Q1 2025 Park Hotels & Resorts Inc Earnings Call

Operator: Greetings and welcome to the Park Hotels & Resorts first quarter 2025 earnings conference call. At this time, optists entering the Tsunami mode. If anyone should require operator assistance, please press star zero on your telephone keypad.

Greetings and welcome to the Park hotels <unk> resorts first quarter 2025 earnings conference call.

At this time, all participants are in listen only mode.

If anyone should require operator assistance. Please press star zero on your telephone keypad.

Operator: A question and answer session will follow the formal presentation. You may be placed into the question queue at any time by pressing star 1 on your telephone keypad and we ask that you please ask one question and one follow up then return to the queue. As a reminder, this conference is being recorded.

A question and answer session will follow the formal presentation you.

You may be placed in the question queue at any time by pressing star one on your telephone keypad and we ask you. Please ask one question and one follow up then return to the queue.

As a reminder, this conference is being recorded.

Ian Weissman: It's now my pleasure to turn the call over to your host, Ian Weissman, Senior Vice President, Corporate Strategy. Ian, please go ahead.

Speaker Change: It's now my pleasure to turn the floor over to your host Ian Weissman Senior Vice President corporate strategy and please go ahead.

Ian Weissman: Thank you, Operator, and welcome, everyone, to the Park Hotels & Resorts first quarter 2025 earnings report. Before we begin, I would like to remind everyone that many of the comments made today are considered forward-looking statements under federal securities law. These statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed, and we are not obligated to publicly update or revise these forward-looking statements. Actual future performance, outcomes, and results may differ materially from those expressed in forward-looking statements.

Speaker Change: You operator, and welcome everyone to the park hotels <unk> resorts first quarter 2025 earnings call.

Speaker Change: Before we begin I would like to remind everyone that many of the comments made today are considered forward looking statements under federal Securities laws.

Speaker Change: As described in our filings with the SEC. These statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed and we are not obligated to publicly update or revise these forward looking statements.

Speaker Change: Actual future performance outcomes and results may differ materially from those expressed in forward looking statements. Please refer to the documents filed by park with the SEC specifically the most recent reports on forms 10-K, and 10-Q, which identify important risk factors that could cause actual.

Ian Weissman: Please refer to the documents filed by PARC with the S. Specifically, the most recent reports on Forms 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those in the forward-looking state. In addition, on today's call, we will discuss certain non-GAAP financial information, such as FFO and adjusted EBIT. You can find this information, together with reconciliations to the most directly comparable GAAP financial measure, in this morning's earnings release, as well as in our 8K filed with the SEC, and the supplemental financial information available on our website.

Speaker Change: Alts to differ from those contained in the forward looking statements.

Speaker Change: In addition on today's call, we will discuss certain non-GAAP financial information such as <unk> and adjusted EBITDA you can find this information together with reconciliations to the most directly comparable GAAP financial measure in this morning's earnings release as well as in our 8-K filed with the SEC.

Speaker Change: SEC and the supplemental financial information available on our website at PK hotels and resorts Dot com.

Ian Weissman: DKHotelsAndResorts.com Additionally, unless otherwise stated, all operating results will be presented on a comparable This morning, Tom Baltimore, our Chairman and Chief Executive Officer, will provide review of Park's first quarter performance and strategic initiatives, as well as update on our 2025 Outlook.

Speaker Change: Additionally, unless otherwise stated all operating results will be presented on a comparable basis. This morning, Tom Baltimore, Our chairman and Chief Executive Officer will provide review of park's first quarter performance and strategic initiatives as well as update on our 2025 outlook.

Ian Weissman: Sean DeLorto, our Chief Financial Officer, will provide additional color on first quarter results and 2025 guidance. Following our prepared remarks, we will open the call for questions.

Sean <unk>: Sean <unk>, our Chief Financial Officer will provide additional color on first quarter results and 2025 guidance. Following our prepared remarks, we will open the call for questions with that I would like to turn the call over to Tom.

Tom Baltimore: With that, I would like to turn the call over. Thank you, Ian, and welcome, everyone.

Speaker Change: Thank you Ian and welcome everyone.

Tom Baltimore: I am pleased to report that we delivered better than expected performance. first quarter with Breitbart essentially flat despite tough comparison to last year when our portfolio significantly outperformed in almost every market. Resulting in nearly 8% REVPAR growth compared to the first quarter of 2023. Arbonne Creek Complex in Orlando and Casa Marina Resort in Key West. First quarter rep are increasing by 14% and 12% respectively, and we were very pleased to see broad-based strength in several of our core markets. Miami, New Orleans, Puerto Rico, Washington, D.C., and San Francisco reporting above, Industry Average Rev Part G.

Speaker Change: I'm pleased to report that we delivered better than expected performance in the first quarter with Revpar essentially flat. Despite a tough comparison to last year when our portfolio significantly outperformed in almost every market.

Speaker Change: Resulting in.

Speaker Change: Nearly 8% revpar growth compared to the first quarter of 2023.

Speaker Change: Our Bonnet Creek complex in Orlando, and Casa Marina resort in key West continued to lead the portfolio following their transformative renovations with first quarter, revpar, increasing by 14% and 12% respectively.

Speaker Change: We were very pleased to see broad based strength in several of our core markets.

Speaker Change: With Miami.

Speaker Change: Orleans, Puerto Rico.

Speaker Change: Washington, D C and San Francisco reporting above industry average revpar gains.

Tom Baltimore: Results from our Hilton Hawaiian Village Hotel. continues to recover from the labor strike last fall, offset these gains. causing a 420 basis point drag on our first quarter.

Results from our Hilton Hawaiian village Hotel.

Speaker Change: Which continues to recover from the labor strike last fall offset these gains, causing a 420 basis point drag on our first quarter results.

Tom Baltimore: From a capital allocation perspective, it was another productive quarter as we remained laser-focused on allocating capital to unlock the embedded value in our portfolio and maximize shareholder returns. We initiated over $80 million of capital improvements during the quarter, while we plan to execute the second phase of renovations at both of our Hawaii hotels during the third quarter. Alongside with the second phase of main tower guest room renovations at the Hilton New Orleans River. We're also excited to announce the upcoming $100 million transformative renovation of the Royal Palms South Beach, Miami. Hotel having recently suspended operations.

Speaker Change: From a capital allocation perspective, it was another productive quarter as we remain laser focused on allocating capital to unlock the embedded value in our portfolio and maximize shareholder returns.

Speaker Change: We initiated over $80 million of capital improvements during the quarter.

Speaker Change: While we plan to execute the second phase of renovations at both of our Hawaii hotels during the third quarter.

Speaker Change: Alongside with the second phase of main tower Guestroom renovations at the Hilton New Orleans Riverside.

Speaker Change: We're also excited to announce the upcoming $100 million transformative renovation of the Royal Palm South Beach Miami.

With the hotel, having recently suspended operations construction is expected to begin within the next few weeks.

Tom Baltimore: The renovation will include a complete refurbishment. of all 393 guest rooms. along with the addition of 11 new. All public spaces will be reimagined. Including a new lobby bar, re-concepted food and beverage outlets.

Speaker Change: The renovation will include a complete refurbishment of all 393 Guestrooms along with the addition of 11 new rooms.

Speaker Change: All public spaces will be re imagined.

Speaker Change: A new lobby bar.

Speaker Change: The concept is food and beverage outlets and expanded meeting space is designed to enhance the overall guest experience.

Tom Baltimore: Thank you. Forecasted returns are in excess of 15% to 20%. with the expectation of doubling the hotel's EBITDA once stabilized.

Speaker Change: Forecasted returns are in excess of 15% to 20%.

Speaker Change: With the expectation of doubling the hotel's EBITDA once stabilized.

Tom Baltimore: In 2025, we expect to invest a total of $310 million to $330 million on capital improvements as we continue to reinvest in our iconic portfolio with the confidence We also achieved a major milestone in the entitlements process for the planned 515-room tower and related campus expansion at Hilton Hawaii. In mid-April, the City Council of Honolulu approved our discretionary entitlement applications for the project subject to certain conditions which we expect to be able to satisfy. We also expect to receive final administrative approval of the project by the end of the year.

Speaker Change: In 2025, we expect to invest a total of $310 million to $330 million when capital improvements as we continue to reinvest in our iconic portfolio with the confidence that we can generate higher development yields compare to acquisition yields.

Speaker Change: We also achieved a major milestone in the entitlements process for the planned 515 room tower and related campus expansion at Hilton Hawaiian village.

Speaker Change: In mid April the city Council of Honolulu approve.

Speaker Change: Our proved or discretionary entitlement applications for the project subject to certain conditions, which we expect to be able to satisfy.

Speaker Change: We also expect to receive final administrative approval of the project by the end of this year.

Speaker Change: Additionally, given.

Tom Baltimore: Additionally, given the historically wide disconnect between public and private market valuation We remain active in repurchasing shares during the quarter at a material discount to net asset value. Having bought back approximately 3.5 million shares. for a total purchase price of $45 million. Approximately 11.5 million shares over the past year.

Speaker Change: Given the historically wide disconnect between public and private market valuations, we remain active in repurchasing shares during the quarter.

Speaker Change: At a material discount to net asset value.

Speaker Change: Having bought back approximately three 5 million shares for.

Speaker Change: For a total purchase price of $45 million.

Speaker Change: And approximately 11 and a half million shares over the past year.

Tom Baltimore: Finally, despite a very challenging transaction market... We will continue to make progress toward our strategic initiative. We have several assets in various stages of the marketing and disposition process. Including a pending sale of a non-core hotel at very attractive pricing. However, given the current market uncertainty, we make no assurances as to whether or when the transaction will close.

Speaker Change: Finally, despite a very challenging transaction market.

Speaker Change: Continue to make progress toward our strategic initiatives.

Speaker Change: Oh, selling $3 million to $400 million of.

Speaker Change: Noncore hotels this year.

Speaker Change: Several assets in various stages of the marketing and disposition process <unk>.

Speaker Change: Including a pending sale of any noncore hotel at very attractive pricing.

Speaker Change: However, given the current market uncertainty, we make no assurances as to whether or when the transaction will close.

Tom Baltimore: As a reminder, this is a production of the U.S. Department of Health and Human Services, Since 2017, we have sold or disposed of 45 hotels. for over $3 billion. an effort that has materially reshaped our portfolio. strengthened our long-term growth. turn into operation.

Speaker Change: As a reminder.

Speaker Change: Since 2017, we have sold or disposed of 45 hotels.

Speaker Change: About $3 billion and effort that has materially reshaped our portfolio.

Speaker Change: And strengthened our long term growth path.

Turning to operations we.

Tom Baltimore: We are very pleased with the performance of our Bonnet Creek complex in Orlando following our $220 million comprehensive renovation and meeting space expansion project. Results for the complex continue to come in well ahead of expectations. with a 32% REBPAR increase in Q1 at DeWalt or Prestoia, driven in large part by a surge in transient revenues of nearly 65%. of the Hotel Group market share by nearly 30%.

Speaker Change: We are very pleased with the performance of our Bonnet Creek complex in Orlando following a $220 million comprehensive renovation and meeting space expansion project.

Speaker Change: With a 32% Revpar increase in Q1 at the Waldorf Astoria, driven in large part by a surge in transient revenues of nearly 65%.

Speaker Change: Oh, the hotel grew market share by nearly 30%.

Tom Baltimore: Looking ahead, the outlook for our Orlando hotels remains very strong. Group Revenue pays up 9%, while the overall market is expected to witness tailwind. the opening of Universal's new epic theme park. The EBITDA for the complex is currently forecasted... $90 million in 2025. $30 million increase over 2023.

Speaker Change: Looking ahead.

Speaker Change: The outlook for our Orlando hotels remains very strong.

Speaker Change: With group revenue pace up 9%.

Speaker Change: The overall market is expected to witness tail winds from the opening of Universal's New epic theme Park.

Which is anticipated to accelerate leisure transient demand into the market. After its expected opening this may.

Speaker Change: EBITDA for the complex is currently forecasted to exceed $90 million in 2025.

Speaker Change: $30 million increase over 2023.

Speaker Change: In key west.

Tom Baltimore: Casa Marina delivered another strong. Repar up 12%. driven by a 680 basis point increase in occupancy. nearly 4% growth in ADR. Despite lapping an impressive first quarter of performance last year, Red Park Road. This is over 34% compared. 2020. Hotel also continued to outperform its competitive set. a REVPAR index above 112. At the REACH, RIVPAR held steady year-over-year, following a 7% increase in the first quarter of last year over 2023. Achieving an impressive REBPAR index of 119. We move through the second quarter, we are seeing continued solid performance from both Key West properties. The rare part expected to trend up, most single digits fueled by Casa Marina's continued momentum.

Speaker Change: Marina delivered another strong quarter with Revpar up 12% driven.

Speaker Change: Driven by a 680 basis point increase in occupancy.

Speaker Change: And nearly 4% growth in ADR, despite lapping an impressive first quarter performance last year.

Speaker Change: Revpar growth.

Speaker Change: It was over 34%.

Speaker Change: Compared to 2023.

Speaker Change: The hotel also continues to outperform its competitive set posting your Revpar index above 112.

Speaker Change: At the reach Revpar held steady year over year, following a 7% increase in the first quarter of last year over 2023.

Speaker Change: The hotel continued to outperform.

Speaker Change: Sheathing unimpressive Revpar index of 119.

Speaker Change: Exceeding its competitive set in March by nearly 300 basis points in occupancy and nearly $100 and rate.

Speaker Change: As we move through the second quarter.

Speaker Change: We're seeing continued solid performance from both key west properties.

Speaker Change: Revpar expected to trend up.

Speaker Change: Low single digits fueled by Casuarina as continued momentum.

Speaker Change: Strong group booking patterns and the favorable timing of the Easter holiday shift into April.

Tom Baltimore: favorable timing of the Easter holiday shift.

Tom Baltimore: TURNING TO HAWAII. Rep Park, across our two properties, declined by 15% during the quarter. As our Hilton Hawaiian Village Hotel continues to ramp up following the labor strike in Q4. Marginally softer inbound travel from abroad, also weighed on results. Arrivals from Japan down 6%. Canada down 1.5%. However... We're very encouraged that U.S. domestic visitation remains flat year over year. Including new domestic routes into Honolulu, announced by both Delta and American earlier this year. continues to drive healthy inbound travel. at our Hilton Waikoloa Village Hotel on the Big Island, where a part declined just- during the quarter, while Q2 rare part growth is expected to accelerate to mid-singleton.

Speaker Change: Turning to Hawaii.

Speaker Change: Revpar across our two properties declined by 15% during the quarter.

Speaker Change: As our Hilton Hawaiian village Hotel continues to ramp up following the labor strike in Q4.

Speaker Change: Marginally softer inbound travel from abroad also weighed on our results.

Speaker Change: But arrivals from Japan down 6%.

Speaker Change: And Canada down one 5%.

Speaker Change: However.

Speaker Change: We were very encouraged that U S domestic visitation remained flat year over year.

Speaker Change: Supported by increased air lift from major U S carriers.

Speaker Change: Including new domestic routes into Honolulu announced by both Delta and American earlier, this year, which continues to drive healthy inbound travel from the mainland.

Speaker Change: At our Hilton like lower village hotel on the Big Island Revpar declined just.

Speaker Change: Two 5%.

Speaker Change: During the quarter, while Q2 Revpar growth is expected to accelerate to mid single digit range driven by the nearly 90% increase in group revenue pace during the quarter.

Tom Baltimore: Additionally, Please see the complete disclaimer at https://sites.google.com at Hilton Hawaiian Village.

Speaker Change: Additionally, we continue to see benefits from our recent capital investments at both of our Hawaii hotels.

Speaker Change: As Hilton Hawaiian village, we completed phase one of the Rainbow tower renovation in February which included a full upgrade of 392 Guestrooms and the addition of 12 new Guestrooms.

Tom Baltimore: We completed Phase 1 of the Rainbow Tower renovation in February. 392 guest rooms in the addition of 12 new guest rooms. Phase 1 of the Palace Tower renovation was finalized, upgrading 197 guest rooms. We were pleased to see meaningful. 25% to 30% for the renovated rooms at both resorts. both the Rainbow Tower and Palace Tower guest room renovations during the third quarter.

Speaker Change: At <unk> village.

Speaker Change: Phase one of the Palace tower renovation was finalized upgrading 197, guestrooms and expanding the inventory with six new guestrooms.

Speaker Change: We were pleased to see meaningful rate premiums of 25% to 30% for the renovated rooms at both resorts.

Speaker Change: The first quarter, a clear reflection of the quality and impact of investments made at both resorts.

Speaker Change: We plan to kick off the final phase of both the Rainbow tower in Palace tower Guestroom room renovations during the third quarter.

Tom Baltimore: © The Bulletproof Executive 2013 Looking ahead, the long-term outlook for Hawaii remains very... Supported by Limited New Supply. Hawaii is one of the most dynamic and resilient resort markets in the country. Be simple, Katz. At a huge discount to replacement costs, Park remains well-positioned to deliver above-average long-term growth for shareholders. With respect to fundamentals over the balance of the...

Speaker Change: While the project with the project extending into early next year.

Speaker Change: Looking ahead, the long term outlook for Hawaii remains very favorable.

Speaker Change: Supported by limited new supply.

Speaker Change: Specced it through at least 2029.

Speaker Change: And the anticipated improvement of inbound travel from Japan, as the dollar yen exchange rate normalizes.

Speaker Change: Hawaii is one of the most dynamic and resilient.

Speaker Change: Resort markets in the country.

Speaker Change: With over 3500.

Speaker Change: These simple guestrooms.

Speaker Change: At a huge discount to replacement cost park remains well positioned to deliver above average long term growth for shareholders.

Speaker Change: With respect to fundamentals over the balance of the year.

Tom Baltimore: The near-term outlook for U.S. lodging fundamentals remains. On-going global trade war continues to delay decision-making. causing booking windows across most segments to narrow significantly. Disrupting cross-border leisure travel. April results have been mixed with preliminary red part growth. Driven by double-digit gains in New York. Orlando, and San Francisco. All preliminary REPPAR in Puerto Rico increased by 25%. Offset by weaker performance in Hawaii Chicago, Seattle. Despite the modest decline... I'm going to select a few more. many of our resort and urban hotels. while concerns persist. about a significant slowdown in both international and government-related demand. Neither has had a meaningful impact on our...

Speaker Change: The near term outlook for U S lodging fundamentals remains uncertain.

Speaker Change: Is the ongoing global trade war continues to delay decision, making and amplify geopolitical tensions, causing booking windows across most segments to narrow significantly.

Speaker Change: And disrupting cross border leisure travel.

Speaker Change: April results have been mixed with preliminary revpar growth of one 6%.

Speaker Change: Driven by double digit gains in New York Orla.

Speaker Change: Orlando and San Francisco.

Speaker Change: Which benefited from exceptionally strong group trends.

Speaker Change: While preliminary revpar in Puerto Rico increased by 25%.

Speaker Change: Offset by weaker performance in Hawaii, Chicago Seattle.

Speaker Change: New Orleans, and Washington D C.

Speaker Change: Despite the modest decline.

Speaker Change: And a select few markets, we continue to see pockets of strength in many of our resort and urban hotels.

Speaker Change: All concerns persist about a significant slowdown in both the international and government related demand.

Speaker Change: Neither has had a meaningful impact on our performance.

Tom Baltimore: International demand represents just 10% of total room... for only 3% of overall. Q2 Rev Part Growth is expected to be relatively flat year-over-year. Approximately 290 basis points lower than initial forecast. you to work closely with our operators as they develop contingency plans. Managing operating expenses in the event of further demand softening.

Speaker Change: International demand represents just 10% of total room nights.

Speaker Change: Our government related business accounts.

Speaker Change: For only 3% of overall room nights.

Speaker Change: Based on our current forecast Q.

Speaker Change: Q2, Revpar growth is expected to be relatively flat year over year.

Speaker Change: Approximately 290 basis points lower than initial forecast with Hilton Hawaiian village, representing roughly 80% of the reduction.

Speaker Change: Despite ongoing macro uncertainty.

Speaker Change: We remain laser focused on factors within our control.

Speaker Change: And continue to work closely with our operators as they develop contingency plans.

Speaker Change: For managing operating expenses in the event of further demand softening.

Tom Baltimore: Additionally, while the transaction market remains episodic, We are advancing our strategic objective of selling non-core hotels to further de-leverage the balance sheet.

Speaker Change: Additionally, while the transaction market remains episodic.

Speaker Change: We will remain prudent capital allocators.

Speaker Change: Advancing our strategic objective of selling noncore hotels to further deleverage the balance sheet.

Speaker Change: Support our robust.

Speaker Change: Oh why pipeline.

Tom Baltimore: Sean will provide greater details about guidance in his remarks. Overall, I am incredibly proud of the progress we've made in elevating the overall quality of our portfolio. Targeted capital investments are delivering strong results.

Speaker Change: Sean will provide greater details about guidance in his remarks.

Speaker Change: Overall I'm incredibly proud of the progress we've made in elevating the overall quality of our portfolio positioning.

Speaker Change: Positioning the company for sustained long term growth.

Speaker Change: And returning capital to shareholders.

Speaker Change: Our targeted capital investments are delivering strong results.

Tom Baltimore: Forcing the overall quality of our portfolio.

Speaker Change: Forcing the overall quality of our portfolio.

Speaker Change: And the significant embedded value within our real estate.

Ian Weissman: And with that, I'd like to turn the call over to.

Sean <unk>: And with that I'd like to turn the call over to Sean.

Sean DeLorto: Thanks, Tom. Overall, we were pleased with our first quarter results, with Q1 REV-PAR exceeding expectations, with reported results of $178. representing a modest 70 basis point decline over the prior year period. Difficult year-over-year comparisons were the primary driver of the decline, following last year's nearly 8% growth rate, with the hot occupancy falling by 210 basis points during the quarter, although offset by continued rate strength, with ADR up over 2.3%. Total hotel revenues for the quarter were $608 million and hotel adjusted EBITDA was $151 million. Resulting in a nearly 25% hotel adjusted EBITDA margin. Total expenses were up 3.3% during the quarter, with a majority of the increase related to nearly $10 million of employment tax credits and other relief grants.

Sean <unk>: Thanks, Tom So overall, we were pleased with our first quarter results with Q1, revpar exceeding expectations with reported results of $178 representing.

Sean <unk>: Representing a modest 70 basis point decline over the prior year period.

Sean <unk>: Difficult year over year comparisons were the primary driver of the decline following last year's nearly 8% growth rate with occupancy following by 210 basis points during the quarter, although offset by continued rate strength with ADR up over two 3%.

Sean <unk>: Total hotel revenues for the quarter were $608 million and hotel adjusted EBITDA was $151 million, resulting in a nearly 25% hotel adjusted EBITDA margin.

Sean <unk>: Total expenses were up three 3% during the quarter with the majority of the increase relates to nearly $10 million unemployment tax credits and other relief grants received in Q1 of last year.

Sean DeLorto: Excluding these items, total comparable operating expenses increased just 1% over the prior year period. Adjust EBITDA for the quarter was $144 million and adjusted FFO per share was $46 million.

Sean <unk>: Excluding these items total comparable operating expenses increased just 1% over the prior year period.

Sean <unk>: Adjusted EBITDA for the quarter was $144 million and adjusted <unk> per share was <unk> 46 cents.

Sean <unk>: With respect to our dividend on April 15th we paid our first quarter cash dividend of <unk> 25 per share.

Sean DeLorto: With respect to our dividend, on April 15th we paid our first quarter cash dividend of 25 cents per share, and on April 25th we declared our second quarter cash dividend of 25 cents per share to be paid on July 15th to stockholders of record as of June 30th. The dividend currently translates to an annualized yield of approximately 10%.

Sean <unk>: On April 25th we declared our second quarter cash dividend of 25 per share to be paid on July 15th to stockholders of record as of June 30th.

Sean <unk>: Dividend currently translates to an annualized yield of approximately 10%.

Sean DeLorto: Turning to guidance, as we navigate the increasingly complex global economic landscape and evaluate the impact of the escalated trade war on global travel, we have revised our full-year outlook to reflect a modest slowdown in demand. As a result, we are lowering our Red Park growth forecast by 100 basis points at the mid- to a new range of negative 1% to positive 2%. containing a wider-than-normal range to account for the ongoing uncertainty. Note that most of this adjustment reflects a slower than expected recovery at Hilton Hawaiian Village, coupled with modestly weaker transit demand over the next quarter.

Sean <unk>: Turning to guidance as we navigate the increasingly complex global economic landscape and evaluate the impact of the escalating trade war on global travel we have revised our full year outlook to reflect a modest slowdown in demand.

Sean <unk>: As a result, we are lowering our revpar growth forecast by 100 basis points at the midpoint to a new range of negative 1% to positive 2%.

Sean <unk>: Maintaining a wider than normal range to account for the ongoing uncertainty.

Sean <unk>: Note that most of this adjustment reflects a slower than expected recovery at Hilton Hawaiian village, coupled with modestly weaker transient demand over the next quarter or two.

Sean DeLorto: Hilton Hawaiian Village, along with the overall portfolio, will benefit from easier year-over-year comparisons in November and December, following last year's labor strike there and in a few of our other markets. This, along with an 18% increase in Q4 group revenue pace for the portfolio, should help to support low- to mid-single-digit REBPAR gains during the fourth quarter. With respect to earnings, we are lowering our adjusted EBITDA forecast by just 3% at the midpoint to a new range of $590 million to $650 million, while hotel adjusted EBITDA margin range is now 25.6% to 27.2%, or down just 50 basis points from our initial range.

Sean <unk>: Hilton Hawaiian village, along with the overall portfolio will benefit from easier year over year comparisons in November and December following last year's Labor strike, there and then a few of our other markets.

This along with an 18% increase in Q4 group revenue pace for the portfolio should help to support low to mid single digit revpar gains during the fourth quarter.

Sean <unk>: With respect to earnings we are lowering our adjusted EBITDA forecast by just 3% at the midpoint to a new range of $590 million to $650 million, while hotel adjusted EBITDA margin range is now 25, 6% to 27, 2% or down just 50 basis points from our initial range.

Sean DeLorto: And finally, adjusted FFO per share is reduced by 11 cents at the midpoint to a new range of $1.79 to $2.09 per share. Additionally, as a reminder and included in our original guidance, renovation-related displacement at the Royal Palm South Beach Hotel is expected to reduce red part growth by approximately 110 basis points.

Sean <unk>: And finally, adjusted <unk> per share was reduced by 11 cents at the midpoint to a new range of $1 79 to.

Sean <unk>: To $2.09 per share.

Sean <unk>: Additionally, as a reminder, and included in our original guidance renovation related displacement at the Royal Palm South Beach Hotel is expected to reduce revpar growth by approximately 110 basis points for the year.

Operator: This concludes our prepared remarks. We will now open the line for Q&A. To address each of your questions, we will ask that you limit yourself to one question and one follow-up.

Sean <unk>: This concludes our prepared remarks, we will now open the line for Q&A to address each of your questions. We last eight limit yourself to one question and one follow up operator may we have the first question. Please.

Operator: Operator, may we have the first question? When I've been conducting a question and answer session, as a reminder, if you'd like to be placed into question queue, please press star 1 on your telephone keypad. Once again, that's star 1 to be placed into question queue, and star 2 if you'd like to remove yourself.

Sean <unk>: Certainly will not be conducting a question and answer session. As a reminder, if you'd like to be placed into question queue. Please press star one on your telephone keypad once again that star one to be placed in the question queue and start to if he likes to move yourself from the queue. As a reminder, please ask one question and one follow up then return to the queue.

Operator: As a reminder, please ask one question and one follow-up, then return to the queue.

Floris Dijkum: Our first question today is coming from Floris Dijkum from Compass Point. Your line is now live. Hey, good morning guys. Thanks for taking my question.

Speaker Change: Our first question today is coming from Florida fans I come from Compass point. Your line is now live.

Florida fans: Hey, good morning, guys. Thanks for taking my question.

Speaker Change: Tom maybe if you could comment a little bit on the planned asset sales and and how confident you are in the current market environment and end up being able to achieve decent prices as well having willing buyers.

Tom Baltimore: Tom, maybe if you could comment a little bit on the planned asset sales and how confident you are in the current market environments and being able to achieve decent prices as well as having willing buyers. It's a great question, Floris, and look, we've got tremendous uncertainty right now for all the reasons that we all know, geopolitical. Obviously the tariffs, obviously leading to trade wars and uncertainty is the enemy of decision-making. So I think for many business leaders, men and women, they're probably hesitant, they're probably pausing in many situations and certainly being cautious. No difference than what certainly we're seeing in probably a lot of our peers, hence the reason that I think everybody's been sort of a little more cautious on forward guidance.

Tom Baltimore: Yeah, It's a great question Floris.

Tom Baltimore: But look we've got tremendous uncertainty right now for all the reasons that we all know geopolitical.

Tom Baltimore: Obviously the tariffs are.

Tom Baltimore: Obviously, leading to trade wars.

Tom Baltimore: And uncertainty is the enemy of decision, making so I think for many business leaders men and women there probably hesitant there probably pausing in many situations.

Tom Baltimore: And certainly being cautious.

Tom Baltimore: No difference than what certainly we are seeing and probably a lot of our peers. Hence the reason that I think everybody's been.

Tom Baltimore: Sort of a little more cautious on forward guidance.

Tom Baltimore: I would say that this team has really separated itself in being able to transact even under the worst of circumstances. If you think back since the spin, as we pointed out, we have sold or disposed of 45 hotels, including 14 international. for north of $3 billion.

Tom Baltimore: I would say that this team is really separated itself and being able to transact even in even though they're the worst of circumstances.

Tom Baltimore: Do you think back since the spin as we pointed out we have sold or disposed of 45 hotels, including 14 International.

Tom Baltimore: For north of $3 billion.

Tom Baltimore: We do have one asset under contract, very attractive pricing, and look, we are cautiously optimistic, but we're not going to comment and give any details until it closes. We just think that's the prudent thing to do. But we also have a number of other assets that are at various stages of the marketing process. There's plenty of liquidity. There's plenty of equity capital. There's plenty of debt capital. And if I'm a small family office owner-operator, mid-sized PE firm, these periods of dislocation, I think, can be a really unique opportunity to certainly buy assets. So we are being very targeted.

Tom Baltimore: We do have one asset under contract at very attractive pricing and look we are cautiously optimistic.

Tom Baltimore: But we're not going to comment and give any details until it closes. We just think that's the prudent thing to do but we also have a number of other assets that are at various stages of the marketing process and theres plenty of liquidity, there's plenty of equity capital, there's plenty of debt capital.

Tom Baltimore: I mean, if I'm, a a small family office owner, operator, midsized PE firm.

Tom Baltimore: These periods of dislocation I think can be a really unique opportunity to certainly buy assets. So we are being very targeted or being very focused and I think we've again demonstrated every year that we've been able to sell assets. We've raised the bar a little higher this year.

Floris Dijkum: We're being very focused. And I think we've, again, demonstrated every year that we've been able to sell assets. We've raised the bar a little higher this year, but we're still working our butts off to get as many sales done this year as we can. And we are confident that we will achieve our objectives. Thanks, Tom.

Tom Baltimore: But we're still working our butts off to.

Tom Baltimore: To get as many sales done this year as we can and we are confident that we will achieve our objectives.

Speaker Change: Thanks, Tom maybe on my follow up maybe if you can comment a little bit more on on Hawaii, Obviously, revpar was down 15% in the quarter. You said it drags are so the overall Hawaiian village was at 420 basis point drag on overall results.

Floris Dijkum: Maybe in my follow-up, maybe if you can comment a little bit more on Hawaii. Obviously, REVPAR was down, I think, 15% in the quarter. You said it dragged for the overall. Hawaii Village was a 420 basis point drag on overall results.

Tom Baltimore: How is the ramp of the – obviously, the strike disruption in the fourth quarter, but also the renovations that have just occurred, how quickly will it ramp up in your view? And how dependent are you on the international tourists for some of that ramp? Well, listen, the ramp is taking a little longer as we come out of the strike. Obviously, the strike was 45 days. It certainly had an impact, and we are seeing sequentially improvement. I mean, we were down, obviously, Hilton Hawaiian Village about 15%, obviously, in the, excuse me, 18% in Q1. As we look at April, we're down about 7%, and we're probably going to be down, we think, for the quarter, probably high single-digit, low double-digit.

Tom Baltimore: Okay.

Tom Baltimore: Obviously, the strike disruption in the fourth quarter, but also the renovations that just occurred how quickly will it ramp up in your view and how dependent are you on the on the international tourists for where some of that ramp.

Tom Baltimore: Well listen the the ramp is taking a little longer as we come out of the strike. Obviously these the strike was 45 days it certainly had an impact and.

Tom Baltimore: We are seeing sequentially improvement I mean, we were down obviously Hilton Hawaiian village about 15%, obviously in the excuse me 18% in the in the in Q1 as we look at April we're down about 7% and we're probably going to be down we think for the quarter.

Speaker Change: Probably high single digit low double digit so certainly seeing improvement there feel very good about third quarter, probably mid single digit positive as we think about revpar and as Sean pointed out in his remarks, we've got really favorable an easy comp.

Tom Baltimore: So certainly seeing improvement there. Feel very good about third quarter, probably mid-single-digit positive as we think about RevPAR. And as Sean pointed out in his remarks, we've got really favorable and easy comp in Q4. So overall, we think it's going to be a solid performer, long-term, intermediate and long-term. Of course, we could not be more confident about any market than Hawaii, just given the limited supply growth, given the historic nature of the market, where it is, its RevPAR growth rate has outpaced the U.S. by 120 basis points over the last 20 years. So feel very good about it over the intermediate and long-term.

Speaker Change: In Q4, so overall, we think it's going to be a solid performer long term intermediate and long term Floris, we we could not be more confident about any market in Hawaii, just given the limited supply growth given the historic nature of the market, where it is its revpar growth races.

Speaker Change: Our revpar growth rate has outpaced the.

Speaker Change: The U S by 120 basis points over the last 20 years, so feel very good about it over the intermediate and long term and as it relates to to the renovations that we've been very strategic very thoughtful about it Carl Mayfield and his team on our design and construction are best in class best in the industry.

Tom Baltimore: As it relates to the renovations, we've been very strategic, very thoughtful about it. Carl Mayfield and his team on our design and construction are best in class, best in the industry. And so we think there's really minimal disruption, particularly since you're lapping disruption from the previous year, as we're completing and carefully phasing and staging our renovations there. And we don't have any issues in terms of supplies. We have what we need and are confident that we'll be able to get them done sort of one time, one budget, as I think we've done as well as anybody in this sector, particularly given the nature of our portfolio.

Speaker Change: And so we think there's really minimal disruption, particularly since you are lapping disruption from the previous year as we're completing and carefully phasing and staging our renovations there and and we don't have any.

Speaker Change: Issues in terms of supplies, we have would we need.

Speaker Change: And I'm confident that we'll be able to get them done sort of one time when budget is as I think we've done as well as anybody in this sector and particularly given the nature of our of our portfolio.

Floris Dijkum: Thanks Tom, appreciate it.

Speaker Change: Thanks, Tom appreciate it.

Speaker Change: Okay.

David Katz: Thank you. Next question is coming from David Katz from Jefferies. Your line is now live. David Hey, good morning, everybody. Thanks for taking my question. Look, I wanted to just follow up on the prior conversation about, you know, asset sales, and the market will be what it will be. But, you know, it does look like you've sort of trimmed your core hotels to a smaller number, right? 25 to 20, if I'm seeing that correctly. You know, maybe we should just talk about that, and sort of what the, you know, what's going on with the five, and sort of how we're thinking about that change.

Speaker Change: Thank you next question is coming from David Katz from Jefferies. Your line is now live.

Speaker Change: Hey, David Hey, Good morning, everybody. Thanks for taking my question look I I wanted to just follow up on the prior conversation about you know asset sales and the market will be what it will be but it does look like you've sort of trimmed your core hotels.

Speaker Change: Two to a smaller number right twenty-five to 'twenty, if I'm seeing that correctly.

Speaker Change: Maybe we should just talk about that and sort of what the you know we watch what's going on with the <unk> five.

Speaker Change: And sort of how we're thinking about those that that change please.

Tom Baltimore: It's a great question, David. We have, as a team, again, back to the earlier comment I made, we have worked our tails off, and I know you know this, and really looking to reshape the portfolio. Based on additional work and as we've looked at capital allocation, where do we want to be allocating capital, it's really those top 20 assets that really account for about 85-90% of the value of the company. And so we've made the decision that those are the core assets, the other remaining assets, we want to work really hard to recycle that capital, to sell those assets and take those proceeds and pay down debt, reinvest in strategic ROI projects as we're talking about in Hawaii and New Orleans and obviously Miami.

Speaker Change: Greg It's a great question, David we have as a team again back to the earlier comment I made we have worked our tails off and I know you know this and really looking to reshape the portfolio based on additional work and as we've looked at capital allocation, where do we want to be allocating capital, it's really those top two.

Speaker Change: The assets that really account for about 80, 590% of the value of the company.

So we've made the decision that those are the core assets. The other remaining assets, we want to work really hard to recycle that capital to sell those assets.

Speaker Change: Take those proceeds and pay down debt reinvest in strategic ROI projects as we're talking about and in Hawaii, and New Orleans, and obviously Miami.

Tom Baltimore: And then obviously in periods of dislocation, be prepared to buy back stock, and look, we've bought back 26.5 million shares over the last two and a half years, so I think we've been as prudent as anybody from a capital allocation standpoint and very confident in those 20 hotels being sort of our core, and then working as aggressively as we can to sell the non-core. And that can be different combinations. You saw in Oakland last year, non-performing, difficult market, we closed the hotel. You've seen other situations, there's short-term ground leases, we'll work to figure out a solution for those situations, but we really want to get the core portfolio down to those core 20 hotels where the real embedded value of the company lies.

Speaker Change: And then obviously in periods of dislocation and be prepared to buy back stock and look we have we bought back 26, and a half million shares over the last two and a half years.

Speaker Change: We've been as prudent as anybody from a capital allocation standpoint, and are very confident in those 20 hotels being sort of our core.

Speaker Change: And then working as aggressively as we can to to.

Speaker Change: To sell the non core and that can be different combinations you saw in Oakland last year.

Speaker Change: Nonperforming difficult market, we closed the hotel.

Speaker Change: <unk> seen other situations that are short term ground leases you know will work to.

Speaker Change: You're out of solution for for those situations, but we are.

Speaker Change: We really want to get the core portfolio down to those core 20 hotels, where the real embedded value of the of the company wise.

Speaker Change: Understood and if I can just follow up quickly with respect to the Capex plan, notably Miami, which was important over the course of the year.

David Katz: Understood.

David Katz: And if I can just follow up quickly, with respect to the CapEx that's planned, you know, notably Miami, which is important, and over the course of a year, it seems to me that you've sort of embarked on that. Maybe you could talk about how much of that cost is really sort of, and timing is sort of locked in at this point, just given, you know, the limited visibility in the marketplace. Yeah, it's another great question, David. I would say, and you heard me make this the earlier comment, you've been down, you've seen obviously what we've done in Orlando with the Bonnet Creek and how well that's performing and the complexity of that.

Speaker Change: It seems to me that you sort of embarked on that maybe you could talk about how much of that cost is really sort of timing is sort of locked in at this point just given the limited visibility in the marketplace. Thank you.

Speaker Change: Yes. It is.

David: Another great question, David I would say.

Speaker Change: And then you heard me make this the earlier comment you you've been down you've seen.

Speaker Change: Obviously, what what we've done and in Orlando with the Bonnet Creek, and how well that's performing in the <unk>.

Speaker Change: <unk> city of that and I say this respectfully there's not another team in the lodging REIT landscape that has that experience and has that ability to be able to handle it.

Tom Baltimore: And I say this respectfully, there's not another team in the lodging REIT landscape that has that experience and has that ability to be able to handle it. Miami, this is what we do. Carl Mayfield and the team have studied this situation carefully over the last year. We've bought out many of the subs, we have the GC, we have the permits, we have suspended operations, we will be preparing and fencing around, and we're confident that we will deliver before June of next year for the World Cups. We realize there's some near-term disruption, but we think for intermediate and long-term and for real value creation for shareholders, it's the right decision for us to make.

Speaker Change: Miami. This is what we do Carl Mayfield and and the team have studied this situation carefully over the last year.

Speaker Change: We've we've bought out.

Speaker Change: Many of the subs, we have the juicy we have the permits.

Speaker Change: We have suspended operations, we will be.

Speaker Change: Preparing and fencing around and we're confident that we will deliver before June of next year for the World Cup and we're excited I mean this is a complete transformation of guest rooms public space lobby.

Speaker Change: The pool area of food and beverage outlets and.

Speaker Change: And we think obviously as we said, we think theres, a great opportunity not only for 15% to 20%, 25% Unlevered returns, but the ability to really double EBITDA as well and in a market where you've got such high end.

Speaker Change: Bears coming Rosewood Ahmad.

Speaker Change: Beyond does obviously all open at some point.

Speaker Change: And the ability for us to tuck underneath that and be able to really significantly increase rates.

Speaker Change: And given the quality of that location mid beach right next to the lows. We are we're really excited about this project as we move forward.

Speaker Change: We realize there is some near term disruption, but we think for intermediate and long term and for real value creation for shareholders. It's the right decision for us to make we also believe passionately that we can deliver higher development yields than we can acquisition yields.

David Katz: We also believe passionately that we can deliver higher development yields than we can acquisition yields, and that really plays to our strength as a team. Appreciate it. Thanks very much. Good luck. Thank you.

Speaker Change: I mean that really plays to our strength as a team.

Speaker Change: I appreciate it thank you very much good luck.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question today is coming from Duane <unk> from Evercore ISI. Your line is that life.

Duane Pfennigwerth: Our next question today is coming from Duane Pfennigwerth from Evercore ISI. Your line is now live. Hey, Duane. Hey, good morning.

Duane: Hey, Duane Hey, Thanks, Hey, good morning.

Tom Baltimore: I just wonder if you could give us your updated views on markets that you expect to lead this year, and the underlying demand drivers, and correspondingly, the markets that you expect will lag in your portfolio, and has that pecking order changed since one quarter ago? Well, look, we've talked about Hawaii. We think, obviously, Hawaii's going to continue to ramp up. The Hilton Hawaiian Village, obviously, is on that, given the post-strike. Hilton Waikoloa, we still are very bullish on that. We've obviously got a significant increase in group business there. What's happening in Orlando and the double-digit increase that we've seen at Bonnet Creek, we expect that's obviously going to continue to be a really strong performer.

Duane: Just wondering if you could give us your updated views on markets that you expect to lead this year and the underlying demand drivers and correspondingly the markets that you expect.

Duane: Will lag in your portfolio.

Duane: And has that pecking order changed since since one quarter ago.

Duane: Well look I, we've talked about Hawaii, we think obviously, Hawaii is going to continue to.

Duane: To ramp up the Hilton Hawaiian village, obviously is on that given the post strike Hilton like Aloha, we still are very bullish on that we've obviously got a significant increase in group business there.

Duane: What's happening in Orlando and a double digit increase that we've seen at Bonnet Creek. We expect that's obviously going to continue to be a really strong performer key west obviously again, given the transformative renovations there and what we're doing and how well. They did last year. We were still continue to be very encouraged.

Tom Baltimore: Key West, obviously, again, given the transformative renovations there and what we're doing and how well they did last year, we still continue to be very encouraged. New York City, I mean, New York is up April 16, 17 percent, and we feel good about it in the second quarter, and it continues. Obviously, you've had very little supply added in New York and continue to be cautiously optimistic there. Carribe has been on fire and continues to perform very well for us there. We're expecting, obviously, Denver, given the management changes that we've made there, certainly to see sequential improvement there as we sort of look out.

Duane: New York City, I mean, New York is up April 16th.

Duane: 16, 17% in.

Duane: We feel good about it in the second quarter and you know.

Duane: It continues obviously you've had very little supply added in New York and continue to be cautiously optimistic there Curry Bay has been on been on fire and continues to perform very well for US there were expecting obviously.

Duane: Denver, given the management changes that we've made there certainly and to see sequential improvement there as we sort of look out so well.

Tom Baltimore: So we're, overall, if you think about the first quarter, taking out Hilton Hawaiian Village from that standpoint, and given the tough comp, I mean, it would have been, obviously, a very strong, nearly 4 percent increase in REVPAR for us. And given the fact that we've been so disciplined, and I give huge credit to our asset management team, to Sean's leadership, as well as we look on the cost side. I mean, we were up about 3.3 percent in expenses, but when you take out the one-time anomalies, we were only up a little over 1 percent. So I mean, it's not just the top line of those markets, but it's the discipline as well on the cost side.

Duane: Overall, if you think about the first quarter.

Duane: Taking out taking our Hilton Hawaiian village from that standpoint, and given the tough comp I mean, it would have been obviously, a very strong you know nearly 4% increase in revpar for so.

Duane: And given the fact that we've been so disciplined and I give a huge credit to our asset management team to Sean's leadership.

Duane: As well as we look on the cost side I mean, we were up about three 3% in expenses, but when you take out the one time anomalies, we were only up about one for a little over 1%.

Duane: So I mean, it's not just the top line in those markets, but its the discipline as well on the cost side and so I think we've done a really good job on that front and you'll see that kind of energy and effort to continue as we move forward.

Tom Baltimore: And so I think we've done a really good job on that front, and you'll see that kind of energy and effort to continue as we move forward. Thanks, Tom.

Tom Baltimore: And if I could just follow up on one of those on New York, you know, there's been so much intense media focus on potentially softer international inbound, you know, less Canadian travel, etc. And so what do you think some of that media might be missing in terms of demand drivers to a market like New York? And thanks for taking the questions. Yeah, listen, New York, one of the great cities of the world, as we all know, and there's no doubt when you think about the frustration, the energy around the tariffs right now, there are going to be some.

Speaker Change: Thanks, Tom and if I could just follow up on one of those aren't on New York you know theres been so much.

Speaker Change: Intense media focus on potentially softer international inbound you know less Canadian travel et cetera.

Speaker Change: So what what do you think some of that media might be list are missing in.

Speaker Change: In terms of demand drivers to a to a market like New York and thanks for taking the questions.

Speaker Change: Yeah listen in New York, one of the great cities of the World as we all know that.

Speaker Change: There's no doubt when you think about the frustration and the energy around the tariffs right now they're there they're going to be some obviously, we saw a little bit of decline in the Japanese coming into Hawaii, that's still ramping up but still certainly is still a little over 50% below where we were in 2009.

Tom Baltimore: Obviously, we saw a little bit of decline in the Japanese coming into Hawaii. That's still ramping up, but still certainly still a little over 50 percent below where we were in 2019. International accounts for about 10 percent of our business overall. If you think about pre-pandemic, inbound into the U.S. was about 79 million. I think we're back to somewhere between 70 and 72 million. About half of that comes from Canada and Mexico. Mexico has been pretty consistent. It hasn't seen a fall-off. You've seen a little bit of fall-off in Canada, and we're all hopeful, just given the strong alliance and relationship, that that will get resolved and that will sort of resume.

Speaker Change: <unk> International accounts for about 10% of our business overall.

Speaker Change: Overall, if you think about pre pandemic.

Speaker Change: Inbound into the U S was about.

Speaker Change: About $79 million.

Speaker Change: I think we're back to somewhere between 70 and $72 million about half of that comes from Canada, and Mexico, Mexico has been pretty consistent it hasnt seen a fall off you've seen a little bit of falloff in in Canada, and we're all hopeful just given the strong alliance.

Speaker Change: In relationship to that that will get resolved and that will sort of resume but certainly in the near term that that is a little dilutive, but again for us. It's you know it's less than 2%. So it's really not that significant to the park and into our portfolio.

Tom Baltimore: But certainly in the near term, that is a little dilutive, but again, for us, it's less than 2 percent, so it's really not that significant to Park and to our portfolio. Thank you.

Speaker Change: Thank you.

Speaker Change: Okay.

Thank you. Your next question today is coming from Patrick Scholes you choose Securities. Your line is now live.

Patrick Scholes: Next question today is coming from Patrick Scholes from Truist Security. Your line is now live. Thank you, Operator. Hi. Good morning, everyone. Question for you on the group... On the prior earnings release, it had been tracking six, now it's one, plus one for the year. I wonder if you can kind of give us an apples-to-apples for 2Q to 4Q. I know or suspect that 1Q benefited from the Easter shift, so when you take that out, you sort of naturally, the rest of the year might have been softer. But how does that plus one for 2Q to 4Q compare to your prior projection?

Speaker Change: Thank you operator, hi, good morning, everyone.

Speaker Change: Question for you on the group pace.

Speaker Change: On the prior earnings release, it had been tracking six now it's one.

Plus one for the year I'm wondering if you can kind of give us an apples to apples for two <unk> to <unk> I know are.

Speaker Change: <unk> debt once you benefited from the Easter shift so when you take that out and sort of naturally the rest of the year might be softer, but how does that plus one per <unk>.

Speaker Change: Compare to your prior projection. Thank you hopefully that makes sense.

Sean DeLorto: Thank you. Hopefully that makes sense. Yeah, Patrick, I believe so, hopefully we'll get you a response that aligns with your thinking. But in the end, as we look at pace for, I would say Q2, Q3, pace is roughly just slightly down, 0 to 1% for Q2. And then Q3 is a little bit, it's weaker, it's down 10%. Hawaiian Village, a big driver of that, as well as New Orleans and Chicago, which are both lapping strong Q3 performance on the group side last year. If you recall, obviously Chicago had the DNC, so it's lapping that. But other than those, I would say the markets are pretty healthy for group pace in Q3.

Speaker Change: Yes, Patrick I believe so hopefully we'll get you a response that launch and what you're thinking but in the as we look at pace for I would say Q2 Q3 pace is roughly just slightly down 1% for Q2, and then Q3.

Speaker Change: A little bit weaker it's down 10% Hawaiian village, a big driver of that as well as New Orleans, and Chicago, which are both lapping strong Q3 performance on the group side last year. If you recall the seek Chicago had the D&C. So.

So it is lapping that but other than those are I would say mark is a pretty pretty healthy.

Speaker Change: Our group pacing in Q3, and then Q4 is a very strong quarter for us up 18% a lot of big drivers of a positive pace.

Sean DeLorto: And then Q4 is a very strong quarter for us, up 18%. A lot of big drivers of positive pace, pretty much across the board, not too many properties dragging down the performance for group expected in Q4. So that's kind of how... I would say that, you know, I don't think we've seen much decline in the near term. I think the definites we've had on the books, which represent about, at this point, about 90% of the forecast, have held. No, you know, occasional cancellation, a little bit of, you know, maybe wash, but then offset by revalve, positive revalves in other areas.

Speaker Change: And pretty much across the board not so many property is dragging down the performance for group expected in Q4, So that's kind of how I think.

Speaker Change: Pes goes I would say that.

Speaker Change:

Speaker Change: I don't think we've seen much decline.

Speaker Change: In the near term I think the definition, we've had on the books, which represent about at this point about 90% of the forecast had health no you know occasionally cancellation, a little bit of maybe wash, but then offset by rebound pottery valves and other areas. So it's generally held so I think the funk the group story for the year.

Sean DeLorto: So it's generally held. So I think the group story for the year for us, as we look at it and place it into the guidance, is just confidence around in-the-year, for-the-year bookings, which probably is not unique to us, just kind of thinking through the ability to pick up what's remaining in our reach for the rest of the year. I think we're, you know, the sales teams feel good, but as Tom mentioned, with the uncertainty out there, you're just kind of seeing some hesitancy in decision-making right now. Oh, okay.

Speaker Change: For us as we look at it and plays into the guidance is just confidence around in the year for the year bookings I would say it probably is not unique to us just kind of thinking through the ability to pick up whats remaining and our reach for the rest of the year I think we're privileged.

Speaker Change: Sales teams feel good.

Speaker Change: But as Tom mentioned with the uncertainty out there and you just kind of see some hesitancy in decision, making right now.

Speaker Change: Oh, Okay. So when you say confident.

Sean DeLorto: So when you said confidence, do you mean your incompetence or more sounds like... Not confidence. I just wanted to be clear. Thank you. I think there's confidence out there to kind of pick up the remaining reach in the portfolio. We've obviously hedged a little bit of that in our guidance forecast, but in anything too I think the teams are generally positive on potentially transient side to kind of cover for some of that. Thank you.

Speaker Change: You mean, you mean, your incompetence or more it sounds like there is.

Speaker Change: Not content. So I just wanted to be clear. Thank you.

Speaker Change: I think theres confidence out there that you know to kind of.

Speaker Change: Pick up that remaining reached in the portfolio, we've obviously hedge a little bit of that in.

Speaker Change: And our guidance forecast than anything too I think the teams are generally positive.

Speaker Change: Sensing transient side to kind of cover for some of that.

Speaker Change: Okay. Thank.

Sean DeLorto: If I could flip it one more, what are you seeing for the 26 and 27 group trends and how has that changed since you last reported? Thank you. And then I'm all set.

Speaker Change: Thank you I mean, if I could slip in one more what are you seeing for a 26 and 27 group trends and how has that changed since you last reported. Thank you and then I'm all set.

Sean DeLorto: I won't speak to 27. For 26, we have seen a drop-off. Again, I think, as you think through some of the decision-making issues we're dealing with, I think you're seeing that play into it right now. I think it's more kind of the early parts of 26. Thank you.

Speaker Change: I won't speak to 27 for 26, we have seen a drop off again I think as you think through.

Speaker Change: Some of the decision making.

Speaker Change: Issues, we're dealing with I think you're seeing that play into it right now I think it's more kind of the early parts of 2006.

Speaker Change: Thank you. Your next question today is coming from Smedes Rose from Citi. Your line is now live.

Smedes Rose: Next question today is coming from Smedes Rose from Citi. Your line is now live. Hi, thanks.

Smedes Rose: Hi, Thanks.

Smedes Rose: I just wanted to circle back on the Hilton Hawaiian Village. Sounds like sort of quite a few moving pieces there. And I mean, do you think realistically you could come in ahead of what you did in 24 there on an EBITDA basis? I think you did a little over 160 million. It seems like from what you're saying, that might be hard to achieve. But I just kind of want to maybe I'm not reading what your remarks are.

Smedes Rose: I just wanted to circle back on the Hilton Hawaiian village sounds like sort of quite a few moving pieces there and it's like I mean do you think realistically you could come in ahead of what you did in 2000 and for their on an EBITDA basis. I think you did a little over 160 million. It seems like from what you're saying that might be hard to achieve that.

Smedes Rose: Just kind of wondering maybe I'm not reading what you're your remarks are.

Tom Baltimore: Yeah, we had trouble reading and hearing you, Smedes. Could you just say your question one more time? For the Hilton Hawaiian Village, do you think it's realistic that you can do Ibida this year that's ahead of what you did in 24? Yeah, I mean, it's hard to say right now, Smedes, could we get close to it? I think that's possible, but I think, again, it goes back to the macro-uncertainty. I mean, if you get better visibility and better clarity, and confidence resumes at a higher level, I see no reason that we don't get back closer to sort of, you know, more normalized behavior.

Smedes Rose: Yeah, we had trouble reading here you just say what your question one more time.

Smedes Rose: For the Hilton Hawaiian village.

Smedes Rose: Do you think it's realistic that you can do EBITDA. This year. That's ahead of what you did in 'twenty four.

Smedes Rose: Yeah, I mean, it's hard to say right now smedes could we get close to it.

Smedes Rose: That's possible, but I think again it goes back to the macro uncertainty I mean, if you get better visibility and better clarity.

Smedes Rose: And confidence resumes that at a higher level I see no reason that we don't get back closer to sort of more normalized behavior.

Tom Baltimore: If we end up in an all-out trade war or something along those lines, and God forbid we head to a more softer and sort of recessionary-type environment, which, you know, we are not seeing that at all. This isn't 9-11. This is not the great financial crisis. This is not, obviously, the global pandemic. But, you know, assuming things sort of normalize or are close to normal, then, you know, we're certainly well-positioned. Whether we get back exactly this year, we are very bullish on Hawaii over the intermediate and long term. Fee simple, the barriers to entry, you can't replicate what we have.

Smedes Rose: If we end up in an all out trade war or something along those lines and.

Smedes Rose: God forbid we had.

Smedes Rose: Two two.

More.

Smedes Rose: Softer than sort of recessionary type environment, which we're not seeing that at all this isn't 911. This is not the great financial crisis. This is not obviously the global pandemic, but.

Smedes Rose: Assuming things.

Smedes Rose: So to normalize or as close to normal than we were.

Smedes Rose: We're certainly well positioned whether we get back exactly.

Smedes Rose: This year we are.

Smedes Rose: We're very bullish on Hawaii over the intermediate and long term.

Smedes Rose: Fee simple the barriers to entry you can't replicate what we have.

Tom Baltimore: Obviously, negative supply growth over the last 20 years. Obviously, outperformance from a REV-PAR standpoint versus other resorts over the last 20 years. So it's where, if you're going to be over-indexed, from our standpoint, you want to be over-indexed in Hawaii.

Smedes Rose: Obviously negative supply growth over the last 20 years.

Smedes Rose: Obviously outperformance from a revpar standpoint versus.

Smedes Rose: Versus other resorts over the last 20 over the last 20 years. So.

Smedes Rose: It's where if youre going to be over indexed from our standpoint, you want to be over indexed in Hawaii.

Smedes Rose: Okay.

Smedes Rose: Okay, thank you.

Smedes Rose: Okay. Thank you and then I just wanted to ask you. The it looks like you took a $7 million impairment in the quarter can you just talk about what that was related to.

Smedes Rose: And then I just wanted to ask you the looks like you took a $70 million impairment in the quarter. Can you talk about what that was related to? It's related to an asset, obviously, is our accounting, and as our team has looked at what we think to be the true value of that subject asset, we've made the decision that it was appropriate to write it down and have recognized that accordingly. Okay, so you can't say which one. Yeah, not at this point.

Smedes Rose: Yeah, it's it's related to and an asset obviously is our accounting and as we've as our team has looked at what we think to be the true value of that subject asset.

Smedes Rose: We've made the decision that it was a it was appropriate to.

Smedes Rose: To write it down and recognize that accordingly.

Smedes Rose: Okay. So you can't say, which one I guess.

Smedes Rose: Yeah, no not at this point.

Smedes Rose: Okay alright, thank you.

Smedes Rose: All right, thank you. Thank you, Smedes.

Smedes Rose: Thank you Smedes.

Chris Woronka: Thank you. Next question today is coming from Chris Woronka from Deutsche Bank. Your line is now live. Hey, good morning. Hey, Tom, good morning.

Speaker Change: Thank you next question today is coming from Christopher <unk> from Deutsche Bank. Your line is now live.

Christopher: Hey, great. Good morning, Hey, Tom Good morning, Good morning, good morning.

Tom Baltimore: So just to circle back to the ascent sales for a second, I think everybody's curious, in terms of good outcome for pricing, what's kind of your, Tom, what's your kind of definition of that? I mean, I assume it's kind of based on some kind of NLI or even thought and maybe plus, you know, save capex that might have been required. I mean, I assume that's the right way to look at it. Not some other. per room or something, but any thoughts you have there. Yeah, it's a great question, Chris. I mean, first, look, the assets we're looking to sell are non-core.

Smedes Rose: So just to circle back to the to the asset sales for a second.

Speaker Change: Any everybody's.

Speaker Change: Curiously E.

Speaker Change: In terms of a good outcome for <unk>.

Speaker Change: For pricing what kind of year.

Speaker Change: Tom What's your kind of definition of the I assume it's kind of based on comparable NOI EBITDA and maybe plus.

Speaker Change: You'll see capex that might've been required.

Speaker Change: Lightweight or some other metric.

Speaker Change: Our room or something but any thoughts you have there would be great. Thanks.

Speaker Change: Yeah, It's a great question, Chris I mean first look it's it's a it's in the assets, we're looking to sell our noncore and so is embedded in that obviously, we're looking for attractive pricing certainly at multiples greater than where we're trading.

Tom Baltimore: And so embedded in that, obviously, we're looking for attractive pricing, certainly at multiples greater than where we're trading. And obviously we trade at a ridiculous multiple, so we're confident we can be selling at a higher multiple. That gives some price discovery for the market as well. Saving also CapEx and then being able to reallocate that capital strategically back to our core portfolio and or pay down debt and or buy stock when and where it makes sense. Obviously, given the dislocation, we've been active on all fronts, continuing to manage the balance sheet, continuing to invest back in the portfolio, as well as buying back stock.

Speaker Change: And obviously, we trade at a ridiculous multiples. So we're confident we can be selling at a at a higher multiple that give some price discovery for the market as well.

Speaker Change: Saving also Capex, and then being able to reallocate that capital strategically back to our core portfolio indoor.

Speaker Change: Pay down debt <unk> buy stock when and where it makes sense, obviously, given the dislocation that we've been active on all fronts continuing to manage the balance sheet continue to invest back into the portfolio as well as buying back.

Speaker Change: The stock.

Tom Baltimore: We're very confident as we start printing and showing certainly some of the transactions that are in the pipeline that they will be very attractive and they'll certainly be accretive from where we're currently trading.

Speaker Change: We're very confident as we start.

Speaker Change: Printing and showing.

Speaker Change: Certainly some of the transactions that are in the pipeline that they will be very attractive and there's certainly be accretive from where we're currently trading.

Chris Woronka: Okay, that's great to hear, Tom.

Speaker Change: Okay.

Speaker Change: That's great to hear Tom and then into the fall I.

Sean DeLorto: And as a follow-up, I think Sean may have mentioned that your comparable OPEX, kind of next to the noise last quarter, was just up 1%. You know, we know that several of your hotels had some labor resets late last year that would have pushed that number up. So where are you finding the offsets, the savings, and can that continue? Any kind of contingency plans with your operators? Thanks. Yeah, Chris, I'll take that. I mean, clearly, as we're going through those processes last year, I mean, the challenges to the teams, you come in and budget and whatnot, are ultimately to find savings and across the board.

Speaker Change: I think.

Speaker Change: I think Sean May have mentioned that your comparable opex kind of ex the noise last quarter was just.

Speaker Change: 1%.

Speaker Change: Several of your hotels had some labor resets late last year that would have pushed that number up so where are you finding the offsets savings and you cannot continue.

Speaker Change: Yeah.

Speaker Change: Implementing any kind of contingency plans with your operators.

Speaker Change: Yes.

Speaker Change: Yeah, Chris I'll take that I mean, clearly as we've gone through those those processes last year I mean, the challenges to the teams you can come in and budget and whatnot, Our guard our ultimate defined savings and any across the board and so I think the teams have been successful in doing that I mean, I guess I would say part of the play here too as you think through the mix.

Sean DeLorto: And so I think the teams have been successful in doing that. I mean, again, I would say part of the play here, too, is you think through the mix. I mean, lower occupancy, higher ADR certainly has helped with the flow through in the first quarter. And I think that's part of what you see there. And so as you think through continuing frenzy planning, as we think in the future, I mean, clearly, we're doing those things with the operators. But in an environment where you might see some uncertainty 90 days out, we're sorting out performance in the near term.

Speaker Change: Mean, lower occupancy higher ADR, certainly has helped with the flow through in the first quarter and I think thats part of the.

What you see there and so as you think through contingency planning as we think in the future I mean, clearly we're doing those things, but the operators button and in an environment, where you might see some uncertainties.

Speaker Change: <unk> 90 days out we're seeing outperformance in the near term. So it's definitely a tricky situation for the teams and on the property that too I think about staffing as they try to react to that.

Sean DeLorto: So it's definitely a tricky situation for the teams on the property to think about staffing as they try to react to that dynamic. But in the end, I think they're doing an incredible job of kind of staffing and being efficient, knowing that they've got the challenges coming off of some of the labor contracts we renewed last year. I would say, you know, as we look forward to, you know, we certainly expect to see some other offsets going forward on the fixed cost side, namely insurance certainly is a positive market for the insurers going to market.

Speaker Change: That dynamic, but again I think they do an incredible job of of of kind of staffing and being efficient knowing that they've got the challenges and you're coming off of some of the labor contracts. We've renewed last year I would say you know as we look forward to we certainly expect to see some other offsets going forward on the fixed cost side, namely insurance.

Speaker Change: He is a positive market for the.

Speaker Change: The insurance going to market and so we go to we go to renew on June 1st we're confident we'll get a good a good outcome. There. So I think that plays into how we think about.

Sean DeLorto: And so we go to renew on June 1st. We're confident we'll get a good outcome there. So I think that plays into how we think about, you know, maintaining the expenses and keeping it within reason. That said, I mean, in the end, you still have, you know, four to five percent wage growth. And so we're working to find, you know, the offsets.

Speaker Change: Maintain the expenses and keeping it.

Speaker Change: Within reason that said I mean in the end you still have you know, 4% to 5% wage growth and so we're working to find the offsets where we can.

Tom Baltimore: Hey, Chris, I also just want to say it's... It's strong leadership from Sean, our asset management team, the men and women there who are partnering with our operators. It is also basic blocking and tackling and with a relentless focus on how do we mitigate and how do we manage around. Remember, as you think back through the pandemic and what we were faced with, as dire a situation as anybody in the sector, and we got through it. We got through it as well as anybody, given those facts and circumstances. So the team is experienced. There isn't anything we haven't seen.

Speaker Change: Hey, Chris I also just want to say it's it's.

Speaker Change: It's a strong leadership from from Sean.

Speaker Change: Our asset management team and the men and women there who are who are partnering with our operators.

Speaker Change: It is also basic blocking and tackling.

Speaker Change: With a relentless focus on how do we mitigate and how do we manage around remember as you think back through the pandemic and what we were faced with as dire situation as anybody in the sector and we got through it we got through it as well as anybody given those facts and circumstances. So the team is experienced.

Speaker Change: There isn't anything we haven't seen.

Tom Baltimore: Those that sort of write and have comments that we're a little more union-focused and that our cost structure is always going to be higher, they're just wrong. And if they did a little bit of work, they'd realize the discipline and talent within this team and you see how we continue to deliver and continue to work. So really proud of them and we'll see even more of that when you start seeing the insurance when that turns around and what we print versus what our peers print.

Speaker Change: Those that sort of right and have comments that were a little more union focused and that our cost structure is always going to be higher.

Speaker Change: They are just wrong and as they did a little bit of work they realize the discipline and talent within this team and you see how we continue to deliver and continue to work.

Speaker Change: So really proud of them.

Speaker Change: And we will see even more of that when you start seeing the insurance when that turns around and what we print versus what our peers print.

Chris Darling: Okay, very helpful. Thanks. We really appreciate your comment and your question. Thank you. Hi, thanks. Good morning.

Speaker Change: Okay very helpful. Thanks, David.

Speaker Change: Really appreciate your comment and your question. Thank you.

Speaker Change: Thank you. Your next question today is coming from Jay Kornreich from Wedbush Securities. Your line is now live.

Jay Kornreich: Hi, Thanks, good morning.

Tom Baltimore: One of the first is drilled down a little bit further in Orlando, which continues just to perform exceptionally well, and just curious if you can provide just further details as to what's driving the strength there and how much of a positive tailwind the opening of Epic Theme Park can produce, and if there's any opportunity for Bonnet Creek Complex to produce even more than the $90 million you forecast. Yeah, we certainly expect that we will exceed the 90 million. It's just, if you think about Orlando, you know, people often think about Vegas. It has about 45 million visitors.

Speaker Change: Wanted to first just drill down a little bit further in Orlando, which continues to perform exceptionally well and just curious if you can provide just put a detailed as to what's driving the strength there and how much of a positive tailwind to opening of epic theme park in produce and if theres any opportunity for Bonnet Creek complex to produce even more than the $90 million you forecasted.

Jay Kornreich: Oh, Yeah, we certainly.

Jay Kornreich: Expect that we will exceed the $90 million. It's just if you think about our Orlando.

Jay Kornreich: People, often think about Vegas. It has about 45 million visitors, you've got 74 million visitors plus or minus into Orlando you have obviously epic.

Tom Baltimore: You've got 74 million visitors, plus or minus, into Orlando. You have, obviously, Epic, where Universal has put in 6 billion or more, I think is the publicly disclosed number. The excitement around that, the first park to open in decades. You've also got Disney coming on the heels, talking about another 60 billion, plus or minus. Now, I'm not sure all that's theme park. That's going to be some shifts.

Jay Kornreich: We're universal's put in 6 billion or more I think as the as the publicly disclosed number the excitement around that the first park to open in decades, and you've also got Disney coming on the heels talking about another 60 billion plus or minus 10, I'm not sure that's theme park that's going.

Jay Kornreich: B some some shifts.

Tom Baltimore: But with that kind of backdrop, and given it's a strong hub for convention as well, we are very, very bullish on Orlando. Bonnet Creek, in particular, now, given the additional meeting space that we added at both the Waldorf, as well as Assignia, we have the ability to be able to layer in groups that we didn't have the ability before, and then also having a championship golf course. And, of course, being a Condé Nast winner last year, a top 10 performer, we're getting rave reviews. And the on-site management team just continues to do an exceptional job.

Jay Kornreich: But with that kind of backdrop and given it's a strong strong hub for our convention as well we are very very bullish.

Jay Kornreich: One Orlando Bonnet Creek in particular now given the additional.

Jay Kornreich: Meeting space that we added at both the Waldorf as well as the Cigna, we have the ability to be able to layer in groups that we didn't have the ability before and then also having a championship golf course.

Jay Kornreich: Of course, being a kind of Dana winter last year, a top tier performer.

Jay Kornreich: We're getting rave reviews and the on site management team is just continues to do an exceptional job so where we are very very bullish.

Tom Baltimore: So we are very, very bullish, both near-term and over the intermediate and long-term in Orlando. And certainly, again, if you look over the last 20 years, and sort of rev par growth over the national average, you know, there are several markets, obviously led by Hawaii, Key West, Orlando, Miami, all markets that Park is anchored and where Park has a great footprint. We would encourage investors and listeners to do a little bit more work on that front and see that, and you'll see that there's, I think, a real competitive advantage for Park as we look out.

Jay Kornreich: Both near term and over the intermediate and long term in Orlando and certainly again, if you look over the last 20 years and sort of revpar growth over the national average.

Jay Kornreich: There are several markets, obviously led by Hawaii.

Jay Kornreich: Key West Orlando, Miami, All markets that park is anchored and where park has a great footprint.

Jay Kornreich: We would encourage investors and listeners to do a little bit more work on that front and see that and you'll see that there's a I think a real competitive advantage for park as we look out.

Chris Darling: I appreciate all that color.

Speaker Change: I appreciate all that color and then just one more follow up just going back to more of the macro landscape and just given the uncertainty right. Now are you seeing any change in behavior from your transit customers since April weather I used to be corporates pulling back on visit travel.

Tom Baltimore: And then just one more follow-up, just going back to more of the macro landscape and just given the uncertainty right now, are you seeing any change in behavior from your transit customers since April, whether it needs to be corporates pulling back on business travel or business transit travel or changes in leisure customers traveling to or spending a resource, or are you really just not seeing much change at all at this point? You know, we were down 3% in March. Obviously, you've got this shift of Easter. We expect we're going to end April above the number we have.

Speaker Change: Business transient travel or changes in leisure customers traveling too we're spending a resource or are you really just not seeing much change at all at this point.

Speaker Change: We were down 3% in March obviously, you've got the shift of Easter.

Speaker Change: Where.

Speaker Change: We expect we're gonna end April.

Speaker Change: The number we have we'd have preliminary what we think the final numbers will be above the one six.

Tom Baltimore: We have preliminary. We think the final numbers will be above the 1.6. Obviously, New York, very strong, as I mentioned earlier, up 18%. Bonnet Creek, up 8%. Carribe, up... And mid-20s, CASA up another 14, 15%. So we're, you know, we're not seeing, this is not in a recessionary environment. There's certainly some caution. There's certainly pockets of softness. There's certainly concern. We all share it. There's a lot of uncertainty right now. I think we'd all prefer that we get better visibility. But certainly despite that, and even the jobs report last week, things still are good. We'd like to see some of that uncertainty and some of these trade deals, if they're going to occur, the sooner the better, because I think that will help, I think, provide more confidence as we all move forward.

Speaker Change: Obviously, New York very strong as I mentioned earlier up 18% Bonnet Creek up 8% prepay up.

Speaker Change: And mid Twenty's costs up another 14, 15%. So we're you know we're not seeing this as.

Speaker Change: This is not in a recessionary environment. There is certainly some caution there are certainly pockets of softness there.

Speaker Change: Certainly a concern we have.

Speaker Change: I'll share it theres a lot of uncertainty right now I think we would all prefer that we.

Speaker Change: We get better visibility, but suddenly despite that and even the jobs report last last week.

Speaker Change: Things still are a good.

Speaker Change:

Speaker Change: We'd like to see.

Speaker Change: Some of that uncertainty in some of these trade deals if theyre going to occur the sooner the better because I think that.

Speaker Change: That will help I think provide more confidence as we all move forward.

Robin Farley: Okay, thanks very much. Thank you.

Speaker Change: Okay. Thanks very much.

Speaker Change: Thank you. Your next question today is coming from Robin Farley from UBS. Your line is now live.

Robin Farley: Next question today is coming from Robin Farley from UBS. Your line is now live. Great, thank you. My question was really kind of similar to the last question. You know, in your intro remarks, you mentioned, I think you used the phrase modestly, weaker, transient. And then you talked about some of the challenges with group, maybe some tougher comps later in the year. I guess if you had to sort of rank where the strength or softness is between group and leisure transient and business transient, how would you sort of break down? I mean, it sounds like obviously there's a lot going on and maybe they're all a little bit softer than you thought, or I guess if you were ranking the three.

Robin Farley: Great. Thank you my question was really a kind of similar to the last question.

Speaker Change: In your intro remarks, you mentioned I think you used the phrase modestly weaker transient.

Speaker Change: You talked about some of the challenges with group, maybe some tougher comps later in the year I guess, if you had to sort of rank where the strength or softness is between group and leisure transient business transient how would you sort of breakdown I mean, it sounds like obviously, there's a lot going on in the world.

Speaker Change: A little bit softer than you thought or I guess, if you were ranking necessary.

Speaker Change: Yes.

Tom Baltimore: Well, I just put one, Robin, on the group side. Again, as I mentioned, the pace and like the definites on the books and that holding, I think, is a strength. It's certainly providing that solid base for the business and to be able to, you know, not to worry about that base as much as I think kind of gives it, in this environment, kind of a top building for me. From the leisure side, which we saw in April, I mean, ultimately, Tom talked a little bit to Hawaiian Village, but the absent Hawaiian Village on the resort side, it's up, call it 8% or so for the month.

Speaker Change: Well I guess Robin on the group side again as I mentioned.

Speaker Change: Pes and like the definitely it's on our books.

Speaker Change: And that holding I think is a strength, that's certainly providing that solid base for the business in that it kind of to be able to you know.

Speaker Change: Not to worry about that that base as much as I think kind of gives it in this environment a kind of a top billing for me from the leisure side. What you saw in April and May ultimately talk Tom talk a little bit to align village, but be absent Hawaiian village on the resort side, it's up call it 8% herself for the month.

Sean DeLorto: And this was a month where we came in and had dropped the forecast a little bit and outperformed it by about 160 basis points. You're seeing a lot of, you know, it's almost like people are thinking through like, does this feel like a little bit like coming out of COVID, where a lot of drive-to markets are benefiting and a lot of short-term transient on the leisure side. So I kind of feel like leisure, you know, to me, ranks second right now in the possibilities. As you're thinking about the summertime frames, you know, transient in a lot of places, you might think or it might be a challenge, but I think we're seeing plenty of markets that have leisure pace up in the summertime.

Speaker Change: And this was a month, where we came in and had dropped the forecastle button outperformed by about 160 basis points Youre seeing a lot of yellow.

Speaker Change: Almost like people are thinking through like does it feel like a little bit like coming out of Covid, where a lot of drive to markets are benefiting and a lot of short term.

Speaker Change: Transient leisure side, so I kind of feel like leisure.

Speaker Change: To me it ranked second right now and the possibilities as you think about the summer time frames.

Speaker Change: Transient and a lot of places you might think or it might be a challenge, but I think we're seeing plenty of markets that have leisure pace up.

Speaker Change: In the summertime, so I put leisure second.

Sean DeLorto: So I put leisure second and I think business transient, I think you think, you know, what's capturing that is government and some other elements who I think are certainly pressured, but I think business transient, corporate negotiated still shows, you know, a very narrow booking window short-term, but very solid performance so far. Thanks. And just to clarify, you know, April, of course, would have, you know, a strong April in a lot of the leisure markets with the benefit of Easter. Is there anything when you sort of, when you look out to kind of May and June, where there's not as much of a pronounced calendar shift, would you say that leisure is still pacing up outside of the Easter shift?

Speaker Change: Business transient I think do you think what's captured that is government and some other elements that I think are certainly pressured, but I think business transient corporate negotiated still shows.

Speaker Change: Very.

Speaker Change: Very narrow booking window short term budgetary solid performance so far.

Speaker Change: Thanks, and then just to clarify you know April of course, but if you know.

Speaker Change: A strong April and a lot of the leisure markets with the benefit of Easter is there anything when you Sir.

Speaker Change: When you look out to kind of May and June where theres not as much of a pronounced calendar shift would you say.

Speaker Change: That leaves you still.

Speaker Change: Pacing up held.

Speaker Change: Side of the Easter shift.

Speaker Change: Okay.

Sean DeLorto: Yeah, I would say when I look at, I think June is healthier than May right now, Robin. And so, you know, May I think is just kind of a month where I think we don't have to, I think the group strength at this point, and so I think May is a little bit softer month for us in the quarter, softest of the quarter, and then I think June is stronger with some group backdrop and I think better leisure profile. Okay. Great.

Speaker Change: Yeah, I would say when I look at I think June is healthier than May right now Robin and so you know may I think it's just kind of a month, where I think we all have to I.

Speaker Change: I think the group a strength at this point and so I think maybe a little bit softer month for us in the quarter softness in the quarter and then and I think June June stronger with some of group backdrop, and everything better better leisure profile.

Speaker Change: Okay, great. Thank you.

Chris Darling: Thank you.

Speaker Change: Yep.

Speaker Change: Thank you next question is coming from Chris <unk> from Green Street. Your line is now live.

Chris Darling: Next question is coming from Chris Darling from Green Street. Your line is now live. Thanks. Good morning.

Chris: Thanks, Good morning.

Tom Baltimore: Tom, I wanted to go back to the discussion around capital allocation. I'm curious how you think about pursuing incremental share rate purchases relative to perhaps bolstering your liquidity position. Obviously, a more certain economic outlook today, and you think about some of the debt maturities coming due next year. Chris, it's a great question. Sean and I spend a lot of time in the team really studying it. I mean, obviously, we'd like to, to the extent possible, take proceeds. And if we're buying back stock, we want to do it on a neutral, on a leverage-neutral basis. We clearly want to continue investing back into the core portfolios.

Speaker Change: Tom I wanted to go back to the discussion around capital allocation.

Robin Farley: How do you think about pursuing incremental share repurchases relative to perhaps bolstering your liquidity position, obviously, a more certain economic outlook today and do you think about some of the debt maturities coming due next year.

Speaker Change: Yeah, Chris It's a great question.

Speaker Change: Sean and I spend a lot of time and the team really steady I mean, obviously, we'd like to to the extent possible.

Speaker Change: Proceeds and if we're buying back stock we want to do it on a neutral.

Speaker Change: On a leverage neutral basis.

Speaker Change: We clearly want to continue investing back into the core portfolio as we've talked about it and obviously continuing to to manage carefully the balance sheet I mean, we've got.

Tom Baltimore: We've talked about it. And obviously, continuing to manage carefully the balance sheet. I mean, we've got over $1.2 billion in liquidity. You know, please keep in mind, obviously, the CMBS loan for... Hildenwein Village matures in November, December of next year. We have a plan and we have optionality. Remember, during the pandemic, we did three bond deals. We pushed out maturities. We paid off all the banks. All the banks made fees. We have great banking relationships. We're not reliant on the banks, and we are carefully studying it. You'll see significant progress made on that maturity this year, and we're confident that we'll get it addressed.

Speaker Change: Over $1 $2 billion of liquidity.

Speaker Change: Please keep in mind, obviously the.

Speaker Change: The CBS.

Speaker Change: Loan for.

Speaker Change: Hilton Hawaiian village matures in November December of next year.

Speaker Change: We have a plan and we have optionality.

Speaker Change: Remember during the pandemic.

Speaker Change: We did three bond deals we pushed out maturities, we paid off all the banks all the banks made fees.

Speaker Change: We have great banking relationships.

Speaker Change: We're not reliant on the banks and we are carefully studying it and you'll see a significant progress made on that.

That maturity this year and we're confident that we will get it addressed so no no fear or concern from that standpoint, having said that when you're trading at at.

Tom Baltimore: So no fear or concern from that standpoint. Having said that, when you're trading at this kind of pricing, we certainly think buying back stock at these levels is certainly among the best investment decisions that we can make in buying back into this core portfolio at this kind of pricing. So it's a balancing act, I think we've demonstrated it, and we'll be careful and thoughtful about it, and I think we've demonstrated that over time. That makes sense. Appreciate the thoughts. All right.

Speaker Change: This kind of pricing.

Speaker Change: We certainly think.

Speaker Change: Buying back stock at these levels is certainly among the best investment decisions that we can make it.

Speaker Change: Buying back into this core portfolio at this kind of pricing.

Speaker Change: So it's a balancing act I think we've demonstrated it.

Speaker Change: And there will be careful and thoughtful about it.

Speaker Change: And I think we've demonstrated that over time.

Speaker Change: That makes sense I appreciate the thoughts. Thank you alright. Thank you.

Dany Asad: Thank you.

Dany Asad: Your next question is coming from Dany Asad from Bank of America, your line is now live. Hi, good morning, everybody. So maybe one more question on leisure, if you don't mind. Are you seeing any different patterns of behavior from your consumers staying at your higher-end properties relative to non-luxury resorts? Not in particular, Dany. Clearly, you certainly see better pricing out of the luxury side. You're certainly seeing places like Hawaiian Village, where we're opening up channels to obviously drive more volume there, because we try to recover, which is attracting a little more discount leisure.

Danny Assad: Thank you next question is coming from Danny Assad from Bank of America. Your line is now live.

Danny Assad: Hi, good morning, everybody. So maybe one more question on leisure if you if you don't mind.

Danny Assad: Are you seeing any different patterns of behavior from your consumers staying at your higher end properties relative to non luxury resorts.

Danny Assad: Not in particular, Danny I mean, clearly you certainly see.

Danny Assad: Better pricing out of the luxury side.

Speaker Change: Only seeing.

Speaker Change: Places like Hawaiian village, where we're opening up channels, obviously drive more volume there.

Speaker Change: We're trying to recover which is attracting a little more of a discount and easier, but I think outside of that I don't think the patterns are really changed much.

Sean DeLorto: But I think outside of that, I don't think the patterns are really changing. and The Behavior.

Speaker Change: And the behavior.

Sean DeLorto: Okay, and then one more. Just your non-rooms revenue grew about 200 basis points ahead of REVPAR for the quarter. Is there anything unique to Q1 that would drive this? And just how should we think about REVPAR versus out-of-room spend for the balance of the year with the updated outlook? Yeah, we had some strong group catering contribution, up 9% in Q1. I think as we think about the contribution to overall REBPAR, I'd say about 500 to 100 basis points added to REBPAR. As we discussed, group pace a little bit weaker as we go into Q3, so I think what's driving it overall for the year, though, and a little bit of strength, certainly in Q1, is just the mix between in-house, kind of corporate in-house, and convention has shifted more in the favor of in-house group this year, so you're just going to get better F&B production on the catering side.

Speaker Change: Okay and then.

Speaker Change: One more just your non rooms revenue grew about 200 basis points ahead of Revpar for the quarter.

Speaker Change: Was there anything unique to Q1 that would drive this and just how should we think about revpar versus out of room spend for the balance of the year with the with the updated outlook.

Speaker Change: Yeah, We had yes, we had some strong group.

Speaker Change: Catering contribution up 9% in Q1, I think as we think about the contribution to overall revpar.

Speaker Change: I'd say about 500 to 100 basis points added to Revpar.

Speaker Change: As you think I guess as we discussed group pace, a little bit weaker as we go into Q.

Speaker Change: Q3.

Speaker Change: So I think I think what's driving overall for the year, though in all of its strength and certainly in Q1 is just the mix between in house kind of corporate in house and convention has shifted more in the favor of in House group. This year, so you're just going to get better.

Speaker Change: Better F&B production on the catering side, obviously with convention business you just brought most of getting room blocks off of that and they're eating elsewhere. So I think that's kind of a dramatic as more of a significant shift for us this year.

Sean DeLorto: Obviously, with convention business, you're just mostly getting room blocks off of that, and they're eating elsewhere, so I think that's kind of a dramatic, more of a significant shift for us this year.

Sean DeLorto: Thank you.

Speaker Change: Thank you we've reached end of our question and answer session I'd like to turn the floor back over for any further or closing comments.

Operator: We've reached the end of our question and answer session. I'd like to turn the floor back over for any further closing comments. We really appreciate everybody taking time today and we look forward to seeing you all at upcoming conferences. Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

Speaker Change: We really appreciate everybody taking time today, and we look forward to seeing you all.

Speaker Change: The upcoming conferences.

Speaker Change: Thank you that does conclude today's teleconference and webcast you may disconnect. Your line at this time and have a wonderful day, we thank you for your participation today.

Speaker Change: Yeah.