Q1 2024 Chatham Lodging Trust Earnings Call
Greetings and welcome to Chatham Lodging Trust first quarter 'twenty 'twenty four financial results.
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A question and answer session will follow the formal presentation.
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At this time I'll turn the conference over to Christina Lee President of D. G Public relations, Chris you May now begin.
Christina Lee: Thank you Rob.
Christina Lee: Morning, everyone and welcome to the Chatham Lodging Trust first quarter 2024 results Conference call. Please note that many of our comments today are considered forward looking statements as defined by federal Securities laws. These statements are subject to risks and uncertainties, both known and unknown.
Christina Lee: And our most recent Form 10-K, and other SEC filings all.
Christina Lee: All information in this call is as of May six 2024, unless otherwise noted and the company undertakes no obligation to update any forward looking statement to conform the statement to actual results or changes in the company's expectations.
Christina Lee: Copy copies of our SEC filings and earnings release, which contain reconciliations to non-GAAP financial measures referenced on this call on our website at www, Chatham lodging Trust's Dot com.
Christina Lee: To provide you with some insight into Chatham is 'twenty 'twenty four first quarter results allow me to introduce Jeff Fisher, Chairman, President and Chief Executive Officer Officer, Dennis Craven Executive Vice President and Chief operating Officer, and Jeremy Wegner, Senior Vice President and Chief Financial Officer, Let me turn the session over to Jeff Fisher Jeff.
Jeffrey H. Fisher: Thanks, Chris and I, certainly appreciate everyone joining us this Monday morning for our call.
Jeffrey H. Fisher: As you know we beat first quarter consensus estimates as we combined revpar growth of 2%.
Jeffrey H. Fisher: Together with an almost 20% increase in our other operating profit line and property tax refunds on a couple of our California hotels, we generated free cash flow of $8 $3 million in the quarter up 10% over the 'twenty to 'twenty three first quarter.
Jeffrey H. Fisher: I'm, an asset management perspective, we're laser focused on driving free cash flow any way, we can whether that's by increasing revenue or market share increasing flow through or enhancing ancillary operating profits and in the first quarter, we drove other department.
Jeffrey H. Fisher: Profits up almost 20% as we increased parking rates in certain markets and enhanced our retail market operation.
Offerings and pricing the year over year increase added a penny of that fast forward to our first quarter performance a revpar increase of 2% was split evenly between occupancy and ADR and was substantially greater than industry performance above Hilton's, North American performance and right in line.
Jeffrey H. Fisher: Marriott's performance generating revpar growth and outperformance despite the bad weather in February and the shift of the Easter from April last year into March this year is noteworthy.
Jeffrey H. Fisher: Revpar was boosted by Revpar growth of 17% and our five tech hotels in Silicon Valley in Belvieu and we saw occupancy gained 1200 basis points at these hotels to 67% by far the highest level since 2019.
Jeffrey H. Fisher: Excluding the five tech driven hotels first quarter, Revpar was down 1%, but still up over 2019 levels by 3%.
Jeffrey H. Fisher: Even better news is the strength, we're seeing in April with Revpar up 5% over 2023 and up 4% over 2019 levels with Tech Hotel Revpar up 12% in April and Revpar for all hotels, excluding those same five tech.
Jeffrey H. Fisher: Hotels in April was up 3.6%.
Jeffrey H. Fisher: Jack Hotel occupancy finished at 73% only 400 basis points off the 2019 levels more encouraging news on the surging demand out there.
Jeffrey H. Fisher: April Revpar growth piece, most peers that have reported and supports our thesis that we should continue to outperform the industry in most of our peers in 'twenty 'twenty four due to surging demand in our primarily check driven hotels.
Jeffrey H. Fisher: Within Silicon Valley, we're confident that the corporate demand growth we saw in the first quarter in April will continue. Additionally tech companies are moving forward with their in turn programs.
This year many of the companies are providing a stipend to each in turn to cover them and meals and they in turn can choose where to stay.
Jeffrey H. Fisher: We're already seeing some in turn bookings not at the level of prior years, but as we talked about in February so long as the intern programs are active that is going to generate compression in the market, which is something we did not have last year and obviously compression boose.
Jeffrey H. Fisher: Occupancy and overall Revpar results.
Mountain view is our strongest market in the quarter up 19% as we saw meaningful gains in business travel specifically from our top accounts here, such as Google Broadcom and sure Fox market demand growth has been upper single digits and long term the market sets up well for us.
Jeffrey H. Fisher: As new supply is zero.
Jeffrey H. Fisher: Revpar at our two Sunnyvale hotels gained 12% in the quarter in this market too are showing good underlying fundamentals.
<unk> is up 13% and future supply is up 1%, we're seeing corporate demand from our top accounts, Apple Google intuitive surgical and applied materials and specifically from the start of construction at the Big Epic Center with the garage getting going and.
Jeffrey H. Fisher: That as we've talked about many times should be very beneficial for these two hotels over the next few years.
Jeffrey H. Fisher: San Mateo Revpar growth was 6% in the quarter versus 2019.
Jeffrey H. Fisher: And as for covered more than the three other silicon Valley hotels.
Jeffrey H. Fisher: One aspect to that story is that recently, the 476 room Marriott San Mateo permanently closed its doors, which will increase Marriott system demand in the market and we should see some increased production here as well during.
Jeffrey H. Fisher: During the quarter, we sold the Hilton Garden Inn, Denver Tech for $18 million and including deferred renovation cost. The hotel was sold for an approximate four cap on 2023 NOI, we intend to continue to Opportunistically sell some hotels this year.
Jeffrey H. Fisher: With the goal of redeploying those proceeds into higher revpar and higher growth hotels and markets.
Jeffrey H. Fisher: Typical sales targets I've gotta be hotels, with absolute revpar, and lower absolute revpar and margins and probably hotels that are older that need some upcoming capex or regular cycle renovations or.
We're targeting sales proceeds of 40 million to $100 million continuing to sell these types of hotels, while buying again.
Jeffrey H. Fisher: I said, a higher growth higher revpar and higher margin hotels will enhance shareholder value and cash flow.
Jeffrey H. Fisher: With respect to hotel investments, we are seeing more deal volume and we hope to have an acquisition announced this quarter acquisition targets are coming from developers looking to recycle their own capital.
Jeffrey H. Fisher: As well as all of US who are facing some meaningful risk related to refinancing and the effects. They are from as we all know the levels of C. N V. S debt maturing in 'twenty four 'twenty five is pretty staggering for the industry and should provide additional opportunities for well capitalized owners.
Jeffrey H. Fisher: Like us with the capacity to buy.
Jeffrey H. Fisher: I want to switch gears to address our capital structure as its been a critically important focus for us over the last few quarters, especially.
At quarter end were at the lowest leverage levels in over a decade with leverage ratio of under 25% and a net debt to EBITDA ratio a very healthy four times.
Jeffrey H. Fisher: Subsequent to the end of the quarter, we further enhanced our financial strike raising $50 million via increased borrowings under our term loan.
Jeffrey H. Fisher: We currently have 25 hotels that are unencumbered over the past few years through a combination of asset sales free cash flow and the issuance of common and preferred equity we repositioned our balance sheet to handle the meaningful tranche of maturing debt. This year that the dates back.
2014 during one of chatter was highest growth phases since our IPO.
Jeffrey H. Fisher: We are well capitalized to repay all maturing debt this year.
Jeffrey H. Fisher: In April we repaid the $29 million maturing mortgage on the residence Inn, Anaheim, and we have $255 million maturing in July.
Speaker Change: Let me tell you it's great to put this overhang behind us because we've heard about this for some time from analysts and investors and I'm proud of the work our team has been doing on this front.
I'm sure our investors will share my sentiment.
Including our $260 million credit facility.
Speaker Change: And our Upsized $240 million term loan, we have a $400 million of floating rate debt exposure.
Speaker Change: Allow us to benefit from what should be a declining interest rate environment in the future.
Speaker Change: So in conclusion, we remain confident the Chatham is well positioned to outperform most peers as we have the most internal growth upside we think of most other lodging Reits, especially within our tech hotels, the remainder of our portfolio is performing well new supply as well.
Speaker Change: Less than 1% across our Submarkets and our balance sheet is in great shape to be opportunistic on the transaction front with.
Speaker Change: With that I'd like to turn it over to Dennis Thanks, Jeff within our Tech markets. In addition to Silicon Valley are resident in Bellevue has been thriving. This this year with revpar growth of 40% in the quarter and that's almost entirely due to occupancy growth of 37%.
Dennis M. Craven: Demand growth was almost 20% in the Bellevue market as we are seeing acceleration in all business travel segments. Our standard retail segment, which is B G room demand was up over 1800 room nights or approximately 42% and importantly, special corporate meaning our key corporate accounts was up over 800 room nights or 55.
Dennis M. Craven: 5%.
Dennis M. Craven: Amazon, Microsoft Accenture and bite dancer Tictac, all of which are historically top accounts for us generated over 1500 room nights in the quarter and demand for meta and Toyota is surging as we look forward 60 days in.
Dennis M. Craven: In November Amazon opened a portion of the Sonic building in Bellevue, while it can be more than a thousand employees and intends to double it to belvieu workforce from 10000 to 20000 employees over the next couple of years.
Dennis M. Craven: Mike Dance has also expanded its office presence in Bellevue with two new office leases and with supply projected below 1% in the Bellevue market. This corporate expansion is very good news for the hotel and for Us and it's going to help us continue to outperform.
Dennis M. Craven: Some additional revpar tidbits from the quarter, our first quarter Revpar was not impacted by any renovation impact as we had three hotels with no with renovation disruption in each of the first two quarters of 'twenty, three and 'twenty four first quarter weekday occupancy was the highest since 2019 and for the <unk>.
Dennis M. Craven: First time since the pandemic first quarter weekday occupancy outpaced weekend occupancy.
Dennis M. Craven: Deployments.
Dennis M. Craven: We continue to monitor San Francisco's airports, all international passengers passenger traffic.
Dennis M. Craven: <unk> surpassed 2019 levels in February and March for the first time since 2020 total domestic traffic into S. F. O is up approximately 3% at sea Tac International deployments are up approximately 15% through February and domestic is up about 1% we're seeing more.
Dennis M. Craven: Most of that inbound travel is generally coming from the Asia region.
Dennis M. Craven: Outside of our Tech driven markets are seven primarily leisure oriented hotels that comprise approximately 19% of our first quarter room revenue saw revpar increased 1% year over year top gainers were Anaheim and Portland and on the downside our worst performers were destined and Savannah.
Dennis M. Craven: Weekday and weekend occupancy, where approximately 70% for each of those periods with weekday ADR of $173 outpacing weekend revpar of $163 and that $10 GAAP compares to a $4 gap in the first quarter last year.
Dennis M. Craven: Our top five Revpar hotels were led by the residence Inn Fort Lauderdale with.
Dennis M. Craven: Revpar of $273, which was flat to last year, our residents in San Diego Gaslamp by 195, followed by our Hilton Garden Inn Marina del Rey at $167. Despite being under renovation and then followed by a resident in mountain view at 158, and our residence Inn, Washington D C.
Dennis M. Craven: And White Plains, New York, both with Revpar of $154.
Dennis M. Craven: And our 38 comparable hotels GOP margins were down 120 basis points with the majority of that attributable to labor and benefits, which adversely impacted margins by 110 basis points.
Dennis M. Craven: On a CPR basis. These costs were up approximately 6% year over year labor costs, which are by far our largest expenses have stabilized over the past nine months or three quarters. Our first quarter average hourly wage is essentially unchanged from our 2023 third and fourth quarter hourly wages.
Dennis M. Craven: Our employee head count remains about 20% below pre pandemic levels and we are not experiencing really any labor supply shortfalls around our markets thankfully as we've talked about for a few quarters now our margin comps will become easier after the second quarter as we were still ramping up housekeeping another bright.
Dennis M. Craven: Brand required expenses in the first half of 2023.
Dennis M. Craven: Our top five producers of G O P. In the quarter were led by our Gaslamp residence Inn, the two and a half million the ninth straight quarter. It's allowed our portfolio followed by our tech heavy Sunnyvale two residents in with a $1 5 million of G. O P and third was our residence Inn Fort Lauderdale, and rounding out the top five where our courtyard Dallas downtown.
Dennis M. Craven: And our embassy suites, Springfield, which managed to reach our top five despite being under renovation for most of the quarter.
Dennis M. Craven: Importantly, looking into hotel GOP at our five tech driven hotels Hotel G. O P. A $5 3 million was up a strong 20, 22% over the 2023 fourths quarter GOP margins for the five hotels were up 110 basis points and G. O P. At our residence Inn Bellevue was up approximately 80%.
Dennis M. Craven: <unk>.
Dennis M. Craven: Tech Hotel EBITDA was up almost $1 million or over 25%, so again encouraging trends coming out of these markets.
Dennis M. Craven: As we've previously disclosed if we if we get back to 2019 EBITDA levels, we would add approximately $16 million of EBITDA or over 30 of F. F O.
Dennis M. Craven: With respect to capital expenditures, we spent approximately $10 million in the quarter and still expect to spend about $37 million in 2024.
Dennis M. Craven: During the quarter, we completed renovations at our Hilton Garden Inn Marina del Rey, our Homewood suites in San Antonio Our Hyatt place Cherry Creek, and lastly, our embassy suites in Springfield, Virginia, We have no renovations planned for the second quarter with that I'll turn it over to Jeremy Thanks, Dennis Good morning, everyone.
Jeremy Bruce Wegner: Our Q1 2023 hotel EBITDA was $21 million adjusted EBITDA was $18 9 million and adjusted <unk> per share was <unk> 16 science, we were able to generate a GOP margin of 38, 6% and hotel EBITDA margin of 38%, 38% in Q1, while our Q1 <unk>.
Jeremy Bruce Wegner: <unk> margin was down 120 basis points from our Q1 2023 margin.
Jeremy Bruce Wegner: We are seeing a stabilization of most of the large cost increases that we saw in the second half of last year. Our Q1 hotel EBITDA margin increased 10 basis points versus Q1 2023 due to approximately $800000 of property tax refunds received Q1 of this year.
Jeremy Bruce Wegner: Our balance sheet remains in excellent condition, and we have made significant progress on our plan to address the debt maturities in January 2024, we completed the sale of the HDI Denver tack for approximately $18 million, which include an expected renovation cost of approximately $6 million represents.
Jeremy Bruce Wegner: And EBITDA multiple of 25 times and a cap rate of three 8% our cash balance at the end of Q1 was $72 3 million.
Jeremy Bruce Wegner: Which together with $50 million of incremental proceeds raised through an add on to our unsecured term loan that we closed last week provide a pro forma quarter end cash balance of $122 $3 million.
Jeremy Bruce Wegner: With a pro forma cash balance of $122 $3 million and $260 million of Undrawn availability under our revolving line of credit our pro forma total liquidity of $382 million exceeds the $281 million of remaining debt outstanding at March 30, <unk> that matures in Q2 and Q3 by over.
Jeremy Bruce Wegner: $100 million.
Jeremy Bruce Wegner: We are currently in the process of executing $60 million of C. M. B S financings, which will further reduce the revolving credit facility utilization required to address our remaining debt maturities, we expect to see MBS financings to close in the next month and half rates in the 7% to 7.25% area.
Jeremy Bruce Wegner: As of March 31st Chatham is net debt to LTM EBITDA was four times, which is significantly below our pre pandemic leverage which is generally in the five 5% to six times area. Despite the fact that EBITDA has not fully recovered to pre pandemic levels.
Jeremy Bruce Wegner: Turning to guidance for Q2, we expect Revpar growth of two 5% to 4% adjusted EBITDA of 28, 7% to $34 million and adjusted <unk> per share of 33 to 36.
Jeremy Bruce Wegner: Our Q2 cash interest expense guidance of $7 $7 million reflects the $50 million term loan add on we completed in early may and assumes $60 million of see MBS issuance in the second half of May.
Jeremy Bruce Wegner: We expect Q2 interest income of approximately $700000 second quarter interest expense and interest income do not represent a.
Run rates for Q3, and Q4 as our cash balances are much higher in May and June due to the borrowing.
Jeremy Bruce Wegner: Of money in May to fund the July debt maturities.
Jeremy Bruce Wegner: With respect to hotel EBITDA margins in general, we expect year over year margin comparisons to be much easier starting in Q3 as we begin to lap the fuller staffing levels and other costs that were not completely reflected until the second half of last year.
Jeremy Bruce Wegner: Year over year EBITDA margin comparisons in Q2 2024 are impacted by approximately.
Jeremy Bruce Wegner: A $1 $2 million of one time benefits that positively impacted margins in Q2 of 2023.
Speaker Change: This concludes my portion of the call operator, please open the line for questions.
Speaker Change: Thank you we will now be conducting a question and answer session. If you'd like to ask a question today. Please press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue you.
Speaker Change: You May press Star two if you like to remove your question from the queue.
Speaker Change: Okay.
Speaker Change: So they're using speaker equipment, maybe let's say to pick up your handset before pressing the star keys.
Speaker Change: One moment. Please we poll for questions. Thank you.
Speaker Change: Thank you and our first question today comes from the line of Ari Klein with BMO capital markets. Please proceed with your question.
Aryeh Klein: Thanks, Matt and good morning.
Aryeh Klein: A little more color on the weekend occupancy dynamics, and what you think might be driving that.
Aryeh Klein: And is there an element of consumer softness that youre seeing.
Aryeh Klein: Low end consumer seems to be feeling a little more pressure these days.
Aryeh Klein: Okay.
Aryeh Klein: Hey, Ari this is Dennis yes, I mean listen I think you know for the first time.
Dennis M. Craven: While I think first quarter you know.
Dennis M. Craven: A week into occupancy was about the same as weak day, but it was down as you noted 200 basis points.
Dennis M. Craven: Really driven by Savannah in Destin, and I think listen I think consistent with what you've heard from other other hotel owners. You know if you had exposure in certain parts of you know what I would call, Florida or other high leisure markets that really spiked in <unk>.
Dennis M. Craven: One in 'twenty two from the pandemic those have seen a little bit of a pullback.
Dennis M. Craven: And I think as we've talked about really now for over a year is that we believed and expected that the leisure markets would soften.
Dennis M. Craven: And as you started to see finally.
Dennis M. Craven: People are getting back into the office and working.
And eventually transitioning that leisure oriented travel to be more business travel.
Dennis M. Craven: And you know.
Dennis M. Craven: I think that's essentially what we saw if you look at you know if you look at our seven hotels I think we've talked about you know destin and Savannah, where the worst.
Dennis M. Craven: But really outside of that we had a good mix Anaheim was up 15% Pittsburgh was up 11% Portland up 11%.
Dennis M. Craven: Portsmouth, New Hampshire down, 4% and Fort Lauderdale was up 1% so.
Dennis M. Craven: You know its really just specific to where those leisure hotels are.
Dennis M. Craven: But again kind of not surprising.
Got it and then just you talked a little bit about what youre doing on the other revenues.
Dennis M. Craven: Parking.
Dennis M. Craven: Hence our kind of gross profit well, what's the incremental opportunity that you see there.
Yeah, I mean listen I think you know, we we put out some pretty broad increases.
In March of this year on the parking front.
Hotels, we're tweaking our initiatives to include what I would kind of refer to as surge pricing.
Dennis M. Craven: So for example, you have a Taylor Swift concert you know over multiple days people are there for five or six days, you typically charge $10 a night for parking well most most parking lots most parking structures around there are changing their pricing when you have big time citywide events or something like.
Dennis M. Craven: That and.
Dennis M. Craven: From a hotel perspective, we should do more of that also so it's being a little more nimble, it's being a little more active.
Dennis M. Craven: And looking at demand within the market from really a lodging perspective, and saying hey can we.
Dennis M. Craven: Can we continue to move parking revenue higher.
Dennis M. Craven: The other side is on the retail front.
Which is where we spent some time over the past.
Dennis M. Craven: Six months to 12 months really trying to focus on our product offerings within our market, making sure. We've got the stuff primarily if you're if you're really thinking about it.
Dennis M. Craven: Quick grab stuffs, and especially beer wine and some jurisdictions liquor.
Dennis M. Craven: To be able to.
Dennis M. Craven: Not only offer more of it but look at the pricing of it as well.
Dennis M. Craven: So we.
Dennis M. Craven: One more if you still have some runway there so.
Speaker Change: Understood and then just on the enterprise and the flexibility that companies are providing out there do you think that that's the new normal.
Speaker Change: Do you have a sense of the size of the interim program this year relative to what they were previously.
Well there was essentially no in turns last year so.
Speaker Change: It's going to be well up from last year I think you probably you know.
Speaker Change: You know as we kind of sit here today in turn levels are less than what they were in 2019.
Speaker Change: Just in terms of the overall programs, having said that.
Speaker Change: This type of program is something I think listen there's many different types of accommodations in those markets, whether its apartments short term rentals.
Speaker Change: Airbnb and lodging so.
Speaker Change: And corporate housing so by providing that flexibility it's.
Speaker Change: It's giving a little bit more control to the to the enter those by the way just to clarify those have always been there. So you know as I talked about in our prepared remarks.
Speaker Change: We mentioned it back in February.
Any compression from these interim programs, whether it's at our hotel or in the other offerings. Ultimately is something that was not there last year and should benefit the entire market you know as we move forward into the summer into the programs, but all.
All the all of the companies, we do business with seem to be having internships and they're most of them are doing the stipends. There are a few that are not and we're having regular discussions with those of course this is Jeff.
Jeffrey H. Fisher: Change means again, a lack of visibility on our part relative to the quantity overall, so you know we're not being coy here.
We know the business will be there we know the markets will be up there are they already are up substantially as you've heard but if youre not able to negotiate directly with those companies like we have in the past then we just have to do all we can to attract those folks from.
Compared to the different sources they've got.
Speaker Change: Thank you I appreciate all the color.
Jeffrey H. Fisher: Yeah.
Jeffrey H. Fisher: Yeah.
Jeffrey H. Fisher: Our next question is from the line of Bryan Maher with B Riley Securities. Please proceed with your questions.
Bryan Maher: Thank you and good morning, just a couple from me today.
Bryan Maher: Maybe for Jeremy or Dennis on the cost pressures can you tell us kind of where you're seeing the most and the least relief on those categories.
Bryan Maher: Okay.
Speaker Change: Yes, I mean listen I think you know.
Dennis M. Craven: Surprisingly I think as we've talked about in our prepared remarks staffing is really not much of an issue across most of our markets.
Dennis M. Craven: I think we've obviously heard a lot of things going on in California with respect to fast food minimum wages.
Dennis M. Craven: That really hasnt impacted us at all out in those markets there.
Dennis M. Craven: There really arent a whole lot of what I would call a large scale cost increases that we sit here and are worried about at the moment.
Dennis M. Craven: If you look at our P&L corporate real estate taxes, just from a pure comparable basis and thankfully we benefited some from some refunds in the first quarter, but in general if you look at it.
Dennis M. Craven: Our our largest increases in expenses, it's really probably in our real estate taxes and property insurance.
Dennis M. Craven: Health insurances.
Dennis M. Craven: Health insurance.
Dennis M. Craven: And that was the last thing I was going to talk about which is health insurance just continues to be.
Dennis M. Craven: Our pain and everyone's butt.
Dennis M. Craven: With.
It seems like every year, there's double digit increases.
Dennis M. Craven: And on the positive side for utilities, we're starting to see costs actually come come down year over year there. So.
Dennis M. Craven: Should be a little help you.
Dennis M. Craven: Do you expect any more tax refunds that move the needle at all or is that pretty much behind you.
Dennis M. Craven: We don't expect anything, but we're constantly appealing us asthma. So you never know I mean, we've reflected everything here that we that has happened or that we know about and but we will keep pushing.
Speaker Change: Okay, and then just last for me it seems like we should be expecting.
Speaker Change: You know more capital recycling.
Speaker Change: This positions and likely acquisitions over the next let's say six to 18 months than we've seen in a little while can you tell me and maybe for Jeff what are the criteria that you're looking for you know kind of the most you know maybe kind of one two and three on the list of markets that you want to answer or is it.
Speaker Change: Migration is busy.
Speaker Change: Gross what is it.
Speaker Change: Market that Youre looking for.
I think yes, just to kind of buttress, what you're saying.
Speaker Change: We're very encouraged by the ability to sell that Denver Tech hotel at the number we did we were encouraged by the relatively high number of bidders that were on the deal. So that really caused us to take a real hard look at our 10 year Capex plan.
Speaker Change: Fecal rhinos and other renovations that would be coming up age of hotels and of course.
Speaker Change: The world's different since Covid there are markets.
We're very strong that just are either slow to recover or we.
Speaker Change: We don't think.
Really have a lot more upside left in them.
Speaker Change: Those are hotels that will go to Sal.
Speaker Change: And we want to be in markets, where the population growth is strong anytime we bought a hotel or developed a hotel in a market where population growth was strong.
Speaker Change: Business growth was strong because that's still the core of what we do around here as you know I mean, 80% of these hotels.
Speaker Change: Our business trends and related our corporate hotels.
Speaker Change: Yeah.
Speaker Change: Shows you the strength that we're having this year so far.
Speaker Change: And that'll be our focus for hotels that we try to acquire they should be.
Speaker Change: 10 years old or less for the most part and we do see some deals that are brand new deals, where some developers need to take care of some maturities or recycle their own capital for some other hotels they may have under construction.
Around the country there is still a few folks out there.
Speaker Change: That have some older pipelines older meaning.
Speaker Change: Deals that already are underway, because we all know there's not a ton of brand new deals getting started.
And we see that as a decent source of acquisitions also.
Okay. Thank you.
Speaker Change: As a reminder to ask a question today you May press star one from your telephone keypad.
Speaker Change: The next question is from the line of Tyler Battery with Oppenheimer. Please proceed with your question.
Speaker Change: Hey, Good morning. This is Jonathan on for Tyler Thanks for taking our question.
Jonathan: First one for me is on Revpar in April obviously, very strong can you provide some additional color on that strength.
That number came in maybe versus your expectations and kind of the puts and takes that impacted the month with Easter shifting out and Passover standing alone.
Dennis M. Craven: Yeah. This is Dennis.
Dennis M. Craven: I think listen it starts continued its a start it starts with our tech hotels.
Dennis M. Craven: With Revpar up essentially 12% in April for those five hotels.
That obviously is a strong performer, but I think in general we.
We saw kind of some encouraging trends across our portfolio outside of what I'd call again, the leisure markets more BT, driven Washington D. C has been has performed very well for us.
Dennis M. Craven: We've got three hotels in that area as we talked about the embassy suites, there did really well despite being under renovation for most of the quarter.
Dennis M. Craven: And our New York suburban hotels also showed some pretty good growth. So it's really you know it starts with the tech hotels and just continues with just overall demand strength from the BT.
Dennis M. Craven: Business traveler and that's I think what we're hopeful that we continue to see as Jeff talked about we do have.
Dennis M. Craven: Is there.
The booking window is very low or very short at the moment.
Dennis M. Craven: And it's hard to go out there with a pretty aggressive number. So we're encouraged by what we saw in April, especially on the weekday.
Travel front and you know I think if we can see the same thing here in may is as rates really start to ramp up then hopefully we will deliver a pretty good quarter.
Speaker Change: Okay very helpful. And then maybe switching gears on the Los Angeles market any thoughts overall on that market, what's driving the underperformance relative to your expectations that you mentioned and kind of your outlook or what needs to happen in that market to get back to Quintin archaean.
Speaker Change: Yes, I mean, it was you know up until really kind of the last six months. It was one of our strongest markets I think it had a soft fourth quarter and saw and soft first quarter. Some of that was weather driven.
Speaker Change: But as we've talked about I think it's more of an la focus there just isn't a ton of business travel into the market at the moment.
Speaker Change: We are starting to see some signs of life there.
Speaker Change: Especially at our Woodland Hills in Marina del Rey hotels, I think as we talked about our Anaheim residence Inn had a great first quarter.
Speaker Change: So, it's really that BT travel into downtown and up near Warner Center.
Speaker Change: Okay very helpful. Thank you for all the color that's all for me.
Speaker Change: Thank you.
Speaker Change: At this time, we have no additional questions I would like to turn.
Speaker Change: Turning the floor back to Jeff Fisher for any closing remarks.
Jeffrey H. Fisher: Well, thanks, everybody for being on the call again, and I think I'll just pick up from where it got us left off saying.
That as we look at the guidance given for the second quarter and the rest of the year, we certainly are.
On the conservative side, but we are taking a wait and see attitude for the most part.
Jeffrey H. Fisher: As to the kind of Revpar results that we might see through the quarter and the rest of the year, but we are very encouraged by April numbers were very encouraged by strength, we've seen already into may.
Jeffrey H. Fisher: And we will continue to push the envelope as I said in my prepared remarks on all fronts.
Jeffrey H. Fisher: Continue to propel these earnings and <unk> for the company Thanks for listening.
Speaker Change: This concludes today's conference you may disconnect your lines at this time and thank you for your participation.