Q1 2024 Xenia Hotels & Resorts Inc Earnings Call

Alex: Hello and welcome to the Xenia Hotels & Resorts Inc. Q1 2024 Earnings Conference Call. My name is Alex, and I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation, please press star followed by one on your telephone keypad. And I hand it over to our host, Aldo Martinez, Finance Manager, to begin. Please go ahead.

Hello, and welcome to the Xenia hotels <unk> Resorts, Inc. Q1, 2020 full earnings conference call. My name is Alex somebody coordination nickel would stay flat.

Speaker Change: If you'd like to ask a question in the presentation. Please press star followed by one on your telephone keypad.

Speaker Change: Know how to upsell host Uday Martinez finance manager to begin. Please go ahead.

Aldo Martinez: Thank you, Alex. And welcome to Xenia Hotels & Resorts' first quarter 2024 earnings call and webcam. I'm here with Marcel Verbaas, our Chairman and Chief Executive Officer, Barry Bloom, our President and Chief Operating Officer, and Atish Shah, our Executive Vice President and Chief Financial Officer. Marcel will begin with a discussion of our performance. Barry will follow up with more details on operating trends and capital expenditure projects, and Atish will conclude today's remarks on our banner sheet and outlook.

Uday Martinez: Thank you Alex and welcome to the Xenia hotels, <unk> resorts first quarter 2024 earnings call and webcast.

Here with Marcel her boss, our chair and Chief Executive Officer, Barry Bloom, our President and Chief operating Officer, and a T. Shaw, our executive Vice President and Chief Financial Officer, Marcel will begin with a discussion on our performance Barry will follow with more details on operating trends and capital expenditure projects and <unk> will conclude today's remark.

Speaker Change: That's on our balance sheet and outlook, we'll then open the call for Q&A.

Aldo Martinez: 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 and 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, which could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued yesterday afternoon, along with the comments on this call, are made only as of today, May 3rd, 2024.

Aldo Martinez: We undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find the reconciliation of non-GAAP financial measures to net income and definitions of certain items referred to in our remarks in our first quarter earnings release, which is available on our investor relations section of our website. The 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.

Speaker Change: Before we get started let me remind everyone that certain statements made on this call.

Speaker Change: Historical facts and are considered forward looking statements. These statements are subject to numerous risks and uncertainties that are described in our annual report on Form 10-K, and other SEC filings, which could cause our actual results to differ materially from those expressed in or implied by our comments forward.

Speaker Change: Forward looking statements in the earnings release that we issued yesterday afternoon, along with the comments on this call are made only as of today may three 2024, and we undertake no obligation to publicly update any of these forward looking statements as actual events unfold you can find a reconciliation of non-GAAP financial measures to net income and definitions of certain items.

Referred to in our remarks in our first quarter earnings release, which is available on our Investor Relations section of our website.

Speaker Change: The property level information, we will be speaking about today is on a same property basis for all 32 hotels unless specified otherwise.

Archive of this call will be available on our website for 90 days I will now turn it over to Marcel to get started.

Marcel Verbaas: Thanks, all, and good morning, everyone. Our operating results continued to be encouraging in the first quarter, as strong group demand and steady improvement in business transient demands drove same-property portfolio REFBAR and total revenues that exceeded our expectations for the quarter. A consistent focus on expense controls by our operators and asset management team in a continued inflationary environment allowed us to also achieve a same-property hotel EBITDA margin that was a bit ahead of our expectations. As a result, our adjusted EBIT RRE came in above our internal forecast as well.

Thanks, Oliver and good morning, everyone.

Marcel: Our operating results continued to be encouraging in the first quarter, a strong group demand and steady improvement in business transient demand growth same property portfolio Revpar and total revenues that exceeded our expectations for the quarter.

Marcel: Our consistent focus on expense controls by our operators and asset management team and our continued inflationary environment allowed us to also achieve a same property hotel EBITDA margin that was a bit ahead of our expectations.

Marcel: As a result, our adjusted EBITDA came in above our internal forecast as well.

Marcel Verbaas: For the first quarter of 2024, we reported net income of $8.5 million, adjusted EBITDA RE of $65.3 million, and adjusted FFO per share of 44 cents. While adjusted EBITDA RE declined from the first quarter of 2023, we had anticipated this as high-gradiency Scottsdale at Ganey Ranch had record high performance last year when Phoenix hosted the Super Bowl and overall market demand was extremely strong. Despite the lapping of this outperformance and the high level of EBITDA disruption resulting from the ongoing transformative renovation at our Scottsdale Resort during the quarter, our adjusted FFO per share increased by 10% over last year. This was mostly driven by the significant amount of share buybacks we completed in 2023, which we continued at a slower pace during the early part of the first quarter this year.

Marcel: For the first quarter of 2024, we reported net income of $8 $5 million.

Marcel: Adjusted EBITDA of $65 $3 million and adjusted <unk> per share of <unk> 44 cents.

Marcel: While adjusted EBITDA declined from the first quarter of 2023, we have anticipated. This aside regency Scottsdale at Gainey Ranch at record high performance last year, when Phoenix hosted the Super Bowl and overall market demands was extremely strong.

Marcel: Despite the lapping of this outperformance and the high level of EBITDA disruption, resulting from the ongoing transformative renovation at our Scottsdale resort during the quarter.

Marcel: Our adjusted <unk> per share increased by 10% over last year.

Marcel: Yeah.

Marcel: This was mostly driven by the significant amount of share buybacks, we completed in 2023.

Marcel: Which we continued at a slower pace during the early part of the first quarter this year.

Marcel: Okay.

Marcel Verbaas: Although same-property REFBAR for our 32-hotel portfolio decreased by 1.5% for the quarter, REFBAR actually increased by a healthy 3.7% when excluding high-adherency Scottsdale, despite the negative impact of the Easter holiday occurring at the end of March this year. This increase was mainly driven by a significant 310 basis point increase in occupancy for these 31 hotels. We saw particular strength in a number of our large group-oriented hotels, such as our Houston Hotels, Hyde Regency Portland, and Park Hyde Aviara, as well as at Marriott San Francisco Airport and Hyde Regency Santa Clara.

Marcel: Although same property Revpar for our 32 hotel portfolio decreased by one 5% for the quarter Revpar.

Marcel: <unk> actually increased by a healthy three 7% when excluding hydrogen Scottsdale.

Marcel: Despite the negative impact of the Easter holiday occurring at the end of March this year.

Marcel: This increase was mainly driven by a significant 310 basis point increase in occupancy produced 31 hotels.

Marcel: We saw particular strength in a number of our large group oriented hotels, such as our Houston hotels hydrogen C Portland and park Hyatt <unk>.

Marcel: As well as other as Marriott, San Francisco Airport and hydrogen to Santa Clara.

Marcel Verbaas: We continue to believe that these two high-quality hotels possess some of the greatest earnings growth potential within our portfolio. Additionally, Grand Bohemian Hotel Orlando is hitting its stride. I know that the comprehensive renovation is fully behind us, and Canary Hotel Santa Barbara had outsized revenue and earnings growth compared to last year, as we lapped the room renovation that took place mainly in the first quarter of last year. On a same-property basis, first quarter same-property hotel EBITDA of $70.7 million was 8.5% below 2023 levels, and hotel EBITDA margin decreased 228 basis points. Excluding Hyde Regency, Scottsdale, First Quarter Hotel EBITDA increased 4.7%, and Hotel Ibida Margin decreased just 14 basis points. We continue to be pleased with these margin results, as overall inflation remained at an elevated level As we have noted over the past several quarters...

We continue to believe that these two high quality hotels was that some of the greatest earnings growth potential within our portfolio.

Marcel: Additionally, Grand Bohemian Hotel Orlando is hitting its stride now that the comprehensive renovation is fully behind us.

Marcel: At Canary Hotel, Santa Barbara had outsized revenue and earnings growth compared to last year as we lap the rooms renovation that took place mainly in the first quarter of last year.

Marcel: On a same property basis first quarter same property hotel EBITDA of $77 million was eight 5% below 2023 levels and hotel EBITDA margin decreased 228 basis points.

Excluding hydrogen see Scottsdale.

Marcel: First quarter Hotel EBITDA increased four 7% and hotel EBITDA margin decreased just 14 basis points.

Marcel: We continue to be pleased with these margin results as overall inflation remains at an elevated level during the quarter.

Marcel: Yeah.

Marcel: Okay.

Marcel: As we have noted over the past several quarters.

Marcel Verbaas: The trends across our portfolio continue to indicate that our demand segmentation mix is reverting towards pre-pandemic levels, with Group and Business Transient Demand recovering, and Leisure Demands Normalized. Group demand was a particular bright spot here in the first. Same property group room revenues, excluding Hyde Green and Seascapes Hill, increased 8.1% as compared to the same period last year. We also saw a modest improvement in business transient demand, with continued increases in midweek occupancy.

Marcel: And the trends across our portfolio continued to indicate that our demand segmentation mix is reverting towards pre pandemic levels.

Marcel: With group and business transient demand recovering.

Marcel: As your demand is normalizing.

Marcel: Group demand was a particular bright spot during the first quarter.

Marcel: Same property group room revenues, excluding hygiene Scottsdale increased eight 1% as compared to the same period last year.

We also saw a modest improvement in business transient demand with continued increases in midweek occupancy.

Marcel Verbaas: And while leisure demand has largely stabilized across the portfolio, we did see some further retracement in a few of our more leisure-dependent assets and markets in the quarter, particularly in Napa and Savannah. Now, turning to our capital expenditure projects. We can see in the project that we will spend between $120 and $130 million on property improvements during the year. While Barry will provide additional details on the $33.4 million we invested in the portfolio during the quarter, in his remarks...

Marcel: And while leisure demand has largely stabilized across the portfolio. We did see some further retracement in a few of our more leisure dependent assets and markets in the quarter, particularly in Napa and Savannah.

Marcel: Okay.

Marcel: Now turning to our capital expenditure projects.

Marcel: We can see how to project that we will spend between $120 and $130 million on property improvements during the year.

Marcel: Yeah.

Marcel: While Barry will provide additional details on the $33 $4 million, we invested in to the portfolio during the quarter in his remarks.

Marcel Verbaas: I would like to highlight the progress we are making on the transformational renovation and upbringing of Hyde Regency Scottsdale. The project is progressing as planned, and we still anticipate a completion by the end of 2024 with approximately $65 to $70 million that will be spent during this year. After completing the Adult Pool and its H2Oasis Pool Bar in January, the large family pool and its F&B amenities were fully completed and operational in early April. The new pool complex is spectacular, as it is significantly improved over the resorts previously made.

Barry: I would like to highlight the progress we are making on the transformational renovation and upbringing of hydrogen see Scottsdale.

Barry: Yeah.

Barry: The project is progressing as planned and we still anticipate completion by the end of 2024 with approximately $65 million to $70 million that we spend during this year.

Barry: After completing the adult pool and its H two oasis pool bar in January the.

Barry: The large family pool, and its F&B amenities were fully completed and operational in early April.

Barry: The new pool complex as spectacular as significantly approved over the resorts previous amenities.

Marcel Verbaas: The early reviews have been very positive, and we expect that this new pool complex will be well-received by our anticipated higher-rated leisure and group demand. We also believe that this upgraded pool complex will enable us to attract significant staycation leisure demand during the slower summer season in the years ahead. We also continue to make progress on the renovation of old guest rooms. We have now completed the renovation of 230 rooms, and we anticipate that a total of almost 300 out of our current 491 rooms will be fully renovated by the end of May. The remaining guest rooms, including the additional five rooms that will be created as part of this project, will be completed in a continual phase until final completion by the end of the third quarter.

Barry: The early reviews have been very positive and we expect that this new pool complex will be well received by our anticipated higher rated leisure and group demand.

Barry: We also believe that this upgrade of pool complex will enable us to attract significant staycation leisure demand during the slower summer season in the years ahead.

Barry: Okay.

Barry: We also continue to make progress on the renovation of all guest rooms.

Barry: We have now completed the renovation of 230 rooms, and we anticipate a total of almost 300 out of our current 491 rooms will be fully renovated by the end of May.

Barry: The remaining guest rooms, including the additional five rooms that will be created as part of this project will be completed and continual fails.

Barry: Until a final completion by the end of the third quarter.

Marcel Verbaas: We are also making good progress on the approximately 12,000 square foot expansion of the Arizona Ballroom. We continue to expect that this ballroom expansion, as well as the renovation of all existing ballrooms, meeting spaces, and pre-function space, will be completed by the end of the year. We have also commenced the renovation of the public space, including the lobby, lobby bar, hotel market, and all indoor and outdoor dining space. As announced last quarter, we are collaborating with celebrity chef Richard Blaise on all food and beverage offerings at the relaunched resort.

Barry: We are also making good progress on the approximately 12000 square foot expansion of Arizona Ballroom.

We continue to expect that this ballroom expansion as well as the renovation of our existing ballrooms meeting spaces and pre function space will be completed by the end of the year.

We have also commenced the renovation of the public space, including the lobby lobby bar hotel markets.

Barry: Indoor and outdoor dining spaces.

Barry: As announced last quarter, we are collaborating with celebrity chef Richard place, although on all food and beverage offerings at the relaunch resort.

Marcel Verbaas: We are thrilled to be expanding our relationship with Chevblaze, with whom we have developed an excellent working relationship at Park Hyatt Aviara, Hyatt Regency Grand Cypress, and Hyatt Central Key West. We continue to expect completion of these components by the end of the third quarter. Restaurant concepts and menus are nearly finalized, as work has now begun in each of the food and beverage outlets.

Okay.

Barry: We are thrilled we are expanding our relationship with <unk> with whom we have developed an excellent working relationship at park Hyatt <unk> Hyatt Regency Grand Cypress and Hyatt centric key west.

Barry: Yeah.

Barry: We continue to expect completion of these components by the end of the third quarter.

Barry: Restaurant concepts and menus are nearly finalized as work has now begun in each of the food and beverage outlets.

Barry: Okay.

Marcel Verbaas: And finally, we continue to expect completion of all improvements to the resort's building façade, infrastructure, and grounds to be completed by the end of 2024. However, the renovation and transformation of all of these components will continue to displace a significant amount of revenue and EBITDA as the overall guest experience is meaningfully impacted. We expect that the majority of the remaining revenue disruption will occur during the second and third quarters and subside as the fourth quarter progresses.

Barry: And finally, we continue to expect completion of all improvements the resorts building facade infrastructure and grounds to be completed by the end of 2024.

Barry: The renovation and transformation of all of these components will continue to displace a significant amount of revenue and EBITDA as the overall guest experience is meaningfully impacted.

Barry: We expect that the majority of the remaining revenue disruption will occur during the second and third quarters and subside as the fourth quarter progresses.

Marcel Verbaas: We now expect the impact of renovation disruption to be a bit higher than previously projected, as we have gone deeper into the project, and the sequencing of demolition and construction has become clearer. Atish will provide further details on our outlook, including our renovation disruption, during his remarks.

Barry: We now expect the impact of renovation disruption to be a bit higher than previously projected as we've gotten deeper into the project and the sequencing of demolition and construction has become clearer.

Okay.

Speaker Change: <unk>, who will provide further details on our outlook, including our renovation disruption during his remarks.

Marcel Verbaas: We continue to be extremely excited about this project and the tremendous growth potential that we expect will be created by this transformation. The Phoenix-Scottsdale Luxury Resort Market remains strong, and the soon-to-be-launched Grand Hyde Scottsdale will be a formidable competitor in its luxury pier set. Looking ahead across the portfolio, we remain cautiously optimistic for the remainder of 2024. As we have previously outlined, we believe we have significant embedded earnings growth potential within our portfolio, primarily through our recently renovated properties, our hotels that primarily cater to group and business transient customers, and our two most recent acquisitions, W National and Hyatt Regency Portland at the Oregon Convention Center. Additionally, we continue to expect strong red park growth at our properties in our recovering Northern California, including San Francisco and Santa Clara.

We continue to be extremely excited about this project and the earnings growth potential that we expect will be created by this transformation.

The Phoenix Scottsdale luxury resort markets remain strong and the soon to be launched Grand Hyatt Scottsdale will be a formidable competitor and its luxury peer set.

Speaker Change: Okay.

Speaker Change: Looking ahead across our portfolio, we remain cautiously optimistic for the remainder of 2024.

Speaker Change: As we have previously outlined we believe we have significant embedded earnings growth potential within our portfolio.

Speaker Change: Primarily through our recently renovated properties are hotels that primarily cater to group and business transient customers and our two most recent acquisitions there'll be in Nashville, and Hyatt Regency, Portland, Oregon Convention Center.

Speaker Change: Additionally, we continue to expect strong revpar growth at our properties on a recovering northern California markets, San Francisco and Santa Clara.

Speaker Change: Yeah.

Marcel Verbaas: We saw these themes play out in the first quarter, as we experienced encouraging results at our recently renovated properties, Grand Bohemian Orlando and Canary Hotel Santa Barbara, as well as further gains at properties that were renovated in recent years, including high-efficiency Grand Cypress, our Houston properties, and Waldorf Astoria, Atlanta-Buckett. We also had strong results at our other large group-oriented hotels, our Northern California assets, and our most recently acquired hotels, particularly High Green Chippewa Portals. We're off to a good start in the second half.

Speaker Change: We saw these themes play out in the first quarter as we experienced encouraging results at our recently renovated properties Grand Bohemian Orlando and Canary Hotel in Santa Barbara.

Speaker Change: As well as further gains on properties that were renovated in recent years, including hybrid and see Grand Cypress, Our Houston properties, and Waldorf Astoria Atlanta Buckhead.

Speaker Change: We also had strong results at our other large group oriented hotels, our northern California assets and our most recently acquired hotels, particularly hydrogen supported.

Speaker Change: Yes.

Speaker Change: We are off to a good start in the second quarter.

Marcel Verbaas: We estimate that, excluding Scottsdale, the same property rent bar increased 6.2% in April as compared to the same period in 2023. When including High Green Sea Scottsdale, which continues to deliver very strong results through May of 2023, we estimate that April's REF bar is up 0.9% compared to last year. Given its performance through May of last year and the renovation disruptions we are experiencing this year, we continue to expect that Hyatt Regency Scottsdale will be a drag on Rathbard growth through the first half of the year, after which the comparisons will become more favorable.

Speaker Change: We estimate that excluding Scottsdale same property Revpar increased six 2% in April as compared to the same period in 2023.

Speaker Change: When including hydrogen see Scottsdale, which continues to deliver very strong results through may of 2023.

Speaker Change: We estimate that April Revpar is up <unk>, 9% compared to last year.

Speaker Change: Given its performance through May of last year, and the renovation disruption we're experiencing this year.

Speaker Change: We continue to expect that hydrogen see Scottsdale will be a drag on revpar growth through the first half of the year.

Speaker Change: After which the comparisons will become more favorable.

Marcel Verbaas: We remain particularly optimistic regarding our portfolio performance and earnings growth potential as we look ahead to 2025 and beyond. We expect recent demand trends in our portfolio to continue and are looking forward to the additional growth we expect to get from the completion of the Scottsdale project. We continue to believe that supply growth will remain muted in our sub-markets over the next several years, and especially in the upper upscale and luxury segments where our hotels and resorts are positioned.

Speaker Change: We remain particularly optimistic regarding our portfolio performance and earnings growth potential as we look ahead to 2025 and beyond.

Speaker Change: We expect recent demand trends in our portfolio to continue and are looking forward to the additional growth we expect to get from the completion of the Scottsdale project.

Speaker Change: We continue to believe that supply growth will remain muted in our submarkets over the next several years and.

Speaker Change: And especially in the upper upscale and luxury segments.

Speaker Change: Our hotels and resorts our position.

Barry A. N. Bloom: This will provide a very favorable backdrop for potential REFBAR growth, as we have seen in previous cycles in the lodging industry when supply growth has been subdued. With our high-quality and further-improved portfolio, we expect to be well-positioned to take advantage of this dynamic. I will now turn the call over to Barry to provide more details on our operating results and our capital project. Thank you, Marcel, and good morning, everyone.

Speaker Change: This will provide a very favorable backdrop for potential revpar growth as we have seen in previous cycles in the lodging industry when supply growth has been subdued.

Speaker Change: With our high quality and further improved portfolio, we expect to be well positioned to take advantage of the dynamics.

Speaker Change: I will now turn the call over to Barry to provide more details on our operating results and our capital projects.

Barry A. N. Bloom: For the first quarter, our $32 Same Property Portfolio REV BAR was $176.86 based on occupancy of 67.4% at an average daily rate of $262.39, a decrease of 1.5% as compared to the first quarter of 2023. Excluding Hyatt Regency Scottsdale, first quarter FR was $178.07, an increase of 3.7% as compared to 2020; this increase reflected 3.1 points of occupancy gain and a decline of 1% in average daily rate as compared to the first quarter of 2023.

Barry: Thank you Marcel and good morning, everyone.

Barry: For the first quarter or 32 same property portfolio Revpar was $176 86.

Barry: Based on occupancy of 67, 4% at an average daily rate of $262 39.

Barry: A decrease of one 5% as compared to the first quarter in 2023.

Barry: Excluding Hyatt Regency, Scottsdale first quarter Revpar was $178 <unk> an.

Barry: An increase of three 7% as compared to 2023 <unk>.

Barry: This increase reflected three one points of occupancy gain and a decline of 1% and average daily rate as compared to the first quarter of 2023.

Barry A. N. Bloom: As Marcel indicated in his remarks, the same property leaders in terms of REBPAR growth in the quarter included our hotels that were lapping first quarter 2023 renovations at Canary Santa Barbara and Grand Bohemian Orlando. Additionally, RevPAR grew significantly at High Range Santa Clara, up 26.3%, Waldorf Astoria Atlanta Buckhead, up 15.9%, Fairmont Pittsburgh, up 9.8%, and Portland, where our two hotels were each up approximately 9. Houston, where each of our hotels was up over 8.5%, Park Hyatt Aviara up 7.6%, and Marriott San Francisco Airport, which was up 5%.

Barry: As Marshall indicated in his remarks, the same property leaders in terms of Revpar growth in the quarter, including our hotels were lapping first quarter 2023 renovations at Canary, Santa Barbara and Grand Bohemian Orlando.

Additionally, revpar grew significantly at Hyatt Regency, Santa Clara up 26, 3% Waldorf Astoria, Atlanta, Buckhead at 15, 9% Fairmont Pittsburgh up nine, 8%, Portland, where our two hotels were each up approximately nine 5% Houston, where each of our hotels were up over eight 5%.

Barry: Park Hyatt <unk> of seven 6% and Marriott, San Francisco Airport, which was up 5%.

Barry A. N. Bloom: The growth in these markets is a result of clearly improving business transient and group demand that we are seeing across the portfolio. Conversely, we experienced red car weakness compared to the first quarter of 2023 at a couple of our leisure-driven properties, including Bohemian Savannah Riverfront and Ondas Napa.

Barry: The growth in these markets as a result, and clearly improving business transient and group demand that we're seeing across the portfolio.

Barry: Conversely, we experienced revpar weakness compared to the first quarter of 2023, and a couple of our leisure driven properties, including Bohemian Savannah, Riverfront and Andaz Napa.

Barry A. N. Bloom: As expected, results in the first quarter grew as each month progressed. Looking at each month of the quarter, excluding High Emergency Scottsdale, January REVPAR was $157.14, up 11.1% from January 2023. February Repart was $178.71, up 0.6% compared to February 2023. And March Repart was $198.40, up 0.9% compared to March 2023. Notably, occupancy grew each month during the quarter. We are optimistic about the recovery in corporate and group rates as we continue to achieve higher midweek occupancies across the portfolio, particularly on Tuesday and Wednesday nights, where these higher occupancies are providing meaningful rate compression opportunities.

As expected results in the first quarter grew with each month progressed looking at each month of the quarter, Excluding Hyatt Regency Scottsdale January Revpar was $157 14.

Up 11, 1% to January 2023.

February Revpar was $178 71 of <unk>, 6% compared to February 2023, and March Revpar was up was 190 840.

Barry: <unk>, 9% compared to March 2023, notably occupancy grew each month during the quarter.

Barry: We are optimistic about the recovery in corporate and group rates as we continued to achieve higher midweek occupancy across the portfolio, particularly on Tuesday, and Wednesday nights for these higher occupancies and providing meaningful rate compression opportunities.

Barry A. N. Bloom: We note that compared to 2019, which excludes High Regency Scottsdale, High Regency Portland, and W. Nashville, daily occupancies still trail by approximately 5.5 to 7 occupancy points each day of the week, with the exception of Mondays and Thursdays, which have been slower to recover, trailing 2019 by approximately 10 to 11 occupancy points.

Barry: We note that compared to 2019, which excludes hi, Rishi Scottsdale, Hyatt Regency, Portland, and W. Nashville Daily occupancy still trail by approximately five 5% to seven occupancy points. Each day of the week with the exception of Mondays and Thursdays, which have been slower to recover trailing 2019 by approximately 10% to 11 occupancy points.

Barry A. N. Bloom: Business from the largest corporate accounts across our portfolio continues to be significantly behind 2019, while corporate business from small and medium-sized accounts has recovered much more significantly. Group business continues to be a bright spot across the portfolio, but we continue to see a reversion of pre-pandemic patterns for the first quarter, excluding Hiram C. Scottsdale. Group room revenues were up just over 8% as compared to the first quarter of last year. Notably, much of this growth was in occupancy, with room nights up approximately 7%, and rates up approximately 1%.

Barry: Business from our largest corporate accounts across our portfolio continues to be significantly behind 2019, while corporate business from small and medium sized accounts has recovered much more significantly.

Barry: Group business continues to be a bright spot across the portfolio, where we continue to see a reversion to pre pandemic patterns.

Barry: In the first quarter, excluding hiring see Scottsdale group room revenues were up just over 8% as compared to the first quarter of last year.

Barry: Notably much of this gross growth was in occupancy with room nights up approximately 7% with rate up approximately 1%. This.

Barry A. N. Bloom: This reflects a continued trend in our mix of group business with association group business now recovering at a stronger pace than corporate group business. Now, turning to expenses and profit, first quarter, same property, Hotel Ibida, was $70.7 million, a decrease of 8.5% on a total revenue decline of 0.6% compared to the first quarter of 2023, resulting in 228 basis points of margin decline, excluding High Regency Scottsdale, Hotel Ibiza was $67.2 million, an increase of 4.7% on a total revenue increase of 5.3% resulting in a margin decline of just 14 basis.

Barry: This reflects the continued trend in our mix of group business with Association group business now recovering at a stronger pace and corporate group business.

Now turning to expenses and profit first quarter same property hotel EBITDA was $70 7 million a decrease of eight 5% on a total revenue decline of <unk>, 6% compared to the first quarter of 2023, resulting in 228 basis points of margin decline.

Barry: Excluding high Regency, Scottsdale Hotel EBITDA was $67 2 million an increase of four 7% on a total revenue increase of five 3%, resulting in a margin decline of just 14 basis points.

Barry A. N. Bloom: This modest decline in hotel EBITDA margin for the quarter reflected our operators' ability to manage expenses while continuing to improve guest services and satisfaction. Overall, labor expenses increased over last year, which was expected due to higher occupancy. Our operators continue to control overtime more effectively now that staffing levels have normalized in the Industry Department. Expenses in A&G and property operations were well-controlled, while sales and marketing expenditures continued to increase as hotels grew their sales teams and continued expenditures on digital marketing efforts. Energy expenses for the quarter declined year over year as a result of the warmer weather and reduced pricing in certain markets compared to last year.

Barry: This modest decline in hotel EBITDA margin for the quarter reflected our operator's ability to manage expenses, while continuing to improve guest services and satisfaction.

Barry: Overall labor expenses increased over last year, which was expected due to higher occupancy levels. Our operators continue to control over time more effectively at the staffing levels have normalized.

Barry: In the undistributed departments.

Barry: Expenses in AMG and property operations were well controlled while sales and marketing expenditures continue to increase as hotels grow their sales teams and can continue expenditures on digital marketing efforts.

Barry: <unk> expenses for the quarter declined year over year as a result of the warmer weather and reduced pricing in certain markets compared to last year.

Barry A. N. Bloom: Turning to CapEx, during the first quarter, we invested $33.4 million in portfolio improvements. As Marcel discussed, we continued our significant work on the approximately $110 million transformative renovation and upbranding of the 491-room High Regency Scottsdale Resort & Spa at Guinea Ranch and are pleased that the project continues to be both on time and on budget. In addition to our work in Scottsdale, in the first quarter, we completed the renovation of all meeting rooms at the Waldorf Astoria Atlanta Buckhead, a complete renovation and reconcepting of the restaurant at Bohemian Hotel Savannah, and a renovation of Elway's Downtown Steakhouse at the Ritz-Carlton Denver.

Barry: Turning to Capex during the first quarter, we invested $33 $4 million in portfolio improvements as.

As Marcel discussed we continued our significant work on the approximate $110 million transformative renovation and up branding of the 491 room Hyatt Regency, Scottsdale resort and Spa Gainey Ranch and I'm pleased that the project continues to be both on time and on budget.

Barry: In addition to our work in Scottsdale, and the first quarter. We completed the renovation of all meeting rooms at the Waldorf Astoria, Atlanta, Buckhead, a complete renovation and re concept of the restaurant and Bohemian Hotel Savannah and renovation of always downtown Steakhouse at the Ritz Carlton Denver.

Barry A. N. Bloom: Planned renovations will take place in our Texas hotels during the seasonally slower summer months, including renovation of the restaurant and creation of an M-Club at Marriott Woodlands Waterway, renovation of the lobbies at the Wesson Oaks and Gallery of Houston, relocation of the fitness facility, and addition of a concierge lounge at the Wesson Oaks Houston, and continuing with approximately $20 million of infrastructure and sustainability projects across the portfolio as the year progress We're excited about the work our in-house project management team has completed and even more excited about the projects that we have underway and in various stages of planning for 2024. With that, we'll turn the call over to Atisha. Thank you, Barry.

Barry: Planned renovations will take place in our Texas hotels during the seasonally slower summer months, including the renovation of the restaurant and creation of an M club at Marriott Woodlands waterway renovation of the lobbies of the Western Oaks in Galleria Houston relocation of the fitness facility and additional <unk> lines at the Westin Oaks, Houston and continuing with.

Barry: $20 million of infrastructure and sustainability projects across the portfolio as the year progresses.

Barry: We are excited about the work our in House project management team has completed and even more excited about the progress that we have underway and in various stages of planning in 2024.

Barry: That I will turn the call over to Ashish.

Atish D. Shah: I will provide an update on two items. Our balance sheet and our 2024 guidance. As to our balance sheet, we continue to have a strong balance sheet with ample liquidity. With no near-term maturities, a significant unencumbered asset base, and limited interest rate exposure, our balance sheet continues to be a point of strength for the company.

ashish: Thank you Barry I'll provide an update on two items our.

Our balance sheet.

ashish: Our 2020 for guidance.

As for our balance sheet, we continue to have a strong balance sheet with ample liquidity with.

With no near term maturities are significant unencumbered asset base and limited interest rate exposure balance sheet continues to be a point of strength for the company.

Atish D. Shah: At quarter end, our leverage ratio was 5.2 times trailing 12 months net debt to EBITDA. As a reminder, our long-term target is a leverage ratio in the low 3 to low 4 time stream. We expect to move closer to that range in 2025 as we see the Scottsdale project ramp up post-renovation. To wrap up the balance sheet discussion, note that we repurchased a small amount of stock, about $6 million, during the quarter. As you may recall, during 2023, we repurchased about 9% of our outstanding shares at about $12.75 per share.

ashish: At quarter end, our leverage ratio was five two times trailing 12 months net debt to EBITDA.

ashish: As a reminder, our long term target is the leverage ratio in the low threes to low four times range.

ashish: We expect to move closer to that range in 2025, as we see the Scottsdale project ramp up post renovation.

ashish: To wrap up the balance sheet discussion note that we repurchased a small amount of stock about $6 million during the quarter.

As you may recall during 2023.

ashish: Richard about 9% of our outstanding shares at about $12 75 per share.

Atish D. Shah: While we continue to consider our stock at the current price level to be an attractive use of our capital, we are balancing that with a few other factors, including liquidity in our stock, Current Year CapEx Outlays, and reducing our leverage ratio to be closer to a target. Next, I'll turn to our 2020 Fork Item. At the midpoint, our current full-year guidance is in line with the guidance we provided at the end of February.

ashish: While we continue to consider our stock at the current price level that we have an attractive use of our capital we are balancing that with a few other factors, including liquidity in our stock.

ashish: Current year Capex outlays.

ashish: And reducing our leverage target our leverage ratio to be closer to our target range.

Speaker Change: Next I'll turn to our 2020 for guidance.

Speaker Change: At the midpoint, our current full year guidance is in line in line with the guidance we provided in February.

Atish D. Shah: While the first quarter came in better than expected, given that we are still early in the year and visibility of the back half of the year continues to be limited, we are maintaining guidance midpoints at the prior level. What has increased is our level of confidence in achieving full-year guidance. And we will continue to monitor recent trends to see if the broad momentum over the last several weeks continues over the months ahead.

Speaker Change: While the first quarter came in better than expected.

Speaker Change: That we are still early in the year and visibility to the back half of the year continues to be limited, we're maintaining guidance mid points at prior levels.

Speaker Change: What has increased as our level of confidence in achieving full year guidance.

Speaker Change: And we will continue to monitor recent trends to see if the broad momentum over the last several weeks continues over the months ahead.

Atish D. Shah: With regard to our first quarter results, adjusted EBITDA RE benefited from nearly $1 million of business interruption insurance proceeds that were recognized a quarter earlier than expected. As for a full-year rep part, we continue to expect same-property rep part to increase 3.5% at the midpoint of the range, or 4% exclusive of Scottsdale. Looking at our business by demand segment on the group side and excluding Scottsdale, our group group group revenue case for the second through fourth quarters is up nearly 4%. Of the 4% increase, 90% is driven by rate.

Speaker Change: With regard to our first quarter results adjusted EBITDA benefited from nearly $1 million of business interruption insurance proceeds that were recognized a quarter earlier than expected.

Speaker Change: As for our full year Revpar, we continue to expect same property revpar to increase three 5% at the midpoint of the range or 4% exclusive of Scottsdale.

Speaker Change: Looking at our business by demand segment on the group side and excluding Scottsdale, Our group revenue pace for the second through fourth quarters is up nearly 4%.

Speaker Change: Of the 4% increase 90% is driven by rate.

Atish D. Shah: About 25% of expected group room nights for the balance of the year have yet to be booked. However, in terms of booking activity or group production, it continues to increase, as group room revenue booked in the first quarter for future quarters in the year was ahead of that booked during the first quarter of 2023 for the comparable period. As to leisure demand, as we look ahead to the summer, our operators are expecting robust demand, including more international travelers, as well as more U.S. travelers staying domestic when compared to trends observed last year.

Speaker Change: About 25% of expected group room nights for the balance of the year as yet to be booked.

Speaker Change: In terms of booking activity our group production continues to increase.

Speaker Change: As group rooms revenue booked in the first quarter for future quarters and the year was ahead of that booked during the first quarter of 2023 for the comparable period.

Speaker Change: As the leisure demand as we look ahead to the summer our operators are expecting robust demand, including more international travelers as well as more U S travelers staying domestic when compare it to trends observed last year.

Atish D. Shah: Finally, corporate transient demand During the first quarter, we benefited from higher than expected midweek business transient demand, particularly at some of our larger hotels, and we expect that to continue. As to the expense picture, we continue to experience moderation in expense pressure relative to last year. For the second to fourth quarter, we expect hotel EBITDA margins to decrease about 25 basis points. Excluding the impact of Scottsdale, we expect hotel EBITDA margins for the second to fourth quarters to decrease about 15 days.

Speaker Change: Finally at the corporate transient demand during the first quarter, we benefited from higher than expected mid week business transient demand, particularly at some of our larger hotels and we expect that to continue.

Speaker Change: As to the expense picture, we continue to experience moderation and expense pressure relative to last year.

Speaker Change: For the second to fourth quarter, we expect hotel EBITDA margin to decrease about 25 basis points.

Speaker Change: Excluding the impact of Scottsdale, We expect hotel EBITDA margin for the second to fourth quarters to increase.

Speaker Change: Excuse me decrease about 15 basis points.

Atish D. Shah: At the adjusted EBITDA RE, the midpoint of our full year range is $254 million. By quarter, the second quarter weighting is slightly ahead of the weighting we had in the first quarter, or in the approximate mid to high 20% range. For the third quarter, we expect to earn about 20% of full-year adjusted EBITDA RE. In the final quarter of the year, we expect to earn nearly 30% of full-year adjusted EBITDA. This weighting reflects a slightly lower mix of earnings in the second quarter compared with prior guidance.

Speaker Change: As to adjusted EBITDA, sorry, the midpoint of our full year range of $254 million.

Speaker Change: By quarter, the second quarter weighting is slightly ahead.

Speaker Change: The weighting we had in the first quarter.

Or and the approximate mid to high 20% range.

For the third quarter, we expect to earn about 20% of full year adjusted EBITDA in.

Speaker Change: In the final quarter of the year, we expect to earn nearly 30% of full year adjusted EBITDA sorry.

This weighting reflects a slightly lower mix of earnings in the second quarter versus prior guidance.

Atish D. Shah: One of the drivers of this change is higher-than-expected renovation disruption in the second quarter. As reflected in last night's release, we now expect renovation disruption for the year to be $16 million versus the $14 million we had previously expected. This change is due to the fine-tuning of construction timing at Scottsdale, and it's more impactful in a second. As we get into the second half of 2024, the comps become easier, and our renovation activity turns into a comparative tailwind as the year progresses. And finally, our adjusted FFO per diluted share guidance is unchanged, with the midpoint at $1.69, which reflects about 9% growth in adjusted FFO per diluted share versus 2000.

One of the drivers of this change is higher than expected renovation disruption in the second quarter.

Speaker Change: As reflected in last night's release, we now expect renovation disruption for the year to be $16 million versus the $14 million, we had previously expected.

Speaker Change: This change is due to the fine tuning of construction timing.

Speaker Change: At Scottsdale, and it's more impactful in the second quarter.

Speaker Change: As we get into the second half of 2024 of the comps become easier and our renovation activity turns into a comparative tailwind as the year progresses.

Speaker Change: Yeah.

Speaker Change: And finally, our adjusted <unk> per diluted share guidance is unchanged with the midpoint of $1 69, which reflects about 9% growth in adjusted <unk> per diluted share versus 2023.

Atish D. Shah: To wrap up, during the first quarter, our portfolio benefited from stronger-than-expected business transient and group demand, particularly in some of our larger hotels. We are hopeful that this broad momentum will continue into the remainder of the year. Our focus on the ramp-up of consumer properties, certain markets, which are still in recovery, as well as successful execution on Scottsdale, will continue. And we expect that the setup for 2025 and beyond will continue to improve in the months ahead. And with that, we'll turn the call back over to begin our Q&A.

Speaker Change: To wrap up during the first quarter, our portfolio benefited from stronger than expected business transient and group demand, particularly in some of our larger hotels.

Speaker Change: We are hopeful hopeful that this broad momentum continues into the remainder of the year.

Speaker Change: Our focus on the ramp up of newer properties.

Speaker Change: Certain markets, which are still.

And recovery as well as successful execution on Scottsdale continues.

Speaker Change: We expect that the setup for 2025 and beyond we will continue to improve in the months ahead.

Speaker Change: And with that we'll turn the call back over to begin our Q&A session.

Alex: Thank you. As a reminder, if you'd like to ask a question, you can press star followed by one on your telephone keypad. Our first question comes from Michael Bellisario of Baird. Your line is now open, please go ahead.

Speaker Change: Thank you.

Speaker Change: As a reminder, if you want to ask a question you can press star followed by one on your telephone keypad.

Speaker Change: Our first question comes from Michael Bellisario of Bad.

Your line is now open. Please go ahead.

Michael Joseph Bellisario: Thanks, everyone. Good morning.

Michael Joseph Bellisario: Morning, Mike. The slide that references cooling leisure demand in Nashville, not totally surprising given the recent data, but you only mentioned Napa and, I believe, Savannah in your prepared remarks, so maybe help us understand what you're seeing at the W, how that hotel performed in the quarter relative to your expectations and the broader market. Yeah, sure.

Michael Joseph Bellisario: Good morning, Mike.

Michael Joseph Bellisario: First question probably for Barry here.

Michael Joseph Bellisario: The slide deck references cooling leisure demand in Nashville.

Barry: Totally surprising given the recent data, but you only mentioned Napa I believe Savannah in your prepared remarks, so maybe help us understand what youre seeing at the W. How that hotel performed in the quarter.

Barry: Relative to your expectations and the broader market.

Barry A. N. Bloom: Yeah, sure. When we think about the hotels we generally talk about, transient hotels, those are generally our smaller leisure-focused hotels, which is why the commentary on Napa and Savannah. Obviously, WNH had a very diversified demand base, and one that we've talked about historically is where we really refocused the hotel and tried to achieve better penetration in the corporate transient and group segments, which it has done. The overall backdrop in Nashville, particularly with the number of luxury hotels that have been under-recognized the last few years, resulted in, both in the market and at WNHville, leisure demand during the first

Speaker Change: Yes sure.

Speaker Change: When we think about.

Speaker Change: Maybe generally talk about <unk>.

Speaker Change: Transient hotels those are generally are smaller leisure focus hotels, which is why the commentary on Napa in Savannah, Obviously W. Nash wasn't very diversified demand base and one that we've talked about historically is where we've really refocused the hotel and trying to achieve better penetration in the corporate transient and group segments, which it has.

Speaker Change: Doug.

Speaker Change: The overall backdrop in Nashville, particularly with the number of luxury hotels have entered the market last few years.

Speaker Change: Resulted in both in the market and it W. Nashville.

Speaker Change: Soft a little softness in.

Barry A. N. Bloom: But leisure demand is not the primary driver in the first quarter in Nashville, and it really never has been. So we'll have a much better indication as we move through Q2 and Q3, which are much, much stronger months in the market overall and have historically been much stronger periods of time for the W in Asheville as well.

Speaker Change: Leisure demand during the first quarter, but leisure demand is not the primary driver in the first quarter in Nashville really never has been so we will have a much better indication of as we move through Q2, and Q3, which are much much stronger months in the market overall and have historically been.

Speaker Change: Much stronger.

Speaker Change: Periods of time for the W. Nashville as well.

Marcel Verbaas: And then, on the bigger picture question for Marcel on capital allocation and strategies, could you remind us how you and the board are thinking about value creation for shareholders? What metrics are you focused on? And sort of what are the risk-adjusted returns that you're targeting when looking at investment opportunities?

Speaker Change: Got it understood and then bigger picture question for Marcel on just capital allocation strategies remind us how you and the board are thinking about value creation for shareholders. What metrics are you focused on and sort of what are the risk adjusted returns that youre.

Marcel: We're getting we're looking at investment opportunities that's all.

Speaker Change: For me thank you.

Michael Joseph Bellisario: That's all for me. Thank you. Thanks, Mike.

Speaker Change: Sure.

Speaker Change: Thanks, Michael.

Marcel Verbaas: Atish has obviously spoken about this in his remarks too, and we continue to look at capital allocation as needing to be balanced between the various levers that we can pull to drive value for shareholders. Obviously, last year, we talked quite a bit about not seeing a lot of acquisition opportunities and being very focused on the value that we saw in potential share buybacks, which we obviously were very active in last year. And also, as Atish pointed out, we still believe that there is good value in the stock where we are today.

<unk>, obviously spoken about this in his remarks too and we continue to look at capital allocation us needing to be balanced between the various levers that we can pull to drive value for shareholders.

Speaker Change: Obviously last year, we talked quite a bit about not seeing a lot of acquisition opportunities and being very focused on the value that we saw and potential share buybacks, which we obviously were very active in last year and also as <unk> pointed out we still believe that there is good value in the software we are today.

Marcel Verbaas: But we are balancing that with the needs that we have with cash outlays for CapEx, and clearly, Scottsdale is a big part of that for this year, and also wanting to maintain a good amount of dry powder going forward for potential acquisitions. So clearly, as we kind of work through the main expenditures we have this year, we also are keeping a very close eye on what's out there in the acquisition markets.

Speaker Change: But we are balancing that with the needs that we have which.

Speaker Change: Cash outlays for Capex and clearly Costco is a big part of that for this year and also wanting to maintain a good amount of dry powder going forward for potential acquisition. So.

Speaker Change: Clearly as we kind of worked through.

Speaker Change: The main expenditures we have this year. We also are keeping a very close eye on what's out there in the acquisition markets.

Marcel Verbaas: Clearly, I haven't seen us be active on that side yet here in recent times, but we do feel like the pipeline is building a little bit better now, so there may be some opportunities for us here going forward. Clearly, interest rates are higher than where they were previously, as everyone knows, so that's probably moved up the requirements a little bit on what kind of returns we're looking for, but we're certainly looking for that unlevered, double-digit type return.

Speaker Change: Clearly you haven't seen us be active on that side yet here in recent times, but we do feel like the pipeline is building a little bit little bit better now where there may be some opportunities for us here going forward.

Speaker Change: Clearly.

Speaker Change: Interest rates are higher than where they were previously as everyone knows so that's that's probably moved up the.

Speaker Change: Their requirements a little bit on what kind of returns we're looking for but we're certainly looking kind of formats.

Speaker Change: On Levered double digit type returns.

Marcel Verbaas: And obviously, to the extent that there's more risk and there's more renovation risk or any other risk related to that, you're going to look for some better returns to get to those risk-adjusted returns in that range.

Speaker Change: And obviously to the extent that there's more risk and there is more.

Speaker Change: More renovation risk or any other risks related to the out year.

Going to look for some some better return so to get to those risk adjusted returns in that range.

Aryeh Klein: Thank you. Our next question comes from Aryeh Klein of BMO Capital Markets. The lines are open, please go ahead.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Ari Klein of BMO capital markets.

Aryeh Klein: Your line is now open. Please go ahead.

Marcel Verbaas: Thanks and good morning. Maybe just on the Hyde-Scott sale, curious what you're seeing from a group booking standpoint, you know, as you look beyond this year, you know, what kind of What kind of uplifts are you seeing on the rates side? And maybe if you could talk to Pace at that event, even acknowledging that it's still pretty early.

Aryeh Klein: Thanks, and good morning.

Aryeh Klein: Maybe just on the Scottsdale.

Aryeh Klein: Scottsdale curious what youre seeing.

Aryeh Klein: Bucking that from a group bookings standpoint.

Aryeh Klein: Beyond this year.

Aryeh Klein: What kind of.

Aryeh Klein: What kind of uplift are you seeing on the rate side and maybe if you can talk to you paid that at that assay.

Aryeh Klein: Acknowledging that it's still pretty early.

Aryeh Klein: Yes.

Marcel Verbaas: Thanks, Aryeh, for the question. And it's a good question.

Speaker Change: Thanks for the question and it's a good question, it's one that that the data moves so much when youre looking at really small numbers. If you will in different booking patterns as we look into 'twenty five we buy in another quarter or two obviously, we have a much much better sense of how thats really shaping up for 25 rate is up significantly booking pace.

Marcel Verbaas: It's one that the data moves so much when you're looking at really kind of small numbers, if you will, and different booking patterns as we look into 25. We will, obviously, have a much, much better sense of how that's really shaping up for 25. The rate is up significantly. However, booking pace, in terms of room nights, is where we expected it to be, recognizing that a lot of groups are at www.thevenusproject.com. The very latter part of 24 of them will have a lot of product available for them, and then into 25 as well.

Speaker Change: In terms of room nights is where we expected it to be recognizing that a lot of groups, particularly.

Speaker Change: Particularly higher end groups. They are waiting till closer to the finish line and looking to see the product before they really start putting business on the books for.

The the very latter part of 'twenty, four and we'll have a lot of product available for them and then into 'twenty five as well.

Speaker Change: Okay.

Aryeh Klein: Got it. Thanks. Thanks. And then, Atish, I think you mentioned expectations for inbound international travel recovery, you know, maybe maybe helping leisure a bit in the summer. You know, I'm curious how those views may have changed or if they've changed at all, you know, given the U.S.

Speaker Change: Got it. Thanks, Thanks, and then I think you mentioned expectations breakdown international travel recovery, maybe maybe helping leisure.

Speaker Change: Summer.

Speaker Change: I'm curious how that may have changed or if they've changed at all.

Speaker Change: In the U S dollar shrank.

Atish D. Shah: Yeah, that's a good question, Aryeh. You know, I think there are certain markets which are still very significantly off where they were in pre-COVID in terms of international inbound. We think about some of the markets in Asia, some of the European and Latin American markets that might come into markets like Orlando. So I think even despite, you know, kind of the move on the currency side, there's still a sentiment that, you know, there's a lot more potential for inbound business.

Speaker Change: Yes, that's a good question.

Speaker Change: I think.

Speaker Change: But there are certain markets, which are still very significantly off where they were pre.

Speaker Change: Pre COVID-19 in terms of international inbound, we think about some of the markets in Asia some of the.

Speaker Change: European and Latin American markets.

Speaker Change: That might come into the market like Orlando So.

Speaker Change: Think even despite kind of a move on the currency side Theres still a sentiment that.

Speaker Change: There's a lot more potential for inbound business and certainly if you look at the lift going into markets like San Francisco that has increased quite a bit.

Atish D. Shah: And certainly, if you look at the lift going into markets like San Francisco, that has increased quite a bit, as well as international lists coming into a market like Orlando. International is not a huge driver of our portfolio, but certainly, in those two markets, we do see some international business that comes into the market. So that's just another point about confidence in leisure business this summer.

Speaker Change: As well as.

Speaker Change: International lift coming into a market like Orlando.

International is not a huge driver of our portfolio, but certainly in those two markets. We do see some international business that comes into the market. So.

Speaker Change: That's.

Speaker Change: Just another point around confidence.

Speaker Change: Leisure business this summer.

Aryeh Klein: Thanks, and if I could just go back to the Hyatt Scottsdale, can you just talk a little bit about the cadence of the, yeah, I think you took up the EBITDA impact for the year, just the cadence of that, you know, how things maybe shifted around, you know, impact first half of the year versus second half of the year.

Speaker Change: Thanks, Ed if I could just go back to the.

Speaker Change: Hi, Scott can you just talk a little bit about the cadence of the.

Scott: Yes, I think you took up your EBITDA.

Scott: For the year.

Scott: The cadence of that.

Scott: How things may be shifted around.

Scott: Impact first half of the year versus second half of the year.

Atish D. Shah: Yeah, sure. I mean, the $16 million by quarter, maybe we'll just give you that. So $4 million in the first quarter, $7 million in the second, $4 million in the third, and $1 million in the last quarter of the year. So that's how you get to And as we had mentioned, you know, the increase from 14 to 16 really is more oriented around, year-over-year.

Speaker Change: Yes, sure I mean, the $16 million by quarter maybe.

Speaker Change: Maybe I will just give you that so $4 million in the first quarter or seven in the second.

Speaker Change: Four in the third.

Speaker Change: <unk>.

Speaker Change: The last quarter of the year. So that's that's how you get to the $16 million.

Speaker Change: And as we had mentioned the increase from $14 million to $16 million is more oriented around the second quarter.

Speaker Change: Year over year slightly different obviously, you had $12 million of disruption last year.

How that shook out by quarter was was no disruption in the first quarter of $1 million of construction in the second quarter $5 million in the third quarter.

Atish D. Shah: in the fourth quarter. So, you know, the year-over-year change, obviously four million dollars more disruption this year than last year at Caney Branch. But you can just subtract those two, and you get to, you know, where that four million dollars is.

Speaker Change: In the fourth quarter so.

Speaker Change: The year over year change, obviously $4 million more disruption this year than last year again branch.

But you can just subtract those two and you get to.

Speaker Change: We'll have that $4 million.

Speaker Change: Comes in obviously $10 million more disruption in the first half at $6 million.

Speaker Change: In the second half really more in the fourth.

Speaker Change: Fourth quarter then.

Speaker Change: So.

Speaker Change: Hopefully that helps.

Aryeh Klein: Yeah, thanks. I appreciate the color.

Speaker Change: Yes, Thanks I appreciate the color.

Speaker Change: Okay.

Dori Lynn Kesten: Thank you. Our next question comes from Dori Kesten of Wells Fargo. Your line is now open, please go ahead.

Speaker Change: Thanks Keith.

Our next question comes from Dori Kesten of Wells Fargo.

Dori Lynn Kesten: Your line is now open. Please go ahead.

Dori Lynn Kesten: Thanks. Good morning. On W. Nashville, has your outlook for the remainder of the year shifted at all within the updated guidance? And then I'm just wondering if you finalized plans for the new F&B space there.

Dori Lynn Kesten: Thanks, Good morning.

W Nashville.

Has your outlook for the remainder of the year shifted at all within the updated guidance and then I'm just wondering if you have finalized plans.

Dori Lynn Kesten: And then your F&B space there.

Barry A. N. Bloom: Yeah, no, our outlook and how we perform there in the first quarter and what we're seeing through the rest of the year is right in line with our expectations coming into the year. But again, we feel very good about the market and particularly good about property and the ability they've had to grow the segments where they needed to. And we've also had, as we enjoyed in the first quarter, some better focus on the middle of the P&L, where we're driving a little more EBITDA and more EBITDA margin than we might have expected coming into the year.

Speaker Change: Yes no.

Speaker Change: Our outlook and how we perform there in first quarter and what we're seeing through the rest of the year is right in line with our expectations.

Speaker Change: Coming into the year with.

Speaker Change: And we feel very good about the market in particular, particularly good about the property and the ability they've had to to grow the segments, where they needed to and we've also had to tweak enjoyed in the first quarter I think.

Speaker Change: Some better focus on the middle of the P&L, where we're driving a little more EBITDA and more EBITDA margin.

Speaker Change: Then.

Speaker Change: Then we might have expected coming into the year in terms of food and beverage we've not outlined a plan for a long term replacement for the Dutch switches the three meal restaurant, which left in the very beginning of this year, we're still looking at a number of different concepts.

Barry A. N. Bloom: In terms of food and beverage, we've not outlined a plan for a long-term replacement for the Dutch, which is the three-meal restaurant that left at the very beginning of this year. We're still looking at a number of different concepts, but the property has performed acceptably, certainly, and to our expectations with the unbranded restaurant, which has been very successful for breakfast and lunch and is working on strategies while we figure out a long-term strategy for lunch and dinner.

<unk>.

As performed acceptably certainly in two our expectation with the unbranded restaurant, which is.

Speaker Change: Been very successful for breakfast and lunch and is working on strategies, while we figure out our long term strategy for lunch and dinner.

Dori Lynn Kesten: OK, and then just back on Ganey Ranch, at what point do you bring in the majority of meeting planners to show them the renovated space? I'm just trying to determine, like, in what timeframe you'd see a real solidification of your 25 rooms on the books.

Speaker Change: Okay.

Speaker Change: And then just back on the Daney Ranch at what point do you do you bring in the majority of meeting planners to show them the renovated space.

Speaker Change: To determine again what timeframe.

Speaker Change: Let implication on your 25 rooms on the books.

Barry A. N. Bloom: I mean, obviously, we're actively in the market. The sales teams are doing site tours every day.

Speaker Change: Yes, I mean, obviously there we're actively in the market. The sales teams are doing site tours every day.

Barry A. N. Bloom: There's just not a lot for the guests to see, particularly in terms of the expansion of the meeting space, although we're now at a point where you can actually see the structure. So that's actually a huge plus, as opposed to cleared land next to the existing ballroom facility. So we've actually seen a pretty good uptick in terms of the number of site visits and things like that, thanks to the encouragement of the hotel. So I guess it is.

There's just not a lot for the guests to see particularly in terms of the expansion of the meeting space although.

Speaker Change: We're now at a point, where you can actually.

Speaker Change: See the structure, so that's actually a huge plus as opposed to.

Speaker Change: Cleared land next to the existing ballroom facility. So we've actually seen a pretty good uptick in terms of.

Speaker Change: Number of site visits and things like that at the at the encouragement of the hotel so.

Speaker Change: I guess.

Barry A. N. Bloom: The simple answer is there is no particular point in time. And we had a lot of experiences when we did the ballroom expansion at Grand Cypress. There's no particular mark in time when there's a huge flood of business. It's a continual effort and focus on getting people excited about the product. There are some people that simply won't book the product until it's done, but that's not where the focus is.

Speaker Change: The simple answer is there is no particular point in time, and we had a lot of experiences when we did the ballroom expansion at Grand Cypress, There's no, particularly mark in time, when when Theres, a huge flood of business, it's a continual effort.

Speaker Change: Focus on getting people excited about the product there are some people that simply won't book the product until its done, but thats not where the focus is and that would be business to be out in the latter half of 'twenty, five and 26% 27% of property like us.

Marcel Verbaas: And that would be a business to be out in the latter half of 25, and then 26, and 27 are property-like. Yeah, on the positive side, as we talk about the various components that we're doing there, there's obviously continuous progress that we're making. I mean, when someone goes to the property now, they can see the newer rooms, because we have a good number of our rooms that are completed. They can see the pool complex, which, like I said, is spectacular at this point.

Speaker Change: On the positive side as we as we talk about when we talk about the various components that we're doing there. There is obviously continuous progress that we're making I mean, when someone goes to the property now they can see the newer rooms, because we have a good number of our rooms that are completed they can see the pool complex, which like I said is spectacular at this point.

Marcel Verbaas: And they can see the true progress, like Barry just pointed out, and what's going on with the meeting space. The biggest challenge here for the next two quarters, really the second quarter and the third quarter, is working our way through these public spaces and the lobby and all the F&B offerings. And that's obviously very impactful to the guest experience. So, as we get done with this, which really remains on target to be done by the end of the third quarter, we're getting into the fourth quarter with an essentially fully renovated property, with the exception of finishing up the meeting spaces and then some of the infrastructure and external facade work that will still be going on.

Speaker Change: And I can see the true progress like variables pointed out on what's going on with the meeting space on the <unk>.

Speaker Change: Biggest challenge here for the next two quarters really in the second quarter in the third quarter is working our way through these public spaces.

Speaker Change: The lobby and all the F&B offerings and Thats, obviously very impactful to the guest experience. So as we get done with this which really.

Speaker Change: Gains on targets will be done by the end of the third quarter, we're getting into the fourth quarter would've been essentially fully.

Speaker Change: Renovated property with the exception of finishing up the meeting spaces and then some of the infrastructure in an external facade work that will still be going on.

Marcel Verbaas: So it's going to be a point here, kind of towards the end of the third quarter, where people will be able to come into the property and get a really good sense of what the final product is going to look like.

Speaker Change: So it's going to be a points here kind of towards the end of the third quarter, where people will be able to come into the property and get a real good sense of what the final product that is going to look like.

Dori Lynn Kesten: Okay, great, thanks so much.

Speaker Change: Okay, great. Thanks, so much.

Austin Todd Wurschmidt: Thank you. Our next question comes from Austin Wurschmidt of KeyBank Capital Markets. Your line is now open, please go ahead.

Speaker Change: Thank you our next.

Speaker Change: Next question comes from Austin, <unk> Schmitz of Keybanc capital markets.

Austin Todd Wurschmidt: Your line is now open. Please go ahead.

Austin Todd Wurschmidt: Great, thanks, and good morning, everybody. Wanted to hit a little bit on some of the markets that have been slower to recover, and I'm just curious if these regions and markets like the Bay Area and Portland, to name a couple, are seeing a more durable recovery at this point in demand, and how are booking pace, group, and or transient continuing to ramp as you look out through the rest of the year?

Austin Todd Wurschmidt: Great Thanks, and good morning, everybody.

Austin Todd Wurschmidt: Wanted to hit a little bit on some of the markets that have been slower to recover and I'm. Just curious if if these regions and markets like the Bay area in Portland to name a couple are seeing a more durable recovery at this point demand in an hour.

Austin Todd Wurschmidt: Looking pace.

Austin Todd Wurschmidt: Group and transient continuing to ramp as you look out through the rest of the year.

Speaker Change: Yes. Thanks Austin appreciate the question I think if you look at each of those markets and the growth we achieved a nose in Q1, so Santa Clara and Portland in particular.

Barry A. N. Bloom: I appreciate the question. You know, I think if you look at each of those markets and the growth we achieved in those in Q1, so Santa Clara and Portland, in particular, which you referenced in two of our really good success stories for the quarter, not only show obviously the gap that we've now talked about in getting back to stabilized levels, but that we're achieving those significantly. And we're seeing continued growth, certainly in terms of Santa Clara.

Speaker Change: I think you referenced in two of our I think really good success stories for the quarter not only show.

Speaker Change: Obviously, the gap that we've now talked about and getting back to stabilized levels that we're achieving those significantly.

Speaker Change: And we're seeing continued growth certainly in terms of Santa Clara.

Barry A. N. Bloom: The tech business is the biggest piece that obviously has come back. There are some particular demand generators and specific companies in our backyard there that have really increased their amount of travel by individual travelers, their amount of group travel. You know, we've never really talked about booking pays kind of by property or by market, but suffice it to say that we continue to indicate that those markets not only have an opportunity for recovery, but they're experiencing substantial demand, driving substantial improvement toward that recovery.

Speaker Change: The tech business has been.

Speaker Change: Is the biggest piece that obviously has come back are there some particular demand generators and specific companies in our in our backyard. There that have really increased their amount of travel by individual travelers there amount of group travel.

Speaker Change: We've never really talked about.

Speaker Change: Booking pace kind of by by property or by market, but suffice it to say that.

Speaker Change: Ed.

We continue to indicate those markets not only have an opportunity for recovery, but theyre doing substantial demand driver.

Speaker Change: Driving substantial improvement towards that recovery.

Austin Todd Wurschmidt: So what do you think you need to see to really capture the occupancy point differential that you highlighted in your prepared remarks? What's sort of that next leg up to keep the momentum going?

Speaker Change: So what do you think you need to see to really capture the occupancy point differential that you highlighted in your prepared remarks, what sort of that next leg up to keep the momentum going.

Barry A. N. Bloom: I mean, we certainly think the momentum is going, and we're seeing, obviously, quarter by quarter, we're seeing across the portfolio that corporate transient demand, both in the smaller companies and medium-sized companies, which are generally more recovered, and from the larger companies that are less recovered, every quarter, we're seeing that business move up. You know, in terms of the dynamic of Mondays and Thursday nights having a bigger gap than Tuesdays and Wednesdays pre-COVID, we view that also just as a matter of time and that, ultimately, travel patterns will change when people realize they may not be able to get rooms on Tuesday and Wednesday nights if they're coming to do a business trip in any market, whether it's a strong market or a weak market.

Speaker Change: But I think I mean, we certainly think the momentum is going and we're seeing obviously quarter by quarter, we're seeing across the portfolio that corporate transient demand both at both from the smaller companies and medium sized companies, which are generally more recovered and from the larger companies that are less recovered every quarter, we're seeing that business.

Speaker Change: Move up in terms of the dynamic of of Mondays and Thursday nights, having a bigger gap than Tuesdays and Wednesdays too.

Speaker Change: Pre COVID-19 at system, we view that also just as a matter of time and then ultimately in part travel patterns will change when people realize they may not be able to get rooms on Tuesday, and Wednesday nights, if youre coming to do a business trip in any market, whether it's or whether it's a <unk>.

Speaker Change: A strong market a weak market most of our markets are doing unbelievably well on on Tuesdays and win Tuesday, and Wednesday nights and that there is opportunity for us to drive rate as that business compresses and if theres opportunity and will ultimately in parts ship business back out to Mondays and Thursdays.

Barry A. N. Bloom: Most of our markets are doing unbelievably well on Tuesday and Wednesday nights, and there's opportunity for us to drive rates as that business compresses, and that there's opportunity and will ultimately, in part, shift business back out to Mondays and Thursdays. And what's particularly encouraging as far as kind of going on that path like you're describing, as far as kind of narrowing the gap in occupancy, is how much of our REFBAR growth in the first quarter was occupancy-driven, obviously, versus rate, really all of it, essentially, and we're seeing that continue with our April results. So, you know, most of the growth that we saw in the April REFBAR number that we quoted was really driven by occupancy as well.

Speaker Change: And what's particularly been encouraging as far as kind of going on going on that path like youre, describing as far as kind of narrowing the gap in occupancy.

Speaker Change: Is how much of our revpar growth in the first quarter was occupancy driven obviously versus rate.

Speaker Change: Really all of it essentially and we're seeing that continue with with our April results. So.

Speaker Change: Most of our growth that we saw in the April Revpar number that we quoted was really driven by by occupancy as well.

Austin Todd Wurschmidt: Yeah, that's really helpful. And then just last one for me, maybe for Atish, can you provide some additional detail around your comment about sort of fine-tuning the construction timing and what's really accounting for, you know, the additional disruption now embedded in, it sounds like, the second quarter, in particular, from Hyatt Regency Scottsdale? I mean, was it, you know, pulling forward some room renovation or just, you know, performance in the market that's impacting that, that's creating some additional disruption? Any detail would be helpful. Thanks.

Speaker Change: That's really helpful. And then just last one for me maybe for <unk>.

Speaker Change: Can you provide some additional detail around your comment about sort of fine tuning the construction.

Speaker Change: Timing and what's really accounting for the.

Speaker Change: The additional disruption now embedded in it sounds like second quarter in particular from the Hyatt Regency Scottsdale, I mean was it pulling forward some room renovation or just performance in the market that's impacting that that's creating some additional disruption any detail would be helpful. Thanks.

Austin Todd Wurschmidt: Yeah, sure, Austin. This is Marcel.

Speaker Change: Yes sure Osten. This is Marcel I'll actually answer that for you.

Marcel Verbaas: I'll actually answer that for you. So, we are obviously very, very focused on making sure this project gets done on the timeline that we've outlined and that we want to make sure we hit. So, in order to feel as good as possible about getting all these components done by the time frames that we've talked about, we decided to pull some of the renovations that we're doing on the public spaces, particularly, forward into the second quarter.

Marcel: So we are obviously very very focused on making sure. This this project gets done on the timeline that we've.

We've outlined on that we want to make sure we hit.

Marcel: So in order to feel as good as possible about getting all these component is done by the time frames that we've talked about we decided to pull forward into the second quarter, a little bit earlier in the second quarter. Some of the renovations that were doing on the public spaces, particularly so larvae F&B spaces.

Marcel Verbaas: So, lobby, F&B spaces, and that are pretty impactful to the guest experience and will impact a little bit more on the leisure side, particularly than what we initially had projected. So, that's really the main driver behind it. It's really making sure that we hit these timelines, that we get these projects done specifically at the times we talked about, and having some more comfort around pulling that forward a little bit to start for those particular components.

Marcel: That is pretty impactful to the guest experience.

Marcel: Will will impact.

Marcel: Little bit more on the leisure side, particularly then.

Marcel: We initially had projected so that's really the main driver between edits, it's really making sure that we hit these timelines that we get these projects done specifically on the times we've talked about.

Marcel: And having some more comfort around pulling that forward a little bit to start for those particular components.

Austin Todd Wurschmidt: understood. I appreciate the detail.

Speaker Change: Understood I appreciate the detail.

Tyler Anton Batory: Thank you. Our next question comes from Tyler Batory from Oppenheimer. The line is now open, please go ahead.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Tyler <unk> from Oppenheimer.

Tyler: Your line is now open. Please go ahead.

Jonathan David Jenkins: Good morning. This is Jonathan on behalf of Tyler. Thanks for taking my questions and congrats on the quarter. Most of my questions have been answered, but maybe one for Barry. You noted the discrepancy between large corporate and small and mid accounts. I'm curious how you think about that gap closing and large corporates returning to, perhaps, pre-COVID levels.

Tyler: Thank you and good morning. This is Jonathan on for Tyler. Thanks for taking my question and congrats on the quarter.

Jonathan: Most of my questions have been answered, but maybe one for Barry.

Jonathan: The discrepancy between large corporate and small mid account.

I'm curious, how you think about that gap closing and in large corporates returning to pre COVID-19 levels.

Jonathan: Yes.

Barry A. N. Bloom: As I said, in part response to Austin's question, we're certainly seeing that recover, and the larger accounts are improving quarter over quarter, which obviously we think is a positive. I think it's a little hard to think about when they come closer to closing the gap back to pre-COVID levels. But again, I think some of that has to do with business expanding and people seemingly more willing to travel on Monday and Thursday nights, or at least Monday nights, in addition to Tuesdays and Wednesdays. So that's certainly part of what's going to close the gap.

Barry: As I said in part response to Austin's question, we're certainly seeing that recover.

Barry: The larger accounts are improving.

Barry: Quarter over quarter, which obviously, we think is a positive.

Barry: I think it's a little hard to look to think about when they come closer to closing the gap to back to pre COVID-19 levels, but again I think some of that as to do it just business expanding in that people are are more are becoming seemingly more willing to travel on the Monday and <unk>.

Barry: The nights or at least the Monday nights. In addition to Tuesdays and Wednesdays. So thats certainly part of what's going to close the gap and I think just as more people get back to more normalized patterns that are making more traditional business travel we think thats coming in we don't.

Jonathan David Jenkins: And I think just as more people get back to more normalized patterns and are making more traditional business travel, we think that's coming in. And we don't interface directly with the big four accounting firms or the big three consulting firms or the Fortune 100 companies, which really make up kind of that pool as we analyze it. But all of our operators tell us that people want to be on the road more.

Barry: Interface directly with the big four accounting firms are the big three consulting firms or the fortune 100 companies, which is really makes up kind of that pool as we analyze it but all of our operators tell us that that people want to be on the road more they want to be out they want to earn their points. They want to meet with customers. They want to meet with their own internal teams. So.

Jonathan David Jenkins: They want to be out. They want to earn their points. They want to meet with customers. They want to meet with their own internal teams. So, again, we think it's time and a matter of time issue, not whether demand ultimately comes back.

Barry: Again, we think it is.

Barry: It's a.

Time and matter of time issue not a weather demand ultimately comes back or not.

Jonathan David Jenkins: Okay, great. Very helpful. That's all for me. Thank you.

Speaker Change: Okay, Great very helpful. That's all for me. Thank you.

William Andrew Crow: Thank you. As a reminder, if you'd like to ask a question, that's a star followed by one on your telephone keypad. Our next question comes from Bill Crow or Freeman James. Your lines are open, please go ahead.

Speaker Change: As a reminder, if you'd like to ask a question.

Speaker Change: By one on your telephone keypad.

Speaker Change: Our next question comes from Bill Crow of Raymond James.

William Andrew Crow: Your line is now open. Please go ahead.

William Andrew Crow: Yeah, thanks. Good morning, guys. Barry, one for you.

William Andrew Crow: Yes, thanks, good morning, guys.

William Andrew Crow: Gary one for you.

William Andrew Crow: You all cited weakness in leisure demand in a couple of markets.

William Andrew Crow: You cited weakness in leisure demand in a couple of markets. Sounds isolated, but then, you know, the peers have also identified one or two markets each where they're seeing some weakness in leisure demand. And I'm just, you know, leaning into your experience. What do you think the odds are that a quarter or two from now we're talking about? You know, more challenges in the leisure space than less challenges, I guess, is a way to think about it.

William Andrew Crow: Which cells isolated but then the peers have also identified one or two markets, each where theyre seeing the weakness leisure demand.

William Andrew Crow: Leaning into your experience what do you think the odds are that a quarter or two from now were talking about.

William Andrew Crow: More challenges in the leisure space than the less challenges I guess is a way to think about it.

Barry A. N. Bloom: I guess, I mean, when I think about it as it relates to our portfolio and the markets that we're in that drive the leisure business in the larger hotels, I think about it two ways. One, larger hotels and then our smaller market leisure-driven hotels, but when we think certainly near-term and mid-term about Orlando, Phoenix, Scottsdale, Aviara, we think those properties all have really good attributes that will continue to drive performance. We are not seeing anything that resembles softness and leisure in those higher-end resort properties. So when we feel good about that, again, they're not positioned at the super ultra-luxury level.

Speaker Change: I guess I mean, when I think about it as it relates to our portfolio in the markets. We're in that drive leisure business in the larger hotels. So anything really think about it two ways one larger hotels, and then our smaller market leisure driven hotels, but but when we think certainly near term and midterm about.

Speaker Change: Orlando Phoenix Scottsdale.

Speaker Change: <unk> that we think those properties all have really good attributes to them that we will continue to to drive performance and are not seeing anything that resembles softness in leisure in those.

Speaker Change: In those.

Speaker Change: Higher end resort property, so and we feel good about that again theyre not theyre not positioned at the Super ultra luxury level their position at a level that that guests really like.

William Andrew Crow: They're positioned at a level that guests really like and want to visit those resorts, and because there's sufficient demand in those markets, we'll keep driving those. I think we're certainly seeing normalization of demand in our leisure markets like Key West and Savannah and Northern California, I mean, Napa, in our case, but nothing that is truly problematic in terms of the leisure downturn. Napa, for example, had another very, very tough quarter in terms of weather, which was no doubt a part of the challenge there.

Speaker Change: And want to visit those resorts and that there is sufficient demand in those markets, we'll keep driving those I think that we're certainly seeing normalization of of demand in our on our leisure markets like key west in Savannah, and Northern California.

Speaker Change: In our case.

Speaker Change: But nothing that is truly problematic.

Speaker Change: In terms of the leisure downturn Napa for example had a very another very very tough quarter in terms of weather, which was no doubt part of the chat.

William Andrew Crow: But I think as we look across the portfolio, our assets are really desirable within their markets. We've not seen leisure, we've seen leisure. I mean, we use the word normalized really for a reason, that it's a normalization. The part that we're also particularly getting excited about is that, in general, we've been able to hold to the rate levels that we started to achieve during COVID. Have they softened a little bit in some markets? Yeah, sure they have, but the guest has really been retrained and reaccustomed to paying a much, much higher rate for their leisure stays.

Speaker Change: The challenge there, but I think as we look across the portfolio or assets or a really desirable within their markets, we've not seen leisure.

Speaker Change: You've seen leisure I mean, we.

Speaker Change: Use the word normalize really for a reason that it's a normalization. The part that we're also particularly continue to be picky enthusiastic about is is it in general we've been able to hold to the rate levels that we started to achieve during COVID-19 have they softened a little bit in some markets, yes, sure. They have but the guest has really been retrain and re accustomed to paying a much much.

Speaker Change: Higher rate for their leisure stays.

William Andrew Crow: Okay. All right. I appreciate that. We're trying to dissect as much information on the consumer as we can. There's a lot of uncertainty out there, so I appreciate your commentary. Thank you.

Speaker Change: Okay, Alright appreciate it.

Speaker Change: We're trying to best set as much information on liquid share grows we can.

Speaker Change: A lot of uncertainty out there. So I appreciate your commentary thank you.

Marcel Verbaas: Thank you. At this time, we currently have no further questions, so I'll hand you over to Marcel Verbaas for any further remarks.

Speaker Change: Thank you at this time, we currently have no further questions. So I'll hand back to Marcel for Airbus for any further remarks.

Marcel Verbaas: Thanks, Alex, and thanks, everyone, for joining us today. We're certainly pleased with the continued momentum that we're seeing within our portfolio and in our markets. And we look forward to seeing many of you at NARIT or any other conferences coming up or meeting opportunities. So thanks again for joining us today, and we look forward to speaking to you next.

Marcel: Thanks, Alex and thanks, everyone for joining us today.

Marcel: We're certainly pleased with the continued momentum that we're seeing within our portfolio and in our markets.

Marcel: We look forward to seeing many of you.

Marcel: NAREIT or any other conferences coming up or meeting opportunities. So thanks again for joining us today.

Speaker Change: Look forward to speaking to you next.

Operator: Thank you for joining today's call. You may now disconnect your lines.

Speaker Change: Thank you for joining today's call you may now disconnect your lines.

Speaker Change: Yes.

Speaker Change: Yeah.