Q4 2020 Chatham Lodging Trust Earnings Call
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Greetings and welcome to Chatham Lodging Trust fourth quarter, 'twenty and 'twenty financial results Conference call.
This time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded and is now my pleasure to introduce your host Chris Daly owner of Daly Gray Inc. Thank you you may begin.
Thank you Doug good afternoon, everyone and welcome to the Chatham Lodging Trust fourth quarter, 'twenty and 'twenty results Conference call. Please note that many of our comments day are considered forward looking statements as defined by federal Securities laws. These statements are subject to risks and uncertainties, both known and unknown and described in our most recent form 10-K and other S. D C. Five.
Please.
All information on this call is as of February 'twenty, four 'twenty 'twenty, one unless otherwise noted and the company undertakes no obligation to update any forward looking statement to conform the statement to actual results or changes and the company's expectation.
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 Chatham Lodging Trust Dot com.
<unk> provided you with some insight and Chatham 2024th quarter results allow me to introduce introduce Jeff Fisher, Chairman, President and Chief Executive Officer, Dennis Craven Executive Vice President and Chief operating Officer, and Jeremy Wegner, Senior Vice President and Chief Financial Officer, Let me turn on the session over to Jeff Fisher Jeff.
Thanks, Chris and good afternoon, everyone.
First and foremost I want to thank you for your interest and Chatham and we really sincerely appreciate your participation and interest during these unusual times and.
As I look back this last year as required intense asset management and operating focus and thankful for our platform and our relationship with island hospitality and we are able to pivot very quickly from a corporate perspective, we were laser focused on how best to preserve long term shareholder value.
And knew that we needed to maximize operating performance reduced capital expenditures and G&A expenses and preserve our strong balance sheet and enhanced liquidity.
We certainly produced noteworthy operating performance during the pandemic, we've had the highest absolute revpar of all lodging Reits over the final three quarters of 'twenty 'twenty and.
And companies who've reported their fourth quarter results.
Pending others who've not yet reported we continue to have the highest operating margins of all lodging Reits since our IPO, we've accumulated a portfolio that delivers on a relative basis strong topline and bottom line results no matter the cycle.
We generated the second highest EBITDA per room of all lodging Reits and Twenty-twenty Lastly, and this is pretty incredible through this unprecedented period, we were able to produce positive adjusted EBITDA for the full year.
Our sales and revenue management teams have delivered outstanding results since the outset of the pandemic as proven by our significant Revpar index or market share gains.
Since the beginning of April our Revpar index has jumped 15% to an average monthly index of 136 compared to our 2019 already strong Revpar index of 118, the impressive gains are being driven by islands outstanding direct sales efforts from its national.
Digital and local sales teams as well as concentrated revenue management efforts, ensuring that were quickly adjusting to the diverse demand sources and today's lodging environment.
Additionally, and very importantly, we have the largest concentration of extended stay rooms of all lodging Reits at 58% and another impressive statistic during 2020, 80% of our hotel EBITDA was generated by our residents and and Hollywood.
Suite hotels.
A significant increase over the percentage of rooms are upscale extended stay hotels provide us the flexibility during periods of growth or weakness to diversify our customer base to maximize revenue.
And we believed and a spouse for almost four decades and certainly these results are a testament to our portfolio without sacrificing the upside we can limit the downside.
Okay.
From an operating expense standpoint, we are hyper focused on every expense on the island side, we have a team of analysts that are and day to day touch with every hotel G M and investing 100% of their time to help each hotel micro manage its expenses.
Every regional manager is looking at current expenses daily labor is by far our biggest expense, even though occupancy and revenue has increased substantially off the April lows, our hotel and employment has not increased materially.
On March one we had almost 1800 hotel level employees at June 30, our hotel employee Count was 776 and as of September 30 that count was 855 employees at year end factoring and the sale of the mission Valley Hotel employees.
Essentially remains unchanged again, a fantastic job by our team to hold employment steady, despite improving trends and adding back certain guest amenities.
As trends improve in 'twenty and 'twenty, one and this focus will need to be maintained to generate strong flow through to the bottom line.
In addition.
In addition to hotel level expense management at the corporate level, we've been very aggressive we instituted corporate pay cuts across the board to all employees and unfortunately had to reduce our head count by 35% and total we have reduced salary costs by over 50%.
Our corporate G&A expense was down approximately 20% year over year also we significantly cut capex during 'twenty, and 'twenty or 'twenty and 'twenty budgeted Capex was $23 million and we were able to cut that expense to 14 million and reduction of approximately 40%.
Of the $14 million spent $11 2 million other spending was on two renovations that were ongoing when the pandemic hit. Additionally, we will be pushing up.
To drive that expense line lower.
And we got some wins in 'twenty and 'twenty and property tax expense was down $1 2 million or over 6% at our 39 comparable hotels.
And other strategic goal was to solidify our balance sheet as much as possible and enhanced liquidity with plenty of capacity and debt markets wide open.
And we're using our credit facility to fund our Warner Center development, given the potential liquidity crisis. It was important for us to obtain more permanent financing, we pause the development and the second quarter, having already invested about 30 million into the project, we were able to fully fund the remaining costs with the construction.
And loan. Additionally, we're able to amend our credit facility to gain full availability of the $250 million facility that allows us to make acquisitions, if we see and opportunity.
So on the liquidity front, although we are burning less cash than most of our peers and even though our liquidity runway was longer than most of our peers. We felt that if the opportunity presented itself, we would be open to selling and asset if the pricing was strong so that we could further enhance our liquidity with the ultimate outcome being to <unk>.
Adding flexibility down the road again to be opportunistic on the growth side.
And this ultimately add shareholder value long term this exact opportunity arose when we started talking with the San Diego Housing Commission.
And then the fourth quarter, we sold our 192 room residence and mission Valley to the San Diego Housing Commission for $67 million or almost $350000 per key a very attractive six and a half cap rate on 2019 results as we look back on.
Lodging transactions in 'twenty and 'twenty. This sales stacks up as one of the best of all premium branded sales in 'twenty and 'twenty.
Last year was a difficult year across all fronts, but despite despite all of that I'm proud of our efforts and very appreciative of the sacrifices made by our employees across the country.
Our teams at Chatham and island have the experience to persevere through these situations and our achievements at a pretty dire year are noteworthy. We certainly believe we've made some important strides to protect shareholder value now and provide flexibility to add value down the road.
And we can all say, we're looking forward to better days in 'twenty and 'twenty, one from a lodging perspective booking visibility remains days and maybe a couple of weeks ahead, not a month or month and advance leisure travel remains the best segment and the industry and weekends are the strongest days of the week.
Through the first eight weeks of the year Friday Saturday occupancy is 51% about 15% higher than the other five days of the week or a D. Ours are slightly higher on the weekend Presidents' day weekend was particularly strong with occupancy of 60% Mark.
Trends seem to be picking up steam again led by leisure travel and I will say, we are seeing a small bit of business demand pick up and various markets.
With the continued vaccine rollout and the continued decrease and hospitalizations and death rate. We do expect leisure travel will lead us out of the pandemic and suspect that business travel will gradually come back as we make our way through the calendar year on.
Although we haven't been able to reach cash flow breakeven, we still estimate we need to achieve revpar of approximately $75 there.
I firmly believe that given our portfolio attributes our industry, leading platform with island or our ability to appeal to the diverse customer base that our room type and hotel type allows we believe we'll be able to grow occupancy and rates faster than most of our lodging REIT peers and.
And return to 2019 levels much sooner our liquidity is strong our balance sheet is strong and we have no looming debt maturities and our teams have an incredible amount of operating and corporate experience through good times and downtime and we are enthusiastic about what lies ahead for Chad.
And our investors and with that I'd like to turn it over to Dennis.
Thanks, Jeff and good afternoon, everybody for the quarter, our Revpar declined 60% to $47 down from our third quarter third quarter, Revpar 58, which benefited from more seasonal leisure travel.
And the downward shift was not surprising given the seasonality of the industry as well as the spike in COVID-19, and November and December.
January Revpar $47 was higher than November revpar of $45 and meaningfully higher than December revpar $40 and.
And importantly February revpar through the twenty-first was $52, which would be the highest level since October and again sequentially higher and about 10% more than January revpar. The gains have been made and occupancy with ADR.
And a tight range and the low hundred dollar range among our top six markets Los Angeles was our top performing market and the fourth quarter with Revpar of $79, our Anaheim hotel rate and occupancy of 84% and the fourth quarter due to a large nursing group and some corporate demand and Marina del Rey Hilton.
And garden and had the highest ADR and our portfolio and the quarter with an ADR of $154, which was down 25% from 2019 levels.
San Diego had our second highest revpar among the top six markets at $74 a residence Inn Gaslamp had revpar $78 on a pretty strong ADR of $143, which was only down 15% to last year.
Continuing its strong performance among our top markets are north eastern coastal market portfolio are and revpar of $63 on occupancy of about 50% and rates of approximately $130. Despite their geographic location and and a little bit colder areas. These three hotels continued to benefit from.
The leisure traveler in fact, our Hampton and Portland, Maine had the second highest fourth quarter, ADR and our portfolio and approximately $144. We're looking for a strong summer and all three of these markets. Since these are gonna be open. We believe you know and knock on wood for the entire summer after only being open for about half.
On the summer last year.
Silicon Valley Revpar was $46 on ADR of 105, and occupancy of 44%, which compares compares to the 2019 and fourth quarter revpar of $158 on occupancy of 69%.
18 of our 39 hotels had fourth quarter occupancy over 50%, which compares to 21 hotels and the third quarter and 11 hotels and the second quarter.
Some other standard outperforming hotels are markets, which were very similar to our third quarter outperformers, where our Fort Lauderdale residents and our two hotels and Charleston, Summerville, South Carolina, and a residence Inn and wholesale and mountain view, California.
We continue to see and average length of stay much longer than historical levels for our portfolio, especially with respect to our two most significant brands residence Inn, and Homewood suites, and our residence Inn hotels average length of stay was for four nights and the 2024th quarter, which compares to $4 eight nights and the third quarter $5 90.
And the second quarter, and 2.4 nights and the 2019 fourth quarter.
For our Homewood suites hotels, our average length of stay was $3 three nights and the 'twenty and 'twenty fourth quarter, which compares to $3 nine nights and third quarter, five nights and the second quarter, and two and a half nights and the 2019 and fourth quarter.
Looking at our segmentation production compared to last year corporate revenue is off 56% versus a decline of 65% and the third quarter. Our retail production is off 60% in line with the third quarter and governments are 54% compared to 46% and the third quarter we.
We saw a pretty good boost on our local negotiated segments and so we scored some good wins and a handful of our homewood suites market's booking primarily government nursing and prison staffing books of business.
Lastly, our fourth quarter operating margins were 25% on revpar of $47, yet again, proving how efficient our operating model remains despite the nasty overall lodging fundamentals and that we were able to adapt very quickly once seasonality kicked in and November and December for the second consecutive quarter and for the entire.
Year, we were able to deliver positive adjusted EBITDA.
Our margin and success throughout the pandemic has been highly attributable to our ability to control all costs, but most importantly that comes down to labor labor is by far our biggest expense comprising about 38% of our operating expenses and 29% of our revenue on.
Our labor cost per acre on a per occupied room are down about 15% and the quarter and when you look at our rooms department and our labor cost per occupied room or down approximately 13, 30% to $13 room compared to $18 per room last year and.
As we head into 'twenty and 'twenty one it is certainly critical for us to scrutinize, our labor models and keep them under control when occupancy and rates start to jump.
On past calls, we stated our belief that the complementary food and beverage office offerings will be changing for the industry due to health and safety protocols and customer.
<unk> and Theres been should benefit our bottom line, we are working closely with our brand leaders at Marriott and Hilton and sharing our experiences and our vision for what that should look like and the fourth quarter, our complimentary food and beverage costs have come down 70% year over year and interestingly our evening hospitality costs were a grand total of.
$2000 and the quarter.
On the Capex front, we spent approximately and we spent less than $1 million and the fourth quarter on our 39 hotel portfolio and we invested $10 million and our Warner Center development. The Warner developed Warner Center development is going according to plan from a timing and cost perspective, and we very much and looking forward to opening the hotel in the fourth quarter.
Of this year.
Looking ahead to 2021, our Capex budget includes no renovations and total estimated spend of approximately $6 million of which about half of that is for me mechanical and long term investments and about $750000 is for brand required items primarily related to.
The new lock system at our Marriott branded hotels.
I think with that I'll turn it over to Jeremy. Thanks, Dennis Good afternoon, everyone. Chatham Q4, 2020, Revpar was $47, which represents a 60% decline from Q4 2019.
While the $47 Revpar was lower than our Q3 revpar at $58, the 60% decline versus last year with a slight improvement versus Q3, 61% decline Q4 is always a seasonally low quarter for Chatham business and Q4 2020 was also impacted by elevated COVID-19 spread relative to Q3.
Through our significant efforts to contain costs, we were able to generate the same store Q4 hotel EBITDA margin of eight 4% and GOP margin of 25, 4%, which is quite strong in light of our $47 revpar and the quarter.
Our Q4 2020, adjusted EBITDA was 0.2 million and cash flow before capital, which represents hotel EBITDA less corporate G&A cash interest and $2 $3 million and principal amortization was minus $9 5 million.
Chatham has a strong balance sheet to position positions us well to weather the disruption being caused by the COVID-19 pandemic and to begin considering investment opportunities should they arise.
We ended Q4 with $21 $1 million of unrestricted cash and $10 3 million of restricted cash as growth with loan servicers that can be used for capital expenditures property taxes and insurance.
In November we completed the sale of the residents and mission valley for $67 million, which generated a gain of $21 1 million and allowed us to repay the $26 $7 million mortgage on the property and $37 7 million and borrowings under our credit facility to $67 million sale price represents a six 5% cap rate.
On the hotels 2019, NOI of $4 $3 million and a 14 times multiple on 2019 EBITDA of $4 8 million.
In December we completed an amendment to our credit facility that provides us covenant relief until Q1, 2022, and the ability to utilize the entire $250 million capacity the facility.
When covenants begin to be tested again, starting in March 2022, EBITDA and NOI figures and used for covenants will be calculated on an annualized basis for the first three quarters after testing resume.
At December 31, we had $136 million of liquidity between our unrestricted cash balance and revolving credit facility availability, which provides us a substantial amount of runway for performance to recover and <unk> and capacity to consider potential investment opportunities should they arise our cash burn has been limited during the.
The pandemic given the resilience of our extended stay and limited service asset class and the superior superior performance of our hotel manager and we expect cash flow to continue to improve and the upcoming quarters as COVID-19 vaccination deployment and progresses infections decline and we exit the seasonal low period that occurs for our hotels and Q4.
And Q1.
Chatham and balance sheet also benefits from minimal debt maturities over the next several years the only debt we have maturing between now and the end of 2021 as a single $12 6 million nonrecourse mortgage loan that matures in September 2021, and.
After that the next debt maturity, we have is for our credit facility and March 2022, but we have an option to extend that maturity through March 2023, we will have a significant amount of time for hotel operating performance to recover before we need to refinance a material amount of debt beginning in 2023.
Since visibility around the timing of a recovery and hotel operating performance remains limited we are not going to provide guidance at this time.
This concludes my portion of the call operator, please open the line for questions.
Thank you ladies and gentlemen at this time, we will be conducting a question and answer session. If you'd like to ask a question you May press star one on your telephone keypad, a confirmation tone will indicate your line is and the question queue. You May Press Star two if you would like to remove your question from the Q4 participants using speaker equipment and may be necessary to pick up your handset.
Before pressing the star key.
Our first question comes from the line of Ari Klein with BMO capital markets. Please proceed with your question.
Thank you and good afternoon all.
On the cost side, how you're thinking about the paint and bringing more employees back and in relation to occupancy and you know how and how do you think that trends across the year into next year and then maybe upon a return to a normalized environment and how you're thinking about margins longer term versus where they were maybe pre pandemic.
Yeah, I think all right. Good afternoon, I think to take the second part of the question first I think lesson and I believe between the tweaks that are happening for the evening and social hours basically being eliminated breakfast complimentary.
Breakfast, especially at our extended stay and limited service hotels, I think the offerings, there going to be tweaked back a little bit as well.
And then I think when you're talking about room frequency of room cleaning.
We do believe there will be savings there as well.
And I think we've talked about this for a few quarters now.
We do see margin improvement on an apples to apples basis pre pandemic to whenever we stabilized down the road.
And we you know we haven't quantified and in terms of how many how many basis points at this point, but we do think apples to apples, there theyre going to be better.
And in the future as opposed to they are as opposed to what they were pre pandemic I think from a 2021 and what I said in my prepared remarks, you know its going to be very important for us.
As a management team and island hospitality on the operating side as occupancy starts to come up that the rush to bring back staffing levels and frequency of cleaning.
Which just isn't going to be there is going to be pretty important to stay on top of and.
Especially over the last 15 to 24 months.
Island hospitality has dedicated.
Our resources are on their operations team.
And really spend a lot of time day to day talking to general managers.
And all of our hotels.
And a real time basis managing.
Staffing levels and expense levels. So.
Certainly and that's just something we've got to stay really focused on.
To understand that it is a new operating environment that is the standards are going to be different moving forward and what they were pre pandemic.
Got it and and then maybe can you talk a little bit about the the M&A market and you know your expectations there and what are you seeing from a pricing standpoint, and what kind of what kind of opportunities are out there.
And then from a market preference point of view are you somewhat agnostic or are you at certain preferences, whether it's sand out there or other types of markets and you'd prefer.
Yeah. This is Jeff.
Thank you.
On M&A, I think youre, saying that theres not a lot of transactions right now I think that bid ask gap is pretty wide.
And without a bunch of distressed properties coming to market, yet and there is still some anticipation that happens as we move through the year second half of the year, you've really got some owners.
And are testing the market and testing what kind of values day, you know our offers and they might get relative to their 2019 value.
And.
Although there has been a few deals done at some pretty small discounts to a 2019 realistic value you know I just don't see very much happening nor do I see a lot happening and and the next three or four months. So you know we're in the market.
And we're talking to owners all the time you know we've got we've got good folks, including myself and do that.
Every day, but I don't think it's they are yet.
But we want to be positioned properly to be able to take advantage of those opportunities that may come we want to be opportunistic, but obviously, we want to keep an eye on markets.
And why the southeast and other markets that seem to have even pre pandemic.
<unk> growth better revpar growth and the markets.
And then the average growth. So we'll look at it that we're trying to understand the real supply trends in those markets, but that's going to take a little time to shake out as well you know we really don't believe all the numbers. We read so I think time will tell.
Over the next six months what direction that goes in.
Our next question comes from the line of Bryan Maher with B Riley Securities. Please proceed with your question.
Get act and so on the same resident and how did that opportunity kind of come to you and we've actually read about California markets looking to do more of that and do you see the opportunity to do more of that type of transaction.
Yes go ahead.
Mr Craven, who.
Ill handle that inbound call very dollar piece of it.
Yes, no I mean listen I think Brian It came down again and came to us through well I mean, it was inbound interest.
Debt you know that started the conversations not necessarily about that particular asset, but but certain of our certain of our assets and southern California and.
And I think as is as you know as we started getting into more details and sharing information, especially the needs of certain areas I think.
We were able to pretty much come down to.
That particular location I think there is and you've read about several of these that have now happened and the state of California. There is continued interest.
With the state of California, and in each of our markets to be honest for certain of these type things, they're not easy to do.
Especially from the financing side on the on the housing Commission side.
And it requires a lot of different pieces of financing and.
It requires a building that is.
Basically ready.
And up to all current standards of fire and life safety requirements 80 day accessibility.
On to where it makes sense for the entity or for the housing and commissions to do that so.
And we do have continuous discussions with.
And with certain of not only Chatham hotels, but hotels that are also in California within our within our Innkeepers joint venture.
And we will continue to kind of go down that path to see if there's any opportunities there, but we are we do understand that the state is planning to make more funds available for those types of deals in 2021.
Great and then when we think about a D R, especially when we look back to 2000 and now some of the rationale.
That we saw back then.
How are you guys thinking about the market and your competitors keeping rate you know Eddie and a rational level, whether its lessons learned or what and how is the island.
And Matt.
Yes, I mean, it's.
And I'd say, it's very they're addressing it on a very specific by hotel basis, whereas I think most of you know a lot of these markets are selling you know and we've seen rates basically since the early days of the pandemic and the you know what was 90 to $110 range.
And that really hasn't moved much has a portfolio, but you know as if you look at our portfolio, particularly and especially when you look at leisure markets, such as Fort Lauderdale Savannah.
Portland, Maine, Portsmouth, New Hampshire, and exited in New Hampshire.
San Diego, it's very you know they have a very close eye not only on rates over the next 30 days, but and importantly rates that are over the next 180 days through the summer months, where I think everybody.
I believe the demand, especially on our leisure basis is going to be really strong. So you know I do believe there is some good rate opportunity again and a lot of those.
And more leisure markets to hold if not increase rates, even over and maybe what 2019 was.
Alright, great. Thanks, and just maybe one last one for Jeff.
The lodging stocks, especially the REIT have just been ripping hire some approaching pre pandemic levels. What are your thoughts there and an environment, where we're still running you know industry wide revpar down 40% to 50%.
Well, we certainly like to see that happen right.
Because we think we've done the right things for our shareholders as we've talked about.
Debt at a position us well for going forward.
There's obviously lots of expectation about business coming back pretty strong and the second half of the year.
We're a believer on that front are you know we were real excited about our President's day weekend, and our 65% occupancy on Saturday night, and are 100% occupancy and some of those hotels actually that Dennis just mentioned so yeah.
We think that there's gotta be business rail business out there to be had or revenue management department is absolutely taking off all pandemic pricing.
Starting on March one in those markets are and and most all markets will wait until the very last minute to see how close we can get you know to fill and.
And before Theres any rate adjustment at all so hey.
We'll see how smart the market really is relative to how they're valuing these companies, but I happen to be also a firm believer that there ought to be some.
And some real bounce back as we move through the year.
And thanks, Jeff.
Thank you.
Our next question comes from the line of Tyler <unk> with Janney Capital markets. Please proceed with your question.
Hi, good afternoon, and thanks for taking my questions.
First one I had I just wanted to go back from your commentary on on February and what Youre seeing real time in terms of demand and it sounds like February really driven by some strong leisure travel but interested.
And what's out there real time in terms of corporate type business and I'm also curious if you can touch a little bit more on that.
The sales and revenue management strategy.
Demand is coming back into some of these markets.
Well I'll pick up on that I mean, really frankly on the business traveler from there.
There's there's little bits and pieces as we said and the prepared remarks here and there but.
But there's nothing substantial to report real time in February.
That there's any kind of turnaround.
And in the very near future and of course, and our select service and extended stay hotels, which is what we are booking windows always been tight. So you know we don't have the visibility on sort of group business and otherwise.
Other than and one or two hotels that might be connected or very close not connected physically but their business is connected to conventions.
Whereby theres really no action.
And 2021, so far on the convention fraud.
So I think we're like I said in a wait and see mode on the business side, we do have.
Our usual business travel travelers, whether it would be Google or otherwise and silicon valley and doing some business and putting people in the hotels, but at levels that are just really.
No greater than you know more or less what we've seen over the last let's say three months anyway, so on that front and we're waiting.
And on the pricing front as I said, we're just being you know day to day.
Very proactive in terms of what we price business at what kind of business do we take and for wet and so if we're putting national guard in a hotel.
And you know to man.
Vaccination site like we have and one or two spots. We certainly are putting them in a hotel for memorial day weekend or June or July even at this point. So we're trying to keep all our options open.
And for that business that we do expect to come later on.
Okay, and and I've just got caught on the prepared remarks, our capex spend for 'twenty and 'twenty, one of only $6 million, which seems quite low versus what you spent historically and I think you said that you're not planning any renovation projects and can you talk about that a little bit more and we've got just reflective of the quality of the poor.
All we are trying to be conservative in terms of how youre thinking about deploying capital.
Yeah, Hey, Tyler this is Dennis Yes, 6 million Bucks is that is the plan as our budgeted expenditures for 2021 and no renovations.
And in light of where we are and the and the recovery are still in the midst of the pandemic.
Or we're still taking the approach of conserving capital.
And I think to the extent that we won't be able to you know.
We'll be able to.
And more business and 2021 and.
And listen I don't think Theres any gun to our head to spend $2 million to $3 million per hotel.
Renovated so no reason to push that capital out the door until we think the timing is right.
That makes sense and then just last question from me just housekeeping.
Much of your spend on the Warner Center development, thus far and what does the cadence and spend look like for that project and 2021.
Yeah.
Yeah.
And so on.
Yeah.
Get to the number.
Yes, so we spent a it looks like about $44 million to date.
On the on the development about $34 million left our 24 million $26 million I'm, sorry, I left to go on my subtraction wasn't on at the moment.
And we got about $26 million left to go and 2021.
Around $2 million per month.
Between now and opening so I think.
And.
$2 million to $3 million, a month is probably conservative and what you would want to use for the next for the first two quarters of the year Tyler.
And I think that point that'll get you 18.
And of the 26 million and with the last eight kind of and in the last six months of the year.
Okay very good I appreciate all the detail. Thank you that's all from me.
Thank you Tony.
And as a reminder, ladies and gentlemen, and then star one to ask a question. Our next question comes from the line of Anthony Powell with Barclays. Please proceed with your question.
Hi, good afternoon, everyone.
Hey, Anthony.
Alright.
I guess question on acquisitions I want could you remind me are you able to use your current.
Liquidity to buy assets without any kind of restrictions and if there are restrictions ease and wait them out for me.
We are able to use our liquidity under the line to acquire hotels are they on their requirement under the line is that we maintain.
$25 million of minimum liquidity.
Got it.
I guess, the math of that you'd want to make sure that you would have that before you would do a deal so you'd like to see your cash burn and come down a bit is that fair.
Yeah, I think obviously, we would be mindful of liquidity and availability as we as we consider potential investments okay, but.
But we do have the ability to do something if we if we see something great.
Got it and I guess have you seen and leisure starting to pick up and some of the non I guess resort, our RV vacation hotels and markets like let's say.
And I don't know Dallas, Houston, and isn't that right now, but you know maybe before the storms or are.
And the future and I got I guess broad leisure beyond kind of your your Savannahs, and and Portland, Maine, and whatnot, and and and and if not do you expect to see that broader leisure come back to the portfolio and the spring and summer.
And yeah, I mean, the answer is yes, I mean its debt.
As we talked about on another meeting, but the Staycation concept is still out there and.
And our hotels, we do see people that are whether they're traveling 10 miles down the road to take to go and stay at a hotel for a few nights they might have a pool or be next to something they want to do those are happening and that that I think that is going to continue to be the.
Case, as we move forward and that's part of the leisure the leisure travel, but staycation is still it's still a word that applies and it less and it can be to a courtyard. It can be to a Hilton garden Inn and it can be to our residents in.
And really anywhere anywhere America, but people are looking at hey, we want to get out of the house and we want to go somewhere a change of scenery and.
And have a pool and eat out for a couple of day so.
That is certainly out there.
Got it and maybe one more I mean, how have you been approach and are starting to starting to talk to counterparties from it.
And a potential new joint venture I mean, I know that's part of your playbook during the last day and.
And the last recoveries right is that still something you would consider and have you had.
Paul started yet.
And Anthony.
I would tell you that since for the last nine or 10 months I think there are certainly people who have.
And who have expressed an interest in lodging and trying to establish some type of position and lodging and and acquire assets.
And thankfully, we're a group that's done on them. So there has been interest there, but I think those are a little bit difficult.
For us from a corporate perspective.
And as opposed to just buying assets outright.
We're still involved obviously and our and our colony JV is at the moment.
So I think for us on the interest is there we're glad that we're.
On a list of people, who would love to do business with us and hopefully that provides some opportunities down the road.
Alright, thank you.
Thank you thanks.
Yeah.
There are no further questions and the queue I'd like to hand, the call back to management for closing remarks.
Well, we appreciate all the questions and as I said at the outset everybody's continued interest here, we look forward to moving ahead and reporting even better results for the next quarter. Thank you.
Ladies and gentlemen, and ladies and gentlemen, and today's teleconference. Thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.