Q1 2022 Summit Hotel Properties Inc Earnings Call
And despite the seasonal decline in demand experienced in the fourth quarter average rate actually increased approximately 2% from the third quarter.
Although our fourth quarter Revpar declined slightly from the 98 dollar revpar achieved in the third quarter. The rate of 2019, Revpar recapture continued to accelerate achieving 80% in the fourth quarter compared to 76% in the third quarter.
Our asset and revenue management teams continued to produce tremendous results in what is still a challenging operating environment.
Revpar index for our pro forma portfolio finished the fourth quarter and full year at 119 and 121% respectively.
Which was driven primarily by occupancy premiums of nearly 10 percentage points during each period, demonstrating our ability to continue to capture market share even as the recovery in our markets begins to accelerate.
Trey will provide more detail on the cost side of our business. Shortly as we've been very successful in continuing to manage our hotels with a lean staffing model and create meaningful margin expansion. Despite some well documented pressure on wages.
Consistent with what was experienced across the industry demand softened throughout our portfolio in January and early February is omicron related concerns caused travel disruptions and led many corporations to further delay their return to office plans.
January is not a historically strong leisure travel month to begin with but this year's performance was undoubtedly exacerbated by a temporary COVID-19 related dislocation in demand.
Our preliminary January Revpar finished at approximately $75, which was 31% below January 2019 levels.
Never encouragingly pace trends for the next three months are remarkably strong and point to a meaningful rebound more consistent with the sequential improvements we saw for much of the second third and fourth quarters of last year.
February Revpar paces up over 30% from where January stood at 30 days ago and for the full three day Presidents' day weekend that just ended our portfolio posted a revpar of $126, which was 62% ahead of the same three day weekend a year ago.
Saturday was one of our best single nights in nearly two years as Revpar was nearly $150.
March pace is currently up approximately 35% compared to the same time a month ago for February and we continue to feel confident in the favorable demand backdrop for our portfolio, which is well positioned to benefit from the combination of continued robust leisure demand and a more meaningful return of corporate travel as we move through the year.
As I mentioned in 2021 was an extremely successful year for summit on the transaction front as we were particularly active in our joint venture with GIC, which has proven to be a true differentiator for us and enabled us to pursue a more aggressive growth strategy early in the industry's recovery.
In May we contributed six wholly owned hotels into the venture for total consideration of $172 million.
<unk> the embedded value in our portfolio and creating additional liquidity for the company.
In July we acquired the recently developed 110 room residence Inn Steamboat Springs for $33 million through the joint venture.
The asset has only been open a little over a year. The hotel produced approximately $130 revpar in its first year of operation and exceeded our year, one underwriting by nearly 30%.
Iterating and nearly 6% NOI yield.
The hotels continue to perform exceptionally well early this year with January revpar of approximately $220, which is 135% increase from last January and February is pacing significantly ahead of last year.
In December we acquired the 120, Guestroom embassy suites, and the Catalina foothills of Tucson, Arizona for $25 5 billion.
Through our joint venture with GIC.
Strong peak season demand in Tucson helped drive January revpar at the embassy suites to over $130, which exceeded last year by nearly 80% and also surpassed January 2019 levels.
The embassy suites proximity to our Homewood suites, Tucson will allow both hotels to mutually benefit from various operational synergies and complex opportunities.
Both the residents and steamboat and embassy suites Tucson are located in high growth high barrier to entry resort markets and our top performers in those markets, having generated an average 2021 revpar index of over 150%.
In January we completed the initial closing of 26 of the 27 hotels included in the $822 million portfolio acquisition from Newcrest image the.
The investments significantly increases summit's exposure to several dynamic in high growth Sunbelt markets. The.
The 27th and final hotel at the 176 room canopy in downtown New Orleans is expected to open next month at which point, we would complete the acquisition.
The value allocated to the 27 hotels in total equates to approximately $209000 per key and represents a meaningful discount to estimated replacement cost.
Newcrest image portfolio acquisition also included two parking garages and various economic incentives.
In total we announced or completed over $1 billion of transaction activity in 2121, which increased the number of hotels in our portfolio by 40%.
Our joint venture with GIC now totals 40 hotels, representing over $1 $3 billion of invested capital, including the pending acquisition of the canopy New Orleans.
The recent growth of the joint venture will result in a substantially increased ancillary fee stream earned by summit for asset and capital project management services.
For 2022, we estimate our pro rata share of annual fees to be approximately two to $2 5 million, which equates to 10% to 15% of our estimated corporate cash G&A.
We expect this fee stream to increase in future years as the performance of the acquired asset stabilizes and planned renovation projects commence.
With that I will turn the call over to our CFO Trey cocklin. Thanks.
Thanks, John and good morning, everyone throughout 2021, our portfolio demonstrated strong sequential improvement across all location types, while urban hotels lives meaningfully in the first half of the year. These hotels generated outsized year over year growth in the third and fourth quarters of 160% and 200%.
Respectively.
Translating the nominal revpar of $94 $88. These revpar levels represent 2019 recapture rates of 69% and 72% respectively.
As an additional point of reference in October a month, a month, which typically produces the portfolios highest nominal revpar, our urban hotels generated $105 revpar, representing a recapture rate of approximately 70% to October 2019 urban portfolio Revpar of $140 further.
Evidence of improving fundamentals.
Key factors driving improved performance for the urban portfolio.
Include increased business activity professional and college sports attendance and small group demand.
Revpar for the non urban portfolio was approximately $98 in the fourth quarter driven by continued strength in our non resort properties, which generated a revpar of $118 December was particularly strong for our resorts with a revpar of nearly $130, representing an approximate 5% increase from December two.
19.
Strengthen resort demand has continued into early 2022 with January revpar of $129.
Shifting the portfolio segmentation, while seasonality translates to slowing demand in the fourth quarter average rate for the quarter increased across the entire portfolio in most segments for the full week, including the group and negotiated segments. The fourth quarter continued to benefit from strength in leisure demand, particularly within the.
Retail segment as ADR increased 2% relative to the third quarter and generated a 100% ADR recapture rate to Q4 2019.
On the corporate front occupancy.
Occupancy contribution from the negotiated segment increased modestly from the third quarter, while ADR increased 4%.
Throughout 2021 booking windows experienced sequential quarterly improvement in the fourth quarter bookings within 24 hours declined by nearly 10% from the third quarter and bookings within one to three days of stay declined by 9% relative to the third quarter overall same day bookings comprised of less than <unk>.
20% of our total bookings in the fourth quarter, which is down nearly 10% from the previous quarter.
Finally bookings more than 30 days out increased from 19% of total bookings in the third quarter to 21% of total bookings in the fourth quarter, while the overall booking window remains short relative to pre pandemic standards. We remain encouraged by the continued improvement in these trends.
From a cash flow perspective continued strength in average rate and ongoing expense management discipline enable summit to generate its third consecutive quarter of positive adjusted <unk>, which was $14 $8 million in the fourth quarter, resulting in full year adjusted <unk> of $36 8 million.
Pro forma hotel EBITDA for the fourth quarter was approximately $36 1 million.
Resulting in a $109 $4 million of pro forma hotel EBITDA for the full year 2021.
Operating cost per occupied room in the fourth quarter declined more than 5% compared to 2019, which drove fourth quarter gross operating profit margin at hotel EBITDA margin to 44% and 33% respectively.
These margins represent only a 115 basis points and 133 basis point decline to Q4 2019 levels. Despite a 20% decline in revenue.
For the full year operating cost per occupied room declined 13% compared to 2019, we continue to operate our hotels utilizing a relatively lean staffing model, which consists of approximately 19 ftes on average or slightly more than 55% of pre pandemic staffing levels.
While staffing shortages and rising labor costs continue to affect our industry. Our asset management team has worked diligently to manage operating expenses, which allowed our portfolio to achieve hotel EBITDA retention of 60% when compared to the fourth quarter of 2019.
During the fourth quarter and full year 2021, we invested approximately $9 7 million and $24 million, respectively, and our portfolio on items, primarily related to maintenance capital and advanced purchasing related to upcoming renovations.
As communicated on last quarter's call. We have recently commenced or plan to commence several renovations in markets, where we anticipate a more rapid return of demand in order to minimize disruption from these projects.
Throughout 2022, we are planning for a more typical renovation program in line with pre pandemic levels, although supply chain issues may ultimately impact timing.
Finally, turning to the balance sheet, our current overall liquidity position of nearly $450 million was enhanced throughout 2021 in part due to numerous capital markets transactions.
Early in 2021, we completed the issuance of $287 $5 million of one 5% convertible notes to repay over $250 million of debt, including our revolver to its current zero balance. Additionally.
Additionally, we accessed the preferred market in August taking advantage of a favorable market backdrop with the issuance of $100 million.
570, <unk> series F perpetual preferred.
Proceeds from this opportunistic offering were used to accretively refinance our $75 million, 645% series D preferred stock and to further reduce the outstanding balance on our November 2022 term loan to its current outstanding balance of $62 million.
This stub term loan remains the company's only 2020 to maturity and we continue to maintain ample liquidity to repay all maturing debt through 2024, when considering available extension options from.
From an interest rate risk management perspective, our balance sheet continues to be well positioned including an average interest rate of three 3% with approximately 70% of our current outstanding debt fixed after consideration of various interest rate swaps.
In the second quarter of 2022, we expect to exit the existing waivers on certain financial covenants related to our primary corporate credit facility, which will provide for more capital allocation flexibility regarding investment activity use of proceeds capital projects and potential distributions.
During the fourth quarter, we were repaid in full on two mezzanine loans that had been outstanding since 2017.
Aggregate proceeds from the loan repayments were approximately $26 million and the company earned an 8% IRR on its debt investment over that whole period.
Included in our press release last evening, we provided 2022 guidance on certain nonoperational items, including cash corporate G&A interest expense preferred dividends and capital expenditures, both on a consolidated and pro rata basis.
Based on the hotels that we own today, plus the pending acquisition of the canopy New Orleans downtown.
We expect the mid point of consolidated cash corporate G&A to be $25 million.
Interest expense, excluding the amortization of deferred financing costs to be $53 5 billion.
Preferred dividends to be $18 3 million and pro rata capital expenditures to be $70 million.
With that I will turn the call back over to John .
Thanks, Jack in closing I'd like to take just a minute to publicly thank Craig Anish Husky, our retiring CFO for his tremendous contributions to our growth and success over the years.
And his 25 years with summit, Craig and his team have demonstrated a tremendous ability to produce results in a wide range of operating backdrops and he deserves immense credit for helping establish our best in class operating platform.
He leaves the company in extremely good hands, having developed a strong team fully capable of carrying on his legacy of success.
I've been truly privileged to have him as a partner and wish him the very best in retirement and with that we'll open the call to your questions.
Thank you as a reminder to ask a question you will need to press star one on your telephone to withdraw your question. Please press the pound key please standby, while we compile the Q&A roster.
Our first question comes from Austin <unk> with Keybanc. Your line is open.
Hey, good morning, everybody.
First John just curious how the pace of acceleration you highlighted in some of the booking trends for February and March compare versus our between.
The various segments, albeit business weekday.
Urban resort other segments and then certainly.
Leisure BT in small group. However, you kind of can segment that any detail would be would be helpful.
Yes sure. Good morning Awesome. Thanks for the question I think where we sit today youre still seeing strength in similar markets that you've seen strength over the past 12 months or so it still tends to be a leisure dominated market. We saw incredible strength as we've mentioned in the prepared remarks over Presidents' day weekend, our spring break period, particularly.
<unk> in March and some of these leisure oriented markets continues to pace very very strongly as well and we are starting to see a pick up mid week not dissimilar to kind of what we saw later in the fall in October and November , particularly where we are starting to see better performance mid we even over the last couple of weeks frankly, we've started to see that so.
Do think again, it's more of a continuation of what we saw towards the end of last year, but we are seeing more and more strength midweek.
That's helpful and then with the new <unk> image portfolio now closed and the booking trends picking up what's summit's leverage to kind of the potential urban recovery today versus prior to the new crushed acquisition.
Yes, we're still about 50% of our portfolio is still urban based what we have done is that urban mix has shifted so it's clearly shifted more towards sunbelt urban markets than it was previously but it has stayed roughly the same I think one of the things that we focused on and we've talked a lot about as we've talked about the rationality outlook for the portfolio.
So, particularly as we start to integrate the Newcrest portfolio is.
Just how different the business recovery can can potentially be by market I think when you look at the recovery in the Dallas market is over 80% of where we were in 2019, it's a fraction of that and some of the other gateway more gateway urban markets and so I don't think you're necessarily going to see a linear even recovery amongst markets. We do feel really good that.
Even there are first of all there is a lot of upside in the urban portfolio, but particularly in some of the urban markets, where we have exposure.
Sunbelt in particular <unk> got enormous population growth down here, you've got a huge amount of corporate relocations happening to these type of markets and we do feel like there is going to be.
A quicker trajectory of recovery and a better growth profile over a longer period of time to some of these urban markets.
Maybe some of the other gateway urban markets.
And then just kind of last as a follow up to that.
How does newcrest portfolio performed during this period of disruption relative to your legacy portfolio.
Yes.
It has performed better I think from a recapture for perspective.
Our overall recapture percentage for the full year of last year was about 63%. If we layered in the Newcrest portfolio would add a couple of hundred basis points to that recapture percentage.
It does get a little bit.
I see.
Getting into the numbers in too much detail as Youll recall, a fair number of the assets and the newcrest portfolio or either weren't open in 2019 or werent fully ramped up in 2019, but big and if you look at the pace of recovery in those 26 assets that are currently open a day. It is a little bit ahead of our of our legacy portfolio.
Got it I appreciate the time, thanks, John Thanks.
Thanks Austin.
Thank you. Our next question comes from Michael Bellisario with Baird. Your line is open.
Thanks, Good morning, everyone.
Morning, Mike.
John just wanted to go back to the labor comment that you made it looks like Ftes were flat roughly flat versus <unk>, how much of that is it's simply hard to find labor today versus seasonality.
Seasonality and slightly lower occupancy levels in the fourth quarter versus the third quarter.
Yeah, a little bit of both frankly, I think we've started to see some improvements in the labor market I think the number of applicants that were seeing for positions has ticked up it's still challenging out there I think you're seeing it really across the industry. We did expect there to be a seasonal slowdown in demand I think as we've kind of talked to.
It's been hard to find people. So once we've been able to find those bodies, we want to make sure that we keep them in place. Despite the fact that.
We were moving into what we knew was going to be a little bit slower seasonal period, but we're still running very very lean you know Trey mentioned, we've got roughly 19 ftes per property, it's about 55% of what our typical run rate is we've obviously talked a lot about the wage pressure we've seen across the industry certainly some of that was.
In the fourth quarter and we're still we're still operating those these hotels our cost per occupied room still down more than 5%.
Quarter of this year versus fourth quarter of 2019. So the team has done a really remarkable job continuing to operate the hotels in a very efficient manner and I think done a good job positioning hotels from a staffing perspective once we start to see more of a ramp up in demand here as we progress through this year.
Got it and then 45% that hasn't come back yet what type of position at the hotel level is that is it mostly housekeeping yes.
Yes, it's mostly mostly hourly staff, so mostly housekeeping and front desk.
Got it and then just switching gears.
<unk>.
Acquisitions and capital allocation.
Digesting the.
Newcrest portfolio and here Whats your view on that.
The transaction landscape and how much money you guys might be able to put to work on a net basis in 2022 aside from the new quest transaction.
Yeah, well look we.
We've only on the <unk> portfolio for about 40 days, So we're definitely well on our way to integrating that portfolio within within the company I think we feel better today than we did even when we underwrote or even when we announced the acquisition about what the opportunity set looks like through through that acquisition as we talked a lot about.
We were very thoughtful and diligent in how we structure. The deal. So we didn't use any of our liquidity trade mentioned, we still have nearly $450 million of liquidity available for us to continue to be thoughtful and try to grow the business. We do expect.
To exit our covenant waivers.
Over the course of the next quarter and so we will have even greater flexibility to continue to pursue growth opportunities on a net basis, we prefer to be a net acquirer early in a cycle.
It wouldn't preclude us from looking to sell some assets on an opportunistic basis I think as everybody knows there is theres a lot of capital chasing high quality assets like the ones that we own which.
Speaks to the to supporting the overall value of the business. So again I think we've been thoughtful and positioning the company to continue to grow externally, but we will always continue to be prudent capital allocators and opportunistic both on the buy and the sell side.
Helpful. Thank you.
Thanks, Mike.
Thank you. Our next question comes from Neal Nachman with capital One Securities. Your line is open.
Hey, everyone.
I'm glad we're not.
In Ukraine right now.
Sorry about what's going on I'm sure.
Pretty sad and heard in the market.
Switching gears to something I guess, a little less concerning.
Can you talk about the benefits.
The aim bridge takeover.
<unk>.
Newcrest hotels.
In terms of like.
Maybe articulating are giving us some numbers around.
Savings margins.
Best practices.
Leveraging approximate hotels synergies and things like that that maybe werent underwritten.
The.
In the purchase that'd be great.
Yes sure.
Thanks for the question.
First of all aimed bridges, our largest manager and has has been for some time, we have a wonderful relationship isn't an amazing partners for us really since the time of the company's IPO, we do have kind of our own dedicated team within the Enbridge platform that really services our assets in particular that we think is very unique.
We're big believers in that kind of Optimizes. Overall result, we do think there's real opportunity in terms of the upside in the assets. We haven't quantified that we didn't underwrite that but we do think that there is there is real opportunity both from a sales and a cost perspective.
Some of that is driven by kind of exactly what you've alluded to theres real complex thing activities. We bought 27 hotels that were in the process of by 27 hotels. Many of them are complex either there is a dual branded or tribe triplex type branded properties, where we think theres opportunities to to complex positions and ultimately have a more efficient sales operation.
So we're still again, we're 40 days into the acquisition its part of what I alluded to that we feel better today than we did even when we underwrote the assets because we didn't bake in any of that upside into our underwriting, but we do believe there's going to be some real opportunity there to drive better results not necessarily just because of the ambridge relationship. It has a lot to do with the expertise that we.
Have in house as well both from a revenue and asset management perspective.
That's super helpful. Thanks.
Yes.
Maybe you're talking about balance sheet or capital allocation.
Picture question, I guess, two parter one.
Do you have a different outlook or view towards leverage just kind of.
Over the last few years going into Covid with a little bit higher leverage you're more limited.
And what you could do or how you could do it.
You've done <unk> to date has been through.
GIC.
So that's kind of the.
The first part and the second part is.
What are the signals lines in the sand metrics, you need to see or achieve.
Before you can start doing things more on balance sheet.
Yes.
I'll start and trade can feel free to chime in here on the balance sheet side.
Look I think I think everybody would have like to have a little bit less leverage going into the downturn. We're no different than that I think when we look at and we assess kind of our overall balance sheet health, we look at it.
John just one metric that metric of net debt to EBITDA and I know thats, the easiest metric to compare across the space and across industry, but we look at it on a more holistic basis. We look at interest coverage ratios. We look at fixed charge coverage ratios. We look at our maturity ladder, we look at our total liquidity and if you look at that kind of total picture I think what we what we.
We felt going into this and this was very intentional.
We really had a very healthy balance sheet, we had a little bit more leverage we were kind of at the high end of our stated leverage range going into the downturn, but we did have for the size of our business. We had we had a lot of liquidity. We didn't have any near term maturities and so we were able to navigate through a very choppy a couple of years with our having to raise any dilutive capital are balanced.
<unk> is in a better position today than it was a couple of years ago in part because we've been very thoughtful around how we've raised capital. So I think that where we sit today, we feel very good about the progression in kind of a natural deleveraging that's going to happen over the course of the next couple of years to get us down to a more normalized leverage range.
In terms of how we think about it.
<unk> within the joint venture outside the joint venture.
Look we still really like the joint venture, it's about a quarter on a pro rata basis of our overall portfolio. We think there's still an ability for us to grow within that venture we love the fee stream that it creates it still does help us because it does limit the overall capital that we need to put in any deal.
<unk> been wonderful wonderful partners, we are cognizant of making sure we don't get to a point, where we have an inverted capital structure and so.
I'm very proud that we've gotten to about $1 three of invested capital in the venture I do think there becomes a time as that grows that youll start to see some growth outside of that as well.
Yes, the only thing I'd add to that is what John said is I think organically, we feel like we'll be able to get back into the ZIP code that was always put out there from a net debt net debt to EBITDA perspective over the next couple of years in that.
Feel good about the kind of embedded growth that's in the portfolio and as John said on look at that when we look at our EBITDA to interest coverage ratio.
Two five times and so theres, a fair amount of capacity there.
There as we look at exiting our waivers and what are what our agreement is within our credit facility will be able to operate within.
That starting in the second quarter and that gives us a lot of flexibility to be able to go out.
To deleverage, but also continue to achieve our growth plans, so I think that the.
The long term goals of the plan of the company from a leverage perspective remain the same and we plan to get there.
On a relatively normal.
I appreciate that last one I think the follow up to a previous question, but talking about your FTE count.
And I'm just wondering.
Assuming that demand comes back to 19 levels Tomorrow, how close are you to your sort of.
New brand standard enhanced operating model.
Lodging sector.
Type of run rate.
Are you sure.
Are you you think when everything comes back and things sort of normalize out stabilize out are you at 80% of FTE, 75% of Ftes.
Kind of maybe talk about that.
Yes.
It's a great question I think where we sit today is we are about 55% of normalized FTE counts I think in fairness, we're still working through with the brands what the normalized brand standards are going to look like.
I think in part because we're we're waiting to see this return of business travel and what the effects of that has on our overall business I don't suspect that we're ever going to go back to 35 Ftes.
Per asset I think as you've alluded to there is going to be some efficiencies in this business that's going to allow us.
To continue to operate with a more efficient model and less ftes per hotel.
We're going to still figure that out over time, my guess is that somewhere to use a broad range somewhere between 70% to 80% of our pre pandemic total FTE count.
Alright. Thank you guys. Thanks for taking the questions.
Thanks Neil.
Thank you. Our next question comes from Chris well Rocco.
Which bank your line is open.
Hey, good morning, guys.
Wanted to also revisit the labor as you look from a slightly different angle.
What kind of differences do you see geographically and youre kind of talking about the new cross portfolio, but.
When you are whether it's.
The amount of the percentage increase for wages and benefits were whether it's availability is there a big difference between sun belt, and kind of northern half or coastal.
Yes, I think I think it's market by market, Chris but there is a difference I mean, we're talking very broadly we're lumping 40 markets together over 100 hotels, when we kind of give statistics about what were seeing labor dynamics Theres no question that its more acute in certain markets Orlando was a market in particular that we've talked a lot about where we're.
We've got some more acute staffing challenges in that market, So where there is demand, particularly service related demand. It is it is a tougher staffing market in some of those and some of those areas.
Okay. That's helpful and then.
Kate.
The capex outlook for the year.
Just thinking a little bit longer term and maybe it's more directional than specific numbers, but.
We look out in the few things you want to do with the new cross portfolio and some of the stuff you might have kind of delayed the past two years.
Is there a.
Kind of a run rate you think you get to 'twenty three 'twenty four kind of a new peak level of Capex.
I guess, what I'm really asking is there any.
Big Spike coming that you see.
I don't see a big say look we're going to spend more this year and we've kind of guided to that and it helps a little bit that a fair amount of the assets are in the venture and a fair amount of the spending is in the venture because it's only half of our only it's only half of our share of it.
Go back pre pandemic, when we were spending somewhere between $50 million to $60 million a year.
Or minus 70 hotels.
The midpoint of the guidance on a pro rata basis. We gave this year of $60 million. So it is elevated youre seeing that partially as a reflection of two things one just the higher hotel count and secondly, we do have some renovation activity that we want to get caught up on and we talked I think even very early last year about starting to accelerate the pace of renovations when we.
<unk> had conviction that the demand was in place. So we didn't fall into a period, where we had a lot of deferred capital in we were very fortunate to go into the into the downturn with a new portfolio, where we didn't have any deferred capital. The last thing I would point out and we talked a lot about this as we talked about the integration of the Newcrest portfolio, It's a very new.
So there is really one asset in the entire portfolio that needs an immediate renovation. The vast majority of those assets have been opened within the last three or five years and we don't have any real immediate capital needs. So it was an ability to really add scale to the business without adding a lot of capital needs over the next couple of years. So I think you can look at the run rate that we put out.
For 2022 to be in and around what we would expect over the next couple of years.
Okay very helpful. Thanks, John and last one is just kind of.
On potential dispositions from here.
I mean by definition, you always have a bottom, 10% and I don't know.
Newcrest, probably changes definition of bottom, 10% pushed some legacy hotels down a little bit I mean is there.
Is there a way to gauge how you guys view, how many noncore hotels do you think you have today that you could.
Sell if the price was right versus stuff you want to hold long term for.
The core portfolio.
Yes look I don't know that Theres anything that we really look is truly non core that we just don't want to own anymore.
<unk> said, there is always kind of a bottom 10% of the portfolio that you could dispose of I think more importantly, the way we look at it is first of all we don't have to sell we don't feel like we need to go sell assets to raise capital in some sort of defensive manner again, I wouldn't preclude us from selling assets, we've always been opportunistic sellers of <unk>.
Assets.
As we all know there's a tremendous amount of capital chasing high quality assets in good markets and we've got a portfolio of full of those type of assets and so to the extent that we can find a buyer that will pay the right price every asset in this portfolio is for sale every day and again I wouldn't preclude us from being an opportunistic seller of assets this year.
Okay very good thanks, Sean.
Thank you.
Our next question comes from Bill Crow with Raymond James Your line is open.
Hey, good morning.
John Let me change in guest satisfaction score trends now that the changes in service levels have been implemented for all over a period of time.
Are you guys getting used to the to the changes or as you as you're welcome more business travelers are they.
Rediscovering.
Experience is not quite as.
It was good you used to be.
Yes look I think it's less of an issue today than it was early in the pandemic.
When we stripped out a lot of the amenities and services, we did see that reflected in guest satisfaction scores now some of it is we've added back a lot of amenities and services breakfast is running in a normalized manner.
I do think youre seeing some level of education of the customer that's happened over the last 24 months. So I do think guest satisfaction scores are less bad maybe than they were before I think we are.
Long with the brands, we do want to make sure that there's not additional disruption as the business traveler comes back I don't suspect that there will be I think this business traveler that hasnt been traveling for two years hasnt been traveling for work, but has been traveling for leisure. So I think that customer is already pretty naturally educated so I do think again this is less of a concern today.
And it was a year or two ago.
Okay.
Shifting over to that leisure traveler.
It seems like logic would suggest that.
Per gallon gasoline higher rental rates.
That's what we would take a greater relative tailwind.
Maybe select service leisure guests than it would luxury or even upper upscale.
Leisure guests. So I'm, just wondering if thats starting to.
Be evident maybe some pushback on rates or shorter average durations.
That sort of thing are you seeing any pushback yet yes, we're not we were in fact, we were we've been talking about this over the last couple of days, obviously with some of the news that's going on over in Ukraine, I think kind of the natural fallout of that is potentially higher gasoline prices you've seen oil over $100 a barrel a day, we just having that I think we've even gone.
Back and looked historically, even in periods of time, where you've seen rising gasoline prices you really haven't seen much of an effect on or at least any discernible effect on our occupancies our abilities to push rate I think where we sit today and look we hope. This doesn't go online, we prefer lower gas prices and higher gas prices clearly, but.
We just haven't seen a lot of effects from that I think you've got a consumer today that is a very healthy consumer there is a lot of savings that have been built up and you've just seen a large propensity.
To consume and particularly for travel related things you saw that even a little bit in the results that we had over Presidents' day weekend, which were up 65% year over year.
We were up 4% to 5% in Revpar versus 19, our rates were actually almost 10% higher over Presidents' day weekend. This year than they were in 2019. So again I don't think were rooting for higher gas prices, but historically it hasn't been a big driver of our business and we certainly havent seen any effects from it so far this year.
Great. Thanks.
Thanks Bill.
Thank you and I'm currently showing no further questions I would like to hand, the conference back over to Mr. Steiner for any closing remarks.
Yes. Thank you all for joining US today, we're excited about the future of summit, we look forward to seeing you all hopefully in person soon and speaking with you again next quarter have a nice day.
Ladies and gentlemen. This concludes today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.