Q3 2023 Xenia Hotels & Resorts Inc Earnings Call

Speaker 1: Hello everyone and welcome to the Zenia Hotels and Results Inc. Q3 2023 earnings conference call. My name is Charlie and I'll be coordinating the call today. You will have the opportunity to ask a question at the end of the presentation. If you'd like to register a question, please press star followed by one on your telephone keypads. I'll now hand over to our host, Amanda Bryant, Vice President of the Finance to begin. Amanda, please go ahead.

Hello, everyone and welcome to the Dania hotels and Resorts, Inc. Q3, 2023 earnings Conference call. My name is Charlie and I will be coordinating the call today.

You will have the opportunity to ask your question at the end of the presentation, if you'd like to register your question. Please press star followed by one on your telephone keypad now.

Kind of it's Amanda Bryant, Vice President of finance to begin Amanda. Please go ahead.

Speaker 2: Thank you, Charlie, and welcome to Zena Hotels and Resorts 3rd quarter 2023 earnings call and webcast. I'm here with Marcel Verbaus, our chair and chief executive officer, Barry Bloom, our president and chief operating officer, and a key shop, our executive vice president and chief financial officer.

Thank you Charlie and welcome to Xenia hotels, <unk> resorts third quarter 2023 earnings call and webcast I'm here with Marcel for boss, our chair and Chief Executive Officer, Barry Bloom, Our President and Chief operating Officer, and a key shop, our executive Vice President and Chief Financial Officer Marcel.

Speaker 2: Marcel will begin with a discussion on our performance. Barry will follow with more details on operating trends and capital expenditure projects, and a teach will conclude today's remarks on our balance sheet and outlook. We will then open the call for Q&A.

We will begin with a discussion on our performance Barry will follow with more details on operating trends and capital expenditure projects and teach will conclude today's remarks on our balance sheet and outlook we will.

And then open the call for Q&A.

Speaker 2: Before we get started, let me remind everyone that certain statements made on this call are not historical facts or concerned forward looking statements. These statements are subject to numerous risks and uncertainties as described in our annual report on form 10K and other SEC filings. And could cause our actual results to differ materially from those expressions or implied by our comments.

Before we get started let me remind everyone that certain statements made on this call are not historical facts are considered forward looking statements. These statements are subject to numerous risks and uncertainties as described in our annual report on Form 10-K, and other SEC filings and could cause our actual results to differ materially from those expressed in.

Our implied by our comments forward looking statements in the earnings release that we issued yesterday along with the comments on this call are made only as of today November one 2023, and we undertake no obligation to publicly update any of these forward looking statements as actual events unfold you can find reconciliations of non.

Speaker 2: forward-looking statements in the earnings release that we issued yesterday, along with the comments on this call, are made only as of today, November 1, 2023, and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find recommendations of non-GAAP financial measures in that loss and definitions of certain items referred to in our remarks in the earnings release, which is available on the investor relations section of our website.

non-GAAP financial measures to net loss and definitions of certain items referred to in her remarks, and the earnings release, which is available on the Investor Relations section of our website.

Speaker 2: The third quarter, 2023 property level information, we will be speaking about today is on a same property basis for all 32 hotels unless specified otherwise. An archive of this call will be available on our website for 90 days and will now turn it over to Marcel to get started.

The third quarter 2023 property level information, we will be speaking about today is on a same property basis for all 32 hotels unless specified otherwise an archive of this call will be available on our website for 90 days I will now turn it over to Marcel to get started.

Thanks, Amanda and good morning, everyone.

Speaker 3: Overall results in the third quarter were in line with our expectation.

Overall results in the third quarter were in line with our expectations.

Speaker 3: Our demand segmentation mix continues to revert towards pre-pandemic levels. As business transient, the group demand continues to recover.

Our demand segmentation mix continues to revert towards pre pandemic levels as business transient and group demand continued to recover.

A couple of important renovation projects have essentially wrapped up.

Speaker 3: A couple important renovation projects have essentially wrapped up. And the transformation of the Hyde Munisis Cospillal Resort and Spawn Gany Ranch is well underway.

And the transformation of the hybrid Scottsdale resort and Spa in getting ranch is well under way.

And our recently acquired hotels W. Nashville at Hyatt Regency, Portland, Oregon Convention Center reported a solid quarter of earnings contribution.

Speaker 3: And our recently acquired hotels, WNASTUAL and High Reducing Port on the Deorgon Convention Center, reported a solid quarter of earnings contribution if they were among our top performing assets during the third quarter.

Were among our top performing assets during the third quarter.

Okay.

For the quarter, we reported a net loss of $8 $5 million.

Speaker 3: For the quarter, we reported a net loss of 8.5 million dollars. Adjusted EBITRE was $46.3 million, and adjusted the FFO per share was 26 cents.

EBITDA was $46 $3 million and adjusted <unk> per share was 26 cents.

Same property Revpar in the quarter was $158 48.

Speaker 3: Shane Property Refrar in the quarter was $158.48, a 0.4% increase as compared to the third quarter of 2022. Occupancy increased 70 basis points.

0.4% increase as compared to the third quarter of 2022.

Occupancy increased 70 basis points, while average daily rates decrease 0.6%.

Our results were meaningfully impacted by three of our properties undergoing significant renovations in the quarter.

Speaker 3: Our results were meaningfully impacted by three of our properties undergoing significant renovations in the pool.

This included a comprehensive renovation at the Kimpton Hotel Monaco Salt Lake City.

Speaker 3: This included the comprehensive renovation at the Kimson Hotel Monaco Salt Lake City, the guest rooms renovation at Granbo Hemi and Hotel Orlando, and the transformative renovation at Hyde Reef and Seeds Cups.

The guest rooms renovation at Grand Bohemian Hotel, Orlando, and a transformative renovation at Hyatt Regency Scottsdale.

As Barry will discuss in more detail in his remarks, the salt Lake City renovation, that's now been completed.

Speaker 3: His very will discuss in more detail in his remarks. The Salt Lake City renovation has now been completed. The Orlando project will be completed in the next several days. And this cost bill project is progressing as planned.

The Orlando project will be completed in the next several days and Scottsdale project is progressing as planned.

Unknown Executive: Hello everyone and welcome to the Xenia Hotels & Resorts Inc Q3 2023 Earnings Conference call. My name is Charlie and I'll be coordinating the call today. You will have the opportunity to ask a question at the end of the presentation. If you'd like to register a question, please press star followed by one on your telephone keypads.

Excluding Hyatt Regency, Scottsdale, Revpar increased 4% as compared to the third quarter of 2022.

Speaker 3: Excluding hybrid C-scops Dale, ref are increased 4% as compared to the third quarter of 2022. Highlighting the impact this project had on our results in the third quarter, and we'll continue to have in the near term.

Highlighting the impact this project had on our results in the third quarter and will continue to have in the near term.

Okay.

Amanda Bryant: I will now hand over to our host, Amanda Bryant, Vice President of the Finance to begin. Amanda, please go ahead.

Speaker 3: As compared to the third quarter of 2019, for the 29 hotels we currently own, that were open at that time, excluding high-reheated seascaughts bill, RENFAR was down 1.1% in the third quarter.

As compared to the third quarter of 2019 for the 29 hotels. We currently own that were open at that time, excluding Hyatt Regency Scottsdale Revpar was down 111, 1% in the third quarter.

Amanda Bryant: Thank you, Charlie and welcome to Xenia Hotels & Resorts 3rd quarter 2023 Earnings Call & Webcast.

Amanda Bryant: I'm here with Marcel Verbaas, our Chair and Chief Executive Officer, Barry Bloom, our President and Chief Operating Officer, and the Chief Shop, our Executive Vice President and Chief Financial Officer. Marcel will begin with the discussion on our performance. Barry will follow with more details on operating trends and capital expenditure projects, and a teach will conclude today's remarks on our balance sheet and outlook.

Speaker 3: For these 29 hotels, occupancy with roughly 11 points below 2019, while ADR was up 14.3%.

For these 29 hotels occupancy was roughly 11 points below 2019, while ADR was up 14, 3%.

Okay.

Speaker 3: Locke's fence growth continues to put pressure on bottom line results into lodging industry. Margin contraction for a portfolio moderator than a third.

While expense growth continues to put pressure on bottom line results in the lodging industry.

Margin contraction for our portfolio moderated in the third quarter.

Speaker 3: as hotel Ividal Margin on a same property basis, declined by 159 basis points compared to the third quarter of 2022, which was in line with our expectation.

Hotel EBITDA margin on a same property basis.

By 169 basis points compared to the third quarter of 2022.

Amanda Bryant: We will then open the call for Q&A. Before we get started, let me remind everyone that certain statements made on this call are not historical facts or concerned forward looking statements. These statements are subject to numerous risks and uncertainties as described in our annual report on form 10K and other SEC filings, and could cause our actual results to differ materially from those expressions or implied by our comments. Forward-looking statements in the earnings release that we issued yesterday, along with the comments on this call, are made only as of today, November 1st, 2023, and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold.

Which was in line with our expectations.

Okay.

Speaker 3: excluding Scottsdale margins contract contract of just 60 base

Excluding Scottsdale margins contract contracted just 60 basis points, which is a significant improvement compared to the second quarter margin decline.

Speaker 3: which is a significant improvement compared to the second Florida margin decline.

Okay.

Speaker 3: Recall that property level expenses in the third quarter of last year started normalizing as many of our properties filled open positions and resumed services at the year progress.

Recall that property level expenses in the third quarter of last year started normalizing as many of our properties filled open positions and resumed services as the year progress.

Turning to our individual markets in the third quarter, the strongest revpar growth occurred in several markets that are more dependent on business trends and then group demand.

Speaker 3: According to our individual markets, in the third quarter, the strongest red bar growth occurred in several markets that are more dependent on business transit than group demand.

Speaker 3: Houston, Dallas, Portland, and Nashville reported double-digit ref-bar growth. Pittsburgh and San Francisco experienced high single-digit ref-bar growth.

Houston, Dallas, Portland, and Nashville reported double digit revpar growth, while Pittsburgh in San Francisco experienced high single digit Revpar growth.

Amanda Bryant: You can find recommendations of non-gap financial measures to net loss and definitions of certain items referred to in our remarks in the earnings release, which is available on the investor-relations section of our website. The third quarter, 2023 property-level information, we will be speaking about today is on a same property basis for all 32 hotels unless specified otherwise.

Okay.

Speaker 3: Due to renovation disruption, Phoenix and Salt Lake City were a two-weeks ref-war markets in the quarter. While several leisure-oriented markets, including Napa and Savannah, experienced mid-teen percentage ref-particle.

Due to renovation disruption Phoenix, and Salt Lake City, where our two weakest revpar markets in the quarter.

While several leisure oriented markets, including Napa in Savannah experienced mid teen percentage Revpar declines.

Speaker 3: We are clearly seeing signs of leisure demand normalizing from its historically high post-pendemic levels. Both within our portfolio and in O-

We are clearly clearly seeing signs of leisure demand normalizing from its historically high post pandemic levels.

Amanda Bryant: An archive of this call will be available on our website for 90 days, and will now turn it over to Marcel to get started.

Both within our portfolio and an overall industry data.

Marcel Verbaas: Thanks Amanda, and good morning everyone. Overall results in the third quarter were in line with our expectations. Our demand segmentation makes, continues to revert towards pre-pandemic levels, as business transient and group demand continues to recover.

Speaker 3: However, our portfolio has always benefited from a balanced mix of group business friends in the leisure demand.

However, our portfolio has always benefited from a balanced mix of group business transient and leisure demand.

Speaker 3: And we are continuing to see the gradual shift back through our pre-pendemic set of links.

And we are continuing to see the gradual shift back to our pre pandemic test mix.

Marcel Verbaas: A couple of important renovation projects have essentially wrapped up, and the transformation of the high-dream-cease-copter-resort and spawn-gain-arrange is well underway. And there are recently acquired hotels, WNational and high-dream-cease-portland at the Oregon Convention Center, reported a solid quarter of earnings contribution, if they were among our top-performing assets during the third quarter.

Yeah.

Yeah.

Group business remains a bright spot.

Speaker 3: Group Room Revenue in the Third Quarter was up a little over 3% over the third quarter of 2022. And excluding Scottsdale on both periods, our Group Room Revenue was up about nine.

Group room revenue in the third quarter was up a little over 3% over the third quarter of 2022.

And excluding Scottsville in both periods, our group room revenue was up about 9%.

Okay.

Speaker 3: We continue to see meaningful improvements in group business at our important group of reins of hotels in Orlando, Portland, Atlanta and Dallas.

We continue to see meaningful improvements in group business at our important group oriented hotels in Orlando, Portland, Atlanta and Dallas.

Marcel Verbaas: For the quarter, we reported a net loss of 8.5 million dollars. Adjusted EBITRE was 46.3 million dollars, and adjusted the FFO per share was 26 cents. Shane Property Ref are in the quarter, was $158.48, a 0.4% increase as compared to the third quarter of 2022. Occupancy increased 70 basis points, while average daily rates decreased 0.6%.

Speaker 3: That way, if reminder, we estimated that Group has historically been about a third of our overall business mix.

By way of reminder, we estimate our group has historically been about a third of our overall business mix.

Okay.

Group revenue pace for full year 2023 is up about 13% versus last year for our same property portfolio.

Speaker 3: Group revenue pace for full year 2023 is up about 13% versus last year for our same property portfolio. And up about 15% that we exclude Scottsdale, where the meeting space is now mostly unavailable.

Up about 16%, if we exclude Scottsdale, where to meeting spaces now mostly on available.

Yeah.

Speaker 3: Group ADR for full year 2023 is up about 4%. Again, excluding scuff.

Group ADR for full year 2023 is up about 4%.

Marcel Verbaas: Our results were meaningfully impacted by three of our properties undergoing significant renovations in them. This included the comprehensive renovation at the Kimsen Hotel Monaco Salt Lake City, the guest room's renovation at Grand Bohemian Hotel Orlando, and a transformative renovation at Hyde, we can see Scottsdale. It's very well discussed in more detail on his remarks. The Salt Lake City renovation has now been completed. The Orlando project will be completed in the next several days, and the Scottsdale project is progressing as planned.

Again, excluding Scottsdale.

Speaker 3: Atecial provided an early look into our 2024 group days during his remarks.

Ashish will provide an early look into our 2020 for group pace during his remarks.

Okay.

Business transient demand continued to improve during the third quarter.

Speaker 3: Overall, occupancy improved from Mondays, Tuesdays, and Wednesdays as compared to the third quarter of 2022. While weekend occupancy was down slightly as compared to the same quarter last year.

Overall occupancy improves on Mondays, Tuesdays and Wednesdays as compared to the third quarter of 2022.

While weekend occupancy was down slightly as compared to the same quarter last year.

Speaker 3: Two of our four strongest breath-bargwell markets have reflected results from our most recent acquisitions. I'd reach the Portland, Edurgen, Convention Center, and WNACIO.

Two of our two of our four strongest revpar growth markets reflected results from our most recent acquisitions I don't see Portland, Oregon Convention Center NW natural.

Marcel Verbaas: Excluding Hyde we can see Scottsdale, refarring 3.4% as compared to the third quarter of 2022, highlighting the impact this project had on our results in the third quarter, and we'll continue to have in the near term. As compared to the third quarter of 2019, for the 29 hotels we currently own, that were open at that time, excluding Hyde we can see Scottsdale. Refriger was down 1.1% in the third quarter. For these 29 hotels, occupancy was roughly 11 points below 2019, while ADR was up 14.3%.

Speaker 3: With reference by increasing by 26.8% and 17.3% respectively, these hotels were to quarter.

With Revpar, increasing by 26, 8% and 17, 3% respectively. As these hotels for the quarter.

Speaker 3: Both properties are benefiting from significant growth in group business, if they continue on their path towards that stabilization.

Both properties are benefiting from significant growth in group business as they continue on their path towards stabilization.

Okay.

For 2023 group room revenue on the books at both properties has increased more than 40% over 2022 levels.

Speaker 3: For 2023, group room revenue on the books at both properties has increased more than 40% over 2022 levels. Grimba.

Driven by solid increases in room nights.

Speaker 3: Business Transient Production is also driving growth, as both properties increase volumes with important corporate accounts in weeks.

Business transient production is also driving growth as both properties increased volumes with important corporate accounts in recent months.

Marcel Verbaas: Logspens Growth continues to put pressure on bottom line results in the lodging industry. Margin contraction for a portfolio moderated than a third quarter. As hotel EBITDA margin on a same property basis, declined by 159 basis points compared to the third quarter of 2022, which was in line with her expectations. Excluding Scottsdale, margins contracted just 60 basis points, which is a significant improvement compared to the second quarter margin decline.

Okay.

Speaker 3: Our other top performing markets for the quarter were both located in Texas. Where the Euthan and Dallas markets reported third quarter ref bar growth of 25.2% and 14.2% respect.

Our other top performing markets for the quarter were both located in Texas, where the Houston and Dallas markets reported third quarter Revpar growth of 25, 2% and 14, 2% respectively.

Our hotels in these markets not only drove outstanding third quarter results, but they are also well positioned to capture additional growth in the coming years because of favorable market dynamics and important capital investment space in recent years.

Speaker 3: Our hotels in these markets not only drove outstanding third quarter results, but they are also well positioned to capture additional growth in the coming years, because of favorable market dynamics and important capital investment base in recent years.

Marcel Verbaas: Recall that property logo expenses in the third quarter of last year started normalizing as many of our properties filled open positions and resume services as the year progress. Turning to our individual markets, in the third quarter, the strongest ref park growth occurred in several markets that are more dependent on business transition than group demand. Houston, Dallas, Portland, and Nashville reported double-digit ref park growth, while Pittsburgh and San Francisco experienced high single-digit ref park growth.

Okay.

Speaker 3: Overall, market fundamentals reflect a favorable supply and demand back.

Overall market fundamentals reflect a favorable supply and demand backdrop.

Speaker 3: Texas continues to be a high growth state, both in terms of population growth and business incubations at relocation.

Texas continues to be a high growth state both in terms of population growth and business incubation and relocations.

Speaker 3: Supply grow through 2025 in our specific submarkets is also benign.

Supply growth through 2025, and our specific Submarkets is also benign.

Speaker 3: The Dallas CBD submarket is expected to peak at 2.3%, the youth in North wouldlund submarket at 2.7%, and the youth in Galleria submarket is expected to see no new supply over the next two years.

The Dallas CBD Submarket is expected to peak at two 3% the Houston North woodlands Submarket at two 7%.

And the Houston Galleria Submarket is expected to see no new supply over the next two years.

Yeah.

Marcel Verbaas: Due to renovation disruption, Phoenix and Salt Lake City were two weakest ref park markets in the quarter, while several leisure oriented markets, including Napa and Savannah, experienced mid-teen percentage ref park accounts. We are clearly saying signs of leisure demand, normalizing from its historically high post-bending levels, both within our portfolio and in overall industry data. However, our portfolio has always benefited from a balance mix of group business friends and the leisure demand. And we are continuing to see the gradual shift back to our pre-pandemic set mix.

In terms of earnings contribution our Houston properties peaked in 2015 and since that time have successfully broadened their base of business and reduce reliance on citywide conventions.

Speaker 3: In terms of earnings contribution, our use in properties peak in 2015. And since that time has successfully brought on their base of business and reduced reliance on citywide convention.

Speaker 3: We also imbecile a significant amount of capital into our three use and outtels, leading up to and through the pandemic.

We also invested a significant amount of capital into our three Houston hotels, leading up to and through the pandemic.

Speaker 3: The two Westmans received about $50 million in capital, mostly by renovating and upgrading guest-facing areas.

The two western received about $50 million in capital, mostly by renovating and upgrading guest facing areas.

And in 2020 and 2022.

Speaker 3: We invested approximately $12 million in additional capital expenditures at Maryland Woodlands, primarily on significant improvements to guest rooms and guest path.

We invested approximately $12 million in additional capital expenditures at Marriott woodlands, primarily on significant improvements the guestrooms and guest bathrooms.

Speaker 3: We are pleased to see the benefits of these investments as the market continues its recovery from the pandemic and as economic activity in the region continues to improve.

We are pleased to see the benefits of these investments as the market continues its recovery from the pandemic and its economic activity in the region continues to improve.

Marcel Verbaas: Group business remained a bright spot. Group room revenue in the third quarter was up a little over 3% over the third quarter of 2022, and excluding Scotland both periods, our group room revenue was up about 9%. We continue to see meaningful improvements in group business at our important group variance of totals in Orlando, Portland, Atlanta, and Dallas. By way of reminder, we estimate that group has historically been about a third of our overall business mix.

Okay.

Speaker 3: And despite the significant capital expenditures we have made into these hotels during our ownership periods, our overall investment base is of approximately $360,000 per key on average for the three hotels. Remains attract.

And despite the significant capital expenditures, we have made into these hotels during our ownership period, our overall investment basis of approximately $360000 per key on average for the three hotels remains attractive.

Speaker 3: especially given their excellent locations, high quality and expensive meeting facilities and supporting amenities. So, I'm going to start with the first question.

Especially given their excellent locations high quality and extensive meeting facilities and supporting amenities.

Okay.

Okay.

I would now like to turn to our Scottsdale project as.

Marcel Verbaas: Group revenue pace for full year 2023 is up about 13% versus last year for our same property portfolio, and up about 16% that we exclude Scotland, where the meeting space is now mostly unavailable. Group ADR for full year 2023 is up about 4 percent, again excluding Scott Phil.

Speaker 3: As I mentioned earlier, this transformational renovation is progressing as plans from a schedule and cost respect.

As I mentioned earlier this transformational renovation is progressing as planned from a schedule and cost perspective.

Speaker 3: A lot of disruption to our short-term results is significant. This disruption also continues to be in line with our expertise.

While the disruption to our short term results of significance. This disruption also continues to be in line with our expectations.

Yeah.

As we anticipated demand in the Phoenix Scottsdale market has softened a bit this year, particularly after a very strong first quarter that was aided by the Super Bowl in early February.

Speaker 3: As we anticipated, demand in the Phoenix Scottsville market has swaffered a bit this year, particularly after a very strong first quarter that was aided by the Super Bowl in early February .

Marcel Verbaas: Atish will provide an early look into our 2024 group days during his remarks. Business transient demand continues to improve during the third quarter. Overall, occupancy improved from Mondays, Tuesdays and Wednesdays as compared to the third quarter of 2022. While we can the occupancy was down slightly as compared to the same quarter last year. Two of our four strongest graph bar growth markets have reflected results from our most recent acquisitions. I dream to be Portland, I do Oregon, Convention Center, and W National.

Speaker 3: The market is experiencing similar signs of moderating leisure demands that we are witnessing another one.

The market is experiencing similar signs of moderating leisure demand that we are witnessing in other markets.

As we indicated when we initially announced this transformational renovation our strategy revolves around further optimizing the demand segmentation mix at the resort and being able to drive greater at higher rated group business.

Speaker 3: As we indicated when we initially announced this transformational renovation, our strategy revolves around further optimizing the demand segmentation mix at the resort, and being able to drive greater and higher rate of group is

Speaker 3: We also are aiming to create an upgraded experience that will allow the resource to compete more effectively within its luxury competitive set for a higher rated corporate transit and leisure demand.

We also are aiming to create and upgrade the experience that will allow the resorts to compete more effectively within its luxury competitive set for a higher rated corporate transient and leisure demand.

Marcel Verbaas: With graph bar increase in by 26.8 percent and 17.3 percent respectively as these hotels for the quarter. Both properties are benefiting from significant growth in group business that they continue on their path towards that stabilization. For 2023, group room revenue on the books at both properties has increased more than 40 percent over 2022 levels, driven by solid increases in room nights. Business transient production is also driving growth as both properties increase volumes with important quarter accounts in recent months.

Speaker 3: Discompetitors have said includes a number of resorts that have also received significant capital investment and recent years.

This competitive set includes a number of resorts that have also received significant significant capital investments in recent years.

Speaker 3: The expansion of our meeting space, the significant upgrades to our pool complex, the relaunching and revitalization of our food and beverage amenities, the substantial investment in our upgraded rooms product.

The expansion of our meeting space the significant upgrades through our pool complex, the relaunching and revitalization of our food and beverage amenities the.

The substantial investment in our upgraded rooms product.

Speaker 3: and the ultimate up branding for the Grand Hired Resort, are all important components of this transformation.

And the ultimate brand into a Grand Hyatt resort.

Are all important components of this transformation.

Okay.

Speaker 3: When we initially discussed this project, we indicated that we believe that the record 2022 results at the resort were driven by an unusually high level of post-pandemic domestic leisure demand, as well as expenses that were well below normalized levels.

While we initially discussed this project we indicated that we believe that the record 2022 results at the resort were driven by an unusually high level of post pandemic domestic leisure demand as well as expenses that were well below normalized levels.

Marcel Verbaas: Our other top performing markets for the quarter were both located in Texas, where the youth and dollars markets reported third quarter ref bar growth of 25.2 percent and 14.2 percent respectively. Our hotels in these markets not only drove outstanding third quarter results, but they are also well positioned to capture additional growth in the coming years because of favorable market dynamics and important capital investment base in recent years. Overall, market fundamentals reflect a favorable supply and demand back growth.

Speaker 3: We also spoke about viewing 2019 as a more normalized year, both from a demand segmentation perspective and earnings base for the property.

We also spoke about viewing 2019 as a more normalized here both from a demand segmentation perspective and earnings base for the property.

Speaker 3: Given the resort's aging facilities and an expected normalization of leisure demand in the U.S. overall, and the Phoenix Coffield market in particular, we completed an extensive analysis of long-term supply and demand trends, the competitive landscape, and the challenges and opportunities that the resort presented.

Given the resorts aging facilities and expected normalization of leisure demand in the U S overall, and the Phoenix Scottsdale market in particular.

We completed an extensive analysis of long term supply and demand trends the competitive landscape and the challenges and opportunities that the resort presented.

Marcel Verbaas: Texas continues to be a high growth state, both in terms of population growth and business incubations at relocations. Supply growth through 2025 in our specific submarkets is also benign. The Dallas CBD submarket is expected to peak at 2.3 percent, the youth in North woodland submarket at 2.7 percent, and the youth in Galleria submarket is expected to see no new supply over the next few years. In terms of earnings contribution, our youth and properties peak in 2015, and since that time has successfully brought on their base of business and reduced reliance on citywide conventions.

Everything we are seeing in the market. This year has further increased our confidence in the decision we made to commence this transformational renovation and <unk> of a grand Hyatt.

Speaker 3: Everything we are seeing in the market this year has further increased our confidence in the decision we made to commence this transformational renovation and upranding to a grand height from both a scope.

From both a scope and a timing perspective.

Yes.

The Phoenix Scottsdale market continues to be very attractive for all segments of hotel demand.

Speaker 3: The Phoenix Scotchville market continues to be very attractive for all segments of hotel demands, which will be bolstered by the expected economic and population growth in the markets in the years and decades ahead.

You will be bolstered by the expected economic and population growth in the markets in the years and decades ahead.

Okay.

Speaker 3: With the well located and upgraded and expanded grand high at resort, we believe we will be able to compete very effectively in the Scottsdale luxury resort mark.

With a well located and upgraded and expanded grant Hyatt resort. We believe we will be able to compete very effectively in the Scottsdale luxury resort market.

Marcel Verbaas: We also embed for the significant amount of capital into our three youth and hotels leading up to and through the pandemic. The two westerns received about 50 million dollars in capital, mostly by renovating and upgrading guest facing areas. And in 2020 and 2022, we invested approximately 12 million dollars in additional capital expenditures at Maryland Woodlands, primarily on significant improvements to guest rooms and guest bathrooms. We are pleased to see the benefits of these investments as the market continues its recovery from the pandemic, and as economic activity in the region continues to improve.

And as a result, we expect the resort to grow earnings significantly over both the 2019 pre pandemic peak year, Andy outsized leader drilling results, we achieved in 2022.

Speaker 3: And as a result, we expect the resort to grow earnings significantly over both the 2019 pre-pandemic peak year and the outsized leisure-driven results we achieved in 2022.

Okay.

As a reminder, we have a relatively low investment basis in the resort and we will continue to do so after making these approximately $110 million additional investment.

Speaker 3: As a reminder, we have a relatively low investment basis in the resort. And we will continue to do so after making this approximately 110 million dollar additional investment.

Speaker 3: our invisibility that grows investment bases of less than $700,000 per key upon completion of the project is especially attractive when compared to recent fields of comparable resorts.

Our anticipated gross investment basis of less than $700000 picky. Upon completion of the project is especially attractive when compared to the recent sales of comparable resorts.

Marcel Verbaas: And despite the significant capital expenditures we have made into these hotels during our internship period, our overall investment base is of approximately 360 thousand dollars per key. On average for the three hotels, remains attractive, especially given their excellent locations, high quality, and expensive meeting facilities and supporting them at it.

Yeah.

Speaker 3: We remain extremely excited about the resource future and continue to believe strongly that this project will be a meaningful driver for portfolio earnings growth in the years ahead.

We remain extremely excited about the resort's future and continue to believe strongly that this project will be a meaningful driver for portfolio earnings growth in the years ahead.

Okay.

Speaker 3: Despite a lot of economic and geopolitical uncertainty right now, the year has unfolded largely as expected as it relates to our portfolio performing.

Despite a lot of economic and geopolitical uncertainty right now.

Year has unfolded largely as expected as it relates to our portfolio performance.

Marcel Verbaas: I would now like to turn to our Scottsdale project. As I mentioned earlier, this transformational renovation is progressing as planned from a scheduling cost perspective. A lot of disruption to our short-term results and significance, this disruption also continues to be in line with our expectations. As we anticipated, demand in the Phoenix Scottsdale market has spoken a bit this year, particularly after a very strong first quarter that was aided by the Super Bowl in early February.

While we have been impacted by substantial renovation disruption as anticipated we are optimistic that our continued investments in our portfolio will drive attractive returns.

Speaker 3: While we have been impacted by substantial renovation disruption as anticipated, we're optimistic that our continued investments in a portfolio will drive the track of return.

Okay.

Speaker 3: A teach will provide additional detail for regarding our revised tool year 2023 out.

Ashish will provide additional details regarding our revised full year 2023 outlook.

Speaker 3: We have slightly lowered the midpoint of our projected adjusted EBITDA RE range to reflect the return demand.

We have slightly lowered the midpoint of our projected adjusted EBITDA range to reflect recent demand trends.

However, we continue to believe that our portfolio is well positioned to outperform in the years ahead, given its high quality excellent locations.

Speaker 3: However, we continue to believe that our portfolio is well positioned to outperform in the years ahead. Given its high quality, excellent locations, diversity of demand makes, and recent and ongoing capital investment.

Marcel Verbaas: The market is experiencing similar signs of moderating leisure demand that we are witnessing in other markets. As we indicated when we initially announced this transformational renovation, our strategy revolves around further optimizing the demand segmentation mix at the resort and being able to drive greater and higher rate of group business. We also are aiming to create an upgraded experience that will allow the resort to compete more effectively within its luxury competitive set for a higher rate of corporate transit and leisure demand.

Diversity of demand mix, and recent and ongoing capital investments.

Speaker 3: I will not turn the call over to Barry. I see we'll provide more detail on our portfolio's performance and an update on our capital expenditure projects.

I will now turn the call over to Barry as he will provide more detail on our portfolio performance and an update on our capital expenditure projects.

Thank you Marcel and good morning, everyone.

Speaker 3: As Marcel indicated in his remarks, leading markets in terms of rev-part growth in the quarter include many of our hotelers located a group in business-pandes and customers. Supporting our view that the recovery has extended beyond these Royal Highness properties.

As Marcel indicated in his remarks, leading markets in terms of Revpar growth in the quarter include many of our hotels that cater to group and business transient customers supporting our view that the recovery is extended beyond these oriented properties.

Marcel Verbaas: This competitive set includes a number of resorts that have also received significant capital investments in recent years. The expansion over our meeting space, the significant upgrades through our pool complex, the relaunching and revitalization of our food and beverage amenities, the substantial investment in our upgraded rooms products, and the ultimate up branding through a grand higher resort are all important components of this transformation.

As expected results in the third quarter reflected renovation impact along with challenging year ago growth comparisons.

Speaker 3: As expected, results in a third quarter reflected renovation impact along with challenging year-go growth compares.

Speaker 3: The quarter began with occupancy of 63.7% in July , with an ADR of $245.01, resulting in a REV PAR of $156.12, a 1.2% increase compared to July 2022.

The quarter began with occupancy of 63, 7% in July with an ADR of $245 and <unk>, resulting in a revpar of $156 12.

A one 2% increase compared to July 2022.

Speaker 3: August I can see was 62.6% with an ADR of $237.23. Results can rev-parvo $148.54, a 2.1% increase compared to 2022.

August occupancy was 62, 6% with an ADR of $237 23.

Marcel Verbaas: When we initially discussed this project, we indicated that we believed that the record 2022 results at the resort were driven by an unusually high level of post-pendemic domestic leisure demand as well as expenses that were well below normalized levels. We also spoke about viewing 2019 as a more normalized year, both from a demand segmentation perspective and earnings base for the property. Given the resort's aging facilities and an expected normalization of leisure demand in the U.S, overall and the scenic sculptural market in particular, we completed an extensive analysis of long-term supply and demand trends, the competitive landscape, and the challenges and opportunities that the resort presented.

Results can revpar of $148 54.

A two 1% increase compared to 2022.

Speaker 3: The strongest month of the quarter, as expected, was September , with an occupancy of 65%, and an ADR of $263.51, resulting in a REVBAR of $171.18. However, this represented a 1.9% decline to September 2022.

The strongest months of the quarter as expected with September with occupancy of 65% at an ADR of $263 51.

Resulting in Revpar of $171 18.

However, this represented a one 9% decline to September 2022.

Okay.

Speaker 3: including high-recee Scottsdale. Same property route part increased 4% in the quarter as compared to the third quarter of 2021.

<unk>, Hi, Rishi Scottsdale same property Revpar increased 4% in the quarter as compared to the third quarter of 2021.

Speaker 3: Similar to last quarter, average daily rates at our same property portfolio, moderate in the third.

Similar to last quarter average daily rates at our same property portfolio moderate in the third quarter.

Speaker 3: declining 0.6% as compared to the third quarter of 2022, which had grown substantially over the third quarter of 2021.

Declined <unk>, 6% as compared to the third quarter of 2022, which have grown substantially over the third quarter of 2021.

Marcel Verbaas: Everything we are seeing in the market this year has further increased our confidence in the decision we made to commence this transformational renovation and up branding to a grand higher from both a scope and a timing perspective. The scenic sculptural market continues to be very attractive for all segments of hotel demands, which will be bolstered by the expected economic and population growth in the markets in the years and decades ahead. With the well located and upgraded and expanded grand higher resort, we believe we will be able to compete very effectively in the sculptural luxury resort market.

Speaker 3: As expected, Ray declines it from our leisure orient hotels in the third quarter, exceeded that of our same probably portfolio.

As expected rate declines at some of our leisure oriented hotels in the third quarter exceeded that of our same property portfolio.

Speaker 3: as compared to the third quarter of 2022. However, rates at these properties remain well below, well above 2019 levels. For instance, rates in Key West, Napa, and Savannah were approximately 26%, 21%, and 12% above third quarter 2019 levels respectively.

As compared to the third quarter of 2022 however.

However rates at these properties remained well below well above 2019 levels for instance rates in key west Napa, and Savannah, where approximately 26%, 21% and 12% above third quarter 2019 levels respectively.

Speaker 3: Same property occupancy for the third quarter improved by 70 basis points compared to the third quarter of 2022.

Same property occupancy for the third quarter improved by 70 basis points compared to the third quarter of 2022.

Marcel Verbaas: And as a result, we expect the resort to grow earnings significantly over both the 2019 pre-pendemic peak year and the Aussies leader growing the results we achieved in 2022. As a reminder, we have a relatively low investment basis in the resort, and we will continue to do so after making this approximately 110 million dollar additional investment. Our invisible growth investment basis of less than $700,000 per key upon completion of the project is especially attractive when compared to the recent fields of comparable resorts.

Most of this improvement was driven by higher midweek occupancies, because we cannot compete declined slightly as compared to last year.

Speaker 3: Most of this improvement was driven by higher midweek occupancies as we can occupancy to climb slightly as compared to last week.

Reflecting our commentary regarding further opportunity for recovery, particularly in the corporate segment grew 29 hotels, we owned at the time and excluding IMC Scottsdale Mondays through Thursdays are still down approximately 16% in occupancy from 2019 levels, while we cannot consider down approximately 11%.

Speaker 3: Reflecting our commentary regarding further opportunity for recovery, particularly in the corporate segment, the twenty nine hotels we owned at the time and excluding Hiram C. Scottsdale Monday through Thursdays are still down approximately sixteen percent in occupancy from twenty nineteen levels while weekend occupancy are down approximately eleven percent.

Speaker 3: We are continuing to see rate growth due to compression, particularly on Tuesday and Wednesday nights, but are seeing some softening in rates on weekdays.

We are continuing to see rate growth due to compression, particularly on Tuesday, and Wednesday nights, but are seeing some softening in rates on weekends.

Speaker 3: Business from the largest corporate accounts across our portfolio continues to improve year-to-date, but we estimate that room-night demand is still down about 20% from 2019 levels.

Business from the largest corporate accounts across our portfolio continues to improve year to date, we estimate that room night demand is still down about 20% from 2019 levels.

Marcel Verbaas: We remain extremely excited about the resource future and continue to believe strongly that this project will be a meaningful driver for portfolio earnings growth in the years ahead.

Speaker 3: We continue to benefit from healthy group momentum with pace being driven by increases in both room nights and rates.

We continue to benefit from healthy group momentum with pace being driven by increases in both room nights and rate.

Marcel Verbaas: Despite a lot of economic and geopolitical uncertainty right now, the year has unfolded largely as expected as it relates to our portfolio performance. While we have been impacted by substantial renovation disruption as anticipated, we are optimistic that our continued investments in a portfolio will drive attractive returns.

Speaker 3: including our two most recent acquisitions, High Regency Portland and W. Nashville, but excluding High Regency Scottsdale.

Including our two most recent acquisitions Hyatt Regency, Portland, and W. Nashville, but excluding Hyatt Regency Scottsdale group room revenue on the books for full year 2023 is currently about 16% ahead of last year and about 6% ahead of 2022 levels for the fourth quarter of 2023.

Speaker 3: Group Room Revenue on the books for Folier 2023 is currently about 16% ahead of last year, and about 6% ahead of 2022 levels for the fourth quarter of 2020.

Marcel Verbaas: Atish will provide additional detail regarding our revised full year 2023 outlook. We have slightly lowered the midpoint of our projected adjusted EBITDA RE range to reflect recent demand trends. However, we continue to believe that our portfolio is well positioned to outperform in the years ahead given its high quality excellent locations, diversity of demand makes and recent and ongoing capital investments.

Speaker 3: We believe there is continued opportunity for further recovery and growth in group business, even as we close the gap to 2019. Our current group room revenue on the books for 2023 is about 3% behind 2019 levels, excluding Scottsdale in both periods. Now, switch.

We believe there is continued opportunity for further recovery and growth in group business, even as we closed the gap to 2019.

Our current group room revenue on the books for 2023 is about 3% behind 2019 levels, excluding Scottsdale in both periods.

Now switching gears to expenses and profit.

Speaker 3: The third quarter same property hotel EBITDA was $51.2 million, a decrease of 7.9% on a total revenue decrease of 0.8% compared to the third quarter of 2022, resulting in 169 basis points of margin erosion.

Third quarter same property hotel EBITDA was $51 2 million a decrease of seven 9% on a total revenue decreased <unk>, 8% compared to the third quarter of 2022, resulting in 169 basis points of margin erosion.

Barry Bloom: I will not turn the call over to Barry. I see we'll provide more detail on our portfolios performance and an update on our capital expenditure projects. Thank you, Marcel.

Speaker 4: excluding high-matchy scouts fail, margin decline by just 60 base.

Excluding hi, Rishi Scottsdale margin declined by just 60 basis points.

Barry Bloom: Good morning, everyone. As Marcel indicated in his remarks, leading markets in terms of GDP growth in the quarter include many of our hotels that cater to group and business cleansing customers supporting our view that the recovery has extended beyond these oriented properties. As expected, result in the third quarter reflected renovation impact along the challenging year ago growth comparisons. The quarter began with occupancy of 63.7% in July, with an ADR of $245.01 resulting in a rev bar of $156.12, a 1.2% increase compared to July 2022.

Speaker 4: This decrease in hotel Ipa-Domargin in the third quarter was consistent with our expectations. The margin declines would moderate in the second half of the year as we laughed at lower staffing levels or in place.

This decrease in hotel EBITDA margin in the third quarter was consistent with our expectations. The margin declines would moderate in the second half of the year as we lap the lower staffing levels were in place last year.

Speaker 4: Although rooms and food and beverage department margins decreased in the quarter as compared to the third quarter of 2022, salaries and benefits stabilized and over time was significantly reduced to staffing levels normal.

Although rooms, and food and beverage department margins decreased in the quarter as compared to the third quarter of 2020 to salaries and benefits stabilized and overtime was significantly reduced staffing levels normalized AMG.

Speaker 4: A&G expenses grew a little over 1% compared to the prior year, and property operations and maintenance expenses declined by approximately 1%. Utility expense.

<unk> expenses grew a little over 1% compared to the prior year and property operations and maintenance expenses declined by approximately 1%.

Utility expenses grew by approximately 6%.

Barry Bloom: August occupancy was 62.6%. With an ADR of $237.23, results can rev bar of $148.54, a 2.1% increase compared to 2022. The strongest month of the quarter as expected was September, with occupancy of 65%, and an ADR of $263.51 resulting in rev bar of $171.18. However, this represented a 1.9% decline to September 2022. Excluding high-racee Scottsdale, same property rev bar increased 4% in the quarter as compared to the third quarter of 2021.

Now turning to Capex during the third quarter, we invested $35 $5 million and portfolio improvements, bringing our year to date total to $69 5 million.

Speaker 4: now turning a capex. During the third quarter, we invested $35.5 million in portfolio improvements, bringing our year-to-date total to $69.5 million.

Speaker 4: In the third quarter, we continued guest room renovations at the Grand Bohemian Hotel Orlando, which is expected to be completed in the next few days.

In the third quarter, we continued guestroom renovations at the Grand Bohemian Hotel, Orlando, which is expected to be completed in the next few days.

Speaker 4: Earlier in the year, we completed the comprehensive renovation of all public spaces, including meeting space, lobby, restaurant, bar, Starbucks, and the creation of a rooftop bar.

Earlier in the year, we completed the comprehensive renovation of all public spaces, including meeting space lobby restaurant bar, Starbucks and accretion of a rooftop bar.

Speaker 4: At the Park Hyderiviar Resort, we completed a significant upgrade to the Resorts' Fitness and Mendingies in Spa, which reopened as a branded Miraval Life in Balance.

At the Park Hyatt <unk> resort, we completed a significant upgrade to the resorts fitness amenities and spa, which reopened as a branded mirror of our life imbalanced Spa.

Speaker 4: And finally, at Kempton Hotel Monaco Salt Lake City, we completed the comprehensive renovation of Meeting Space, lobby, restaurant, bar, and guest rooms in the third quarter.

Barry Bloom: Similar to last quarter, average daily rates at our same property portfolio moderate in the third quarter to climb 0.6% as compared to the third quarter of 2022, which we've grown substantially on the third quarter of 2021. As expected, rate declines at some of our leisure orient hotels in the third quarter exceeded that of our same property portfolio as compared to the third quarter of 2022. However, rates at these properties remain well above 2019 levels.

And finally, a kimpton hotel Monaco Salt Lake City, we completed the comprehensive renovation of meeting space lobby restaurant bar and Guestrooms in the third quarter.

The $110 million transformer renovation and upgrading of the 491 room Hyatt Regency, Scottsdale underway and proceeding as planned.

Speaker 4: The $110 million transformative renovation and upbranding of the 491-room high-rises in Scottsdale is underway and proceeding as planned.

Speaker 4: Major components, including the meeting space expansion, pool complex and guest rooms, have all been contracted in line with budget levels, and all phases remain on track to be completed by the end of 2024.

Major components, including the meeting space expansion pool complex in Guestrooms have all been contracted in line with budgeted levels and all phases remain on track to be completed by the end of 2024.

Barry Bloom: For instance, rates in Key West, Napa, and Savannah were approximately 26%, 21%, and 12% above third quarter 2019 levels respectively. Same property occupancy for the third quarter improved by 70 basis points compared to the third quarter of 2022. Most of this improvement was driven by higher midweek occupancies, as we can occupancy decline slightly as compared to last year. Profiting our commentary regarding further opportunity for recovery, particularly in the corporate segment. For the 29 hotels we owned at the time, and excluding high-racee Scottsdale, Monday through Thursdays are still down approximately 16% in occupancy from 2019 levels, while weekend occupancies are down approximately 11%.

Speaker 4: Our expectations for total capital expenditures this year are now at a range of $120 to $130 million, a reduction of $5 million at the midpoint to the timing of deposits and cash flow.

Our expectation for total capital expenditures. This year are now at a range of $120 million to $130 million a reduction of $5 million at the midpoint due to timing of deposits and cash flow.

Speaker 4: We are excited about the projects we have underway and look forward to their completion. With that, I will turn the call over to a

We are excited about the projects, we have underway and look forward to their completion with that I will turn the call over to Ashish.

Thanks, Barry I will provide an update on our balance sheet and discuss our guidance first on our balance sheet.

Speaker 3: Thanks, Barry. I will provide an update on our balance sheet and discuss our guidance. First on our balance sheet.

Speaker 4: At the end of the third quarter, our leverage ratio was about 4.7 times net debt to Ibiza. All of our debt...

At the end of the third quarter, our leverage ratio was about four seven times net debt to EBITDA.

All of our debt is at fixed rates.

Speaker 4: The quarter end industry was about 5.5%.

The quarter end interest rate was about five 5%.

Speaker 4: And our next step maturity is in August 2025.

And our next debt maturity is in August 2025.

Barry Bloom: We are continuing to see a rate growth due to compression, particularly on Tuesday and Wednesday nights, but are seeing some softening and rates on weekends. Business from the largest corporate accounts across our portfolio continues to improve year-to-date, but we estimate that room night demand is still down about 20% from 2019 levels. But excluding high emergency Scottsdale, Group Room revenue on the books for full year 2023 is currently about 16% ahead of last year, and about 6% ahead of 2022 levels for the fourth quarter of 2023.

Speaker 4: We continue to have a fully undrawn line of credit that together with our unrestricted cash reflected approximately $670 million of liquidity at quarter end.

We continue to have a fully undrawn line of credit that together with our unrestricted cash reflected approximately $670 million of liquidity at quarter end.

Speaker 4: During the quarter, we bought back just over $5 million of our senior notes in the open market at roughly 1% below par.

During the quarter, we bought back just over $5 million of our senior notes in the open market at roughly 1% below par.

Speaker 4: In addition, we continue to repurchase shares. Year-to-date through today, we've repurchased 6.5% of our outstanding shares at an average price of $12.72 per share.

In addition, we continue to repurchase shares year to date through today, we've repurchased six 5% of our outstanding shares at an average price of $12 72 per share.

Speaker 4: We have approximately $73 million for meeting on our board repurchase authorization.

We have approximately $73 million remaining on our board repurchase authorization.

Speaker 4: We paid a 10 cents per share dividend in the third quarter on an annualized basis that reflects the yield of approximately 3.4% on our stock.

We paid a <unk> 10 per share dividend in the third quarter.

Barry Bloom: We believe there is continued opportunity for further recovery and growth in group business, even as we close the gap to 2019. Our current Group Room revenue on the books for 2023 is about 3% behind 2019 levels, excluding Scottsdale in both periods. Now switching gears to expenses and profit, third quarter same property hotel EBITDA was $51.2 million, a decrease of 7.9% on a total revenue decrease of 0.8% compared to the third quarter of 2022, resulting in 169 basis points of margin erosion, excluding high emergency Scottsdale, margin decline by just 60 basis points.

On an annualized basis that reflects a yield of approximately three 4% on our stock.

Speaker 4: It also reflects a payout ratio under 40% of projected FAD based on the midpoint of our FFO guidance.

It also reflects a payout ratio under 40% projected fad based on the midpoint of our <unk> guidance.

Second I will turn to our full year outlook, we have lowered our expectations for revpar growth by 50 basis points to four 5% at the midpoint.

Speaker 4: Second, I will turn to our full-year outlook. We have lowered our expectation for rep park growth by 50 basis points to 4.5% at the midpoint.

Speaker 4: While third quarter results were in line with prior guidance, our revised Outlook reflects tempered fourth quarter expectations.

While third quarter results were in line with prior guidance, our revised outlook reflects tempered fourth quarter expectations.

Speaker 4: This reflects lower weekend demand than had been previously expected as leisure demand continues to normalize.

This reflects lower weekend demand that had been previously expected as leisure demand continues to normalize.

Barry Bloom: This decrease in hotel EBITDA margin and third quarter was consistent with our expectations, the margin decline would moderate in the second half of the year as we laughed the lower staffing levels were in place last year. Although rooms and food and beverage department margin decrease in the quarter as compared to the third quarter of 2022, salaries and benefits stabilized and over time was significantly reduced to staffing levels normalized. ANG expenses grew a little over 1% compared to the prior year and property operations and maintenance expenses declined by approximately 1%. Utility expenses grew by approximately 6%.

Speaker 4: And it also reflects the continued improvement in business transient demand, albeit at a slightly more gradual pace than we had previously estimated.

And it also reflects the continued improvement in business transient demand, albeit at a slightly more gradual pace than we had previously estimated.

On a preliminary basis, we estimate October revpar declined two 3% versus last year excluding.

Speaker 4: On a preliminary basis, we estimate October Rev Part to climb 2.3% versus last year, excluding high-at-regencies Scottsdale, October Rev Part increased about 2.4% versus last year.

Excluding Hyatt Regency Scottsdale October Revpar increased about two 4% versus last year.

Speaker 4: The impact of the Scottsdale renovation on RevPAR was about 100 basis points higher in October than it was in the third quarter.

The impact of the Scottsdale renovation on Revpar was about 100 basis points higher than October than it was in the third quarter.

Barry Bloom: Now turning a cap X, during the third quarter we invested $35.5 million in portfolio improvements, bringing our year-to-date total to $69.5 million. In the third quarter we continued guest room renovations at the Grand Bohemian Hotel Orlando, which is expected to be completed in the next few days. Earlier in the year we completed the comprehensive renovation of all public spaces, including meeting space, lobby, restaurant, bar, Starbucks and the creation of a rooftop bar.

Speaker 4: As a reminder, October has historically been the most significant month of the quarter, with nearly 50% of our fourth quarter EBITDA earned during the month.

As a reminder October has historically been the most significant month of the quarter with nearly 50% of our fourth quarter EBITDA earned during the month.

Speaker 4: As we look ahead to November and December , our pace is significantly impacted by the Scottsdale renovation.

As we look ahead to November and December our pace is significantly impacted by the Scottsdale renovation transient room revenue pace for the two months is 2% lower than last year.

Speaker 4: Granted room revenue pace for the 2 months is 2% lower than last year. Excluding Scott sale, transient pace.

Excluding Scottsdale transient pace is up 6%.

Speaker 4: As of the end of the third quarter, group room revenue pays for November and December was down about 4% versus last year.

Barry Bloom: At the Park Hyde Aviar Resort we completed a significant upgrade to the Resorts fitness amenities and spa, which reopened as a branded Miraval life imbalance spa. And finally, at Kimpton Hotel Monaco Salt Lake City, we completed the comprehensive renovation of meeting space, lobby, restaurant, bar and guest rooms in the third quarter. The $110 million transformative renovation up branding of the 491 room high-risey Scottsdale underway and proceeding as planned. Major components including the meeting space expansion, pool complex and guest rooms have all been contracted in line with budget levels and all phases remain on track to be completed by the end of 2024.

As of the end of the third quarter group room revenue pace for November and December was down about 4% versus last year.

Speaker 4: Again, excluding Scottsdale pace for the two months was up 2%.

Again, excluding Scottsdale pace for the two months was up 2%.

As the hotel EBITDA margins, we expect them to decline approximately 200 basis points during the fourth quarter as compared to the fourth quarter of last year.

Speaker 4: As the hotel EBITDA margins, we expect them to decline approximately 200 basis points during the fourth quarter, as compared to the fourth quarter last year.

Speaker 4: Excluding Scottsdale, fourth quarter margins are expected to be flat to slightly positive.

Excluding Scottsdale fourth quarter margins are expected to be flat to slightly positive.

As to adjusted EBITDA, sorry, we have lowered the midpoint by $4 million to $250 million.

Speaker 4: As to adjusted EBITDA RE, we have lowered the midpoint by $4 million to $250 million.

Speaker 4: are adjusted FFO guidance of $167 million at the midpoint is $1 million lower than prior guidance.

Our adjusted <unk> guidance of $167 million at the midpoint is $1 million lower than prior guidance.

Barry Bloom: Our expectation for total capital expenditures this year are now at a range of $120 to $130 million. The reduction of $5 million in the midpoint to the timing of deposits and cash flow. We are excited about the projects we have underway and look forward to their completion.

Speaker 4: This is a result of the $4 million in lower expected adjusted EBITDA RE offset by slightly lower interest expense and slightly lower income tax expense. Our G&A expense

This is a result of the $4 million and lower expected adjusted EBITDA are offset by slightly lower interest expense and slightly lower income tax expense.

Atish Shah: That will turn the call over to a teach. Thanks Barry.

Our G&A expense guidance is unchanged.

Atish Shah: I will provide an update on our balance sheet and discuss our guidance. First on our balance sheet. At the end of the third quarter, our leverage ratio was about 4.7 times net debt to EBITDA. All of our debt is at fixed rates. The quarter end interest rate was about 5.5%. And our next debt maturity is in August 2025. We continue to have a fully undrawn line of credit that together with our unrestricted cash reflected approximately $670 million of liquidity at quarter end.

Speaker 4: On a per share basis, we expect FFO of about $1.51 at the midpoint.

On a per share basis, we expect <unk> of about $1 51 at the midpoint.

Speaker 4: which is half a cent higher than prior guidance due to buybacks since we last reported.

Which is half a cent higher than prior guidance due to buybacks since we last reported.

Speaker 4: Looking ahead to 2024, while it's still early, there are a few data points that we can offer for now.

Looking ahead to 2024, while it's still early there are a few data points that we can offer for now.

First on our group outlook as of the end of the third quarter, we had about 45% of our group revenues for next year.

Speaker 4: First on our group outlook, as of the end of the third quarter, we had about 45% of our group revenues for next year. Our

Already definite.

Speaker 4: That group room revenues for 2024 is pacing flat, excluding Scottsdale. Group pace is up about 10% for next year.

That group room revenues for 2024 is pacing flat <unk>.

Atish Shah: During the quarter, we bought back just over $5 million of our senior notes in the open market at roughly 1% below par. In addition, we continue to repurchase shares. Year-to-date through today, we've repurchased 6.5% of our outstanding shares at an average price of $12.72 per share. We have approximately $73 million remaining on our board repurchase authorization. We paid a $0.10 per share dividend in the third quarter on an annualized basis that reflects the yield of approximately 3.4% on our stock. It also reflects a payout ratio under 40% projected FAD based on the midpoint of our FFO guidance.

Excluding Scottsdale group pace is up about 10% for next year.

Speaker 4: Second on corporate rates. We expect corporate negotiated rates for 2024 to be up in the load amid single digit percentage range as based on preliminary feedback from our operators. And third.

Second on corporate rates, we expect corporate negotiated rates for 2024 to be up in that low to mid single digit percentage range.

Based on preliminary feedback from our operators.

And third on new supply growth.

Speaker 4: across our market tracks, we expect supply growth to be up just over 1% next year based on our way to geographic room mix.

Across our market tracks, we expect supply growth to be up just over 1% next year based on our weighted geographic room mix.

Speaker 4: This is considerably lower than annual supply growth has been over the last few years.

This is considerably lower than annual supply growth has been over the last few years.

Speaker 4: Why will we will not yet be providing 2024 guidance?

While we will not yet be providing 2020 for guidance.

Speaker 4: And we'll do so when we report the fourth quarter. We are providing an estimate of the impact of disruption from our Scottsdale project.

And we will do so when we report the fourth quarter.

Atish Shah: Second, I will turn to our full year outlook. We have lowered our expectation for rev par growth by 50 basis points to 4.5% at the midpoint. While third quarter results were in line with prior guidance, our revised outlook reflects tempered fourth quarter expectations. This reflects lower weekend demand than it had been previously expected as leisure demand continues to normalize. And it also reflects the continued improvement in business transient demand, albeit at a slightly more gradual pace than we had previously estimated.

Providing an impact providing an estimate of the impact of disruption from our Scottsdale project.

Speaker 4: We expect the impact of EBITDA to be about $12 million over the course of next year.

We expect the impact to EBITDA.

$12 million over the course of next year.

Speaker 4: By quarter, our estimate is $3 million in the first quarter, $5 million in the second quarter, $3 million in the third quarter, and $1 million in the fourth quarter.

By quarter, our estimate is $3 million in the first quarter <unk>.

$5 million in the second quarter three.

$3 million in the third quarter and $1 million in the fourth quarter.

Speaker 4: By way of reminder, in 2023, the EBITDA impact due to the Scottsdale renovation is expected to be about $14 million.

By way of reminder, in 2023, the EBITDA impact due to the Scottsdale renovation is expected to be about $14 million.

Atish Shah: On a preliminary basis, we estimate October rev par declined 2.3% versus last year, excluding higher Regency Scottsdale, October rev par increased about 2.4% versus last year. The impact of the Scottsdale renovation on rev par was about 100 basis points higher in October than it was in the third quarter. As a reminder, October has historically been the most significant month of the quarter with nearly 50% of our fourth quarter EBITDA earned during the month.

Speaker 4: by quarter that was approximately $2 million in the second quarter, $5 million in the third quarter and we estimate it will be approximately $7 million in the fourth quarter.

By quarter that was approximately $2 million in the second quarter $5 million in the third quarter and we estimate it will be approximately $7 million in the fourth quarter.

Speaker 4: which we also expect to be the peak absolute level of quarterly evid-dod displacement from the renovation.

Which we also expect to be the peak absolute level of quarterly EBITDA displacement from the renovation.

Speaker 4: So as we look at next year, we will see the largest year over year net renovation impact in the first half.

So as we look at next year, we will see the largest year over year net renovation impact in the first half.

Speaker 4: By the time we get to the second half, we'll be laughing this year's heavy disruption.

By the time, we get to the second half we will be lapping this year's heavy disruption.

Atish Shah: As we look ahead to November and December, our pace is significantly impacted by the Scottsdale renovation. Transient room revenue pace for the two months is 2% lower than last year, excluding Scottsdale transient pace is up 6%. As of the end of the third quarter, group room revenue pace for November and December was down about 4% versus last year, again excluding Scottsdale pace for the two months was up 2%. As the hotel EBITDA margins, we expect them to decline approximately 200 basis points during the fourth quarter, as compared to the fourth quarter last year, excluding Scottsdale fourth quarter margins are expected to be flat to slightly positive.

Speaker 4: Despite less renovation disruption next year, we expect EBITDA from Scottsdale property to be lower than in 2023.

Despite less renovation disruption next year, we expect EBITDA from Scottsdale property to be lower than in 2023.

Speaker 4: This is because Leisure and Group Demand were particularly strong during the first four months of this year, and the property also benefited from the Super Bowl this year.

This is because leisure and group demand were particularly strong during the first four months of this year and the property also benefited from the Super Bowl this year.

Speaker 4: We expect we will undertake some other capital expenditure projects next year that are likely to negatively impact EBITDA.

We will we expect we will undertake some other capital expenditure projects next year that are likely to negatively impact EBITDA.

Speaker 4: similar to what we've done in any given year. Well, it's a bit premature to pinpoint that impact. As we have typically done, we will do so when we next report.

Similar to as similar to what we've done in any given year, while it's a bit premature to pinpoint that impact as we've typically done we will do so when we next report.

Atish Shah: As to adjusted EBITDA RE, we have lowered the midpoint by $4 million to $250 million. Our adjusted FFO guidance of $167 million at the midpoint is $1 million lower than prior This is a result of the $4 million in lower expected adjusted EBITDA, RE, offset by slightly lower interest expense and slightly lower income tax expense. Our GNA expense guidance is unchanged. On a per share basis, we expect FFO of about $1.51 at the midpoint, which is half a cent higher than our guidance due to buybacks since we last reported.

I'd like to conclude by mentioning that the company continues to be well positioned with no near term debt maturities, our high quality portfolio and strong relationships with industry participants, including brands managers lenders and others.

Speaker 4: I'd like to conclude by mentioning that the company continues to be well positioned with no near term debt maturities, high quality portfolio, and strong relationships industry participants, including brand managers, lenders, and others.

Speaker 4: We're executing on an on track on several potential high value projects that we expect to continue to drive strong growth in the years.

We're executing on.

And on track on several potential high value projects that we expect to continue to drive strong growth in the years ahead.

Speaker 4: And with that, we'll turn the call back over to Charlie for RQ and A session.

And with that I will turn the call back over to Charlie for our Q&A session.

Okay.

Speaker 1: Thank you. Of course, if you'd like to ask a question, please press star followed by one on your telephone keypad. If you'd like to draw your question, please press star followed by two. When preparing to ask your question, please ensure you are unmuted locally. As a reminder, that the star followed by one on your telephone keypad.

Thank you of course have you'd like to ask a question. Please press star followed by one on your telephone keypad.

Your question. Please press star followed by two when preparing to ask a question. Please ensure you on muted locally as a reminder, that star followed by one on your telephone keypad.

Atish Shah: Looking ahead to 2024, while it's still early, there are a few data points that we can offer for now. First, on our group outlook, as of the end of the third quarter, we had about 45 percent of our group revenues for next year are already definite. That group's room revenues for 2024 is pacing flat, excluding Scott Stale's group pace is up about 10 percent for next year. Second, on corporate rates, we expect corporate negotiated rates for 2024 to be up in as low to mid single digit percentage range as based on preliminary feedback from our operators.

Our first question comes from Bryan Maher of B Riley <unk>, Brian. Your line is open. Please go ahead.

Speaker 1: Our first question comes from Brian Mar of the UILI's SQRITIES Brian , your line is open, please go ahead.

Speaker 1: Thank you and good morning. Just one kind of area I want to address, and I don't think you really talked about it much in your prepared comments was, you know, you have a pretty formidable liquidity position.

Thank you and good morning.

Just one kind of area I wanted to address and I don't think you really talked about it much in your prepared comments was.

You have a pretty formidable liquidity position between your cash and your availability.

Speaker 5: And we have a marketplace where hotels are starting to be handed back to lenders. I suspect we haven't seen the bottom of that, but we'd welcome some commentary there. Marcel, how are you thinking about allocating your cap?

And we have a marketplace, where hotels are starting to be handed back to lenders I suspect we haven't seen the bottom of that but would welcome. Some commentary there Mark how are you thinking about allocating your capital between future buybacks, you've been pretty aggressive this year in acquisition opportunities over the next 12.

Atish Shah: And third, on new supply growth. Across our market tracks, we expect supply growth to be up just over 1 percent next year based on our weighted geographic room mix. This is considerably lower than annual supply growth has been over the last few years. Why will we will not yet be providing 2024 guidance? And we'll do so when we report the fourth quarter. We are providing an impact or providing an estimate of the impact of disruption from our Scott Stale project.

Speaker 5: future buybacks you've been pretty aggressive this year and acquisition opportunities over the next 12 to 18 months.

To 18 months.

Yes, good morning, Brian.

Speaker 3: At two-year point, I think we are still in a situation where we're not quite seeing the depth of acquisition opportunities that we expect to see going forward.

To your point I think we are still in a situation, where we're not quite seeing that depth of acquisition opportunities that we expect to see going forward.

Speaker 3: So particularly as we're looking at our current stock price, we think that there's a lot of value there as compared to certainly what we believe the outside value for these properties would be. So it is really a balancing act, frankly, making sure that we maintain enough liquidity.

So, particularly as we're looking at our current stock price, we think that there is a lot of value there as compared to.

Atish Shah: We expect the impact of EBITDA to be about $12 million over the course of next year. By quarter, our estimate is $3 million in the first quarter, $5 million in the second quarter, $3 million in the third quarter, and $1 million in the fourth quarter. By way of reminder, in 2023, the EBITDA impact due to the Scott Stale renovation is expected to be about $14 million. By quarter, that was approximately $2 million in the second quarter, $5 million in the third quarter, and we estimate it will be approximately $7 million in the fourth quarter, which we also expect to be the peak absolute level of quarterly EBITDA displacement from the renovation.

Certainly what's what we believe the outside value for these properties would be so it is really a balancing act frankly, making sure that we <unk>.

Maintain enough liquidity to potentially look at acquisitions, when there is more and more interesting opportunities out there.

Speaker 3: to potentially look at acquisitions when there's more and more interesting opportunities out there, but we certainly see a lot of value in our stock currently. And you know, obviously the third component of the debt is.

But we certainly see a lot of value in our stock currently and obviously the third component of that is we do have a good number of wells.

Speaker 3: We do have a good number of, well, at this point.

Well at this points really the bulk going into Scottsdale, but any other capex needs that we're going to have over the next couple of years as well does make sure that we maintain enough liquidity to for those kind of high potential projects that we're working on in addition to the buybacks and maintaining enough dry powder for potential acquisition opportunities in future.

Speaker 3: really the bulk going into a Scottsdale but any other cat-backs needs that we're going to have over the next couple years as well. Just make sure that we maintain enough liquidity for those kind of high potential projects that we're working on in addition to the buybacks and maintaining enough dry powder for potential acquisition opportunities in the future.

Atish Shah: So as we look at next year, we will see the largest year over year net renovation impact in the first half. By the time we get to the second half, we'll be laughing this year's heavy disruption. Despite less renovation disruption next year, we expect EBITDA from Scott Stale property to be lower than in 2023. This is because leisure and group demand were particularly strong during the first four months of this year, and the property also benefited from the Super Bowl this year.

Okay. Thank you.

Thank you. Our next question comes from Bill Crow of Raymond James Bill. Your line is open. Please proceed.

Speaker 1: Thank you. Our next question comes from Bill Crow of Raymond James. Bill, your line is open. Please proceed.

Okay.

Speaker 6: Great, good morning. Curie. Warning.

Great Good morning.

Sure good morning.

Takeout Scottsdale and good morning, if you take out Scottsdale the equation, how much does revpar half to grow next year in order to have flat EBITDA.

Speaker 6: morning. If you take out Scottsdale from the equation, how much does rev par have to grow next year in order to have flat e-b-

Atish Shah: We expect we will undertake some other capital expenditure projects next year that are likely to negatively impact EBITDA similar to what we've done in any given year. While it's a bit premature to pinpoint that impact, as we have typically done, we will do so when we next report.

Speaker 4: Well, you know, we're still in the budgeting process, but if you take scots.of the equation, you know, I think it's probably kind of in the load of mid single digit range.

Well.

We're still in the budgeting process, but if you take Scott start of equation.

I think it's probably in the.

Low to mid single digit range.

Speaker 4: to get to fly the beta, just based on, you know, initial indications on expense.

To get to flat EBITDA just based on initial.

Indications on expense pressures in Nebraska.

Atish Shah: I'd like to conclude by mentioning that the company continues to be well-positioned with known near-term debt maturity, high-quality portfolio, and strong relationships industry participants, including brands, managers, lenders, and others. We're executing an on-track on several potential high-value projects that we expect to continue to drive strong growth in the years ahead.

Speaker 3: I think Barry Dips did obviously get into a little bit of what we're seeing, just what the overall expenses and growth and expenses. And we are certainly at a much closer level to full staffing than where we were in previous quarters. And that's why you're seeing the moderation that we saw on the third quarter too, as compared to the margin contraction that we had in the second quarter of this year. So the fact that

I think Barry dips did obviously.

Get into a little bit of what we're seeing just what the overall expenses and growth in expenses and we are certainly at a much closer level to full full staffing than where we were in previous quarters and thats why youre seeing the moderation that we saw in the third quarter two as compared to the margin contraction that we had in the second quarter of this year so far.

Unknown Executive: And with that, we'll turn the car back over to Charlie for our Q&A session. Thank you.

<unk>.

Speaker 3: You know, if you think about that we have 4% the ref bar growth in the third quarter of this year, excluding Scottsdale and our margins contracted by 60 basis points.

About that we had 4% revpar growth in the third quarter of this year, excluding Scottsdale and our margins contracted by 60 basis points I think that leads you to kind of that range that would teach us is talking about.

Unknown Executive: Of course, if you'd like to ask a question, please press star for the by one on your telephone keypad. If you'd like to put your question, please press star for the by two. When preparing to ask a question, please ensure you are muted locally. As a reminder, that star for the by one on your telephone keypad.

Speaker 3: I think that leads you to kind of that range that the teacher is talking about.

Speaker 6: Yeah, that's helpful. Thank you. And then just a pile of questions. What are it, it seems like a little bit earlier than that we saw this.

Yeah No. That's helpful. Thank you and then just a follow up question.

I was wondering it seems like middle of the year, maybe it was a little bit earlier that we saw this.

Bryan Maher: Our first question comes from Brian Ma of the U.S. Securities Brian. Your line is open. Please go ahead. Thank you and good morning. Just one kind of area I want to do address and I don't think you really talked about much in your prepared comments was, you know, you have a pretty formidable liquidity position between your cash and your availability. And we have a marketplace where hotels are starting to be handed back to lenders.

The slowdown in the month or in the quarter for the quarter booking activity. It just things seem to slow on that and Im wondering what youre seeing.

Speaker 6: slow down in the month or in the quarter for the quarter booking activity. It just seems to slow on that. I'm wondering what you're seeing on the booking window on those shortcomings.

The booking window on those short term bookings.

<unk>.

Speaker 3: Yeah, I mean, I think if you think about fourth quarter pace,

Yes, I mean, I think if you think about fourth quarter pace.

Short term bookings are still very much a reality and I think we're seeing that extend into 2024, as well where <unk> talked about overall pace for 'twenty, four and where we are it's pretty heavily front loaded.

Speaker 3: Short-term bookings are still very much a reality, and I think we're seeing that extend into 2024 as well, where...

Bryan Maher: I suspect we haven't seen the bottom of that, but we'd welcome some commentary there. More so, how are you thinking about allocating your capital between future by-backs? You've been pretty aggressive this year. And acquisition opportunities over the next 12-18 months.

Speaker 7: for while Teesh talked about, you know, overall pace for 24 and where we are, it's pretty heavily front loaded, which we take as a good sign that businesses is responding quickly and.

Which we take as a good sign that businesses is responding quickly and where we're now starting to see properties really push to try to put more business on the books in the last half of 2024, which quite frankly is pretty easy because in most of our large scale group properties. The first two quarters are in really good shape.

Speaker 7: We're now starting to see properties really push to try to put more business on the books in the last half of 2024, which quite frankly is pretty easy because in most of our large scale group properties, the first two quarters are in really good shape.

Unknown Executive: Yeah, good morning, Brian. At the two-year point, I think we are opportunities that we expect to see going forward. So particularly as we're looking at our current stock price, we think that there's a lot of value there as compared to, certainly, what we believe the outside value for this property would be. So it is really a balancing act, frankly, making sure that we maintain enough liquidity to potentially look at acquisitions when there's more and more interesting opportunities out there.

Yeah.

Okay. Thanks, that's it for me.

Speaker 1: Our next question comes from Dory Kirsten of Wells Fargo. Dory your line is open. Please go ahead.

Our next question comes from Dori Kesten of Wells Fargo. Your line is open. Please go ahead.

Okay.

Speaker 8: Thanks, good morning. What's sometime now under the new GM cell that the W now?

Thanks, Good morning.

With some good morning, now under the new Gms.

Okay.

Speaker 8: Hey, have you seen a notable shift in operations that you were looking forward to put the hotel kind of back on the trajectory to stabilize the yield?

Have you seen a notable shift in operations that you were looking for to put a quickie hotel coming back on that trajectory to stabilize yield.

Unknown Executive: But we certainly see a lot of value in our stock currently. And, you know, obviously, the third component of the debt is we do have a good number of well, at this point, really the bulk going into Scottsdale, but any other catbacks needs that we're going to have over the next couple of years as well. Just make sure that we maintain enough liquidity to, for those kind of high potential projects that we're working on in addition to the buybacks and maintaining an off-drive battle for potential acquisition opportunities and future. Okay, thank you. Thank you.

Okay.

Speaker 7: Yeah, I think I would say very much so. We had a very, very good third quarter there in terms of rooms operations, both in terms of the red part of the hotel drove in absolute terms as well as relative to its competitive set. A lot of that managed to flow through the operations as they've taken a new and fresh clean look at kind of how to optimize the property operationally. Well just in our understanding of the communications field.

Yes, I think I would say very much so.

We had a very very good third quarter there in terms of rooms operations. Both in terms of the Revpar of the hotel drove in absolute terms as well as relative to its competitive set a lot of that manage the flow through the operations has taken a new and fresh clean look at kind of how to optimize the property operate.

Donnelley.

Speaker 7: And certainly with the amount of group business hotel has done, which was a big contributor to Q3, as we expected to be, and a much larger component of the business of the hotel as we move forward. Bank of contribution was also good. The piece that's still a work in progress and not surprising given the amount of time it takes is really looking at the multiple food and beverage outlets in the property and still going back and really working on kind of

<unk>.

And certainly with the amount of group business. The hotel has done which was a big contributor to Q3 as we had expected to be in a much larger component of the business of the hotel as we move forward banking contribution was also good the piece that's still a work in progress and not surprising given the amount of time. It takes us really looking at the multiple food and beverage.

William Crow: Our next question comes from Bill Crow of Raymond James. Bill, you're on his open. Please proceed. Great. Good morning.

William Crow: If you take out Scottsdale's good morning, if you take out Scottsdale's me equation, how much does Revpar have to grow next year in order to have flat EBITDA? Well, you know, we're still in the budgeting process, but if you take Scottsdale out of the equation, you know, I think it's probably kind of the load of this single digit range, to get to fly the Ubisoft just based on, you know, initial indications on expense pressures and the rest.

Outlets in the property and still going back and really working on kind of new marketing and digital marketing and social media plans for each outlet to really think about how we can maximize performance and we're working on some things were not really prepared to talk about yet, but we think we will certainly do.

Speaker 7: new marketing and digital marketing and social media plans for each outlet to really think about how we can maximize performance and we're working on you know some things we're not really prepared to talk about yet but that we think we'll certainly be able to get the property on a better track and certainly more.

Be able to get the property on a.

Better track and certainly more.

Speaker 7: Help get us closer to Bridget the Gap that we still have on the Food and Revege house.

Helped get us closer to bridge the gap that we still have on the food and beverage outlets.

William Crow: Yeah, I think Barry Dips did obviously get into a little bit of what we're seeing just when the overall expenses and growth and expenses and we are certainly at a much closer level to full, full staffing than where we were in previous quarters. And that's why you're seeing the moderation that we saw on the third quarter to as compared to the margin contraction that we had in the second quarter. So the fact that, you know, if you think about that we have 4% ref bar growth in the third quarter of this year, excluding Scottsdale and our margins contracted by 60 basis points, I think that leads you to kind of that range that that Atecious is talking about. Yeah, that's helpful. Thank you.

Speaker 8: Okay, I think last quarter you said maybe the hotel's about a year behind where you thought or it's not taking a year longer to stabilize. Is that still fair?

Okay, I think last quarter, you said, maybe the hotel's about a year behind where you thought.

Taking your longer to stabilize is that still fair.

Yes, I think Thats still fair.

Speaker 3: I would reiterate what Barry said. We obviously are really kind of undertaking this path of kind of revamping some of the FAB operations here.

I would reiterate what Barry said, we were obviously are really kind of undertaking this path of kind of revamping some of the F&B operations here and it's still relatively early days with the new GM in place.

Speaker 3: It's still relatively early days with the new GM in place.

Speaker 3: I believe you've seen the property or so and you know what's up to any facilities that we have there.

I believe you've seen the property yourselves.

Outstanding facilities that we have there. So we are still very confident in the long term prospects for our for the hotel.

Speaker 3: So we are still very confident in the long term prospects for the hotel. Clearly it is taking a little bit longer to stay with us, but we're made to a great mark and a great asset, and we're so very excited about the growth prospects there.

Clearly it has taken a little bit longer to stabilize but.

It remains a great market, a great asset and we're still very excited about the growth prospects there.

Unknown Executive: And then just a pile of questions. What are it seems like little the year, maybe it was a little bit earlier than that we saw this slow down and in the month or in the quarter for the quarter booking activity, it just seems to slow on that end. And I'm wondering what you're seeing on the booking window on those short term bookings. Thanks. Yeah, I mean, I think if you think about fourth quarter pace, short term bookings are still very much a reality.

Yeah, Okay. Thank you.

Thank you.

Speaker 1: Thank you. As a reminder, if you'd like to ask a question, please press star for the part one on your telephone key.

As a reminder, if you'd like to ask a question. Please press star followed by one on your telephone keypad.

Speaker 1: Our next question comes from David Katz of Jeffries. David, your line is open. Please proceed. Hi, Mo.

Our next question comes from David Katz of Jefferies. David Your line is open. Please proceed.

Hi, Good morning, everyone. Thanks for taking my question.

Speaker 6: I want to, T-Shield, go back to some of your prepared remarks. We appreciate the detail around Scottsdale and how that rolls.

I want to just go back to some of your prepared remarks.

Unknown Executive: And I think we're seeing that extend into 2024 as well, where we're all teach talked about, you know, overall pace for 24 and where we are. It's pretty heavily front loaded, which we take as a good sign that businesses is responding quickly and we're now starting to see properties really push to try to put more business on the books in the last half of 2024, which quite frankly, it's pretty easy because in most of our large scale group properties, the first two quarters are in really good shape. Thank you.

We appreciate the detail around Scottsdale, and how that rolls into 2024.

Speaker 6: for I think you did suggest that their cutter would be more projection in 2024. And what I'm trying to envision is, you know, whether they could have the same kind of impact or Scottsdale or, you know, we start to get into more of a cash flow.

Unknown Executive: Okay, thanks for the tip for me.

I think you did suggest that there.

<unk> would be more projection.

2024.

What I'm trying to envision is whether that could have the same kind of impact of Scottsdale.

Or we start to get into more of.

No cash flow pivot or harvest mode.

Speaker 4: Yeah, thanks David. Yeah, you know, that, that comment was really meant to indicate that there are in any given year some projects that we do. We don't expect to do anything next year of the magnitude of the project in Scottsdale. But, you know, while, while giving the displacement number for Scottsdale, I'm not really rolling up.

Yes, Thanks, David.

Yeah that comment was really meant to indicate that there are in any given year. Some projects that we do we don't expect to do anything next year of the magnitude of the project in Scottsdale.

Dori Kesten: Our next question comes from Dory Kirsten of Wells Fargo. Dory, your line is open. Please go ahead. Thanks. Good morning. Thank you. What's some time now under the new GM cell at the W Nash.

But.

While I was giving the displacement number for Scottsdale Im not really rolling up.

Speaker 4: any in all displacement for next year, just given that we're still in the budgeting process and capital planning mode. So that's really what that comment was meant to indicate is that there are, in any given year, we have some other smaller projects. We expect we'll have those next year as well. And just, you know.

Any and all displacement for next year, just given that we're still in the budgeting process and capital planning.

Dori Kesten: Hey, have you seen a notable shift in operations that you were looking forward to put the hotel kind of back on the trajectory to stabilize deals? Yeah, I think I would say very much so. We had a very, very good third quarter there in terms of rooms operations, both in terms of the red part of the hotel drove in absolute terms, as well as relative to its competitive set. A lot of that managed to flow through the operations as they've taken a new and fresh clean look at kind of how to optimize the property operationally.

Mode. So.

That's really what that comment was meant to indicate to us that there in any given year. We have some other smaller projects. We expect we'll have those next year as well.

Sure.

Speaker 4: And we expect those in fact be, you know, similar to the projects we had this year, we had a handful of other projects that we were working on. So we likely will have, you know, several other projects next year that we'll work on as well.

And we expect those in fact be similar.

Similar to the projects we have this year, we had a handful of other projects that we're working on so we likely will have some.

Several other projects next year that will work on as well.

Yeah.

So should I think about those magnitude wise.

Dori Kesten: And certainly with the amount of group business hotel has done, which was a big contributor to Q3, as we expected to be in a much larger component of the business of the hotel. As we move forward, banking contribution is also good. The piece that's still a work in progress and not surprising given the amount of time it takes is really looking at the multiple food and beverage outlets in the property and still going back and really working on kind of new marketing and digital marketing and social media plans for each outlet to really think about how we can maximize performance and we're working on some things we're not really prepared to talk about yet.

As something order of magnitude similar torches this year ex Scottsdale.

Speaker 9: Something, order of magnitude similar to what you do this year, X Scotchdale, is that fair way to...

A fair way to go.

Think about that I think more or less I mean look yes look we still we don't have a specific number for those projects and the timing will obviously vary relative to the projects. We did this year.

Speaker 4: Yeah, I think more or less. I mean, look, yeah, that look, we feel we don't have a, you know, specific number for those projects and the timing, well, obviously very relative to the projects we did this year, namely, Grand Booking, Me and Orlando and the project in Salt Lake. But I think, it's probably a fair guess to do that.

Namely Grand Bohemian Orlando and the project in Salt Lake, but I think.

It's probably a fair guess to to do that.

Speaker 3: Yeah, and it's really, I'll just add to that, David, that it really is just as a piece that is kind of indicating that there may be some more disruption than essentially the 12 million that he outlined for Scottsdale. If you think about this year's disruption, we've talked about about 18 million of total disruption, 14 million of which came from Scottsdale. So there was an additional roughly 4 million that came from some other project this year.

And it's really I'll, just add to that David.

Dori Kesten: But the we think will certainly be able to get the property on a better track and certainly more help get us closer to bridge the gap that we still have on the food and beverage outlets. Okay.

It really is just a piece.

Just kind of indicating that there may be some more disruption than essentially the 12 million that you outlined four for Scottsdale. If you think about this year's disruption we've talked about about $18 million of total disruption 14 million of which came from Scottsdale. So there was an additional roughly $4 million came from some of our projects this year.

Dori Kesten: I think last quarter, you said maybe the hotel's about a year behind where you thought or is it taking you longer to stabilize? Is that still fair? Yeah, I think that's still fair. And I just would reiterate what Barry said. We obviously are really kind of undertaken this path of kind of revampings on the F and B operations here. And it's still relatively early days with the new team. I believe you've seen the property or so when you know what's outstanding facilities that we have there.

Speaker 3: We've just not pinpointing exactly what it is for any additional projects, because frankly, we're still going through the whole process of finalizing capital budgets for next year and really looking at what we may or may not want to tackle next year. So, as I'm sure you can understand, we'll get into a lot more detail on that as we do our next de-ing of next year.

We are just not pinpointing exactly what it is for any additional projects because frankly, we're still going through the whole process of finalizing capital budgets for next year and really looking at what we may or may not want to tackle next year, so well as I'm sure you can understand we'll get into a lot more detail on that as we do our next earnings call at the beginning of next year.

Speaker 9: Got it. If I could sneak one more quick, and I'd appreciate it. You know, one of one of the other public.

Got it if I could sneak one more quick one on I appreciate it.

Dori Kesten: So we are still very confident in kind of the long term prospects for the hotel. Clearly it is taking a little bit longer to stabilize, but it reminds a great market, a great asset, and we're so very excited about the growth prospects there. Yep. Okay. Thank you.

One of <unk>.

One of the other public Reits.

Speaker 9: You know, announced a transaction recently and I'm just wondering whether you think the capital market plan of the market is better worth of the shame and whether there's a message in that or not.

<unk> announced the transaction recently I'm, just wondering whether you think the capital markets landscape as better worse or the shame.

And whether there's a message in that or not.

Unknown Executive: As a reminder, if you'd like to ask a question, please press star, follow by one on your telephone keypads.

From a capital markets perspective.

Speaker 3: Maybe just, I don't know if you want to be more specific about what you're asking about exactly what transaction are you talking about? Company-wide transactions, you're talking about a specific individual asset acquisition.

David Katz: Our next question comes from David Katz of Jeffries. David Yolana's open. Please proceed. Hi, morning, everyone. Thanks for sticking my question. I want to a few go back to some of your prepared remarks. You we appreciate the detail around Scottsdale and how that rolls into 2024. I think you did suggest that there could or would be more projection in 2024. And what I'm trying to envision is, you know, whether they could have the same kind of impact of Scottsdale or, you know, we start to get into more of a cash flow pivot or harvest load.

Maybe just I don't know if you want to be more specific about what youre asking about exactly what transactions are you talking about company wide transactions that youre talking about a specific individual asset acquisition.

Speaker 9: Well, I mean, what prompted the question was the Boston asset, the Sunshine Council.

Well I mean, what what what prompted the question was.

The Boston asset that sandstorm sold.

Speaker 9: I'll have to share. Whether there's a message in that about, you know, receptivity or underwriting conviction, and there was...

Gotcha and sharing of whether theres, a message in that about receptivity or underwriting conviction and the receptivity of the capital market. So that's what I was getting at yes.

Speaker 3: Yeah, no, thanks. Thanks for the clarification, David. So, from our perspective, I mean, there are still clearly, there are transactions being completed and there is interest in well-located assets and good assets that are out there. And we know about our transactions that are currently in the pipeline that will also be...

For the clarification David.

So yes.

From our perspective, I mean, there is still clearly there there are transactions being completed and there is interest in and well located assets in good assets that are out there and we know of other transactions that are currently in the pipeline that will also be view, probably pretty constructively as it relates to valuations of hotel assets.

David Katz: Yeah, thanks David. Yeah, you know, that that comment was really meant to indicate that there are in any given year, some projects that we do, we don't expect to do anything next year of the magnitude of the project in Scottsdale. But, you know, while I was giving the displacement number for Scottsdale, I'm not really rolling up any and all displacement for next year, just given that we're still in the budgeting process and capital planning, you know, mode.

Speaker 3: you would probably pretty constructively as it relates to evaluations of hotel assets. And I think

I think.

Speaker 3: We all know that interest rates have obviously increased very significantly and I'm sure you've seen some recent refinancing that have been done that where mortgage rates are in kind of the high 8% kind of range.

We all know that interest rates have obviously increased very significantly significantly and I'm sure you've seen some recent refinancings that have been done that.

Mortgage rates are and kind of the high 8% kind of range.

But I think people are underwriting that and then probably underwriting some sort of refinancing down the road. It hopefully more attractive levels that gives them confidence in and what their long term returns could be.

Speaker 3: that gives them confidence in what their long term returns could be. That being said, I think the market is still not overly deep for larger size asset acquisition.

David Katz: So that's really what that comment was meant to indicate just that there are, you know, in any given year, we have some other smaller projects, we expect to have those next year as well. And just, you know, and we expect those, in fact, to be, you know, similar to the projects we had this year, we had a handful of other projects that we were working on. So we likely will have, you know, several other projects next year that will work on as well.

Now that being said I think the market is still not overly deep for for larger size asset acquisitions.

Speaker 3: and both from a number of assets that are out there and a number of transactions that are getting complete. We've still seen some more deals done at some kind of the smaller size trends.

Both from a number of assets that are out there and a number of transactions that are getting completed and we're still seeing some more deal was done at some.

Kind of the smaller sized transactions than youre seeing in the larger sizes, but I do think there is certainly interest in the lodging space and I think part of that is also being driven by kind of looking past. These next 612 months looking at watts.

Speaker 3: than you're seeing in the larger sizes. But I do think there's certainly interest in the lodging space. And I think part of that is...

David Katz: So, should I think about those magnitude wise as, you know, something order of magnitude similar to which is this year X Scottsdale is that fair way to think about the other. Yeah, I think more or less, I mean, look, yeah, that look, we still, we don't have a, you know, specific number for those projects and the timing, well, obviously very relative to the projects we did this this year. Namely, grand booking me in Orlando and the project in Salt Lake, but I think, you know, it's probably a fair guess to do that.

Speaker 3: also be driven by kind of looking past these next, you know, six to 12 months, looking at what supply picture looks like for the space, which is obviously very, very appealing compared to where we've been historically. So I think that there are certainly plenty of interest in the hotel space overall. And

Supply the supply picture looks like for the space, which is obviously very.

Very appealing compared to where we've been historically so I think there are certainly plenty of interesting in the hotel space overall and and.

Speaker 3: And obviously from our perspective, we see a pretty good path forward for growth in a portfolio like ours as well.

And obviously from our perspective, we see a pretty good path forward for growth in a portfolio like ours as well.

Okay.

Thank you I appreciate it.

David Katz: Yeah, and it's really, I'll just add to that, David, that's it really is just as a piece that just kind of indicating that, you know, there may be some more disruption than essentially the 12 million that the outline for for Scottsdale. If you think about this year's disruption, we've talked about about 18 million of total disruption, 14 million of which came from Scottsdale, so there was an additional roughly 4 million that came from some other project this year.

Okay.

Speaker 1: Thank you. Our next question comes from Michael Bellissario of Bad Michael. Your line is open. Please go ahead.

Thank you. Our next question comes from Michael Bellisario of Baird. Michael Your line is open. Please go ahead.

Okay.

Thanks, Good morning, everyone.

Speaker 10: Just a good morning, a couple quick clarifications just on the

Okay.

Good morning couple of quick clarifications just on the.

Speaker 10: Moriatt, first time the fourth quarter outlook. Sounds like it's all on the top line coming down a little bit. Is that correct or are there any incremental expense headwinds that you're also baking into updated failure guys?

First on our fourth quarter outlook. It sounds like it's all on the top line coming down a little bit is that correct or are there any incremental expense headwinds that you're also baking into.

David Katz: We've just not pinpointing exactly what it is for any additional projects, because frankly, we're still going through the whole process of a finalizing capital budgets for next year and really looking at what we may or may not want to tackle next year.

<unk> full year guidance.

No Mike I think you got it right, it's really Revpar driven I mean, if you look at.

Speaker 4: No, Mike, I think you got it right. It's really rough part driven. I mean, if you look at everything else, how we're thinking about the renovation impact or the expense.

David Katz: So well, as I'm sure you can understand, we'll get into a lot more detail on that as we do our next or next call at the beginning of next year. Got it. If I could sneak one more quick one and I'd appreciate it. You know, one of one of the other public reads, you know, announced a transaction recently and I'm just wondering whether you think the capital market landscape is better worth of the shame and whether there's a message in that or or not.

Everything else.

How we're thinking about the.

The renovation impact or the expense.

Backdrop that Hasnt changed it's really top line driven.

Speaker 3: backdrop that hasn't changed. It's really outwind driven.

Speaker 4: primarily associated with the two things that I mentioned. You demand a little bit lighter on weekends and and then BT ramping but ramping up slightly slower.

<unk> associated with the two things that I mentioned.

The demand a little bit lighter on weekends.

And then BT ramping but ramping up slightly slower.

Speaker 10: Got it. Just wanted to clarify that. And then just on the 24 numbers for Scottsdale.

Got it just wanted to clarify that and then just on the 24 numbers for Scottsdale.

Speaker 10: to clarify there if it's net positive two from renovations, but you expect the year over year to be down, is that sort of at least net three negative, sort of like for like, is that all in the first quarter then, or is that gonna be spread out more between one, Q and two, Q?

Just to clarify there net positive to from renovations, but you expect the year over year to be down is that sort of at least next three negative sort of like for like is that all in the first quarter, then or is that going to be.

David Katz: You know, from a capital market perspective, maybe you just, I don't know if you want to be more specific about what you're asking about exactly what transaction are you talking about, company-wide transactions, are you talking about a specific individual asset acquisition? Well, I mean, what prompted the question was the Boston asset that's unsconcilled. Oh, and whether there's a message in that about, you know, receptivity or underwriting conviction and the receptivity of the capital market.

Spread out more between <unk> and <unk>.

Yes, it's mostly first quarter.

Speaker 4: That's where we saw, you know, kind of pull up more of the strength, at least relative to this year. There's a tad bit in the first month of the second quarter, but

That's where we saw kind of a more of a strength at least relative to this year.

There is a tad bit in the first month of the second quarter, but it's mostly first quarter.

Speaker 10: Yeah, okay. And then just last one from me, probably for Barry here, I think you mentioned meaningful improvement in group performance, group trends, and a few of your key markets, any incremental color, you could provide there maybe what's driving that optimism and that upside.

Got it Okay and then just last one for me probably for Barry I think you mentioned meaningful improvement.

David Katz: That's what I was getting at. Yeah, no, no, thanks, thanks for the clarification, David. So, you know, from our perspective, I mean, there's still clearly there, there are transactions being completed and there is interest in well-located assets and good assets that are out there and we know of other transactions that are currently in the pipeline that will also be viewed probably pretty constructively as it relates to evaluations of hotel assets. And I think we all know that interest rates have obviously increased very significantly and I'm sure you've seen some recent refinancing that have been done that's where, you know, mortgage rates are in kind of the high 8 percent kind of range.

<unk> group performance group trends and a few of your key markets any incremental color you can provide there maybe what's driving that optimism in that upside.

Speaker 7: Yeah, I think in part it's a shift back to, like everything else is shifting. It's a little bit of shift back to our more normal group patterns, where we're seeing a much more blended mix of kind of corporate group.

Yes, I think in part it's a shift back to like everything else is shifting and so it will be a shift back to our more normal.

Group patterns, where we're seeing a much more blended mix of kind of corporate group.

Speaker 7: Association group and smurf group and where that's falling across the year. It's falling in the more traditional places So you don't have I mean that kind of the big build up

Association Group, and Smurf group, and where that's falling across the year its falling into more traditional places. So you don't have that.

Kind of the big buildup of corporate demand has softened mall, that's incredibly lucrative business is the shift back to more group of the traditional <unk>.

Speaker 7: Corporate demand has softened and all that's incredibly lucrative business. It's the shift back to more group of the traditional Tai Chi Fad we've talked about before.

David Katz: But I think people are underwriting debt and then probably underwriting some sort of refinance down the road at hopefully more attractive levels that gives them confidence in what their long-term returns could be. But that being said, I think, you know, the market is still not overly deep for larger size asset acquisitions and, you know, both from a number of assets that are out there and a number of transactions that are getting completed.

Talked about before we had this tremendous pent up demand from corporate and association is typically booked further out. So now we're getting that association group. The books further out we're getting the high quality.

Speaker 7: right we had just tremendous pent up demand from corporate and association typically book further out so now we're getting that association group books further out we're getting the high quality uh... you know summer business in a lot of resorts that it is you know sports groups dance groups things like that so it's just a more balanced

Summer business and a lot of resorts that it is.

Sports group's stance groups things like that so it's just a more balanced.

Group, a mix across the year, which is ultimately driving higher and better pace, both in room nights and in rate.

Speaker 7: group mix across the year, which is ultimately driving.

David Katz: We've still seen some more deals done at some kind of the smaller size transactions than you're seeing in the larger sizes. But I do think there's certainly interest in the lodging space and I think part of that is also being driven by kind of looking past these next, you know, six to twelve months and looking at what supply, this supply picture looks like for the space, which is obviously very, very appealing compared to where we've been historically. So I think that there are certainly plenty of interest in the hotel space overall and obviously from our perspective, we see a pretty good path forward for growth in a portfolio like ours as well.

Speaker 7: higher and better pace both in room nights and in rate.

David Katz: Thank you, I appreciate it.

Yes.

Okay.

Helpful. Thank you.

Speaker 1: Thank you. Our next question comes from Ari Klein or BMO Capital Market. Ari, your line is open. Please go ahead.

Thank you. Our next question comes from Ari Klein of BMO capital markets. Your line is open. Please go ahead.

Speaker 11: Thanks and good morning. Maybe just on the balance sheet with some higher near term catbacks and and even that next year impacted by renovation. How high are you come?

Great. Thanks, good morning.

<unk>.

Maybe just on the balance sheet with some higher near term capex.

EBITDA next year impacted by renovation, how high you're comfortable with leverage getting to or maybe just where do you think it will kind of peak out at.

Speaker 11: leverage getting to or maybe just where do you think it'll kind of peak out at?

Michael Bellisario: Thank you. Our next question comes from Michael Bellissario of Bed, Michael. Your line is open. Please go ahead. Thanks, good morning, everyone. Good morning. A couple quick clarifications. Just on the morning, on first on the fourth quarter outlook. Sounds like it's all on the top line coming down a little bit. Is that correct or are there any incremental expense headwinds that you're also baking into updated fully or guys? No, Mike, I think you got it right.

Speaker 4: Yeah, thanks, Ari. Well, you know, pre-COVID, we have been running the company from kind of this range of low three times to low four times. And that certainly continues to be kind of our target range and the optimal level for us, given the asset profile. That said, there is a lot of recovery potential here over the next couple of years. And we pointed to some of that. And...

Yes, Thanks Ari.

Pre COVID-19, we had been running the company from kind of in this range of low three times below four times and that certainly.

<unk> to be kind of our target range and the optimal level for us given the asset profile.

That said there is a lot of recovery potential here over the next couple of years and we pointed to some of that.

Speaker 4: prior conversations as well as the materials we posted. So we do expect there'll be natural delivering for the company.

Prior conversations as well as the materials, we posted so we do expect there'll be natural delevering for the company.

Speaker 4: You know, as we go forward here over the next couple of years, given the EBITDA growth, particularly from some of the newer investments as well of the catback.

As we go forward here over the next couple of years, given the EBITDA growth, particularly from some of the newer investments as well as the Capex.

Michael Bellisario: It's really rough part driven. I mean, if you look at, you know, everything else, you know, how we're thinking about the renovation impact, or the expense, you know, backdrop, but that hasn't changed. It's really outline driven and primarily associated with the two things that I mentioned. You demand a little bit light around weekends and and then BT ramping, but ramping slightly slower. Got it. Just wanted to clarify that. And then just on the 24 numbers for Scottsdale, just to clarify there, if it's net positive to from renovations, but you expect the year over here to be down, is that sort of at least net three negative sort of like for like, is that all in the first quarter then or is that going to be spread out more between one Q and two Q. Yeah, it's mostly first quarter.

Speaker 4: As we think about next year, I think, as we talked about earlier, it is a little bit of a balance here, given the levels cat-bex we have with other uses that we've been attractive, including PIVAC.

As we think about next year I think as we talked about earlier it is a little bit of a balance here given the level of Capex. We have with other uses that we deem attractive including buybacks and I think where we are leverage wise roughly speaking is about right.

Speaker 4: And I think where we are leveraged wise, roughly speaking is...

Speaker 4: about right. We're north of that low four times higher end that I've mentioned, but again, as we look farther out, we think we can, you know, comfortably get back into that range. So I would say, you know, we're fine kind of in the high fours, maybe even a little bit higher, just given the recovery potential of the business.

We're north of that low four times higher and that I had mentioned, but again as we look further out we think we can comfortably get back into that range. So I would say refine kind of in the.

High fours.

Maybe even a little bit higher just given the recovery potential of the business.

Speaker 4: So hopefully that gives you a little bit of color and to how we're thinking about.

So hopefully that gives you a little bit of Howard.

Color into how we're thinking about.

Speaker 4: leverage in the balance sheet in light of what we've got cooking in terms of catbacks and how we're thinking about share repurchases and continuing to be active there.

Leverage in the balance sheet in light of.

What we've got in terms of Capex.

Michael Bellisario: That's where we saw, you know, kind of more of the strength, at least relative to this year. There's a tad bit in the first month of the second quarter, but it's mostly first quarter. Got it. Okay. And then just last one from me, probably for Barry here. I think you mentioned meaningful improvement in group performance, group trends and a few of your key markets, any incremental color. You could provide there maybe what's driving that optimism and that upside.

How we're thinking about share repurchases and continuing to be active there.

Okay.

Speaker 11: And then on the item stock cell, it's curious about how you think about maybe shutting the hope to hell down or if you would consider that in an effort to accelerate the renovation, the renovation timeline. And if not, what I guess why not.

I appreciate that and then on the items Scott curious about how you think about maybe starting to have Hal down or if you would consider that in an effort to accelerate.

The renovation the renovation timeline.

<unk>.

I guess why not.

Speaker 3: Yeah, we obviously looked at that very extensively to see what we thought the rights approach would be. And.

Yes, we obviously looked at that very extensively to see what we thought the right approach would be.

Michael Bellisario: Yeah, I think in part, it's a shift back to like everything else is shifting. It's a little bit of shift back to our more normal group patterns where we're seeing a much more blended mix of kind of corporate group. Association group and smurf group and where that's falling across the year, it's falling in the more traditional places. So you don't have, I mean that kind of the big build up of corporate demand has has softened and all that's incredibly lucrative business.

And if anything that's face to do that would have been in.

Speaker 3: If anything that's face to do that would have been in the last, really in the last few months as opposed to going forward. And even with that, we looked at it very closely to make sure that we felt that we were not hurting ourselves financially in the short term, but also not hurting ourselves with a ramp up if you have to open the hotel back up. And the good thing about this hotel is that you've got

Michael Bellisario: It's the shift back to more group of the traditional type we've had we've talked about before. Right. We had this tremendous pent up demand from corporate and associations typically book further out. So now we're getting that association group of books further out. We're getting the high quality, you know, summer business and a lot of resorts that it is, you know, sports groups, dance groups, things like that. So it's just a more balanced group mix across the year, which is ultimately driving. We're getting higher and better pace both in room nights and in rate. Thank you.

The last really into kind of the last few months as opposed to going forward and but even with that we looked at it very closely to make sure that we felt that we were not hurting ourselves financially in the short term, but also not hurting ourselves with a ramp up if you have to open the hotel back up and the good thing about this hotel is that <unk> got some pretty distinctive areas of the host.

Speaker 3: some pretty distinctive areas of the hotel from a guest room perspective, where you can easily do one side of the building and have the other rooms on the other side of the building available.

Well from a guest room perspective, where you can easily do one side of the building and have the utter rooms on the other seven building available and Thats what were working through right now as we're doing the guest room renovation to make sure that we get through the first half of the building first and then have the second half available really when the pool complex has done in the.

Speaker 3: And that's what we're working through right now, as we're doing to get through in renovation, to make sure that we get through the first half of the building first and then have the second half available, really when the pool complex is done at the beginning of the next year.

Beginning of the next of next year so.

Speaker 3: It probably, it might be helpful for me to expand on that a little bit because we've obviously talked about this in meetings before but...

Broadly.

Might be helpful for me to expand on that a little bit because we've obviously talked about this in meetings before but maybe not quite as granular ways, where as I'd like to do now which is.

Speaker 3: Maybe not quite in a granular way as that like to do not, which is

Speaker 3: We really have a strategy of making sure that we can attract a leader of business primarily in the first half of next year by having the pool complex complete and by getting the guest rooms completed really here into fourth quarter and the first quarter of next year. And being able to drive the leader demand into the hotel first while the

We really have a strategy of making sure that we can attract leisure business primarily in the first half of next year by having the pool complex complete and by getting the guest rooms completed.

Ari Klein: Our next question comes from Ari Klein of BMO capital markets. Ari, your line is open. Please go ahead. Thanks. Thanks and good morning. Maybe just on the balance sheet with some higher near term catbacks and EBITDA next year impacted by renovations. How are you comfortable with leverage getting to or maybe just where do you think it'll kind of peak out at? Yeah, thanks, Ari. Well, you know, pre COVID, we have been running the company with from kind of this range of low three times below four times.

Really here in the fourth quarter and the first quarter of next year.

And being able to drive to leisure demand into the hotel first while the.

Speaker 3: The meeting space isn't available yet with the expanded meeting space that we're doing.

The meeting space isn't available yet with the expanded meeting space that we're doing and then over the summer and the kind of slower periods that naturally occurs anyway really tackling primarily the F&B operations. So we have a very well thought out process here of how we're staging this this whole renovation and trying to.

Speaker 3: and then over the summer in the kind of slower periods that naturally occurs anyway, really tackling primarily the F and B operations. So we have a very well thought out process here of how we're staging this whole renovation and trying to...

No.

Speaker 3: minimize disruption, getting the pieces going as quickly as we can. And we feel very strongly that we're not losing a lot of time honestly by not closing down the resort entirely, but that we're actually managing through this the best way possible, maximizing our cash flow during this time frame without really losing any kind of time and completing this process.

Minimize disruption getting the pieces going as quickly as we can and we feel very strongly that we're not losing a lot of time honestly by not closing down the resort entirely.

Ari Klein: And that certainly continues to be kind of target range and the optimal level for us given the asset profile. Well, that said, there is a lot of recovery potential here over the next couple of years. And we pointed to some of that in prior conversations as well as the materials we posted. So we do expect there will be natural delivering for the company. You know, as we go forward here over the next couple of years, given the EBITDA growth, particularly from some of the newer investments as well of the catbacks.

Doug we're actually managing through this the worst and best way possible maximizing our cash flow during this timeframe without really losing any kind of timing and completing this process.

Yeah.

Thank you.

Speaker 11: And if I can just squeeze one more in just looking at San Jose, it's obviously a challenge for market, but I'm surprised that occupancy get a little bit from last year with tech companies returning to office. What are you seeing in that market and how do you think that kind of evolved?

If I can just squeeze one more in just looking at San Jose, Yes, obviously challenged market.

Occupancy dipped a little bit.

Ari Klein: As we think about next year, I think, you know, as we talked about earlier, it is a little bit of a balance here given the levels catbacks we have with other uses that we be attractive, including buybacks. And I think where we are leveraged wise, roughly speaking is about right, you know, we're north of that low four times higher end that I've mentioned. But again, as we look farther out, we think we can comfortably get back into that range.

Last year with tech companies are turning to Opex.

What are you seeing in that market and how do you think that kind of evolves into 2024.

Yes.

Speaker 7: I think one of the challenges there is that that law there has been more return tax to office.

I think one of the one of the challenges there is that while there has been more return to office.

Speaker 7: There have also been significant layoffs. So that has masked a little bit of the opportunity to go out to the vet market. It's also true that when people were not in the office, we actually, and it was one of our original strategies from the beginning of COVID, was to attract business.

<unk> also been significant layoffs, so that is masked a little bit of the opportunity to go out because that market is.

Also true that when people were not in the office, we actually and it was one of our original strategies from the beginning of Covid was to attract.

Ari Klein: So I would say, you know, we're fine kind of in the high fours, maybe even a little bit higher, just given the recovery potential of the business. So hopefully that gives you a little bit of how we're, you know, color into how we're thinking about leverage and the balance sheet in light of, you know, what we've got cooking in terms of catbacks and how we're thinking about share repurchases and continuing to be active there.

Business from people, who are visiting the office meeting employees, who are paying their own way to come into the market to be in the office. The couple of days a week and that business has changed a lot as a result of tech layoffs and resulted requirements to be in the office more days has led a lot of people to come back to.

Speaker 7: from people who were visiting the office, meeting employees who were paying their own way to come into the market to be in the office the couple of days a week. And that business has changed a lot, both as a result of tech layoffs and a result of requirements to be in the office more days has led a lot of people to come back to be more local to the office. We have,

Be more local to the office.

We have.

Ari Klein: Appreciate that. And then on the item, Scottsdale, curious about how you think about maybe shutting the hotel down or if you would consider that in an effort to accelerate the renovation, the renovation timeline, and it's not what, I guess why not. Yeah, we obviously looked at that very extensively to see what we thought the rights of the pro would be. And if anything that's faced to do that would have been in the last few months as opposed to going forward.

Ari Klein: And even with that, we looked at it very closely to make sure that we felt that we were not hurting ourselves financially in the short term, but also not hurting ourselves with a ramp up if you have to open the hotel back up. And the good thing about this hotel is that you've got some pretty distinctive areas of the hotel from a guest room perspective where you can easily do one side of the building and have the other rooms on the other side of the building available.

Speaker 7: It, the Q3 of this year had also never had a particular good setup for us in that hotel on the group side. As we continue to work with the adjacent convention center on driving more business into that center, but we had always known that that would be soft. So those are kind of the two or three components that led to a little bit of softening there.

The Q3 of this year had also never had a particularly good set up for us in that hotel on the group side.

As we continue to work with the adjacent Convention center on driving more business into that center, but we had always known that that will be soft. So those are kind of the two or three components that led to a little bit of softening.

Sir.

Speaker 7: And the flip side is we have seen rate improvement there through the period as well, in part because we, because I mean, it's not the ideal outcome, but sometimes because we didn't have some of the lower rate of group business, that we'd ordinarily have lower rate of group business, we'd ordinarily have in that hotel during Q3.

The flip side is we have seen rate improvement there.

Through through the period as well you would period as well in part because we because it's not it's not the ideal outcome, but some of that's because we didn't have some of the lower rated group business that we would ordinarily have low rated group business, we would ordinarily have in that hotel during Q3.

Okay.

I appreciate the color.

Speaker 1: Thank you. Our next question comes from Austin Verschmitt of Keyback Capital Markets. Austin, your line is open. Please go ahead.

Thank you. Our next question comes from Austin Schmidt of Keybanc capital markets. Austin. Your line is open. Please go ahead.

Ari Klein: And that's what we're working through right now as we're going to guest room renovation to make sure that we get through the first half of the building first and then have the second half available really when the pool complex is done in the beginning of the next year. So it probably is, it might be helpful for me to expand a little bit because we've obviously talked about this in meetings before, but maybe not quite in as granular a way as we're that like to do not, which is we really have a strategy of making sure that we can attract a leader business primarily in the first half of next year by having the pool complex complete and by getting the guest rooms completed really here into fourth quarter and the first quarter of next year.

Thanks, and good morning, everybody.

I'm curious.

Recent softness in leisure demand that you highlighted kind of change your outlook for this segment at all heading into 2024 and was there any specific markets or hotels across the portfolio.

You'd highlight.

Speaker 7: Yeah, I talked a little bit in prepare remarks. I mean, where we continue to see...

Yes, I talked a little bit in prepared remarks, where we continue to see.

Speaker 7: A little pullback in both occupancy and rate are really the key leisure markets we've talked about for a long time now, which are Napa Savannah and Key West Key West. We actually had some lap to a renovation last year so that so so we actually showed growth

A little a little pullback in both occupancy and rate are really the key leisure markets. We've talked about for a long time now which are.

Napa Savannah, and key West <unk>, we actually had some lap to renovation last year. So.

Ari Klein: And being able to drive the leader demand into the hotel first while the meeting space isn't available yet with the expanded meeting space that we're doing. And then over the summer in the kind of slower periods that naturally occurs anyway, really tackling primarily the F and B operations. So we have a very well thought out process here of how we're staging this whole renovation and trying to minimize disruption and getting the pieces going as quickly as we can.

So we actually showed growth in in Q3, there was really result of renovation lapping.

Speaker 7: into three there that was really a result of renovation lapping. Again, as I mentioned in the peer market as well, rates are incredibly strong in those markets and we've not seen a lot of rate pressure. I think it's a simply a matter of in each of those markets, if you spent 10 minutes on each one, which we obviously don't have time for today, each one of them has their own unique dynamic. Napest certainly has been impacted by the West Coast and Texlow down and layoffs and things like that.

Again as I mentioned in prepared remarks, as well rates are incredibly strong in those markets and we have not seen a lot of rate pressure I think it's just simply a matter of in each of those markets.

We spent.

10 minutes on each of them, which we obviously don't have time for.

Ari Klein: And we feel very strongly that we're not losing a lot of time honestly by not closing down the resort entirely, but that we're actually managing through this the best way possible, maximizing our cash flow during this time frame without really losing any kind of time in completing this process.

Today, each one of them has their own unique dynamic Napa certainly has been impacted.

Bye.

The west Coast and tech slowdown in layoffs and things like that.

Speaker 7: But we continue to be pleased with performance in Savannah, despite the year over year decline. Charleston's held up very well in Q3 as well. And again, QS has always been a tremendous market for

But we continue to be pleased with our performance in in Savannah, Despite year over year decline Charleston's held up very well in Q3, as well and again key west has always been a tremendous market for four.

Unknown Executive: Thanks. And if I can just squeeze one more in just looking at San Jose, it's obviously a challenge for market, but I'm surprised that occupancy get a little bit from from last year with tech companies returning to office. What are you seeing in that market and how do you think that kind of evolves into 2024? Yeah, I think one of the one of the challenges there is that the wall, there has been more return tech to office.

Speaker 7: anyone that's invested there. And so we don't have a particular view in 24 that we see anything remotely close to the clients we've seen this year. In fact, we certainly hope that the occupancy levels will stabilize back to the more normal levels, albeit at at much significantly enhanced rate over 2019.

Anyone that has invested there and so we don't have a particular view in 2000 and for that we see anything remotely close to the declines we've seen this year in fact, we certainly hope that that the occupancy the acuity levels will stabilize back to the more normal levels, albeit at at much significantly enhanced rate over 2019.

Speaker 3: The only thing I'll add to that is that from our perspective, we've been in these leisure markets for a long time. We didn't just jump into these markets in the last couple of years, right? So we're in some really long-term proven, high-demand leisure markets, where we feel very good about the long-term prospects and where it does will kind of stabilize and normalize.

No. The only thing I'll add to that is that from our perspective, we've been in these leisure markets for a long time, we didn't just jump into these markets in the last couple of years for us. So we're in some really long term proven high demand leisure markets, where we feel very good about the long term prospects on where it goes will kind of stabilize our normalized.

Unknown Executive: There've also been significant layoffs. So that has masked a little bit of the opportunity to go out because of that market. It's also true that when people were not in the office, we actually and it was one of our original strategies from the beginning of COVID was to attract business from people who were visiting the office, meeting employees who were paying their own way to come into the market to be in the office the couple of days a week.

Speaker 3: Obviously very important now that is prepared to mark two that we have seen very significant rate growth in those markets even still compared to 19. So it doesn't really change our outlook as it relates to those particular markets. I think what we're seeing is is really.

Obviously very important to others I prepared remarks, too that we have seen very significant rate growth in those markets, even still compared to 19. So it doesn't really change our outlook as it relates to those particular markets. So I think what we're seeing is is really what we kind of expect that which is a softening of kind of the overall domestic leisure.

Unknown Executive: And that business has changed a lot both as a result of tech layoffs and a result of requirements to be in the office more days has led a lot of people to come back to be more local to the office. We have The Q3 of this year had also never had a particularly good set up force in that hotel on the group side. As we continue to work with the adjacent convention center on driving more business than in that center, but we had always known that would be soft.

Speaker 3: what we kind of expected, which is a softening of kind of the overall domestic leisure trends. And as a piece pointed out, that is, you know, a little bit more significant in the fourth quarter than we initially anticipated, but it's also not quite being made up by business friends that are accelerating as much as we were projecting, you know, a quarter ago. So it's really kind of the balance of those things, but we feel good about where we are in those leisure markets. We feel good about the hotels that we have in those markets.

<unk> trends.

As <unk> pointed out that is.

And a little bit more significant in the fourth quarter, then than we initially anticipated, but it's also not quite being made up by business transient accelerating as much as we were projecting a quarter ago. So it's really kind of the balance of those two things, but we feel good about where we are in those leisure markets. We feel good about the hotels that we have in those markets.

Unknown Executive: Those are kind of the two or three components that led to a little bit of softening there. And the flip side is we have seen rate improvement there through the period as well, compared as well. In part because we, because I mean it's not the ideal outcome, but some of that's because we didn't have some of the lower rate of group business to we'd ordinarily have low rate of group business we'd ordinarily have in that hotel during Q3.

Speaker 3: And as you know, and as I've pointed out, number of times.

As you know and as I pointed out a number of times. This kind of gradual shift back is not a bad thing for our portfolio because we do have a very good balance between corporate transient group and leisure demand.

Speaker 3: This kind of gradual shift back is not a bad thing for our portfolio, because we do have a very good balance between corporate transients, group and leader demands, and particularly this strength that we're and theholder a multiple sessions with the gentleman in charge of fundamentally involving

And particularly the strength that we're continuing to see in group is very consistent with what our expectations are and really plays into where we think we're going to benefit over the next couple of years, which is we have assets that are more heavily dependent on that type of business. We obviously did the board the additional ballroom at Grand Cypress, where were expecting good growth over what we.

Speaker 3: very consistent with what our expectations are and really plays into where we think we're going to benefit over the next couple of years, which is...

Speaker 3: We have assets that are more heavily dependent on that type of business. We obviously did the additional ballroom at Grand Fyre's where we're expecting good growth over what we saw in 17, 18, 19. Certainly what we're doing in Scottsdale, plays into that where we wanna make sure that it's extremely attractive for all three demand segments. And where to increase group business that we're going after there, it's gonna be very important for the long-term success of the property.

Unknown Executive: All right, appreciate the color.

17, 18 19.

Unknown Executive: Thank you.

Certainly what we're doing in Scottsdale plays into that where we want to make sure that it's extremely attractive for all three demand segments and where does the increased group business that we're going after there is going to be very important for the long term success of the property. So.

Austin Wurschmidt: Our next question comes from Austin Verschmitt of key bank capital markets, Austin. Your line is open. Please go ahead. Thanks, and good morning, everybody. I'm curious that the recent softness and leisure demand that you highlighted kind of change your outlook for this segment at all heading into 2024 and where there are any specific markets or hotels across the portfolio that you'd highlight. Yeah, I talked a little bit in the pair of remarks and they were where we continued to see a little a little pullback in both occupancy and rate are really the key leisure market we've talked about for a long time now, which are.

Speaker 3: And overall trends in these demand segments, we're not surprised by what we're seeing.

And overall trends in these demand segments, we're not we're not surprised by what we're seeing there.

Yeah. That's a good segue into my next question I guess with respect to the corporate segment you referenced the 16% Delta in occupancy versus 19 levels I guess, how does that compare to the beginning of this year and any specific markets where that corporate demand that has underperformed you.

Into the fourth quarter versus <unk>.

Initial expectations or budgets.

Is it is it.

Any specific hotels or markets or just broad based.

Austin Wurschmidt: We actually had some lap to a renovation last year, so we actually showed growth in Q3 there, there was really a result of renovation lapting. Again, as I mentioned in the pair of remarks as well, rates are incredibly strong in those markets and we not seen a lot of rate pressure. I think it's a simply a matter of in each of those markets if you if you spent you know 10 minutes on each of them, which we obviously don't have time for today, each one of them has their own unique dynamic.

Speaker 3: Well, I think part of it is it's twofold from my perspective. I'm very jump in as well, but

Well I think part of it is it's twofold from my perspective, I'm very jump in as well, but.

Speaker 3: We, Orlando, for example, is a component of that. And Orlando was a Grandpa Union Orlando, which is really a business transient hotel for the most part and some group element to it. Not really.

We Orlando for example is a component of that in Orlando was a green.

Even in Orlando, which is really a business transient hotel for the most part and some group element to it not really very specific very significantly driven by leisure.

Speaker 7: very significantly driven by leader. And that renovation being extended out a little bit, you'd certainly have a bit of an impact in the beginning of the fourth quarter as well. So some of our more business oriented hotels are someone who wants to have on a gone some of the renovations this year too. We have seen an improvement in corporate transients as the year has progressed, where you're still seeing

And Thats.

Renovation being extended out a little bit certainly had a bit of an impact in the beginning of the fourth quarter as well.

Austin Wurschmidt: Napa certainly has been impacted by the west coast and text load down and layoffs and things like that. But we continue to be pleased with performance in in Savannah despite the year over year to climb, Charleston's held up very well in Q3 as well. And again, QS has always been a tremendous market for for anyone that's invested there and so we don't have a particular view in 24 that we see anything remotely close to the clients we've seen this year.

So some of our more business oriented hotels or some of the ones that have undergone some of the renovations. This year too we have seen an improvement in corporate transient as the year has progressed.

Where youre still seeing where you need to see additional growth is really on the Monday nights on the Thursday nights Tuesday, and Wednesday nights are performing very well.

Speaker 3: where you need to see additional growth is really on the Monday nights and the Thursday nights. Tuesday and Wednesday nights are performing very well. Where you're really seeing that delta in the occupancies, it's very much driven by what you're seeing on Monday and Thursday nights. And that is still driven by return to office, more traveled by especially the larger upper accounts that needs to occur on those nights of the week that we haven't quite seen yet.

Are you really seeing that delta and in the Occupancies, it's very much driven by what Youre seeing on Monday, and Thursday, Knutsen and it is still driven by return to office more travel by especially the larger corporate accounts that needs to occur on those nights of the week that we haven't quite seen yet.

Austin Wurschmidt: In fact, we certainly hope that the occupancy the occupancy levels will stabilize back to the more normal levels, albeit at much significantly and answer rate over 2019. Any other thing I'll add that out is that you know from our perspective, we've been in these leisure markets for for a long time, we didn't just jump into these markets in the last couple of years right, so we're in some really long term proven high demand leisure markets.

That's helpful. That's all for me. Thank you.

Speaker 1: Thank you, our final question of today comes from Luis Ricardo Chinchilla or Deutsche Bank, Luis Yolanda's Open, please go ahead.

Thank you. Our final question today comes from Ricardo Chinchilla of Deutsche Bank. Your line is open. Please go ahead.

Austin Wurschmidt: Where we feel very good about the long term prospects and where those will kind of stabilize and normalize and obviously very important now that is prepared to mark two that we have in very significant rate for us and those markets are even still compared to 19. So it doesn't really change our outlook as it relates to those particular markets, I think what we're seeing is is really what we kind of expect that which is a softening of kind of the overall domestic leisure trends.

Hey, guys. Thanks, so much for taking my question I was wondering if you could comment on your refinancing strategy.

Speaker 12: I was wondering if you could comment on your refinancing strategy, acknowledging that you guys have a pretty good rate, it's fixed, and that effectively you have plenty of liquidity. So any insight on what you're thinking and perhaps if you will be more inclined to be more conservative in leverage.

Acknowledging that you guys have.

Really good rate sticks and that email.

Effectively you have plenty of liquidity, so any insight on what youre thinking and you know, perhaps you would be more inclined to be more conservative in leverage.

Austin Wurschmidt: And as a piece pointed out that is, you know, a little bit more significant in the fourth quarter than we initially anticipated, but it's also not quite being made up by business friends that celebrating as much as we were projecting, you know, a quarter ago. So it's really kind of the balance of those things, but we feel good about where we are in those leisure markets we feel good about the hotels that we have in those markets.

Hum.

Speaker 12: Although I know this was already asked, but if you could probably like a range in what you would feel comfortable in deteriorating, you know, from the mental environment.

Although I know this was already asked but if you could provide like a range you would you feel comfortable in deteriorating fundamentals.

The mental environment.

Speaker 3: Well, thanks for the question. So on the first part of the question with regard to...

Well thanks for the question. So on the first part of the question with regard to <unk>.

Austin Wurschmidt: And as you know, and as I've pointed out a number of times, this kind of gradual shift back is not a bad thing for our portfolio because we do have a very good balance between corporate transients group and leisure demands. And particularly this strength that we're competing in the seeing group is very consistent with what our expectations are and really plays into where we think we're going to benefit up in the next couple of years, which is we have assets that are more heavily dependent on that type of business.

Speaker 4: refinancing or financing. Our next maturity is in August to 25. So it's quite some time away. I think there are obviously potentially many avenues we could explore for that debt maturity. And a lot's going to depend on pricing what's available and attractive. Certainly the high yield market is one that we could continue to access. And we've got.

Refinancings or financings. Our next maturity is in August of 25, so it's quite some time away.

I think.

There are obviously potentially many avenues, where you could explore for that debt maturity and a lot's going to depend on sort of pricing, what's available and attractive certainly the high yield market is one that we can continue to access and we've got.

Austin Wurschmidt: We obviously did the additional ballroom at Grand Cypress, where we're expecting good grows over what we saw in 1718-19. Certainly what we're doing and Scottsdale plays into that where we want to make sure that it's extremely attractive for all three demands segments. And we're adding increased group business that we're going after there is going to be very important for the long-term success of the properties. So in overall trends in these demands segments, we're not surprised by what we're seeing. Here.

Speaker 4: a good track record in that space, but there are other financing tools we could utilize as well. So just a little bit too early to really have

<unk>.

Good.

<unk> track record in that space.

But there are other financing tools, we can utilize as well so just a little bit too early to really have a specific strategy laid out, but we do feel particularly.

Speaker 4: strategy laid out, but we do feel particularly confident in the avenues available to the company. And we continue to stay close to the opportunities on that side. So as we get a little bit closer, I think we continue to monitor it and we'll make some decisions.

Particularly confident in the avenues available to the company and we continue to stay close to the opportunities on that side. So as we get a little bit closer I think we continue to monitor and we'll make some decisions with regard to that but still almost a couple of years away.

Speaker 4: with regard to that, but still in the couple years away.

Austin Wurschmidt: That's a good segue into my next question. I guess with respect to the corporate segment, you reference the 16% Delta and occupancy versus 19 levels. I guess how does that compare to the beginning of this year and any specific markets where that corporate demand that is underperformed? You reference into the fourth quarter versus initial expectations or budgets. Is it any specific hotels or markets or just broad basing? Well, I think part of it is it's two folds from my perspective.

Speaker 4: And then to the second part of your question, really around how we're thinking about the balance sheet overall and leverage level.

And then to the second part of your question really around how we're thinking about the balance sheet overall leverage level I would say as I pointed out earlier that range of levers that we had talked about the low <unk> to low four times continues to be appropriate for us.

Speaker 4: I would say, as I pointed out earlier, that range of leverage that we had talked about the low 3 to low 4 times continues to be appropriate for us.

Speaker 4: You know, and I do think, um, specifically to your question, look, as we look at the business over the next several years, we do see a lot of upside and we've articulated some of that.

And I do think.

Specifically to your question look as we look at the business over the next several years, we do see a lot of upside and we've articulated some of that in terms of EBITDA levels. This business could get to so I think that really is the focus when you think about leverage level for the company and while there may be some near term headwinds.

Speaker 4: in terms of the evidol levels this business could get to. So...

Austin Wurschmidt: I'm very jumping as well, but we Orlando, for example, is a component of that and Orlando was a grandpa Eman Orlando, which is really a business transient hotel for the most part. And some group elements to it, not really very specifically driven by leader and that renovation being extended out a little bit, certainly have a bit of an impact in the beginning of the fourth quarter as well. So as some of our more business oriented hotels are some of the ones that have gone so in the renovations this year too.

Speaker 4: I think that really is the focus when you think about leverage level for the company. And while there may be some near-term headwinds, and we haven't obviously provided guidance for next year yet, we're really looking big picture and longer term at where do we want the leverage level for the company to be relative to the growth prospects.

And obviously provided guidance for next year yet.

Really looking big picture and longer term at where do we want to leverage level for the company to be relative to the growth prospects and stabilized EBITDA, we're expecting from the projects and investments we've made so.

Speaker 4: and the stabilized EBITDA we're expecting from the projects and investments we've made.

Speaker 4: I think, you know, I would just keep that in mind as you think about, you know, where we want to take the balance sheet and how we're thinking about the right level.

I would just keep that in mind as you think about where we want to take the balance sheet and how we're thinking about the right level of.

Austin Wurschmidt: We have seen an improvement in corporate transients as the year has progressed, where you're still seeing where you need to see additional growth is really on the Monday nights and the Thursday nights. Tuesday and Wednesday nights are performing very well, where you're really seeing that Delta in the occupancies, it's very much driven by where you're seeing on Monday and Thursday nights. And that is still driven by return to office more travel by especially the larger over the concept needs to occur on those nights of the week that we haven't quite seen yet. That's helpful.

Speaker 4: of debt for the company relative to the long term earnings potential of a company.

Of.

Debt for the company relative to the long term earnings potential of the company.

Okay.

Thank you so much for your answers.

Speaker 1: Thank you. We have no further questions registered at this point. So I'll turn the call back over to Chair and CEO Marcel Babas for any closing remarks.

Thank you we have no further questions registered at this point thoughts are on the call back over to chairman and CEO Marseille boss for any closing remarks.

Speaker 3: Thank you, Charlie. Thanks for joining us this morning. And I will see many of you over the next few weeks. Those of you we won't see, which is a good rest of the year, good holiday season. And we look forward to connecting with everyone at the beginning of next year.

Thank you Charlie Thanks for joining us this morning, and I will see many of you over the next few weeks those view, we won't see what you.

Good for the rest of the year good holiday season, and we look forward to connecting with everyone at the beginning of next year Okay.

Austin Wurschmidt: That's all for me. Thank you.

Luis Ricardo Chinchilla: Our final question of today comes from Luis Ricardo Chinchilla of Twitch Bank Luis. Your line is open. Please go ahead.

Okay.

Speaker 1: Ladies and gentlemen, this concludes today's call. Thank you for joining. You may not disconnect your line.

Ladies and gentlemen. This concludes today's call. Thank you for joining you may now disconnect your lines.

[music].

Luis Ricardo Chinchilla: Hey guys, I thank so much for taking my question. I was wondering if you could comment on your refinancing strategy acknowledging that you guys have you know a pretty good rate it's fixed and then you know effectively you have plenty of liquidity. So any insight on what you're thinking and you know perhaps if you would be more inclined to be more conservative in leverage. Although I know this was already asked, but if you could provide like a range and would you feel comfortable in deteriorating you know from the mental environment.

Yeah.

Atish Shah: Well, thanks for the question. So on the first part of the question with regard to refinancing or financing, you know, our next maturity is an August to 25 so it's quite some time away. I think, you know, there are obviously potentially many avenues we could explore for that debt maturity and a lot's going to depend on sort of pricing what's available and attractive. Certainly the high yield market is one that we could continue to access and we've got, you know, a good track record in that space.

Atish Shah: But there are other financing tools we could utilize as well. So just a little bit too early to really have a specific strategy laid out, but we do feel particularly confident in the avenues available to the company and you know we continue to stay close to the opportunities on that side. So as we get a little bit closer, I think, you know, we continue to monitor and we'll make some decisions with regard to that, but still almost a couple years away.

Atish Shah: And then to the second part of your question really around how we're thinking about the balance sheet overall and leverage level. I would say, you know, as I pointed out earlier, that range of levers that we had talked about the low three to low four times continues to be appropriate for us. You know, and I do think specifically your question, look, as we look at the business over the next several years, we do see a lot of upside and we've articulated some of that in terms of EBITDA levels this business could get to.

Atish Shah: So I think that really is the focus when you think about leverage level for the company and why there may be some near-term headwinds and you know, we have an obviously provided guidance for next year yet. We're really looking big picture and longer term at where do we want the leverage level for the company to be relative to the growth prospects and stabilize EBITDA we're expecting from the projects and investments we've made.

Atish Shah: So I think, you know, I would just keep that in mind as you think about, you know, where we want to take the balance sheet and how we're thinking about the right level of. That for the company relative to the long term earnings potential.

Luis Ricardo Chinchilla: Thank you so much for your answer. Thank you.

Marcel Verbaas: We have no further questions registered at this point, so I'll turn the call back over to Chair and CEO Marcel Verbaas for any closing remarks. Thank you, Charlie. Thanks for joining us this morning. I know we'll see many of you over the next few weeks. Those of you we won't see, which is a good for the rest of the year, a good holiday season, and we look forward to connecting with everyone at the beginning of next year again.

Unknown Executive: Ladies and gentlemen, this concludes today's call. Thank you for joining. You may not disconnect your lines.