Q1 2026 Sunstone Hotel Investors Inc Earnings Call

May 5, 2026

Operator: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Sunstone Hotel Investors Q1 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will be given at that time. I would like to remind everyone that this conference is being recorded today, 5 May 2026 at 11:00 AM Eastern Time. I will now turn the presentation over to Mr. Aaron Reyes, Chief Financial Officer. Please go ahead, sir.

Speaker #2: Later, we will conduct a question-and-answer session and instructions will be given at that time. I would like to remind everyone that this conference is being recorded today.

Speaker #2: May 5th, 2026, at 11:00 AM Eastern Time. I will now turn the presentation over to Mr. Aaron Reyes, Chief Financial Officer, please go ahead, sir.

Speaker #2: Thank you, Operator. Before we begin, I would like to remind everyone that this call contains forward-looking statements that are subject to risks and uncertainties including those described in our filings with the SEC.

Aaron Reyes: Thank you, operator. Before we begin, I would like to remind everyone that this call contains forward-looking statements that are subject to risks and uncertainties, including those described in our filings with the SEC, which could cause actual results to differ materially from those projected. We caution you to consider these factors in evaluating our forward-looking statements. We also note that the commentary on this call will contain non-GAAP financial information, including adjusted EBITDARE, adjusted FFO, and hotel-adjusted EBITDARE. We are providing this information as a supplement to information prepared in accordance with generally accepted accounting principles. Additional details on our quarterly results have been provided in our earnings release and supplemental, which are available in the investor relations section of our website. With us on the call today are Bryan Giglia, Chief Executive Officer, and Robert Springer, President and Chief Investment Officer.

Speaker #2: Which could cause actual results to differ materially from those projected. We caution you to consider these factors in evaluating our forward-looking statements. We also note that the commentary on this call will contain non-GAAP financial information including adjusted EBITDA-RE, adjusted FFO, and hotel adjusted EBITDA-RE.

Speaker #2: We are providing this information as a supplement to information prepared in accordance with generally accepted accounting principles. Additional details on our quarterly results have been provided in our earnings release and supplemental which are available in the Investor Relations section of our website.

Speaker #2: With us on the call today are Bryan Giglia, Chief Executive Officer, and Robert Springer, President and Chief Investment Officer. After our remarks, the team will be available to answer your questions.

Aaron Reyes: After our remarks, the team will be available to answer your questions. With that, I would like to turn the call over to Bryan. Please go ahead.

Speaker #2: With that, I would like to turn the call over to Bryan. Please go ahead.

Speaker #3: Thank you, Aaron, and good morning, everyone. We were pleased with our performance in the first quarter which came in ahead of our expectations even with some weather-related headwinds across a handful of our markets.

Bryan Giglia: Thank you, Aaron. Good morning, everyone. We were pleased with our performance in Q1, which came in ahead of our expectations, even with some weather-related headwinds across a handful of our markets. The strength was broad-based with continued solid group results and transient performance that was better than anticipated. Overall, RevPAR in Q1 grew an impressive 14.6%. Excluding Andaz Miami Beach, which continues to ramp nicely, RevPAR grew 5.7%. This strong revenue performance, combined with continued focus on cost controls at the hotels and at the corporate level, allowed us to generate meaningful growth in earnings. The added benefit of our accretive repurchase activity drove even greater growth in earnings per share, with Q1 adjusted FFO nearly 29% higher than last year. Our resorts once again led the portfolio with combined comparable RevPAR growth of over 18%.

Speaker #3: The strength was broad-based with continued solid group results and transient performance that was better than anticipated. Overall, RevPar in the quarter grew an impressive 14.6%.

Speaker #3: Excluding Ondo's Miami Beach, which continues to ramp nicely, RevPar grew 5.7%. This strong revenue performance combined with continued focus on cost controls at the hotels and at the corporate level allowed us to generate meaningful growth in earnings.

Speaker #3: The added benefit of our accretive repurchase activity drove even greater growth in earnings per share with first quarter adjusted FFO nearly 29% higher than last year.

Speaker #3: Our resorts once again led the portfolio with combined comparable RevPar growth of over 18%. While the rebound at YLAA Beach Resort was expected, it has been impressive where revenue grew 14% in the quarter even with significant cancellations from the two weather events that impacted the Hawaiian Islands in March.

Bryan Giglia: The rebound at Wailea Beach Resort was expected, it has been impressive, where revenue grew 14% in the quarter, even with significant cancellations from the two weather events that impacted the Hawaiian Islands in March. We will need to navigate some repair work and disruption following the storms, the outperformance in January and February, and the trends that we are seeing for the remainder of the year, continue to point to a sustained recovery in Maui. We were also quite pleased with performance at our Wine Country Resorts, which turned in a combined 34% growth in RevPAR, driven by better contributions from both group and transient business. As we shared with you on our last call, we were encouraged with how Andaz Miami Beach performed over the festive period and into the early weeks of this year.

Speaker #3: While we will need to navigate some repair work and disruption following the storms, the outperformance in January and February and the trends that we are seeing for the remainder of the year continue to point to a sustained recovery in Maui.

Speaker #3: We were also quite pleased with performance at our wine country resorts, which turned in a combined 34% growth in RevPAR, driven by better contributions from both group and transient business.

Speaker #3: As we shared with you on our last call, we were encouraged with how Ondo's Miami Beach performed over the festive period and into the early weeks of this year.

Speaker #3: That trend has continued with results exceeding expectations in the first quarter. We are seeing further strength into April with second quarter benefiting from strong transient and group business with major events like the F1 race last weekend and the World Cup coming this summer.

Bryan Giglia: That trend has continued, with results exceeding expectations in Q1. We are seeing further strength into April, with Q2 benefiting from strong transient and group business, with major events like the F1 race last weekend and the World Cup coming this summer. During Q1, the Andaz ran 86% occupancy at a $564 rate and produced $6.5 million of EBITDA. The concept ran a similar occupancy, but at a rate over $900 per night. Q1 was an absolute success for the Andaz, we are encouraged with how much opportunity we have to continue to grow rate closer to its peers and build on our multiyear growth story.

Speaker #3: During the first quarter, the Ondo's ran 86% occupancy at a rate and produced 6.5 million of EBITDA. The comp set ran a similar occupancy but at a rate over 900 per night.

Speaker #3: Q1 was an absolute success for the Ondo's and we are encouraged with how much opportunity we have to continue to grow rate closer to its peers and build on our multi-year growth story.

Speaker #3: We've had a solid start to the year and we are well positioned to deliver on our earnings expectations in 2026 and next phase of growth into comp in New Orleans and weather-related headwinds across the East Coast.

Bryan Giglia: We've had a solid start to the year. We are well-positioned to deliver on our earnings expectations in 2026, and we look forward to the resort's next phase of growth into 2027 and beyond. Our urban hotels had a noisier quarter as we navigated a challenging Super Bowl comp in New Orleans and weather-related headwinds across the East Coast. RevPAR declined 9.3% in Q1 across our urban portfolio. Out-of-room spend performed better and limited the decline in total RevPAR to only 2.9%. At JW Marriott New Orleans, revenue was lower given the benefit of the Super Bowl in the prior year. Despite the challenging comp, our hotel continued to gain share.

Speaker #3: RevPAR navigated a challenging Super Bowl first quarter across our urban portfolio, but out-of-room spend performed better and limited the decline in total RevPAR to only 2.9%.

Speaker #3: At JW New Orleans, revenue was lower given the benefit of the Super Bowl in the prior year but despite the challenging comp, our hotel continued to gain share.

Speaker #3: After picking up nearly 15 points of RevPar index in 2025, the JW again outperformed the comp set in the first quarter and now sits at over 150% relative to the group demonstrating the strength of the hotel's location, superior room product, declined 9.3% in the and recently upgraded meeting space.

Bryan Giglia: After picking up nearly 15 points of RevPAR index in 2025, the JW again outperformed the comp set in the Q1 and now sits at over 150% relative to the group, demonstrating the strength of the hotel's location, superior room product, and recently upgraded meeting space. In addition, our New Orleans hotel had one of its best Q1 production results in years, with group bookings growing over 50% relative to the prior year. In Boston, the quarterly performance was hampered by the severe winter weather that disrupted travel earlier in the year. Overall, we expect the Q1 to be the toughest quarter for our urban portfolio, with sequential growth in RevPAR through the balance of the year. Our convention hotels turned in better-than-expected performance with RevPAR growth of 5.2%.

Speaker #3: In addition, our New Orleans hotel had one of its best first quarter production results in years with group bookings growing over 50% relative to the prior year.

Speaker #3: In Boston, the quarterly performance was hampered by the severe winter weather that disrupted travel earlier in the year. Overall, we expect the first quarter to be the toughest quarter for our urban portfolio, with sequential growth in RevPAR through the balance of the year.

Speaker #3: Our convention hotels turned in better-than-expected performance with RevPAR growth of 5.2%. Performance varied widely, however, as we experienced the push and pull of a few large events.

Bryan Giglia: Performance varied widely, however, as we experienced the push and pull of a few large events. In Washington, DC, we had a very challenging comp given the inauguration last year. After increasing over 24% in Q1 2025, RevPAR at our Westin DC Downtown was 9.8% lower this year due to the tough comp and higher group attrition from the severe winter storms that occurred in the quarter. Despite this decline, our performance was better than expected as stronger transient demand helped to partially offset the sluggish group backdrop in the market. Additionally, The Westin had a solid booking quarter with transient pace for the next 6 months up 11% relative to last year, pointing to a continuation of the current transient trend.

Speaker #3: In Washington, D.C., we had a very challenging comp given the inauguration last year. After increasing over 24% in the first quarter of 2025, RevPar at our Weston D.C.

Speaker #3: downtown was 9.8% lower this year due to the tough comp and higher group attrition from the severe winter storms that occurred in the quarter.

Speaker #3: Despite this decline, our performance was better than expected, as stronger transient demand helped to partially offset the sluggish group backdrop in the market. Additionally, the Weston had a solid booking quarter, with transient pace for the next six months up 11% relative to last year, pointing to a continuation of the current transient trend.

Speaker #3: On the flip side, RevPar increased over 27% in San Francisco where the Super Bowl added compression to a market that was already on a positive trajectory.

Bryan Giglia: On the flip side, RevPAR increased over 27% in San Francisco, where the Super Bowl added compression to a market that was already on a positive trajectory. If you look only at January and March, RevPAR was still higher by 14% as the city benefited from an active event calendar and an increased level of commercial activity in the downtown area. Performance at the Renaissance Orlando at SeaWorld was impacted by isolated group cancellations earlier in the quarter and a shift in the mix of business, which led to a decline in rooms RevPAR, but generally flat total RevPAR given the benefit of strong contribution from out-of-room spend. We expect the balance of the year to be more conducive to growth in Orlando, with particular strength in Q3 and Q4, where H2 group pace is up over 40% relative to last year.

Speaker #3: In fact, if you look only at January and March, RevPar was still higher by 14% as the city benefited from an active event calendar and an increased level of commercial activity in the downtown area.

Speaker #3: Performance at the Renaissance Orlando at SeaWorld was impacted by isolated group cancellations earlier in the quarter and a shift in the mix of business which led to a decline in rooms RevPar but generally flat total RevPar given the benefit of strong contribution from out-of-room spend.

Speaker #3: We expect the balance of the year to be more conducive to growth in Orlando with particular strength in Q3 and Q4 where second-half group pace is up over 40% relative to last year.

Speaker #3: Lastly, in San Diego, we were pleased to see better transient performance in the market which has given us a more optimistic outlook for the year.

Bryan Giglia: In San Diego, we were pleased to see better transient performance in the market, which has given us a more optimistic outlook for the year. We are in the final stages of our meeting space renovation at the hotel, and we expect that our Q2 will be the toughest comp of the year, with sequential improvement through the Q3 and Q4 as we benefit from better group patterns and our new meeting space. On the expense side, we were particularly pleased to see better productivity in the rooms department, which allowed us to keep comparable departmental expense growth on a per occupied room basis to only 1%. This better cost performance was partially offset by higher utility expenses, property G&A, and sales costs.

Speaker #3: We are in the final stages of our meeting space renovation at the hotel and we expect that our second quarter will be the toughest comp of the year with sequential improvement through the third and fourth quarters as we benefit from better group patterns and our new meeting space.

Speaker #3: On the expense side, we were particularly pleased to see better productivity in the rooms department which allowed us to keep comparable departmental expense growth on a per-occupied room basis to only 1%.

Speaker #3: This better cost performance was partially offset by higher utility expenses property G&A and sales costs. Overall, our comparable portfolio excluding Ondo's saw expense growth for all costs increase 3.4% on an absolute basis during the quarter or 2.4% per occupied room.

Bryan Giglia: Overall, our comparable portfolio, excluding Andaz, saw expense growth for all costs increase 3.4% on an absolute basis during the quarter or 2.4% per occupied room. This was generally consistent with our expectations and allowed us to grow margins by 140 basis points. Given the cadence of our quarterly revenue growth, we expect that Q1 will be our strongest margin growth performance of the year. We are continuing to work with our operators to focus on cost controls and drive efficiencies wherever possible. As part of our last earnings call in February, we noted that we were encouraged by the trends we were seeing in recent operations, but that broader uncertainty gave us reasons to be cautious. This remains the case today, with recent events only reinforcing this view.

Speaker #3: This was generally consistent with our expectations and allowed us to grow margins by 140 basis points. Given the cadence of our quarterly revenue growth, we expect that the first quarter will be our strongest margin growth performance of the year but we are continuing to work with our operators to focus on cost controls and drive efficiencies wherever possible.

Speaker #3: As part of our last earnings call in February, we noted that we were encouraged by the trends we were seeing in recent operations but that broader uncertainty gave us reasons to be cautious.

Speaker #3: This remains the case today with recent events only reinforcing this view. We continue to monitor events that could impact costs and the demand for travel.

Bryan Giglia: We continue to monitor events that could impact costs and the demand for travel. While we did not see any measurable impact on our Q1 operations, an elongated period of heightened volatility or sustained increases in fuel prices could present headwinds. That said, performance in Q1 was meaningfully ahead of our expectations, and based on what we see today, we are comfortable revising our full-year outlook higher to reflect these results. Given the elevated uncertainty, we will continue to be measured in our expectations for the rest of the year. If more of the momentum from the Q1 carries into the balance of the year or if some of the special events slated for later this year outperform our modest expectations, we could be positioned to deliver stronger performance.

Speaker #3: While we did not see any measurable impact on our first quarter operations, an elongated period of heightened volatility or sustained increases in fuel prices could present headwinds.

Speaker #3: That said, performance in the first quarter was meaningfully ahead of our expectations and based on what we see today we are comfortable revising our full-year outlook higher to reflect these results.

Speaker #3: Given the elevated uncertainty, we will continue to be measured in our expectations for the rest of the year. If more of the momentum from the first quarter carries into the balance of the year, or if some of the special events slated for later this year outperform our modest expectations, then we could be positioned to deliver stronger performance.

Speaker #3: We are encouraged by the increase in hotel transaction activity and believe the environment may be becoming more conducive to executing our capital recycling strategy and demonstrating the value of our portfolio.

Bryan Giglia: We are encouraged by the increase in hotel transaction activity and believe the environment may be becoming more conducive to executing our capital recycling strategy and demonstrating the value of our portfolio. In the interim, we continued to deliver value to shareholders through an additional $50 million of accretive common and preferred stock repurchase activity so far this year. We expect to continue opportunistic repurchase activity as pricing allows, while we focus on generating profitability growth from our operations and realizing the benefits of our investment projects. With that, I'll turn the call over to Robert to give some additional details on our capital investment activity.

Speaker #3: In the interim, we continue to deliver value to shareholders through an additional $50 million of accretive common and preferred stock repurchase activity so far this year.

Speaker #3: We expect to continue opportunistic repurchase activity as pricing allows, while we focus on generating profitability growth from our operations and realizing the benefits of our investment projects.

Speaker #3: And with that, I'll turn the call over to Robert to give some additional details on our capital investment activity.

Speaker #2: Thanks, Bryan. We've gotten off to a busy start on the operations and investment front. As we shared with you last quarter, our planned capital projects for 2026 were concentrated in the first half of the year and I'm pleased to report that we have made solid progress executing them on schedule and on budget.

Robert Springer: Thanks, Bryan. We've gotten off to a busy start on the operations and investment front. As we shared with you last quarter, our planned capital projects for 2026 were concentrated in H1 of the year, and I'm pleased to report that we have made solid progress executing them on schedule and on budget. In San Diego, we are wrapping up the renovation of the meeting space. The finished product looks great and should help the hotel to maintain its leadership position in the market. Recent trends in the city have been more encouraging. Based on what we see today, we expect better performance in the latter part of this year. The hotel is pacing ahead for 2027. In Miami, we are also finishing construction on Bazaar, and we are very pleased with how the space is coming together.

Speaker #2: In San Diego, we are wrapping up the renovation of the meeting space. The finished product looks great and should help the hotel maintain its leadership position in the market.

Speaker #2: Recent trends in the city have been more encouraging and based on what we see today, we expect better performance in the latter part of this year and the hotel is pacing ahead for 2027.

Speaker #2: In Miami, we are also finishing construction on a bazaar and we are very pleased with how the space is coming together. We expect to begin training activities in late summer with the restaurant opening in early fall to take advantage of the full high season in the market.

Robert Springer: We expect to begin training activities in late summer, with the restaurant opening in early fall to take advantage of the full high season in the market. As we shared earlier, our renovated resort is already attracting some great group business, the addition of Bazaar will round out the property, further increasing its appeal with luxury travelers and higher-end groups. We anticipate that Bazaar will not only help drive incremental room night demand at the hotel, will be a dining destination for guests from nearby properties and local residents as well. Elsewhere across the portfolio, we will be starting some facade work and a rooms refresh at Oceans Edge Resort & Marina in the middle part of the year as part of a broader effort we are working on to drive incremental revenue and earnings to this resort.

Speaker #2: As we shared earlier, our renovated resort is already attracting some great group business but the addition of bazaar will round out the property further increasing its appeal with luxury travelers and higher-end groups.

Speaker #2: We anticipate that bazaar will not only help drive incremental room night demand at the hotel but will be a dining destination for guests from nearby properties and local residents as well.

Speaker #2: Elsewhere across the portfolio, we will be starting some facade work and a rooms refresh at Ocean's Edge Resort and Marina in the middle part of the year as part of a broader effort we are working on to drive incremental revenue and earnings to this resort.

Speaker #2: We will also be completing some smaller routine projects across the rest of the portfolio. As Bryan noted earlier, our Wilea Beach Resort was impacted by a series of severe storms that came through the Hawaiian Islands in March and brought heavy winds and substantial rainfall.

Robert Springer: We will also be completing some smaller routine projects across the rest of the portfolio. As Bryan noted earlier, our Wailea Beach Resort was impacted by a series of severe storms that came through the Hawaiian Islands in March and brought heavy winds and substantial rainfall. While our resort remained operational during the storms, we did sustain wind and water damage in some of the guest rooms, public spaces, and portions of the roofs. We are currently working to restore impacted areas and should have most of the public space and guest room related work completed in the coming weeks. We will, however, have some additional repair work to do on a few roofs, which will not be done until later this year.

Speaker #2: While our resort remained operational during the storms, we did sustain wind and water damage in some of the guest rooms public spaces and portions of the roofs.

Speaker #2: We are currently working to restore impacted areas and should have most of the public space and guest room-related work completed in the coming weeks.

Speaker #2: We will, however, have some additional repair work to do on a few roofs which will not be done until later this year. We are working closely with our insurers to pursue cost recovery for the repair work and lost business from the storms.

Robert Springer: We are working closely with our insurers to pursue cost recovery for the repair work and lost business from the storms. It is too early to share any of those details. Based on what we see today, we expect that incremental capital expenditures needed at Wailea will likely mean that we will be in the upper half of our existing CapEx guidance range for 2026. We are still working through the details of the approach and timing, the required spend and cost recovery from our insurance policies, and will share additional information as part of our next call. With that, I'll turn it over to Aaron. Please go ahead.

Speaker #2: But it is too early to share any of those details. Based on what we see today, we expect that incremental capital expenditures needed at Wilea will likely mean that we will be in the upper half of our existing CapEx guidance range for 2026.

Speaker #2: We are still working through the details of the approach and timing that are required spend and cost recovery from our insurance policies and will share additional information as part of our next call.

Speaker #2: With that, I'll turn it over to Aaron. Please go ahead.

Speaker #3: Thanks, Robert. As we noted at the top of the call, our earnings results for the first quarter came in ahead of expectations. Driven by broad-based strength across the portfolio.

Aaron Reyes: Thanks, Robert. As we noted at the top of the call, our earnings results for Q1 came in ahead of expectations, driven by broad-based strength across the portfolio. Rooms RevPAR grew an impressive 14.6% in the quarter, including an 890 basis point benefit from Andaz Miami Beach. Total RevPAR for all hotels increased 13.4%, including an 810 basis point benefit from Andaz. Given our mix of business, we anticipated that rooms revenue would grow faster than total revenue in Q1, which was the case. Ancillary spend performed better than we thought. The guidance ranges that I will discuss shortly reflect a more optimistic outlook for out-of-room revenue growth than our prior expectations.

Speaker #3: Rooms RevPar grew an impressive 14.6% in the quarter including an $890 basis point benefit from Mondoz Miami Beach. Total RevPar for all hotels increased 13.4% including an $810 basis point benefit from Mondoz.

Speaker #3: Given our mix of business, we anticipated that Rooms Revenue would grow faster than Total Revenue in the first quarter which was the case. But ancillary spend performed better than we thought and the guidance ranges that I will discuss shortly reflect a more optimistic outlook for out-of-room revenue growth than our prior expectation.

Speaker #3: The stronger top-line performance in the quarter contributed to earnings that were ahead of our expectations including adjusted EBITDA-RE of $68 million. An increase of 18% relative to last year.

Aaron Reyes: The stronger top-line performance in the quarter contributed to earnings that were ahead of our expectations, including adjusted EBITDARE of $68 million, an increase of 18% relative to last year. When combined with the added benefit of our accretive repurchase activity, adjusted FFO per diluted share was $0.27, an increase of nearly 29% from last year. Our balance sheet remains strong. We have no debt maturities prior to 2028, and net leverage stands at only 3.5x trailing earnings or 4.6x, including our preferred equity. Since December of last year, we have repurchased over $19 million in liquidation value of our traded preferred stock at a 21% discount, a positive impact on both FFO and NAV. Included in our press release this morning are the details of our updated outlook for 2026.

Speaker #3: When combined with the added benefit of our accretive repurchase activity, adjusted FFO per diluted share was $27. An increase of nearly 29% from last year.

Speaker #3: Our balance sheet remained strong. We have no debt maturities prior to 2028 and net leverage stands at only 3.5 times trailing earnings or 4.6 times including our preferred equity.

Speaker #3: Since December of last year, we have repurchased over $19 million in liquidation value of our traded preferred stock at a 21% discount. A positive impact on both FFO and NAV.

Speaker #3: Included in our press release this morning are the details of our updated outlook for 2026. Our revised guidance ranges reflect the outperformance we saw in the first quarter but retain a degree of caution for the balance of the year, given the uncertain backdrop.

Aaron Reyes: Our revised guidance ranges reflect the outperformance we saw in the first quarter, but retain a degree of caution for the balance of the year, given the uncertain backdrop. We now expect that rooms RevPAR for all hotels in the portfolio will increase between 5% and 7.5% to a range of $236 to $242. This reflects the full year benefit of Andaz Miami Beach, which is expected to contribute approximately 400 basis points of growth at the midpoint. Based on what we see today, we now expect total RevPAR to increase between 5% to 7.5%, an increase of 125 basis points at the midpoint, which captures our higher expectations for growth in ancillary spend.

Speaker #3: We now expect that rooms RevPAR for all hotels in the portfolio will increase between 5% and 7.5%, to a range of $236 to $242.

Speaker #3: This reflects the full-year benefit of Mondoz Miami Beach which is expected to contribute approximately $400 basis points of growth at the midpoint. Based on what we see today, we now expect Total RevPar to increase between 5% to 7.5%.

Speaker #3: An increase of 125 basis points at the midpoint. Which captures our higher expectations for growth in ancillary spend. This would now imply a range of $390 to $400 with a similar $400 basis point benefit from Mondoz.

Aaron Reyes: This would now imply a range of $390 to 400 with a similar 400 basis point benefit from Andaz. As we noted on our last call, Q1 will be our strongest revenue growth quarter of the year, with the remaining growth quarters being between the lower end and the midpoint of our RevPAR and total RevPAR guidance ranges. While Andaz will certainly provide a lift to our results all year, the impact will become less pronounced as we get further into the year and begin to lap more of last year's operations, with the revenue growth benefit estimated at approximately 500 basis points in Q2 and 150 to 200 basis points in each of Q3 and Q4.

Speaker #3: As we noted on our last call, the first quarter will be our strongest revenue growth quarter of the year with the remaining growth quarters being between the lower end and the midpoint of our RevPar and Total RevPar guidance ranges.

Speaker #3: While Mondoz will certainly provide a lift to our results all year, the impact will become less pronounced as we get further into the year and begin to let more of last year's operations.

Speaker #3: With the revenue growth benefit estimated at approximately 500 basis points in the second quarter, and 150 to 200 basis points in each of the third and fourth quarters.

Speaker #3: This revised revenue growth is now expected to translate into adjusted EBITDA-RE in the range of $238 million to $252 million. Based on where we sit today, we expect our FFO per diluted share to now range from 88 cents to 96 cents.

Aaron Reyes: This revised revenue growth is now expected to translate into adjusted EBITDARE in the range of $238 million to 252 million. Based on where we sit today, we expect our FFO per diluted share to now range from $0.88 to 0.96. This updated earnings per share range reflects the benefit of better operations and our recent share repurchase activity. In terms of the distribution of our earnings by quarter, based on the midpoint of our updated range, the Q1 accounted for roughly 28% of our full-year earnings, with the Q2 expected to comprise approximately 28% to 29%, and the balance split more or less evenly across the Q3 and Q4. Moving to our return of capital.

Speaker #3: This updated earnings per share range reflects the benefit of better operations and our recent share repurchase activity. In terms of the distribution of our earnings by quarter, based on the midpoint of our updated range, the first quarter accounted for roughly 28% of our full-year earnings.

Speaker #3: With the second quarter expected to comprise approximately 28% to 29%. And the balance split more or less evenly across the third and fourth quarters.

Speaker #3: Moving to our return of capital, since the start of the year up to the end of April, we have repurchased $35 million of common stock at a blended price of $9.11 per share.

Aaron Reyes: Since the start of the year up to the end of April, we have repurchased $35 million of common stock at a blended price of $9.11 per share. In addition, we have also purchased over $14 million of our preferred stock at a blended price of $19.84 per share or a 21% discount to its liquidation value. This common and preferred stock repurchase activity has been accretive to both NAV and earnings per share. While we retain capacity and appetite for additional share repurchases, our revised 2026 outlook does not assume the benefit of additional buyback activity. In addition to our share repurchases, our board of directors has authorized a $0.09 per share common dividend for the Q2 and has also declared the routine distributions for our Series G, H, and I preferred securities.

Speaker #3: In addition, we have also purchased over $14 million of our preferred stock at a blended price of $19.84 per share or a 21% discount to its liquidation value.

Speaker #3: This common and preferred stock repurchase activity has been accretive to both NAV and earnings per share. And while we retain capacity and appetite for additional share repurchases, our revised 2026 outlook does not assume the benefit of additional buyback activity.

Speaker #3: In addition to our share repurchases, our board of directors has authorized a $0.09 per share common dividend for the second quarter and has also declared the routine distributions for our Series G, H, and I preferred securities.

Speaker #3: Before we conclude our prepared remarks, I'll turn it back over to Bryan for some additional thoughts.

Aaron Reyes: Before we conclude our prepared remarks, I'll turn it back over to Bryan for some additional thoughts.

Speaker #2: Before we open the call to questions, I want to provide an update on our 2026 objectives. The company remains focused on realizing the value of our portfolio.

Bryan Giglia: Before we open the call to questions, I wanna provide an update on our 2026 objectives. The company remains focused on realizing the value of our portfolio. Over the past few years, we have sold hotels at what have proven to be attractive valuations and redeployed proceeds into the most accretive option available at the time. While most of the proceeds went to repurchase common or preferred stock at a discount, we also acquired assets when our cost of capital became more competitive. Given the improving transaction market, we expect to recycle capital in 2026 and take advantage of strong private market values for certain assets. This would allow us to redeploy proceeds into additional share repurchases at a discount to NAV or liquidation preference or potential hotel acquisitions under the right circumstances.

Speaker #2: Over the past few years, we have sold hotels at what have proven to be attractive valuations and redeployed proceeds into the most accretive option available at the time.

Speaker #2: While most of the proceeds went to repurchase common or preferred stock at a discount, we also acquired assets when our cost of capital became more competitive.

Speaker #2: Given the improving transaction market, we expect to recycle capital in 2026 and take advantage of strong private market values for certain assets. This would then allow us to redeploy proceeds into additional share repurchases at a discount to NAV or liquidation preference or potential hotel acquisitions under the right circumstances.

Speaker #2: We remain focused on executing transactions that will result in the best risk-adjusted returns to our shareholders. The Board and management remain committed to maximizing value for shareholders and are open to pursuing any alternative that would reasonably be expected to result in value creation.

Bryan Giglia: We remain focused on executing transactions that will result in the best risk-adjusted returns to our shareholders. The board and management remain committed to maximizing the value for shareholders and are open to pursuing any alternative that would reasonably be expected to result in value creation. With that, we can now open the call to questions. Operator, please go ahead.

Speaker #2: With that, we can now open the call to questions. Operator, please go ahead.

Speaker #4: To ask a question, please press star followed by the number 1 on your telephone keypad. In the interest of time, we ask that you please limit yourself to one question and one follow-up.

Operator 2: In the interest of time, we ask that you please limit yourself to 1 question and 1 follow-up. Thank you. Our first question comes from Duane Pfennigwerth from Evercore ISI.

Operator: To ask a question please press star followed by the number one on your telephone keypad. In the interest of time, we ask that you please limit yourself to 1 question and 1 follow-up. Thank you. Our first question comes from Duane Pfennigwerth from Evercore ISI.

Speaker #4: Thank you. Our first question comes from Dwayne Fredigworth from Evercore ISI. Please go ahead. Your line is open.

Speaker #5: Yeah. Hi. This is Peter on for Dwayne. Thanks for taking the question. So I guess if we zoom out and think about the 14 hotel portfolio and that portfolio reaching some level of stabilization, what are some of the building blocks left to get there?

[Analyst] (Evercore ISI): Hi, this is Peter on for Duane Pfennigwerth. Thanks for taking the question. I guess if we zoom out and think about the 14 hotel portfolio and that portfolio, you know, reaching some level of stabilization, what are some of the building blocks left to get there? I guess said differently, you know, what are some of the growth drivers beyond what you've provided for 2026?

Speaker #5: And I guess said differently, what are some of the growth drivers beyond what you've provided for 2026?

Speaker #6: Sure. Good morning. Let me start and then Aaron can provide some more additional detail. When you look at the building blocks, there are several pieces.

Bryan Giglia: Sure. Good morning. Let me start and then Aaron can provide some more additional detail. When you look at the building blocks, there are several pieces. First, Andaz is a multi-year story. We had an excellent Q1. The resort is ramping up. We started to see this at the end of Q4 last year and into Q1 this year, and it's ramping and the group business has been very strong. The transient business continues to grow. We're very happy with the performance so far. That said, when we look at Q1 and we look at our rate, which was in the mid 500s, and we look at the comp set, we still have a lot of room to grow.

Speaker #6: First, Mondoz is a multi-year story. We had an excellent Q1. The resort is ramping up. We started to see this at the end of Q4 last year and into Q1 this year, and it's ramping in the group business has been very strong.

Speaker #6: The transient business continues to grow, and we're very happy with the performance so far. That said, when we look at Q1 and we look at our rate, which was in the mid-$500s, and we look at the comp set, we still have a lot of room to grow.

Bryan Giglia: We are-- The comp set was running, you know, kind of plus 1,000. That's a lot of room for us to expand into next year. Also, Q4 last year was kind of the same delta. Q4 this year we have room to grow. Opening the Bazaar at the end of this year into the high season. The Beach Club just opened, which also serves as additional meeting space for the resort. Andaz has a very good, you know, two-year-plus trajectory on that. Wailea is also another asset where we had, you know, we had room to grow. We talked about this last year of having to have the island stabilize, and we saw that with Kaanapali reaching kind of a stable 70% occupancy in Q4.

Speaker #6: And so, the comp set was running kind of plus 1,000. So that's a lot of room for us to expand into next year.

Speaker #6: Also, fourth quarter last year was kind of the same delta. And so fourth quarter this year, we have room to grow. Opening the bazaar at the end of this year into the high season, the beach club just opened, which also serves as additional meeting space for the resort.

Speaker #6: So Mondoz has a very good two-year-plus trajectory on that. Maui is also another asset where we had room to grow. We talked about this last year, of having to have the island stabilize, and we saw that with Kaanapali reaching kind of a stable 70% occupancy in the fourth quarter.

Speaker #6: Our transient volume started to recapture our index and our share in the fourth quarter of last year, has gone into this year, and given where we are relative to prior EBITDA, there's still several million dollars of EBITDA growth that we will get into next year.

Bryan Giglia: Our transient volume started to recapture our index and our share in Q4 of last year, has gone into this year. Given where we are relative to prior EBITDA, there's still several millions of dollars of EBITDA growth that we will get into next year. San Francisco is another market for us that has grown and rebounded very well, but still has quite a ways to go. Everything we're seeing in that market from the group demand, from the transient demand, from the citywide demand, that's all been very positive and will go into 2027 and beyond.

Speaker #6: San Francisco is another market for us that has grown and rebounded very well, but still has quite a ways to go. And everything we're seeing in that market—from the group demand, from the transient demand, from the citywide demand—that's all been very positive, and we'll go into '27 and beyond.

Bryan Giglia: You know, as far as San Francisco's strength, we've also seen that help Wine Country and the 2 resorts there, where as the citywides and the city of San Francisco does better, it then leads into additional leisure demand up in Wine Country. You know, those are the big pieces that we will continue to see grow throughout the next few years.

Speaker #6: And then as far as San Francisco's strength, we've also seen that help wine country and the two resorts there, where as the citywides and the city of San Francisco does better, it then leads into additional leisure demand up in wine country.

Speaker #6: So I think that those are those are the big pieces that we will continue to see grow throughout the next few years. Yeah. And it's what I might add to that.

Aaron Reyes: Yeah. Just what I might add to that, I think Bryan hit, you know, the, certainly the broader points of what we have going on across the portfolio. I think on top of that, we have the added benefit of the repurchase activity that we've been doing. We've been thoughtful in how we've allocated capital, both to our common stock and most recently to our preferred stock as well. As we think about just the potential for not just EBITDA growth, but growth on an earnings per share basis, you know, certainly we have, you know, capacity for significant accretion in FFO per share.

Speaker #6: I think Bryan hit certainly the broader points of what we have going on across the portfolio. I think on top of that, we have the added benefit of the repurchase activity that we've been doing.

Speaker #6: So we've been thoughtful in how we've allocated capital, both to our common stock and most recently to our preferred stock as well. So as we think about just the potential for not just EBITDA growth, but growth on an earnings per share basis, certainly we have capacity for significant increase in an FFO per share.

Speaker #5: Thank you.

Bryan Giglia: Thank you.

Speaker #4: Excellent.

Bryan Giglia: Thanks.

Speaker #5: Thank you. Yeah. And then I guess you mentioned the transaction markets are getting more active. Could you just quickly expand on that and what sort of assets are you seeing being marketed?

[Analyst] (Evercore ISI): Thank you. Yep. I guess you mentioned the transaction markets are getting more active. Could you just quickly expand on that and, you know, what sort of assets are you seeing being marketed? What are brokers saying? So on and so forth. Thanks for taking the questions.

Speaker #5: What are brokers saying? So on and so forth. Thanks for taking the questions.

Speaker #6: Sure. We see additional equity capital coming into the markets and into increasing the number of deals out there and potential transactions, which is good and healthy for that market.

Bryan Giglia: Sure. You know, we see additional equity capital coming into the markets and into increasing the number of deals out there and potential transactions, which is good and healthy for that market. Right now you're seeing more luxury assets out there. I think that that is, you know, given where the recovery has been and given where the demand and the productivity of those assets, there's a lot more on the luxury side. I would guess that as the year goes on and some of those transactions are announced and closed, we'll start to see more of the higher quality for upscale assets come to market too.

Speaker #6: Right now, you're seeing more luxury assets out there. And so I think that that has given where the recovery has been and given where the demand and the productivity of those assets there is, there's a lot more on the luxury side.

Speaker #6: I would guess that as the year goes on, and some of those transactions are announced and closed, we'll start to see more of the higher quality or upscale assets come to market too.

Speaker #4: Our next question comes from Michael Bellisario from Baird. Please go ahead. Your line is open.

Operator 2: Our next question comes from Michael Bellisario from Baird. Please go ahead, your line is open.

Operator: Our next question comes from Michael Bellisario from Baird. Please go ahead, your line is open.

Michael Bellisario: Thanks. Good morning, guys.

Speaker #7: Thanks. Good morning, guys.

Michael Bellisario: Thanks. Good morning, guys.

Speaker #5: Good morning, Mike.

Bryan Giglia: Good morning, Mike.

Speaker #7: Brian, just want to follow up on your acquisition commentary. Maybe high level, can you talk about the criteria that you're looking at for potential acquisitions just in terms of markets, brands, initial yields, and then also just the appetite for maybe buying a cash-flowing asset versus doing another deep return renovation project?

Michael Bellisario: Bryan, I just wanna follow up on your acquisition commentary. Maybe high level, could you talk about the criteria that you're looking at for potential acquisitions, just in terms of markets, brands, initial yields, and then also just the appetite for maybe buying a cash flowing asset versus doing another deep return renovation project? Thanks.

Speaker #7: Thanks.

Speaker #6: Sure. I think with what we've done in the past and the way we've approached things in the past, I think it's important, especially for a hotel for a portfolio our size, is to make sure that we have some degree of balance.

Bryan Giglia: Sure. You know, I think, you know, with what we've done in the past and the way we've approached things in the past, I think it's important, especially, you know, for a portfolio our size, is to make sure that we have some degree of balance. We have, you know, we have a lot of deeper turns that are coming back online and or ramping up assets. Would we have capacity for that? Yes. That said, you know, like, look, everything we do, we have to look at what the options are available to us and what is the best, you know, allocation of capital, whether it be using our balance sheet or recycling an asset on a risk-adjusted basis, what makes the most sense for our shareholders.

Speaker #6: And so, we have a lot of deeper turns that are coming back online or ramping up assets. So, would we have capacity for that?

Speaker #6: Yes. That said, anything everything we do, we have to look at what the options are available to us and what is the best allocation of capital, whether it be using our balance sheet or recycling an asset.

Speaker #6: On a risk-adjusted basis, what makes the most sense for our shareholders? And up until this point, that has absolutely been share repurchase and repurchasing our preferred at a meaningful discount to liquidation.

Bryan Giglia: Up until this point, you know, that has absolutely been share repurchase and repurchasing our preferred at a meaningful discount to liquidation preference. You know, going forward, that's a balance. That's something that, you know, as our cost of capital, you know, improves and our stock price improves, then we look to balance that with potential acquisitions or you know, mainly coming from recycling capital where we can take advantage of private market values and maybe specific markets where, or specific asset types where there is a lot of demand right now, and we can, you know, potentially realize a portion or a good portion of our, of the future upside today.

Speaker #6: Preference. Going forward, that's a balance. That's something that as the as our cost of capital improves and our stock price improves, then we look to balance that with potential acquisitions or and mainly coming from recycling capital, where we can take advantage of private market values and maybe specific markets where or specific asset types where there is a lot of demand right now.

Speaker #6: And we can potentially realize a portion or good portion of the future upside today. And then we go redeploy that at something that has good growth, maybe not quite as good growth, but at a much more compelling initial yield.

Bryan Giglia: We go redeploy that in something that has good growth, maybe not quite as good growth, but at a much more compelling initial yield that maybe provides some future opportunities. You know, again, it depends. Every day we make the decision of how we're going to allocate additional capital. You know, I think where we stand right now, our stock and preferred is still very compelling. As that changes, I, you know, I think that the preference would probably be more stabilized. You know, if you look at the types of hotels and resorts that we have, we like, you know, we like assets, usually slightly larger assets that have a good group component to it, and then some secondary, whether it be leisure or business transient.

Speaker #6: That maybe provides some future opportunities. So again, it depends. Every day we make the decision of how we're going to allocate additional capital. And I think where we stand right now, it's our stock and preferred is still very compelling.

Speaker #6: But as that changes, I think that the preference would probably be more stabilized if you look at the types of hotels and resorts that we have.

Speaker #6: We like assets. Usually, slightly larger assets that have a good group component to it. And then some secondary, whether it be leisure or business transient.

Bryan Giglia: You know, varying degrees of rebranding activity, whether it be like the Westin DC or the Marriott Long Beach, where, you know, different degrees of renovation, but still same game plan, where we're able to capture more index through finding a brand that, you know, could do better as something else. You know, that's our focus. I think where we are today, it's still, you know, our equity and preferred are very attractive. As things, you know, as the space improves, I think that gives us more opportunity to deploy into assets.

Speaker #6: Varying degrees of rebranding activity, whether it be like the Westin in D.C. or the Marriott Long Beach, where there are different degrees of renovation but still the same game plan, where we're able to capture more index through finding a brand that could do better or something focused.

Speaker #6: I think where we are today, it's still our equity and preferred are very attractive. But as things as the space improves, I think that gives us more opportunity to deploy into assets.

Speaker #7: Okay. Thank you.

Smedes Rose: Okay. Thank you.

Michael Bellisario: Okay. Thank you.

Speaker #4: Our next question comes from Sneed's Rose from Citi. Please go ahead. Your line is open.

Operator 2: Our next question comes from Smedes Rose from Citi. Please go ahead, your line is open.

Operator: Our next question comes from Smedes Rose from Citi. Please go ahead, your line is open.

Speaker #8: Hi. Thanks. Maybe just switching to a couple of market questions, I wanted to ask you on the Andaz. I think in the past, you had talked about maybe mid to low teens, EBITDA, contribution this year.

Smedes Rose: Hi. Thanks. Maybe just switching to a couple of market questions. I wanted to ask you, on the Andaz. I think in the past you had talked about maybe mid to low teens EBITDA contribution this year. Are you still comfortable with that? Are you seeing any kind of lift from the World Cup, helping that property?

Speaker #8: Are you still comfortable with that? And are you seeing any kind of lift from the World Cup helping that property?

Speaker #6: Sure. Morning, Sneeds. Yeah. We feel based on where the asset has performed. And remember, there's when you look at the seasonality of the market, the asset will be a little bit skewed more towards the first quarter of this year, just as it's ramping up.

Bryan Giglia: Sure. Morning, Smedes. Yeah, we feel based on where the asset has performed, and remember there's, you know, when you look at the seasonality of the market, the asset will be a little bit skewed more towards the Q1 this year, just as it's ramping up. You know, Q1 in through kind of April is a big piece of the annual EBITDA. Based on what we've seen so far, based on the transient bookings going forward, based on our group bookings going forward, we feel very comfortable with the range we've given and, you know, probably inching towards the higher side of that, and with some opportunity to achieve that this year.

Speaker #6: But first quarter in through kind of April is a big piece of the annual EBITDA. So based on what we've seen so far, based on the transient bookings going forward, based on our group bookings going forward, we feel very comfortable with a range we've given.

Speaker #6: And probably inching towards the higher side of that. And with some opportunity to achieve that this year. As far as the World Cup goes, we've had really good events in the market this year, national championship, F1 last weekend was fantastic.

Bryan Giglia: As far as the World Cup goes, you know, we've had really good events in the market this year. National championship, F1 last weekend was fantastic. You know, I think World Cup, we continue to be measured in our various markets where we have matches. You know, at this point, it's a good time in the year for Miami because the summertime tends to be the lower season. Having additional international travel coming into the market will be good for the market. Again, as we get closer, we will have a better understanding of the ultimate impact. Right now we continue to be somewhat measured across our markets for World Cup.

Speaker #6: I think World Cup, we continue to be measured in our various markets where we have matches. And at this point, it's a good time in the year for Miami because of summertime is tends to be the lower season.

Speaker #6: So having additional international travel coming into the market will be good for the market. Again, as we get closer, we will have a better understanding of the ultimate impact.

Speaker #6: But right now, we continue to be somewhat measured across our markets for World Cup.

Speaker #8: Okay. And then I just was hoping you could maybe comment on a couple of the larger group markets where you operate. You mentioned a lot of strength, I think, at the JW in New Orleans.

Smedes Rose: Okay. I just was hoping you could maybe comment on a couple of the larger group markets where you operate. You mentioned a lot of strength, I think, at the JW Marriott New Orleans. Are you seeing strength overall in that market? It seems like it's been kind of weak maybe on the group side. I'm just wondering what you're seeing bigger picture and maybe just kind of touch on, if you could touch on Orlando and San Diego as well.

Speaker #8: Are you seeing strength overall in that market? It seems like it's been kind of weak, maybe on the group side. I'm just wondering what you're seeing bigger picture, and maybe if you could just touch on Orlando and San Diego as well.

Speaker #6: Yeah. And so our when we look at first quarter and second quarter too, transient has been the strongest segment across the board. And transient at some of our large group hotels have been better than anticipated.

Bryan Giglia: Yeah. Our, you know, when we look at Q1 and Q2, too, transient has been the strongest segment across the board, and transient at some of our large group hotels have been, you know, better than anticipated. The way our group calendars and group bookings laid out this year was always the H1 was sort of the weaker of the two, and that our pace picked up in, depending on the asset Q2, Q3, Q4. When we look at like, you know, who has good group pace in the H2 of the year, that's where we're talking about New Orleans, where pace is up significantly for the H2. Orlando also had a tougher H1 comp.

Speaker #6: The way our group calendars and group bookings laid out this year was always the first half was sort of the weaker of the two.

Speaker #6: And that our pace picked up in depending on the asset Q2, Q3, Q4. And so when we look at who has group good group pace in the second half of the year, that's where we're talking about New Orleans where pace is up significantly for the second half.

Speaker #6: Orlando also had a tougher first half comp. We'll have a tougher first half comp first quarter and first half. But has a really good second half.

Bryan Giglia: We'll have a tougher H1 comp, Q1 and H1, but has a really good H2. DC has stronger citywides and does pick up, and then there's some events in DC that should be helpful. You know, when we look forward, we have a great transient base of business for the next 6 months that is booking very strong. We didn't have the greatest group bookings in H1, but when we look at the H2 of the year, that's where it really picks up, and that's where we get, you know, we start feeling pretty good about what the setup is for the H2. There's also some other variables out there that could impact travel, that could impact fuel costs.

Speaker #6: DC has stronger city-wides and does pick up. And then there's some events in DC that should be helpful. So when we look forward, we have a great transient base of business for the next six months that has booked at a booking very strong.

Speaker #6: We didn't have the greatest group bookings in the first half, but when we look at the second half of the year, that's where it really picks up.

Speaker #6: And that's where we get—we start feeling pretty good about what the setup is for the second half. Now, there's also some other variables out there that could impact travel, that could impact fuel costs.

Speaker #6: And so again, we like what we see. We like the setup. We are going to remain I think like others, measured until we get a little bit more time to see what other external impacts there could be.

Bryan Giglia: Again, we like what we see, we like the setup. We are gonna remain, you know, I think like others, measured until we get a little bit more time to see what other external impacts there could be.

Speaker #8: Yeah. Makes sense. Okay. Thank you. Appreciate it.

Operator 2: Yeah, makes sense. Okay. Thank you. Appreciate it. Our next question comes from Daniel Politzer from J.P. Morgan. Please go ahead, your line is open.

Operator: Yeah, makes sense. Okay. Thank you. Appreciate it. Our next question comes from Daniel Politzer from J.P. Morgan. Please go ahead, your line is open.

Speaker #4: Our next question comes from Daniel Pulitzer from JPMorgan. Please go ahead. Your line is open.

Speaker #9: Hi, this is Michael Hirsch on for Dan today. Thanks for taking my question. Following up on that last answer there—in the prepared remarks, you had mentioned seeing some group cancellations during the first quarter.

Michael Hirsch: Hi, this is Michael Hirsch on for Dan today. Thanks for taking my question. Sort of on, you know, on that last answer there, in the prepared remarks, you had mentioned seeing some group cancellations during Q1 across the portfolio. Could you provide any additional color on attrition or overall group trends and pacing for this year or next?

Speaker #9: Across the portfolio, could you provide any additional color on attrition or overall group trends and pacing for this year or next?

Speaker #6: Yeah. I mean, overall attrition is probably down slightly from where we were last year. I mean, there were some talk about other external forces.

Bryan Giglia: I mean, overall attrition is probably down slightly from where we were last year. I mean, there were some, you know, some talk about other external forces. There was a lot of government cancels last year. Attrition is down across the board. That's how, you know, we're always gonna have cancellations throughout the year, and there's always some attrition throughout the year. You know, some of the storms on the East Coast did, you know, impact, you know, various groups. That, you know, there was probably, you know, 2 different weeks of that where we had some groups that, you know, either couldn't get to the destination or had to cancel last minute based on, you know, some storms.

Speaker #6: There was a lot of government cancels last year. So attrition is down across the board. That's how we're always going to have cancellations throughout the year.

Speaker #6: And there are always parts where there's some attrition throughout the year. Some of the storms on the East Coast did impact various groups, and so there's probably two different weeks where we had some groups that either couldn't get to the destination or had to cancel last minute based on some storms.

Speaker #6: So again, I don't think I think those were more specific to the weather or specific events and not overall group patterns. I think where we are seeing on the group side is we're seeing the ancillary spend continue to be very strong.

Bryan Giglia: Again, I think those were more specific to the weather or specific events and not overall, you know, group patterns. I think where we are seeing on the group side is we're seeing the ancillary spend continue to be very strong. We continue to see corporate groups and associations both perform well. As I said before, our group pace does pick up into H2 of this year, and we have, you know, it's a little early to start talking about future years, but 2027 pace looks good at this point.

Speaker #6: We continue to see corporate groups and associations both perform well. And as I said before, our group pace does pick up into the second half of this year.

Speaker #6: And we have—it's a little early to start talking about future years, but '27 pace looks good at this point.

Speaker #9: Thank you. And then for my follow-up, you touched on World Cup in Miami. But for your broader portfolio, could you remind us what your outlook is for the RevPAR uplift and what about recent World Cup demand trends are leading to your more measured approach?

Michael Hirsch: Thank you. For my follow-up, you touched on World Cup in Miami, but for your broader portfolio, could you remind us what your outlook is for the RevPAR uplift? What about recent World Cup demand trends are leading to your more measured approach?

Speaker #6: Well, I think our measured approach is how we started the year. We were we didn't have and it was too early to have bookings.

Bryan Giglia: Well, I think our measured approach is how we started the year. You know, we didn't have, you know, it was too early to have bookings. There was the expectation that things would be very strong, but again, not having a recent history and not having the business on the books, we felt it didn't make sense to get out over our skis and start, you know, anticipating rate increases and major demand. I think that, you know, we started the year measured. You know, as we get closer, we've seen different data points and other, you know, either through the brands or others saying that it is going to be a shorter term booking window.

Speaker #6: There was the expectation that things would be very strong, but again, not having a recent history and not having the business on the books, we felt it didn't make sense to get out over our skis and start anticipating rate increases and major demand.

Speaker #6: So I think that that we started the year measured. As we get closer, we've seen different data points and other either through the brands or others saying that it is going to be a shorter-term booking window.

Bryan Giglia: You know, we do have some group business on, you know, I think, but it's limited. There's a group in San Francisco, a group in Miami, there is some. If we see international travel very strong during that time period and, you know, last-minute bookings pick up, then that will be additive to our, you know, to our Q3, but not Q2 and Q3, but not in any of our guidance at this point.

Speaker #6: We do have some group business on, I think. But it's limited. There's a group in San Francisco, a group in Miami. And so there is some, but if we see international travel very strong during that time period and last-minute bookings pick up, then that will just—that will be additive to our third quarter.

Speaker #6: But second and third quarter, but not in any of our guidance at this point.

Speaker #9: Thank you.

Michael Hirsch: Thank you.

Speaker #4: Our next question comes from Tim Billingsley from Compass Point. Please go ahead. Your line is open.

Operator 2: Our next question comes from Kenneth Billingsley from Compass Point. Please go ahead, your line is open.

Operator: Our next question comes from Kenneth Billingsley from Compass Point. Please go ahead, your line is open.

Speaker #10: Hi. This is Ken. Thank you for taking my question. I wanted to follow up on out-of-room spending. Your total RevPAR guidance grew faster than the RevPAR.

Kenneth Billingsley: Hi, this is Ken. Thank you for taking my question. I wanted to follow up on out-of-room spending. Your total RevPAR guidance grew faster than the RevPAR. I'd like to know, maybe could you talk about what's driving some of that? How much of it is a fixed spending, and what you have associated with the room, and how much of it is discretionary?

Speaker #10: And I'd like to know, could you talk about what's driving some of that? How much of it is fixed spending, and what do you have that's associated with the room?

Speaker #10: And how much of it is discretionary?

Speaker #6: Well, I think even with first, good morning, Ken. Even with groups, there's a portion of it is discretionary. You have your if you have your minimums, you have your contracted amounts.

Bryan Giglia: Well, I think even with group First, good morning, Ken. Even with groups, there's a portion of it is discretionary. You have, you have your, you know, you have your minimums, you have your contracted amounts, but as you get, you know, closer to the event, you see, you know, people buying up and groups buying up different things, adding things, and in certain times, they subtract things. I, you know, what we've seen in the first quarter, and not just specific to corporate group, we've seen it with association too, is we've just seen a better, a better spend.

Speaker #6: But as you get closer to the event, you see people buying up and groups buying up different things, adding things, and certain times they subtract things.

Speaker #6: What we've seen in the first quarter and not just specific to corporate group, we've seen it with association, too, is we've just seen a better spend.

Speaker #6: And those the contractual amount is there, but the additional add-ons or upgrades whether it be through AV, through food options, beverage options, what have you, is that we have it was a strong quarter for that.

Bryan Giglia: Those, you know, the contractual amount is there, but the additional add-ons or, you know, upgrades, whether it be through AV, through food options, beverage options, what have you. You know, it was a strong quarter for that, and we don't see that slowing down at this time.

Speaker #6: And we don't see that slowing down at this time.

Speaker #10: And away from just the group specific and out-of-room spending not related to the group, I would imagine you're seeing that being stronger as well?

Kenneth Billingsley: Away from just the group specific and out-of-room spending not related to group, I would imagine you're seeing that being stronger as well.

Speaker #6: Yeah. It's also a function of occupancy pickup, too, right? So in YLAA, that's a market where have a significant out-of-room spend for your transient customer.

Bryan Giglia: Yeah, it's also a function of occupancy pickup too, right? In Wailea, that's a market where we have a significant, you know, out-of-room spend for your transient customer, as we regain our occupancy share, that was happening during the quarter and will continue throughout the rest of the year. Those customers spend more money at the, you know, at the bars, at the restaurants, at the, you know, other events and amenities at the hotel. Yes, absolutely, we're seeing that, we're seeing that on the transient side too. You know, more at the resorts than at your, you know, at a business transient hotel where there's less options to spend.

Speaker #6: As we regain our occupancy share, that was happening during the quarter and will continue throughout the rest of the year. Those customers spend more money.

Speaker #6: At the bars, at the restaurants, at the other events and amenities at the hotel. So yes, absolutely, we're seeing that. We're seeing that on the transient side, too.

Speaker #6: More at the resorts than at your at a business transient hotel where there's less options to spend.

Speaker #10: Sure. Okay. So a lot of the uplift there is on the occupancy side, not so much that they're necessarily spending more per room?

Kenneth Billingsley: Sure. Okay. A lot of the uplift there is on the occupancy side, not so much that they're necessarily spending more per room.

Speaker #6: Well, on the group side, we're spending more per occupied room. On the occupancy on the transient side, it's going to depend hotel by hotel.

Bryan Giglia: Well, on the group side, we're spending more per occupied room. On the transient side, it's going to depend, hotel by hotel. Maui, I would say, is probably a mix of both.

Speaker #6: Maui, I would say, is probably a mix of both. And that's but at the at some of the more luxury resorts in wine country, there's just generally more spend, whether it be spa, food, occupancy that hasn't was up a little bit over the in the quarter, but we're seeing strong spend across.

Kenneth Billingsley: Right

Bryan Giglia: At the, you know, at some of the more luxury resorts in Wine Country, there's, you know, there's just generally more spend, whether it be spa, food, occupancy, you know, was up a little bit over the quarter, but we're seeing strong spend across.

Speaker #10: Great. Thank you.

Kenneth Billingsley: Great. Thank you.

Speaker #4: Our next question comes from Chris Darling from Green Street. Please go ahead. Your line is open.

Operator 2: Our next question comes from Chris Darling from Green Street. Please go ahead. Your line is open.

Operator: Our next question comes from Chris Darling from Green Street. Please go ahead. Your line is open.

Speaker #11: Thanks. Good morning. Brian, I understand guidance may prove conservative, but if I sort of look at what's implied for the rest of the year, it would seem to suggest sort of flattish, maybe even slightly declining margins for the rest of the year, hoping you could put that outlook in the context and also talk about just generally how you see expenses trending through the rest of the year.

Chris Darling: Thanks. Good morning.

Chris Darling: Thanks. Good morning. Brian, I understand, you know, guidance may prove conservative, but if I sort of look at what's implied for the rest of the year, it would seem to suggest sort of flattish, maybe even slightly declining margins for the rest of the year. Hoping you could put that outlook into context, and also talk about just generally how you see expenses trending for the rest of the year.

Bryan Giglia: Good morning.

Chris Darling: Brian, I understand, you know, guidance may prove conservative, but if I sort of look at what's implied for the rest of the year, it would seem to suggest sort of flattish, maybe even slightly declining margins for the rest of the year. Hoping you could put that outlook into context, and also talk about just generally how you see expenses trending for the rest of the year.

Speaker #6: Yeah, I mean, in general, we see our expenses are increasing three and a quarter to three and a half percent. And so, if you look at the RevPAR gain distribution quarter to quarter, first quarter was our biggest growth.

Bryan Giglia: Yeah. I mean, in general, we see, you know, our expenses are, you know, increasing 3.25% to 3.5%. If you look at the RevPAR gain distribution quarter-to-quarter, Q1 was our biggest growth and will be our biggest growth for the quarter. Our margins, obviously, we had margin expansion during the Q1. As we go throughout the rest of the year, you know, luckily, we saw good productivity in the Q1. We are endeavoring and planning on having, you know, maintaining productivity or increasing our productivity, especially in the rooms department, because that's the most valuable.

Speaker #6: And will be our biggest growth quarter. And so our margins, obviously, we had margin expansion during the first quarter. As we go throughout the rest of the year, luckily, we saw good productivity in the first quarter.

Speaker #6: We are endeavoring in planning on having maintaining productivity or increasing our productivity especially in the rooms department because that's the most valuable. And so depending on where RevPAR shakes out for the rest of the year, we can be possibly positive to slightly up to I think or maybe neutral for the rest of the year.

Bryan Giglia: Depending on where RevPAR shakes out for the rest of the year, you know, we can be, you know, possibly, you know, positive to slightly up, to, you know, I think, you know, or maybe neutral for the rest of the year. You know, it'll depend on if we're conservative on the RevPAR side, then we'll absolutely have better flow through and margins will tick up. Right now, given where the implied RevPAR guidance is for the remainder of the year and that expenses are growing in that low-ish to mid-3%, you know, we'll revise it when we have another quarter or so under our belt. Right now, we figured that that was, you know, the most prudent thing to do.

Speaker #6: So, it’ll depend on if we’re conservative on the RevPAR side. Then we’ll absolutely have better flow-through, and margins will tick up. But right now, given where the implied RevPAR guidance is for the remainder of the year, and that expenses are growing in that low-ish to mid 3%, we’ll revise it when we have another quarter or so under our belt.

Speaker #6: But right now, we figured that that was the most prudent thing to do.

Speaker #11: Okay. Understood. And I may have missed this earlier, but could you elaborate on some of the recent operating performance at the wine country hotels and just your outlook for the rest of the year there?

Chris Darling: Okay. Understood. You know, I may have missed this earlier, but could you elaborate on some of the recent operating performance at the Wine Country hotels and just your outlook for the rest of the year there?

Speaker #6: Yeah. I mean, first quarter is the low season there. And so it's the most challenged on occupancy side. And so the key to that profitability or trying to get to break even in the first quarter is really making sure you have the right amount of group business.

Bryan Giglia: I mean, Q1 is the low season there, it's the most challenged on occupancy side. The key to that profitability or trying to get to break even in Q1 is really making sure you have the right amount of group business. That's something we've been talking about for a couple years now and really having the resorts focus on is try to get that right group base in there. You know, that group base comes at a lower rate, but comes with a higher ancillary spend. You know, the hotels, the resorts have worked very hard to get as much group on the books as they can. Quite honestly, they both had great group on the books this year.

Speaker #6: And that's something we've been talking about for a couple of years now and really having the resorts focus on is try to get that right group base in there.

Speaker #6: And that group base comes at a lower rate but comes with a higher ancillary spend. And so the hotels, the resorts have worked very hard to get as much group on the books as they can.

Speaker #6: And quite honestly, they both had great group on the books this year. I mean, this is in the works for a while, but they've been able to get that good first-quarter group base.

Bryan Giglia: I mean, this is, you know, been in the works for a while, but they've been able to get that good Q1 group base. Transient demand has been better than expected, so that benefited both. You know, while we had bad weather on the East Coast and in Hawaii, also in California and in Wine Country, they had great weather for Q1 this year, that helped also. All those factors kind of came together and gave us, you know, a Q1 we're very pleased with. Going forward, both hotels have continued to have very good transient demand. Four Seasons has very good group pace for H2 of the year. Montage has decent group pace.

Speaker #6: Transient demand has been better than expected, so that benefited both. And then, while we had bad weather on the East Coast and in Hawaii, also in California and in wine country, they had great weather.

Speaker #6: For the first quarter of this year. And so that helped also. So all those factors kind of came together. And gave us a first quarter we were very pleased with.

Speaker #6: Going forward, both hotels have continued to have very good transient demand. Four seasons has very good group pace for the second half of the year.

Speaker #6: Montage has decent group pace. Montage is maybe a little farther ahead of Four Seasons as far as establishing its group business, which is something that—we're doing more group room nights this year than we've ever done before.

Bryan Giglia: Montage is, you know, maybe a little farther ahead of Four Seasons as far as establishing its group business, which is something that we're doing, you know, more group room nights this year than we've ever done before. It's probably about 55% of total occupancy. We'd like to see that, you know, inch up to about 60%, 65%. That would be ideal for that asset. Both, you know, whether it be, you know, luxury is outperforming, and combine that with the demand we're seeing in the improvements we're seeing from the Bay Area that feeds up there, our outlook for both is very strong for the rest of the year.

Speaker #6: It's probably about 55% of total occupancy. We'd like to see that inch up to about 60, 65 percent. That would be ideal for that asset.

Speaker #6: But both, whether it be luxury, is outperforming, and combine that with the demand we're seeing and the improvements we're seeing from the Bay Area that feeds up there.

Speaker #6: Our outlook for both is very strong for the rest of the year.

Speaker #11: Okay. Thank you for taking the questions. That's it for me.

Chris Darling: Okay, thank you for taking the questions. That's it for me.

Speaker #4: Our next question comes from Floris van Dijkum from Leidenburg. Please go ahead, your line is open.

Operator 2: Our next question comes from Floris van Dijkum from Ladenburg. Please go ahead, your line is open.

Operator: Our next question comes from Floris van Dijkum from Ladenburg. Please go ahead, your line is open.

Speaker #12: Hey, thanks, guys. Just maybe following up on the wine country hotels. I mean, the performance—even though it was still a loss—it's a $4 million improvement in terms of EBITDA relative to the first quarter of last year, which is pretty meaningful.

Floris van Dijkum: Hey, thanks, guys. Just maybe following up on the Wine Country hotels. I mean, the performance was, you know, even though it's still a loss, it's, you know, $4 million improvement in terms of EBITDA relative to Q1 of last year, which is pretty meaningful. As you think about your disposition plans, are those potential sale candidates in your view, particularly now that the JW Marriott in Marco Island has sold and, you know, the luxury market seems to be, you know, unthawing in terms of, you know, financing availability?

Speaker #12: As you think about your disposition plans, do you have a are those potential sale candidates in your view, particularly now that the JW Marriott in Marco Island has sold and the luxury market seems to be unfalling in terms of financing availability?

Speaker #6: Yeah, I don't know if Marco Island is a direct comp for these two, but look, I think we've been very clear. When we look at our portfolio and we look at potential dispositions, we want to capitalize on private market values.

Bryan Giglia: Yeah, I don't know if Marco Island is a direct comp for these two. You know, look, I think we've been very clear. We're looking You know, when we look at our portfolio, and we look at potential dispositions, we wanna capitalize on private market values. There are certain types of assets right now, and luxury absolutely being one of them, and markets where there's a lot of interest. You know, we don't comment on transactions, you know, before we have something to publicly say. Based on our actions in the past and based on the criteria I just highlighted, we're clearly out there exploring various opportunities, you know, really at all times.

Speaker #6: And that there are certain types of assets right now and luxury absolutely being one of them. And markets where there's a lot of interest, we're not we don't comment on transactions before we have something to publicly say, but based on our actions in the past and based on the criteria I just highlighted, we're clearly out there exploring various opportunities really at all times.

Bryan Giglia: To make sure that we can, you know, have assets that we can recycle and redeploy those proceeds either into our common, our preferred or, as I said earlier, if things improve, you know, different acquisition targets. You know, monetizing low-yielding assets is something that, you know, could be achievable right now in the current market, and we'll look at, you know, doing what we can. There are a lot of luxury assets out in the market right now. I mean, there are older portfolios that are coming back. There is a lot of supply out there. You know, this is a core tenet of our strategy of redeploying and recycling assets. It's something that we're focused on doing.

Speaker #6: But to make sure that we can have assets that we can recycle and redeploy those proceeds either into our common or preferred, or, as I said earlier, if things improve, different acquisition targets.

Speaker #6: But monetizing low-yielding assets is something that could be achievable right now in the current market. And we'll look at doing what we can. There are a lot of luxury assets out in the market right now.

Speaker #6: I mean, there are older portfolios that are coming back that so there's a lot of there is a lot of supply out there, but this is a core tenet of our strategy, of redeploying and recycling assets.

Speaker #6: So, it's something that we're focused on doing.

Speaker #11: Thanks. Maybe a follow-up. I mean, obviously, operations are definitely trending the right way right now. But your guidance is, again, like everybody else in all your peers, everybody's staying very cautious maybe touch on are there outliers in terms of the World Cup impact that it could have based on what your outlook is today?

Floris van Dijkum: Thanks. Maybe a follow-up. I mean, obviously operations, you know, are definitely, you know, trending the right way right now. Your guidance is, again, you're like everybody else and all your peers. Everybody's staying very cautious. Maybe touch on, are there outliers in terms of the World Cup impact that it could have based on, you know, what your outlook is today? I mean, what's the upside if the World Cup does pan out to be better than what you're expecting in your view?

Speaker #11: I mean, what's the upside if the World Cup does pan out to be better than what you're expecting? In your view.

Speaker #6: Yeah, I mean, that will add significant compression. Look, when we look at the state of the industry, or at least what we're seeing in our portfolio, Q1 had great transient demand.

Bryan Giglia: Yeah, I mean, that will add significant compression. You know, look, when we look at the state of the industry or at least what we're seeing in our portfolio, Q1 had great transient demand. The next 6 months of transient bookings are up significantly, they're not just up at resorts. They're up at our convention hotels, they're up at our urban hotels, and they're also up at our resorts. Transient's very strong. Our H2 group pace is very strong, group business is strong. Group contribution is strong. We see the hotels booking, you know, significant current year and future year business. All of that is strong.

Speaker #6: The next six months, bookings—the next six months of transient bookings—are up significantly. And they're not just up at resorts; they're up at our convention hotels.

Speaker #6: They're up at our urban hotels, and they're also up at our resorts. So transient is very strong. Our second half group pace is very strong.

Speaker #6: And so group business is strong. Group contribution is strong. We're we see the hotels booking significant current year and future year business. So all of that is strong.

Speaker #6: So all these positive points, if World Cup comes in stronger, then that's just that's additional compression and additional benefit that will accrete to our performance.

Bryan Giglia: All these positive points, if World Cup comes in stronger, then that's just additional compression and additional benefit that will accrete to our performance. You know, the conservatism and the caution is that, you know, there are events out there that could impact the cost and demand of travel. Because of that, you know, we, and I think most of our peers in the industry, will remain cautious until we see those potential impacts, you know, alleviated. Thanks, guys.

Speaker #6: The conservatism and the caution is that there are events out there that could impact the cost and demand of travel. And so, because of that, we—and I think most of our peers in the industry—will remain cautious until we see those potential impacts alleviated.

Speaker #12: Thanks, guys.

Floris van Dijkum: Thanks, guys.

Speaker #4: Our next question comes from Logan Epstein from Wolf Research. Please go ahead. Your line is open.

Operator 2: Our next question comes from Logan Epstein from Wolfe Research. Please go ahead. Your line is open.

Operator: Our next question comes from Logan Epstein from Wolfe Research. Please go ahead. Your line is open.

Speaker #11: Yeah, thanks for taking the question. Maybe just one for me. Last quarter, you guys talked about staying on the topic of transient demand. You guys mentioned that government-related demand was coming back to San Diego in the first two months of the year.

Logan Epstein: Yeah, thanks. The question, maybe just one for me. Last quarter, you guys talked about staying on the topic of transient demand. You guys talked about government-related was coming back to San Diego in the first 2 months of the year. Just curious if you saw that trend continue into March and April, and then how you expect that to impact both San Diego and DC for the rest of the year.

Speaker #11: Just curious if you saw that trend continue into March and April and then how you expect that to impact both San Diego and DC for the rest of the year.

Speaker #6: So, we saw really the largest increase in transient demand was in Long Beach in the first quarter. And there's defense and other businesses in there, government-related businesses.

Bryan Giglia: We saw really the largest increase in transient demand was in Long Beach in the first quarter. There's defense and other businesses in there, government-related businesses. We saw a good pickup in Long Beach. San Diego, we saw transient pickup. It was more negotiated, and then some discount also, which the negotiated piece of it could be government-related 'cause it could be consultants and contractors and that work. In DC, I think we saw a little bit less in DC, but we saw strong transient. What the transient in DC is really coming from is the rebranding to a Westin. We're picking up more corporate accounts, more retail accounts.

Speaker #6: So we saw a good pickup in Long Beach. San Diego, we saw transient we saw transient pickup. It was more negotiated. And then some discount also which the negotiated piece of it could be government-related because it could be consultants and contractors and that work.

Speaker #6: In DC, I think we saw a little bit less in DC, but we saw strong transient. And what the transient in DC is really coming from is the rebranding to a Westin.

Speaker #6: We're picking up more corporate accounts, more retail accounts. And so when you look at our rate and our occupancy index, compared to pre-Westin, we're definitely gaining share on the market.

Bryan Giglia: When you look at our rate and our occupancy index compared to pre-Westin, we're definitely gaining share on the market. While some of that is, like, everything in DC will be government-related, what we're really seeing there is the benefit of the rebranding that we did.

Speaker #6: And so while some of that is everything in DC will be government-related, what we're really seeing there is the benefit of the rebranding that we did.

Speaker #11: Thanks, Bryan. I'll leave it there.

Logan Epstein: Thanks, Bryan. I'll leave it there.

Speaker #4: Our last question comes from Chris. Line is open.

Operator 2: Our last question comes from Chris Woronka from Deutsche Bank. Please go ahead. Your line is open.

Operator: Our last question comes from Chris Woronka from Deutsche Bank. Please go ahead. Your line is open.

Speaker #12: Hey, yeah. Good morning, guys. Thanks for taking the question. Bryan, you covered a lot of ground on Miami, on Andaz, and kind of up.

Chris Woronka: Hey. Yeah, good morning, guys. Thanks for taking the question. Bryan, you know, you covered a lot of ground on Miami, on Andaz, and kind of what still needs to happen to get fully ramped up, and seems like you had a good start in Q1. Can you maybe just flesh out a few more details on, I know there's still obviously a rate story, but is there also kind of a group story to this? I guess more ancillary, I don't know how much like beach club you mentioned before will factor in. Just trying to get a sense for how much is strictly rate, which should have obviously nice flow through, versus kind of group and other things that still need to happen. Thanks.

Speaker #12: And it seems like you had a good start in Q1. But can you maybe just flesh out a few more details on I know there's still obviously a rate story but is there also kind of a group story to this?

Speaker #12: And I guess, more ancillary—I don't know how much Beach Club you mentioned before will factor in. So, just trying to get a sense for how much is strictly rate, which should have obviously nice flow-through, versus kind of group and other things that still need to happen.

Speaker #12: Thanks.

Speaker #6: Sure. Our target—and good morning, Chris. Our target for group is probably about 25% for the hotel this year. We'll run 20-ish percent of the business group, which is better than we anticipated going into the year.

Bryan Giglia: Sure. You know, our target morning, Chris. Our target for group is probably about 25% for the hotel, and this year we'll run 20-ish% of the business group, which is better than we anticipated going into the year. We've, we've actually seen not only group volume, but the quality of the group continue to improve as we move throughout the year. You know, Miami is a, is a repeat market, both for the transient customer and the group customer. You know, that quality of group, whether it be at the end of the year for Art Basel or other major events, is that, you know, we didn't really participate in that last year. We'll have groups in this year, and next year we'll probably have even better groups in.

Speaker #6: We've actually seen not only group volume, but the quality of the group continue to improve as we move throughout the year. Miami is a repeat market.

Speaker #6: Both for the transient customer and the group customer. So that quality of group, whether it be at the end of the year for our Basel or other major events, is that we didn't really participate in that last year.

Speaker #6: And so we'll have groups in this year, and next year we'll probably have even better groups in. And so while we have some occupancy on the group side, the group side is also—will be a rate story.

Bryan Giglia: While we have some occupancy on the group side, the group side is also will be a rate story. Also at the end, you know, in the end of Q3, Q4, when Bazaar opens, that's going to bring a level of energy and notoriety into the hotel where, you know, that's going to be a big catalyst when it comes to the overall rate of the hotel, the resort also. You know, everything has accelerated in Q1, where we've seen the group pick up, the group demand, the quality of the group increase.

Speaker #6: And then also, at the end—in the end of the third quarter, fourth quarter—when Bizarre opens, that's going to bring a level of energy and notoriety into the hotel, where that's going to be a big catalyst when it comes to the overall rate of the hotel or the resort also.

Speaker #6: So everything has accelerated in the first quarter where we've seen the group pickup, the group demand, the quality of the group increase. And so while there's still occupancy there, there's still ancillary spend there.

Bryan Giglia: While there's still occupancy there's still ancillary spend there, as we move into next year, it starts to become more of the rate story, and we have a lot of space between our current rate and the market rate, where that will be very meaningful to the cash flow of the hotel.

Speaker #6: As we move into next year, it starts to become more of the rate story. And we have a lot of space between our current rate and the market rate where that will be very meaningfully very meaningful to the cash flow of the hotel.

Speaker #12: Okay. Very helpful. Thanks, Bryan.

Chris Woronka: Okay. Very helpful. Thanks, Bryan.

Speaker #4: We have no further questions. I would like to turn the call back over to Bryan Giglia for closing remarks.

Operator 2: We have no further questions. I would like to turn the call back over to Bryan Giglia for closing remarks.

Operator: We have no further questions. I would like to turn the call back over to Bryan Giglia for closing remarks.

Speaker #6: Thank you, everyone, for your interest and we look forward to seeing many of you at upcoming conferences and look forward to also anyone that we have the chance to get through the new Andaz.

Bryan Giglia: Thank you, everyone, for your interest, and we look forward to seeing many of you at upcoming conferences and look forward to also anyone that we have the chance to get through the new Andaz. We've had many tours, but are always available to show off this really remarkable resort. Thank you.

Speaker #6: We've had many tours, but are always available to show off this really remarkable resort. Thank you.

Operator 2: This concludes today's conference call. Thank you for your participation. You may now disconnect.

Operator: This concludes today's conference call. Thank you for your participation. You may now disconnect.

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Q1 2026 Sunstone Hotel Investors Inc Earnings Call

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Sunstone Hotel Investors

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Earnings

Q1 2026 Sunstone Hotel Investors Inc Earnings Call

Tuesday, May 5th, 2026 at 3:00 PM

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Sunstone Hotel Investors

Earnings

Q1 2026 Sunstone Hotel Investors Inc Earnings Call

SHO

Tuesday, May 5th, 2026 at 3:00 PM

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