gone back and address near term maturities.
Probably more near term liquidity issues and extension of waivers.
I think again, we're coming into this I think on a from a relative position of strength for we've got fairly manageable cash burn rates I think a portfolio thats essentially entirely open and poised to recover quicker and thankfully. We just don't have any maturities to worry about till November of 2022, but I think just the discussions with the lenders country.
We need to be very constructive.
Excuse me continue to have a fair amount of dialogue with them.
Okay. That's it for me thank you.
Thank you.
Do have a follow up question from the line of Neil Malkin with capital One Securities. Your line is now open.
Hey, guys. Thanks, just one.
Tobey cases are starting you know they've been over the last couple of weeks accelerating.
We started to see a couple of the Blue States cities.
Either partial shutdowns are reverting.
Pulling back on on some.
Okay reopening plans I think Boston, Massachusetts, and then.
San Francisco as well I'm just wondering.
What.
How do you think it will look this time around if you know the second wave.
Continues to pick up.
In terms of potential restrictions again.
Do you think that that now people have a lot more information than we have sort of a planned maybe it won't be as impactful too to hotel fundamentals or.
Our could we see another.
You know potential dip over the next.
Coming months.
Neil It's Dan Thanks for the Great DC softball question.
Okay.
Cove is a serious issue and.
It affects people's different but.
There are clear benefits that.
Cities have seen by.
Shutting down in limiting exposure.
There's there's also clear consequences for.
Business owners and like.
Like us and trying to find that delicate balance.
When their lives at stake is always is always tough.
I think some of these cities carrying on an over abundance of caution is well founded.
As these cases continue to go.
Grow and certain markets I think moving quickly.
There are is a smart and can slow down spread and hopefully reduce cases and ultimately does so it's.
It's not surprising that there are cities that are and communities that are moving quickly to do that.
To the extent that it effects.
Our hotels in our markets.
If it's in those markets it certainly will slow things down.
But I think.
Making sure that the health and safety of.
Travelers and is certainly Paramount I do believe it will be shorter term and quicker rebound as these things come up so I'm not sure that that's over.
Overly insightful, but.
We do see that there is some risk in these markets.
That we have to manage around from a labor perspective.
All right. Thank you appreciate it.
Thank you our last follow up question will come from the line of Austin Wurschmidt with Keybanc capital markets. Your line is now open.
Thanks, guys. Just one quick one here. So you referenced in the prepared remarks that October Revpar was.
Around $50 and then you went on to highlight that you really don't need too much additional demand to get you to core corporate breakeven, which makes sense based on the cash burn rates, but when you marry that with the seasonality comments in in November and December slowdown I'm, just curious if that potential slowdown if you.
Are basing that on historical trends or if there's something in the booking data.
You see looking out that gives you greater pause given the fact that business travel is a much more smaller component of demand today.
Yes, I do think it's predominantly based on what we've seen historically, we're operating in an environment that is incredibly short term booking window I think in the third quarter, 70% of our room nights booked within seven days and 60% of a booked within three days. So you know we generally don't have a lot of visibility.
At the end it from of it from a booking window perspective, we have even less today. So it's hard for us to use anything but kind of what we've seen from historical perspective, I do think we have some level of optimism around the holidays as Dan talked about in the end the pacing data, albeit small at least around Thanksgiving at this time as positive, but our expectation is.
For some level of moderation in the first couple of weeks of November again based mostly on what we've seen historically.
Thanks, Joe.
Thank you. This concludes today's question and answer session I would now like to turn the call back to Mr. Hansen for closing remarks.
Thank you all for joining today in this time of uncertainty now rest assured the team at summit is experienced working hard for every dollar and we believe we're positioned very well to get back to gross wish you all a terrific week and look forward to seeing everyone in person soon.
Yes.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
Everyone have a great day.
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