Q1 2026 RLJ Lodging Trust Earnings Call

May 4, 2026

Operator 3: Greetings, welcome to the RLJ Lodging Trust Q1 2026 Earnings Conference Call. It is now my pleasure to introduce your host, John Paul Austin, Director of Investor Relations. Thank you, sir. You may begin.

Operator: Greetings, welcome to the RLJ Lodging Trust Q1 2026 Earnings Conference Call. It is now my pleasure to introduce your host, John Paul Austin, Director of Investor Relations. Thank you, sir. You may begin.

Speaker #2: A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad.

Speaker #2: As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, John Paul Austin, Director of Investor Relations. Thank you, sir.

Speaker #2: You may begin.

Speaker #3: Thank you, operator. Good morning, and welcome to RLJ Lodging Trust's Q1 2026 first quarter earnings call. On today's call, Leslie Hale, our President and Chief Executive Officer, will discuss key highlights for the quarter.

John Paul Austin: Thank you, operator. Good morning, and welcome to RLJ Lodging Trust 2026 Q1 earnings call. On today's call, Leslie Hale, our President and Chief Executive Officer, will discuss key highlights for the quarter. Nikhil Bhalla, our Chief Financial Officer, will discuss the company's financial results. Tom Bardenett, our Chief Operating Officer, will also be available for Q&A. Forward-looking statements made on this call are subject to numerous risks and uncertainties that may lead the company's actual results to differ materially from what has been communicated. Factors that may impact the results of the company can be found in the company's 10-Q and other reports filed with the SEC. The company undertakes no obligation to update forward-looking statements. Also, as we discuss certain non-GAAP measures, it may be helpful to review the reconciliations to GAAP located in our press release.

Speaker #3: Nikhil Bhalla, our Chief Financial Officer, will discuss the company's financial results. Tom Bardenet, our Chief Operating Officer, will also be available for Q&A. Forward-looking statements made on this call are subject to numerous risks and uncertainties that may lead the company's actual results to differ materially from what has been communicated.

Speaker #3: Factors that may impact the results of the company can be found in the company's 10-Q and other reports filed with the SEC. The company undertakes no obligation to update forward-looking statements.

Speaker #3: Also, as we discuss certain non-GAAP measures, it may be helpful to review the reconciliations to GAAP located in our press release. Finally, please refer to our schedule of supplemental information, which includes pro forma operating results for our current hotel portfolio.

John Paul Austin: Finally, please refer to our schedule of supplemental information, which includes pro forma operating results for our current hotel portfolio. I'll now turn the call over to Leslie.

Speaker #3: I'll now turn the call over to Leslie.

Speaker #4: Thanks, John Paul. Good morning, everyone, and thank you for joining us today. We are encouraged to see the lodging industry off to a strong start this year, benefiting from the underlying strength of fundamentals.

Leslie Hale: Thanks, John Paul. Good morning, everyone, and thank you for joining us today. We are encouraged to see the lodging industry off to a strong start this year, benefiting from the underlying strength of fundamentals, with the acceleration of business transient demand being a key driver. We are particularly pleased with our Q1 results as our urban-centric portfolio outperformed the industry. Our favorable footprint with exposure to many top-performing markets, such as Northern California and South Florida, among others, allowed us to capture the broad-based momentum in all segments of demand, along with a ramp from our recent high-impact renovations and conversions, driving solid results ahead of our expectations. During the Q1, we achieved RevPAR growth of 4.8%, outperforming the industry by 100 basis points.

Speaker #4: With the acceleration of business transient demand being a key driver, we are particularly pleased with our first quarter results, as our urban-centric portfolio outperformed the industry.

Speaker #4: Our favorable footprint, with exposure to many top-performing markets such as Northern California, South Florida, among others, allowed us to capture the broad-based momentum in all segments of demand, along with the ramp from our recent high-impact renovations and conversions.

Speaker #4: Driving solid results ahead of our expectations. During the first quarter, we achieved REPAR growth of 4.8%, outperforming the industry by 100 basis points. We delivered robust non-room revenue growth, which exceeded our REPAR performance by more than 300 basis points.

Leslie Hale: We delivered robust non-room revenue growth, which exceeded our RevPAR performance by more than 300 basis points, and we drove high single-digit year-over-year EBITDA growth and margin expansion. We also advanced our conversion pipeline and addressed all of our maturities through 2029. Our solid Q1 performance demonstrates the momentum in our urban markets and the growth embedded in our portfolio, while the ongoing execution of our capital allocation and balance sheet initiative position us to continue to drive outperformance relative to the industry and create long-term shareholder value. Turning to our operating results. Our Q1 RevPAR growth of 4.8% was balanced between occupancy and ADR gains. Trends improved sequentially throughout the quarter, with RevPAR in February and March achieving healthy year-over-year growth of 6% and 9% respectively, following January's RevPAR decline.

Speaker #4: And we drove high single-digit year-over-year EBITDA growth and margin expansion. We also advanced our conversion pipeline and addressed all of our maturities through 2029.

Speaker #4: Our solid first-quarter performance demonstrates the momentum in our urban markets and the growth embedded in our portfolio, while the ongoing execution of our capital allocation and balance sheet initiatives positions us to continue to drive outperformance relative to the industry and create long-term shareholder value.

Speaker #4: Turning to our operating results, our first-quarter RevPAR growth of 4.8% was balanced between occupancy and ADR gains. Trends improved sequentially throughout the quarter, with RevPAR in February and March achieving healthy year-over-year growth of 6% and 9%, respectively, following January's RevPAR decline.

Speaker #4: Both February and March were aided by a robust calendar of events as well as the favorable timing of holidays which bolstered demand. We were pleased to see this positive momentum carry into April.

Leslie Hale: Both February and March were aided by a robust calendar of events as well as the favorable timing of holidays, which bolstered demand. We were pleased to see this positive momentum carry into April. Our urban markets have been consistently performing well, disproportionately benefiting from positive trends across all demand segments. We were pleased to see our urban footprint outperform the broader industry urban markets, with a number of our markets delivering high single-digit RevPAR growth. Notably, Northern California achieved outstanding RevPAR growth of 27%, benefiting not only from the Super Bowl and the favorable shift of the RSA Conference to March this year, but also from the continued expansion of the AI industry, which is driving significant corporate investment and business travel demand broadly across this market, in addition to a better overall environment.

Speaker #4: Our urban markets have been consistently performing well, disproportionately benefiting from positive trends across all demand segments. We were pleased to see our urban footprint outperform the broader industry urban markets.

Speaker #4: With a number of our markets delivering high single-digit REPAR growth, notably Northern California achieved outstanding REPAR growth of 27%. Benefiting not only from the Super Bowl and the favorable shift of the RSA conference to March this year, but also from the continued expansion of the AI industry, which is driving significant corporate investment and business travel demand broadly across this market, in addition to a better overall environment.

Speaker #4: New York City was another noteworthy market during the quarter, with our properties achieving over 8% REPAR growth driven by healthy corporate and leisure transient demand, a favorable events lineup, and the ramp of our high-occupancy renovations that we completed last year.

Leslie Hale: New York City was another noteworthy market during the quarter, with our properties achieving over 8% RevPAR growth, driven by healthy corporate and leisure transient demand, a favorable events lineup, and the ramp of our high occupancy renovations that we completed last year. As it relates to segmentation, business travel saw robust growth during Q1, with our business transient revenues growing by 9%, which was largely demand-driven, with room nights increasing by nearly 700 basis points. The momentum in business travel accelerated throughout the quarter, underpinned by strong growth in business investment, driven by AI-related spending as well as record corporate profits. This is specifically fueling the ongoing strength in sectors such as technology, finance, aerospace, and life sciences, which is amplifying overall BT demand. Leisure trends were strong across our portfolio, with revenues growing by 5%.

Speaker #4: As it relates to segmentation, business travel saw robust growth during the first quarter, with our business transient revenues growing by 9%. This was largely demand-driven, with room nights increasing by nearly 700 basis points.

Speaker #4: The momentum in business travel accelerated throughout the quarter, underpinned by strong growth in business investment driven by AI-related spending, as well as record corporate profits.

Speaker #4: This is specifically fueling the ongoing strength in sectors such as technology, finance, aerospace, and life sciences, which is amplifying overall BT demand. Leisure trends were strong across our portfolio, with revenues growing by 5%.

Speaker #4: Demand remained resilient, and we were encouraged to see rate growth of 3%. The leisure segment benefited from a compressed spring break, as well as elevated demand at a number of our hotels, as winter storms across the country drove additional leisure travel during the peak season.

Leslie Hale: Demand remained resilient, and we were encouraged to see rate growth of 3%. The leisure segment benefited from a compressed spring break as well as elevated demand at a number of our hotels as winter storms across the country drove additional leisure travel during peak season. Our urban leisure once again saw stronger relative performance as our hotels and live-workplace submarkets are capturing robust demand around sports, concerts, dining, festivals, and entertainment. Importantly, our geographically diversified portfolio continues to benefit year after year from the rotation of signature events within our footprint. Relative to our group segment, even with difficult comparisons from the inauguration in DC and the Austin Convention Center, booking trends remained healthy, evidenced by our in-the-quarter for the quarter revenue pace increasing by 900 basis points and ADR increasing by 3% over last year.

Speaker #4: Our urban leisure once again saw stronger relative performance, as our hotels and live-workplace submarkets are capturing robust demand around sports, concerts, dining, festivals, and entertainment.

Speaker #4: Importantly, our geographically diversified portfolio continues to benefit year after year from the rotation of signature events within our footprint. Relative to our group segment, even with difficult comparisons from the inauguration in D.C. and the Austin Convention Center, booking trends remained healthy, evidenced by our end-of-quarter, for-the-quarter revenue pace increasing by 900 basis points and ADR increasing by 3% over last year.

Speaker #4: We were especially pleased to see a meaningful pickup in group bookings for the second quarter, which saw pace improve by 400 basis points. We are encouraged by the increasing share of corporate bookings within our group mix.

Leslie Hale: We were especially pleased to see a meaningful pickup in group bookings for Q2, which saw pace improve by 400 basis points. We are encouraged by the increasing share of corporate bookings within our group mix, which has positive implications for ADR and out-of-room spend. Our portfolio also generated outsized non-room revenue growth of 8.2%, once again underscoring the momentum behind our ROI initiatives and the investments we have made in expanding ancillary revenue channels. These initiatives allowed us to increase our total revenues by 5.4%. This top-line growth, combined with disciplined cost management and a lean operating model, contributed to our significant EBITDA outperformance relative to our initial expectations and our margins expanding by 45 basis points over the prior year. Now turning to capital allocation.

Speaker #4: Which has positive implications for ADR and out-of-room spend. Our portfolio also generated outsized non-room revenue growth of 8.2%, once again underscoring the momentum behind our ROI initiatives and the investments we have made in expanding ancillary revenue channels.

Speaker #4: These initiatives allowed us to increase our total revenues by 5.4%. This top-line growth, combined with disciplined cost management and a lean operating model, contributed to our significant EBITDA outperformance relative to our initial expectations and our margins expanding by 45 basis points over the prior year.

Speaker #4: Now, turning to capital allocation, our transformative renovations from last year, as well as our completed conversions, are delivering tangible results and contributed meaningfully to our outperformance relative to the industry.

Leslie Hale: Our transformative renovations from last year, as well as our completed conversions, are delivering tangible results and contributed meaningfully to our outperformance relative to the industry. This is demonstrated by our four major renovations at high occupancy hotels completed last year, achieving 9% RevPAR and 10% EBITDA growth during the quarter. Our conversions continued to deliver solid results, with our seven completed conversions generating EBITDA growth of 16%. Additionally, we made further progress towards our Renaissance Pittsburgh Hotel conversion and remain on track to relaunch the property under Marriott's Autograph Collection this summer. We advanced preparation of our conversion of the Wyndham Boston Beacon Hill, which will join Hilton's Tapestry Collection, and we are on pace to begin construction later this year. We look forward to announcing our next conversion in the coming quarter.

Speaker #4: This is demonstrated by our four major renovations at high-occupancy hotels completed last year, achieving 9% REPAR and 10% EBITDA growth during the quarter. Our conversions continue to deliver solid results, with our seven completed conversions generating EBITDA growth of 16%.

Speaker #4: Additionally, we made further progress towards our Renaissance Pittsburgh conversion and remain on track to relaunch the property under Marriott's Autograph Collection this summer. We advanced preparation of our conversion of the Wyndham Boston Hotel, which will join Hilton's Tapestry Collection, and we are on pace to begin construction later this year.

Speaker #4: And we look forward to announcing our next conversion in the coming quarter. Collectively, these capital allocation initiatives, supported by our strong balance sheet, position us for multiple years of growth in 2026 and beyond.

Leslie Hale: Collectively, these capital allocation initiatives, supported by our strong balance sheet, position us for multiple years of growth in 2026 and beyond. Looking ahead, we recognize that the macro environment remains uncertain, driven by an evolving geopolitical backdrop, which is giving rise to shorter booking windows and limiting visibility beyond the near term. To date, however, we have not observed a noticeable impact on our results. Our Q1 outperformance on both the top and bottom line is encouraging. We believe the setup continues to favor urban markets for the remainder of the year, supported by sustained strength in business transient and robust demand for urban leisure experiences, trends that should disproportionately benefit our portfolio. Overall, we had already anticipated these healthy trends in our original guidance for the remainder of the year. However, given the current uncertainty, we will continue to monitor any shifts in demand.

Speaker #4: Looking ahead, we recognize that the macro environment remains uncertain. Driven by an evolving geopolitical backdrop, which is giving rise to shorter booking windows and limiting visibility beyond the near term, to date, however, we have not observed a noticeable impact on our results.

Speaker #4: Our first quarter outperformance on both the top and bottom line is encouraging, and we believe the setup continues to favor urban markets for the remainder of the year.

Speaker #4: Supported by sustained strength in business transient and robust demand for urban leisure experiences—trends that should disproportionately benefit our portfolio. Overall, we had already anticipated these healthy trends in our original guidance for the remainder of the year.

Speaker #4: However, given the current uncertainty, we will continue to monitor any shifts in demand. Our outlook assumes the continuing broad-based strength in BT, supported by healthy corporate profits and growth across a number of industries, reinforcing our view that the recovery in this segment has further room to grow.

Leslie Hale: Our outlook assumes the continuing broad-based strength in BT, supported by healthy corporate profits and growth across a number of industries, reinforcing our view that the recovery in this segment has further room to grow. The resiliency of leisure demand and expectations for continued rate growth as we approach the peak summer travel season, especially in our urban markets, which have an extensive lineup of events, sports, concerts, and entertainment. A positive group pace for the remainder of the year, with ADR demonstrating pricing power. Our expectations that even with a shortened booking window, we will continue to see strong for the quarter bookings. A favorable footprint to capture upcoming catalysts, including the World Cup and America's 250th anniversary. The ongoing momentum in Northern California across all demand segments, further validating the sustainability of this market's recovery.

Speaker #4: The resiliency of leisure demand and expectations for continued rate growth as we approach the peak summer travel season, especially in our urban markets, which have an extensive lineup of events, sports, concerts, and entertainment.

Speaker #4: A positive group pace for the remainder of the year, with ADR demonstrating pricing power, and our expectations that even with a shortened booking window, we will continue to see strong end-of-quarter, for-the-quarter bookings.

Speaker #4: A favorable footprint to capture upcoming catalysts, including the World Cup and America's 250th anniversary. The ongoing momentum in Northern California across all demand segments further validates the sustainability of this market's recovery.

Speaker #4: Continued growth of non-room revenues from our ROI initiatives, as well as tailwinds from the ramp of our four significant renovations completed last year and our recently completed conversions, which are well positioned to drive multiple years of growth.

Leslie Hale: Continued growth of non-room revenues from our ROI initiatives, as well as tailwinds from the ramp of our four significant renovations completed last year and our recently completed conversions, which are well-positioned to drive multiple years of growth. Our strong results are a direct outcome of the strategic repositioning of our portfolio over the past several years through asset recycling, targeted acquisition, and high-impact conversions. As we look ahead, we remain cautiously optimistic about the long-term durability of the demand trends we are seeing and believe our well-positioned portfolio will support continued strong relative performance and the creation of long-term value for our shareholders. With that, I will turn the call over to Nikhil.

Speaker #4: Our strong results are a direct outcome of the strategic repositioning of our portfolio over the past several years. Through asset recycling, targeted acquisition, and high-impact conversion, as we look ahead, we remain cautiously optimistic about the long-term durability of the demand trends we are seeing and believe our well-positioned portfolio will support continued strong relative performance and the creation of long-term value for our shareholders.

Speaker #4: With that, I will turn the call over to Nikhil.

Speaker #5: Thanks, Leslie. To start, our comparable numbers include our 92 hotels owned at the end of the first quarter. Our reported corporate adjusted EBITDA and AFFO include operating results from all sold hotels during RLJ's ownership period.

Nikhil Bhalla: Thanks, Leslie. To start, our comparable numbers include our 92 hotels owned at the end of Q1. Our reported corporate adjusted EBITDA and AFFO include operating results from all sold hotels during RLJ's ownership period. Our Q1 results came in ahead of our expectations, with occupancy increasing by 2.6% to 70.8%. Average daily rate increasing by 2.1% to $210, and our RevPAR of $149 increasing by 4.8% versus the prior year. Fundamentals strengthened throughout the quarter following January's 1.9% RevPAR decline, with growth accelerating to a robust 6.1% in February and 8.9% in March. These healthy trends carried into April, which achieved preliminary RevPAR growth of approximately 4%.

Speaker #5: Our first-quarter results came in ahead of our expectations, with occupancy increasing by 2.6% to 70.8%, average daily rate increasing by 2.1% to $210, and our RevPAR of $149 increasing by 4.8% versus the prior year.

Speaker #5: Fundamentals strengthened throughout the quarter following January's 1.9% REFPAR decline, with growth accelerating to a robust 6.1% in February and 8.9% in March. These healthy trends carried into April, which achieved preliminary REFPAR growth of approximately 4%.

Speaker #5: During the quarter, we saw meaningful strength within our urban markets, which achieved 4.4% REFPAR growth, outperforming STR's comparable markets by 110 basis points. This growth was broad-based and balanced between approximately a 2-point increase in occupancy and a 2-point increase in ADR.

Nikhil Bhalla: During the quarter, we saw meaningful strength within our urban markets, which achieved 4.4% RevPAR growth, outperforming STR's comparable markets by 110 basis points. This growth was broad-based and balanced between approximately a 2-point increase in occupancy and a 2-point increase in ADR. Our strong urban portfolio performance was bolstered by double-digit RevPAR growth in markets such as South Florida, which grew RevPAR by approximately 10%, and Houston and Denver, which each achieved 14% RevPAR growth. Demonstrating that our portfolio benefits from 7 days a week demand, both weekdays and weekends saw mid-single-digit RevPAR growth. Our urban markets benefited from improvements in all segments of demand, notably business travel.

Speaker #5: Our strong urban portfolio performance was bolstered by double-digit REFPAR growth in markets such as South Florida, which grew REFPAR by approximately 10%, and Houston and Denver, which each achieved 14% REFPAR growth.

Speaker #5: Additionally, demonstrating that our portfolio benefits from seven days a week demand, both weekdays and weekends saw mid-single-digit RevPAR growth. Our urban markets benefited from improvements in all segments of demand, notably business travel.

Speaker #5: The acceleration in BT demand that we are seeing has positive implications for the momentum in out-of-room spend, which was evident in the robust growth of 8.2% in our non-room revenues that we saw during the first quarter.

Nikhil Bhalla: The acceleration in BT demand that we are seeing has positive implications for the momentum in out-of-room spend, which was evident in the robust growth of 8.2% in our non-room revenues that we saw during Q1. We were especially pleased to see the strong revenue growth come on the heels of the robust 7.2% growth we achieved during the prior quarter. Our non-room revenues generate strong margins, which improved by 130 basis points during the quarter, underscoring the success of our ROI initiatives aimed at profitably growing food and beverage, reconcepting underutilized spaces, and growing other ancillary revenues. Overall, non-room revenue growth led our Q1 total revenues to grow by 60 basis points ahead of our RevPAR growth.

Speaker #5: We were especially pleased to see the strong revenue growth come on the heels of the robust 7.2% growth we achieved during the prior quarter.

Speaker #5: Our non-room revenues generate strong margins, which improved by 130 basis points during the quarter, underscoring the success of our ROI initiatives aimed at profitably growing food and beverage, reconcepting underutilized spaces, and growing other ancillary revenues.

Speaker #5: Overall, non-room revenue growth led our first-quarter total revenues to grow by 60 basis points ahead of our RevPAR growth. Turning to bottom-line results, total operating expenses were up 2.1% on a per-occupied room basis.

Nikhil Bhalla: Turning to bottom-line results, total operating expenses were up 2.1% on a per occupied room basis, underscoring the benefits of our lean operating model and our disciplined approach to managing costs, which allow for strong flow to the bottom line. Although energy expenses were elevated due to the winter storms as well as disruption in the energy markets due to the war, these were more than offset by improvements in fixed costs given by a double-digit decline in property insurance due to a favorable renewal last year and other cost control initiatives. During Q1, our portfolio achieved hotel EBITDA of $89.9 million, representing year-over-year growth of $6.1 million, or 7.2%, and hotel EBITDA margins of 26.4%, which expanded by 45 basis points over the prior year.

Speaker #5: Underscoring the benefits of our lean operating model and our disciplined approach to managing costs, which allowed for strong flow to the bottom line. Although energy expenses were elevated due to the winter storms as well as disruption in the energy markets due to the war, these were more than offset by improvements in fixed costs driven by a double-digit decline in property insurance due to a favorable renewal last year and other cost-control initiatives.

Speaker #5: During the first quarter, our portfolio achieved hotel EBITDA of $89.9 million, representing year-over-year growth of $6.1 million, or 7.2%, and hotel EBITDA margins of 26.4%, which expanded by 45 basis points over the prior year.

Speaker #5: These results translated to adjusted EBITDA of $80.9 million and diluted earnings per share of $0.33 for the first quarter. With respect to our balance sheet, as previously announced, during the first quarter we executed a series of refinancing transactions which expanded our underwriting capacity by $500 million.

Nikhil Bhalla: These results translated to adjusted EBITDA of $80.9 million and adjusted FFO per diluted share of $0.33 for Q1. With respect to our balance sheet, as previously announced, during Q1, we executed a series of refinancing transactions which expanded our undrawn capacity by $500 million and created additional flexibility. We intend to use the additional capacity created by these refinancings to pay off our $500 million senior notes that mature on July 1 this year. Following this payoff, we will have no maturity due until 2029, and our weighted average maturity will be over 4 years.

Speaker #5: And created additional flexibility. We intend to use the additional capacity created by these refinancings to pay off our $500 million senior notes that mature on July 1 this year.

Speaker #5: Following this payoff, we will have no maturity due until 2029, and our weighted average maturity will be over four years. Our balance sheet remains well-positioned with over $950 million of liquidity, including underwriting capacity of $600 million on our corporate revolver.

Nikhil Bhalla: Our balance sheet remains well-positioned with over $950 million of liquidity, including undrawn capacity of $600 million on our corporate revolver. 84 of our 92 hotels unencumbered by debt, an attractive weighted average interest rate of 4.6%, and 75% of debt either fixed or hedged. We ended Q1 with $2.2 billion of debt. In addition to proactively addressing our maturities, we continued to demonstrate our steadfast commitment to returning capital to shareholders by paying an attractive and well-covered quarterly dividend of $0.15 per share. Now turning to our full year outlook. We are pleased with the strong start to the year. At the same time, we remain mindful of the uncertainty in the overall macro environment.

Speaker #5: Eighty-four of our ninety-two hotels are unencumbered by debt. We have an attractive weighted average interest rate of 4.6%, and 75% of our debt is either fixed or hedged. We ended the first quarter with $2.2 billion of debt.

Speaker #5: In addition to proactively addressing our maturities, we continue to demonstrate our steadfast commitment to returning capital to shareholders by paying an attractive and well-covered quarterly dividend of $0.15 per share.

Speaker #5: Now, turning to our full-year outlook, we are pleased with the strong start to the year. At the same time, we remain mindful of the uncertainty in the overall macro environment.

Speaker #5: We have incorporated our strong first-quarter outperformance into our revised guidance, while keeping our expectations for the remainder of the year unchanged from our prior outlook.

Nikhil Bhalla: We have incorporated our strong first quarter outperformance into our revised guidance while keeping our expectations for the remainder of the year unchanged from our prior outlook. For 2026, we now expect comparable RevPAR growth to range between 1.5% and 3.5%. Comparable hotel EBITDA between $356 to 380 million. Corporate adjusted EBITDA between $324 to 348 million, and adjusted FFO per diluted share to be between $1.29 and $1.45. Our outlook assumes no additional acquisitions, dispositions or balance sheet activity beyond what has been completed to date. We continue to estimate capital expenditures will be in the range of $80 to 90 million.

Speaker #5: For 2026, we now expect comparable RevPAR growth to range between 1.5% and 3.5%. Comparable hotel EBITDA is expected to be between $356 million and $380 million.

Speaker #5: Corporate adjusted EBITDA between 324 million dollars and 348 million dollars. And adjusted FFO per diluted share to be between a dollar and 29 cents and a dollar and 45 cents.

Speaker #5: Our outlook assumes no additional acquisitions, dispositions, or balance sheet activity beyond what has been completed to date. We continue to estimate capital expenditures will be in the range of $80 million to $90 million.

Speaker #5: Cash G&A will be in the range of $32.5 million to $33.5 million. And we expect net interest expense will be in the range of $101 million to $103 million.

Nikhil Bhalla: Cash G&A will be in the range of $32.5 million to $33.5 million. We expect net interest expense will be in the range of $101 million to $103 million. We also expect total revenue growth will continue to outpace RevPAR growth due to the success of our initiatives to drive out of room spend. With respect to the cadence for the rest of the year, our view of Q2 has not changed. However, in light of our strong Q1 results, our adjusted EBITDA contribution for Q2 will be slightly lower than last year, with the balance of the contribution in the back H2.

Speaker #5: We also expect total revenue growth will continue to outpace REFPAR growth due to the success of our initiatives to drive out-of-room spend. With respect to the cadence for the rest of the year, our view of the second quarter has not changed.

Speaker #5: However, in light of our strong first-quarter results, our adjusted EBITDA contribution for the second quarter will be slightly lower than last year, with the balance of the contribution in the back half of the year.

Speaker #5: Finally, please refer to our press release from this morning for additional details on our outlook, and to our schedule of supplemental information, which will include comparable 2026 and 2025 quarterly operating results for our 92-hotel portfolio.

Nikhil Bhalla: Finally, please refer to our press release from this morning for additional details on our outlook and to our schedule of supplemental information, which will include comparable 2026 and 2025 quarterly operating results for our 92 hotel portfolio. Thank you, and this concludes our prepared remarks. We will now open the line for Q&A. Operator.

Speaker #5: Thank you, and this concludes our prepared remarks. We will now open the line for Q&A. Operator.

Speaker #1: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad.

Operator 3: Our first question comes from the line of Michael Bellisario with Baird. Please proceed with your question.

Speaker #1: A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue.

Speaker #1: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions.

Speaker #1: Thank you. Our first question comes from the line of Michael Bellisario with Baird. Please proceed with your question.

Operator: Our first question comes from the line of Michael Bellisario with Baird. Please proceed with your question.

Michael Bellisario: Thanks. Good morning, everyone.

Speaker #2: Thanks. Good morning, everyone.

Speaker #3: Morning, Mike.

Nikhil Bhalla: Good morning, Mike.

Leslie Hale: Good morning, Mike.

Speaker #2: Leslie, can you add a little bit to your commentary on the accelerating business demand you mentioned, but that seems to be offset a little bit by a shorter booking window?

Michael Bellisario: Leslie, can you add a little bit to your commentary on the accelerating business demand you mentioned, but that seems to be offset a little bit by a shorter booking window. Did I hear that correctly? Is that shorter booking window, is that broad-based or specific to a customer segment?

Speaker #2: Did I hear that correctly? And is that shorter booking window— is that broad-based, or specific to a customer segment?

Speaker #1: So, I would say on BT, Mike, my comment about the booking window was really more so on group and on leisure. I think as it relates to BT, the acceleration we saw was broad-based.

Leslie Hale: I, you know, I would say on BT, you know, my comment about the booking window was really more so on group and on leisure. I think as it relates to BT, the acceleration we saw was broad-based. We're continuing to see national accounts grow, which is our highest rated customers. The sectors in tech and aerospace and life sciences continue to be the sectors that we're seeing the strength at. That's really a function of, you know, strong corporate profits. It's business investment, really sort of driving and aligning with what we're seeing. Our midweek trends remain strong, you know, relative there. On the booking window side, what we've seen is that, you know, group is booking shorter.

Speaker #1: We're continuing to see national accounts grow, which is our highest rated customers. The sectors in tech and aerospace and life sciences continue to be the sectors that we're seeing the strength at.

Speaker #1: And that's really a function of strong corporate profits. It's business investment really sort of driving and aligning with what we're seeing, so our midweek trends remain strong.

Speaker #1: Relative there. On the booking window side, what we've seen is that group is booking shorter. As I mentioned on the call, our end-of-quarter pace for first quarter was strong.

Leslie Hale: As I mentioned, on the, on the call or in the quarter for the quarter pace, Q1 was strong. We actually saw 22% of our bookings in the quarter for the quarter. While it's been short, it's still been materializing so that gives us comfort, you know, as it relates to group. Then on the leisure side, we've actually seen booking window elongate. So we've seen the opposite relative to group.

Speaker #1: We actually saw 22% of our bookings in the quarter for the quarter. And while it's been short, it's still been materializing. And so that gives us comfort as it relates to group.

Speaker #1: And then, on the leisure side, we've actually seen the booking window elongate. So we've seen the opposite, relative to group.

Speaker #2: Got it, that's helpful. And then, just sort of along the same lines, just on the out-of-room spending—how much of that is you're taking price versus an increase in volume?

Michael Bellisario: Got it. That's helpful. Then just sort of along the same lines, just on the out of room spending, how much of that is you're taking price versus an increase in volume? Is that pickup really being driven by business travel?

Speaker #2: And is that pickup really being driven by business travel?

Speaker #1: It's definitely business travel that's playing a key role. And it's not just business transit—it's also business group. Business group has increased to more than 50% of our overall group mix.

Leslie Hale: It's definitely business travel is playing a key role. It's not just business transient, it's also business group. You know, business group has increased to more than 50% of our overall group mix, and that bodes well for out of room, you know, for F&B orders while they're in their group meetings. It's in general as BT continues to increase, they do more in spending in the hotel as well. I'll let Tom add some color.

Speaker #1: And that bodes well for out-of-room for F&B orders while they're in their group meetings. And it's in general, as BT continues to increase, they do more in spending in the hotel as well.

Speaker #1: I'll let Tom add some color.

Speaker #2: So Mike, what we're seeing underneath the F&B hood is we have banquets growing. What Leslie was stating about group, we're seeing a much more significant amount of corporate group come.

Tom Bardenett: Mike, what we're seeing underneath the F&B hood is we have banquets growing. What Leslie was stating about group, we're seeing a much more significant amount of corporate group come, and with that, banquets goes right along with that. Even when we think about our ROI initiatives, we've spent quite a bit of money on making sure that we have a beverage centric, thoughtful food and beverage approach. Our lounge up around 12%. When we think about AV room rental, when we look at our meeting space and our atriums, as well as where we've put some capital, those continue to be enhancing our ability on the F&B, which allows us to increase margin by about 50 basis points.

Speaker #2: And with that, banquets go right along with that. Even when we think about our ROI initiatives, we've spent quite a bit of money on making sure that we have a beverage-centric, thoughtful food and beverage approach.

Speaker #2: So, our lounge is up around 12%. And then, when we think about AV room rental, when we look at our meeting space and our atriums, as well as where we've put some capital, those continue to be enhancing our ability on the F&B, which allows us to increase margin by about 50 basis points.

Speaker #2: Below that, because of the drive to market still being healthy in the first quarter, we had parking revenues up. And then, lastly, I would say where we've been spending a lot of time is watching the consumer behavior.

Tom Bardenett: Below that, because of the drive to market still being healthy in Q1, we had parking revenues up. Lastly, I would say where we've been spending a lot of time is watching the consumer behavior in and around our lobby and where we've been enhancing. We've kind of taken that select service margin expansion, excuse me, market expansion to our full service hotels as well. So that grab-and-go consumer trends, total revenues, enhancing by, you know, people looking for something in a hurry on the way to the airport and having an opportunity to grab that, in addition to what we talked about with F&B and parking, has really enhanced our profitability on non-room revenue.

Speaker #2: In and around our lobby, and where we've been enhancing, we've kind of taken that select-service margin expansion—excuse me, market expansion—to our full-service hotels as well.

Speaker #2: And so that grab-and-go consumer trend's total revenues are enhanced by people looking for something in a hurry on the way to the airport, and having an opportunity to grab that, in addition to what we talked about with F&B and parking, has really enhanced our profitability on non-room revenue.

Speaker #1: Yeah. And Mike, I'll just add what's kind of in our pipeline that kind of bolts onto some of Tom's comments around the thoughtful F&B and how we've approached it.

Leslie Hale: Yeah, Mike, I'll just add what's kind of in our pipeline that kind of bolts on to some of Tom Bardenett's comments around the thoughtful F&B and how we've approached it. We've talked about on previous calls how we've been really focused on having F&B that attracts guests that are outside the hotel. We did it at Mills House in Mandalay in Nashville, we still have Pittsburgh and Boston, you know, in the pipeline. Just to put some numbers around that, you know, our total revenues for our conversions were up 8%, in aggregate. That's really a function of our ROI investment in demonstrating how thoughtful we've been around the out-of-room spend.

Speaker #1: We've talked about on previous calls how we've been really focused on having F&B that attracts guests from outside the hotel. We did it at Mills House in Mandalay, in Nashville.

Speaker #1: And we still have Pittsburgh and Boston in the pipeline. And just to put some numbers around that, our total revenues for our conversions were up 8%.

Speaker #1: In aggregate, and that's really a function of our ROI investment in demonstrating how thoughtful we've been around the out-of-room spend.

Speaker #2: That's all helpful. Thank you.

Michael Bellisario: That's all helpful. Thank you.

Speaker #3: Our next question comes from the line of Austin Worschmidt with KeyBank. Please proceed with your question.

Operator 3: Our next question comes from the line of Austin Wurschmidt with KeyBanc. Please proceed with your question.

Operator: Our next question comes from the line of Austin Wurschmidt with KeyBanc. Please proceed with your question.

Speaker #4: Thanks. Good morning, everybody. Leslie, you highlighted some high-level details about the outlook across various segments. Could you just walk through the cadence of RevPAR growth guidance over the balance of the year, and maybe how some of those building blocks between segments are expected to play out at this point?

Austin Wurschmidt: Thanks. Good morning, everybody. Leslie, you highlighted some high-level details about the outlook across, you know, various segments. Could you just walk through the cadence of RevPAR growth guidance over the balance of the year and maybe how some of those building blocks between segments are expected to play out at this point? Thanks.

Speaker #4: Thanks.

Speaker #1: Yeah, sure. So, Austin, what I would say is that, clearly, Q1 came in better than we expected, but our view for the second quarter really hasn't changed.

Leslie Hale: Yeah, sure. Austin Wurschmidt, what I would say is that, clearly, Q1 came in better than we expected, but that, our view for Q2 really hasn't changed. The trends that we're seeing right now are coming in line with our expectations. We mentioned in our prepared remarks that April was up around 4%. We know that Easter was gonna move up in the month, we're seeing strength in business and group filling in that space that's been moved up. May, within that quarter, is gonna be our softest month because of the tough comps. June's gonna benefit from the World Cup.

Speaker #1: The trends that we're seeing right now are coming in line with our expectations. We mentioned in our prepared remarks that April was up around 4%.

Speaker #1: We know that Easter was going to move up in the month, and so we're seeing strength in business and group filling in that space that's been moved up.

Speaker #1: May, within that quarter, is going to be our softest month because of the tough comps. And then, as you know, June is going to benefit from the World Cup.

Speaker #1: And then what I would say is that within that month, within the second quarter, group pace was already pacing ahead of 2025. And then we really have no change to our perspective on the back half of the year.

Leslie Hale: What I would say is that within that month, within Q2, group pace was already pacing ahead of 2025. We really have no change to our perspective on the back half of the year. Again, Q3 benefiting from World Cup. We expect Q3 to benefit more than Q2 from the World Cup because there's a higher demand for the later stage games. You layer in the 250th anniversary on top of an existing holiday and obviously Salesforce. Q4, we'll see a lapsing of the shutdown, a government shutdown, but that's gonna be offset by the election. This setup was already anticipated in our original guidance.

Speaker #1: Again, third quarter benefiting from World Cup. We expect third quarter to benefit more than second quarter from the World Cup because there's a higher demand for the later-stage games.

Speaker #1: And then you layer in the 250th anniversary on top of an existing holiday and, obviously, Salesforce. Fourth quarter, we'll see a lapsing of the shutdown—government shutdown.

Speaker #1: But that's going to be offset by the election. So this setup was already anticipated in our original guidance. And what we're seeing today is in line with our expectations, in particular.

Leslie Hale: What we're seeing today is in line with, you know, with our, you know, expectations. In particular, you know, I would also just sort of say, you know, as it relates to World Cup, you know, it's still early, you know, but we are, you know, encouraged, you know, by what we're seeing. You know, we were very thoughtful in, you know, how we approached, you know, our perspective around, building our, our blocks and on World Cup. For example, you know, we were really thoughtful about focusing on blocks related to, related to teams, media, and sponsors. We wanted to have, you know, really, strong revenue management and focusing on length of stay and, you know, making sure that we were disciplined around rate.

Speaker #1: I would also just sort of say, as it relates to World Cup, it's still early. But we are encouraged by what we're seeing. We were very thoughtful in how we approached our perspective around building our blocks.

Speaker #1: And on World Cup, for example, we were really thoughtful about focusing on blocks related to teams, media, and sponsors. And we wanted to have really strong revenue management and focus on length of stay, and making sure that we were disciplined around rate.

Speaker #1: So, today, what we're seeing is that those blocks that we anticipated are actually picking up because we were thoughtful. And we're getting deposits around teams and media.

Leslie Hale: Today, what we're seeing is that those blocks that we anticipated are actually picking up, because we were thoughtful, and we're getting deposits around teams and media. As it relates to transient, what we're seeing today is promising. It's early, around game day, we are seeing ADR, you know, come in line with our expectations. You know, I think that the World Cup, and when you look at high occupancy markets, it's really a rate game, in markets like LA, New York, and Miami. Overall, these trends we're seeing are in line with our expectations and our original assumptions that we had in our guidance.

Speaker #1: And then, as it relates to transient, what we're seeing today is promising. It's early, but around game day, we are seeing ADR come in line with our expectations.

Speaker #1: I think that the World Cup, when you look at high-occupancy markets, it's really a rate game. And markets like L.A., New York, and Miami.

Speaker #1: But overall, these trends we're seeing are in line with our expectations and our original assumptions that we had in our guidance.

Speaker #4: Yeah, that's helpful detail on World Cup. Just switching for a comment you had on leisure and the elongated booking window. Just wondering how much of that you think is sort of sensitivity to changes in airfare, given what's happened with energy costs, and how does that inform your view on sort of pace as you look out in this segment and what that could look like.

Austin Wurschmidt: Yeah, that's helpful detail on World Cup. Just switching for a comment you had on leisure and the elongated booking window. Just wondering, you know, how much of that you think is sort of, you know, sensitivity to changes in airfare, given what's happened with energy costs, and how does that inform your view on sort of pace as you look out within this segment and you know what that could look like, just given the resiliency, you know, in the consumer? Thanks.

Speaker #4: Just given the resiliency in the consumer. Thanks.

Speaker #1: Yeah, I think that the elongated booking window—some of it may be related to airfare. But I actually think it's around the strength of demand that people are recognizing.

Leslie Hale: Yeah. You know, I think that the elongated booking window, some of it may be related to, you know, to airfare, but I actually think it's around the strength of demand that people are recognizing, and they may not be able to get the room that they wanted, and so they're recognizing they need to book a little bit earlier. As we mentioned before, a lot of these special events are happening on top of timings that were already windows that already had high occupancy. I think that's affecting the psychology of the consumer today. I would also say that a lot of our leisure, again, urban leisure, is seeing, you know, urban entertainment ramp up, you know, around the lifestyle consumer.

Speaker #1: And they may not be able to get the room that they wanted, and so they're recognizing they need to book a little bit earlier.

Speaker #1: As you mentioned before, a lot of these special events are happening on top of timings that were already windows that already had high occupancy.

Speaker #1: And so I think that's affecting the psychology of the consumer today. I would also say that a lot of our leisure—again, urban leisure—is seeing urban entertainment ramp up around the lifestyle consumer.

Speaker #1: And so, as a result, I think they're trying to get ahead of what they saw in the first quarter around leisure travel. And so, I think that's what's causing it to elongate.

Leslie Hale: As a result, I think they're trying to get ahead of what they saw in Q1 around leisure travel, and so I think that's what's causing it to elongate. You know, could there be some airline, you know, implication in that? For sure. You know, I think that's, you know, that's part of it.

Speaker #1: Could there be some airline implications in that? For sure. But I think that's part of it.

Speaker #2: The other thing I would add, Austin, to what we're seeing is there's a shift going on in regards to the ability to drive rate with leisure.

Tom Bardenett: The other thing I would add, Austin, to what we're seeing is there's a shift going on in regards to the ability to drive rate with leisure. If you recall, last year was primarily demand, and there was rate sensitivity. Right now we're seeing growth in both midweek as well as weekend demand, and then we're also seeing growth in rate. We're pricing ourselves appropriately based on that seven-day heart of demand and these events that are taking place that our footprint is pretty diversified, as you know. When a special event moves from one location to another, whether it was, let's say, the NBA All-Star Game that went from San Francisco to LA, we get the benefit of that because of our diversified portfolio. Same thing with Super Bowl. You know, it was in New Orleans last year, San Francisco this year.

Speaker #2: If you recall, last year was primarily demand, and there was rate sensitivity. Right now, we're seeing growth in both midweek as well as weekend demand.

Speaker #2: And then we're also seeing growth in rate. And so we're pricing ourselves appropriately based on that seven-day heart of demand. And these events that are taking place—that our footprint is pretty diversified, as you know.

Speaker #2: So, when a special event moves from one location to another, whether it was, let's say, the NBA All-Star Game that went from San Francisco to L.A., we get the benefit of that because of our diversified portfolio.

Speaker #2: Same thing with the Super Bowl. It was in New Orleans last year, San Francisco this year. So we're able to capture a lot of those, instead of anomalies that are just moving around the country, where we're able to capitalize on it based on our diversification and our footprint.

Tom Bardenett: We're able to capture a lot of those instead of anomalies, they're just moving around the country where we're able to capitalize on it based on our diversification and our footprint.

Speaker #1: And I think Tom's point around rate is another example of the consumer not being price sensitive, which is why I was suggesting that it's more around them seeing the strength of demand.

Leslie Hale: I think Tom's point around rate is another example of the consumer not being price sensitive, and which is why I was suggesting that it's more around them seeing the strength of demand.

Speaker #4: Thanks. All good points. That's all from me. Thank you.

Austin Wurschmidt: Thanks. All good points. That's all for me. Thank you.

Speaker #3: Our next question comes from Lion of Tyler Battery with Oppenheimer. Please proceed with your question.

Operator 3: Our next question comes from line of Tyler Batory with Oppenheimer. Please proceed with your question.

Operator: Our next question comes from line of Tyler Batory with Oppenheimer. Please proceed with your question.

Speaker #5: Hey, good morning, everyone. Thanks for taking my questions, and congrats on the strong results here and some really good execution. Just a follow-up on Austin's question.

Tyler Batory: Hey, good morning, everyone. Thanks for taking my questions. Congrats on the strong results here, and some really good, really good execution. Just to follow up on Austin's question, can you put a finer point on how you define leisure travel? I'm not sure if World Cup related travel, if that's all leisure. I'm assuming there might be a portion of that that's group and maybe even business travel too.

Speaker #5: Can you put a finer point on how you define leisure travel? I'm not sure if World Cup-related travel—if that's all leisure. I'm assuming there might be a portion of that that's group, and maybe even business travel too.

Speaker #2: Yeah, I'll give you an example since you asked about World Cup. So, when Leslie was speaking about the difference between group and leisure, group would be the teams, the media, the sponsors—what we've actually locked in blocks and have deposits.

Tom Bardenett: Yeah, I'll give you an example since you asked about World Cup. When Leslie was speaking about the difference between group and leisure, group would be, you know, the teams, the media, the sponsors, where we've actually locked in blocks and have deposits. What's still to come and what we're finding on the transient pace, specifically in the last 3 to 4 weeks, is around the game days, ticket sales, searches around, you know, where do I wanna stay? You're gonna book your airfare, you're gonna make sure that you've got travel, then you're gonna look at hotels. What we're seeing is the ADR growth around that. That would be leisure around World Cup. Same thing with 250th anniversary. We do have activation.

Speaker #2: What's still to come, and what we're finding on the transient pay specifically in the last three to four weeks, is around the game days—ticket sales, searches around where do I want to stay.

Speaker #2: You're going to book your airfare. You're going to make sure that you've got travel, and then you're going to look at hotels. So what we're seeing is the ADR growth around that.

Speaker #2: That would be leisure around World Cup. Same thing with 250th anniversary. We do have activation. There are marketing programs around the four cities, which are New York, Philadelphia, D.C., as well as Boston.

Tom Bardenett: There's marketing programs around the four cities, which are New York, Philadelphia, DC, as well as Boston. Thanks. When we see that, you're also seeing now more demand coming in. It'll all be pretty much leisure related based on how we code, you know, when people are booking from the outside in.

Speaker #2: Thanks. And when we see that, you're also seeing now more demand coming in. It'll all be pretty much leisure-related, based on how we code when people are booking from the outside in.

Speaker #5: Okay, thank you for that. Switching gears to capital allocation—can you rank order your priorities right now? Curious if capital recycling is something that might look a little more interesting just given your fundamental outlook.

Tyler Batory: Okay, thank you for that. Switching gears, capital allocation, can you rank order your priorities right now? I'm curious if capital recycling is something that might look a little more interesting just given your fundamental outlook.

Speaker #1: Sure, Tyler. What I would say is that we're constructive on the transaction market. And as we become more active with dispositions, we will be balanced between taking advantage of the dislocation in our stock, maintaining a strong balance sheet, and executing on our conversion strategies.

Leslie Hale: Sure, Tyler. What I would say is that, you know, you know, we're constructive on the transaction market, and as we become more active with dispositions, you know, we will be balanced between taking advantage of the dislocation in our stock, maintaining a strong balance sheet, and, you know, executing on our conversion strategies. We strive to execute buybacks on a leverage-neutral basis, and so when we use disposition proceeds, that allows us to do that, and obviously we didn't have any dispositions in Q1. You know, relative to our conversions, you know, our, you know, our results are very tangible. As I mentioned before, total revenues for our 7 completed conversions are up 8%, and our EBITDA was up 16% in the quarter.

Speaker #1: We strive to execute buybacks on a leverage-neutral basis, and so when we use disposition proceeds, that allows us to do that. And obviously, we didn't have any dispositions in Q1.

Speaker #1: Relative to our conversions, our results are very tangible. As I mentioned before, total revenues for our seven completed conversions are up 8%. And our EBITDA was up 16% in the quarter.

Speaker #1: And so, this is a direct result of the investment we're making in the ROI. So, as we recycle assets, you're going to see us be balanced in that, and that would include activity on the buyback side.

Leslie Hale: This is a direct result of investment we're making in the ROI. As we recycle assets, you're gonna see us be balanced, and that would include activity on the buyback side.

Speaker #5: Okay, that's all from me. Thank you.

Tyler Batory: Okay. That's all for me. Thank you.

Speaker #3: Our next question comes from Lion of Gregory Miller with Truist. Please proceed with your question.

Operator 3: Our next question comes from the line of Gregory Miller with Truist. Please proceed with your question.

Operator: Our next question comes from the line of Gregory Miller with Truist. Please proceed with your question.

Speaker #4: Good morning, everyone. I'd like to ask a couple of questions on specific markets. Maybe to start off, could you provide your thoughts about how Louisville is performing this year?

Gregory Miller: Thank you. Good morning, everyone. I'd like to ask a couple questions on specific markets. Maybe to start off, could you provide your thoughts about how Louisville is performing this year and your expectations for the rest of the year, particularly on the convention group front? Thank you.

Speaker #4: And your expectations for the rest of the year? Particularly on the convention group front. Thank you.

Speaker #2: Sure, Greg. As you know, we have our Marriott as well as a residence in Louisville. And the Marriott is connected to the convention center.

Tom Bardenett: Sure, Gregory. As you know, we have our Marriott as well as a Residence Inn in Louisville, and the Marriott is connected to the convention center. What we're finding at our Marriott is it's had, you know, back-to-back significant growth years. We just came off of Kentucky Derby, which was another major success for us. What we're finding is agriculture, you know, some of the type of accounts that go to Louisville, that are attracted to Louisville are all Midwest-based, if you will. It competes with Nashville, competes with other regional locations. We get the benefit of that because we're connected to the convention center.

Speaker #2: What we're finding at our Marriott is that it's had back-to-back significant growth years. We just came off of Kentucky Derby, which was another major success for us.

Speaker #2: And what we're finding is, agriculture—some of the type of accounts that go to Louisville, that are attracted to Louisville—are all Midwest-based, if you will.

Speaker #2: It competes with Nashville, competes with other regional locations. And so we get the benefit of that because we're connected to the convention center. And a long time ago, probably about five or six years ago, when they added additional space, they really changed the way we can sell our hotel, where we can actually have two conventions at the same time because of the exhibit space they added right across the street, which is connected.

Tom Bardenett: A long time ago, probably about 5, 6 years ago, when they added additional space, it really changed the way we can sell our hotel, where we can actually have two conventions at the same time because of the exhibit space they added right across the street, which is connected. In addition to that, we were looking at the beginning of the year, pretty strong results in regards to, you know, what we're seeing on the pace side. We're also, because of the size of the asset, we look out to 2027 and 2028. We're very encouraged in regards to what the pace looks like going forward for this asset. What I would say is the big top accounts that come into Louisville, like healthcare, Humana, the University of Louisville continues to spend and look to add research.

Speaker #2: In addition to that, we were looking at the beginning of the year—pretty strong results in regards to what we're seeing on the pay side.

Speaker #2: We're also, because of the size of the asset, we look out to '27 and '28. We're very encouraged in regards to what the pace looks like going forward for this asset.

Speaker #2: And what I would say is the big top accounts that come into Louisville, like healthcare, Humana, the University of Louisville, continue to spend and look to add research.

Speaker #2: And so we're seeing our top accounts come back into the city as well, so still very strong about where we're positioned. And then the Residence Inn also does very well, being just a couple of blocks away from our Marriott, with overflow when we have those types of groups.

Tom Bardenett: We're seeing our top accounts come back into the city as well. Feel very strong about where we're positioned. The Residence Inn also does very well, being just a couple blocks away from our Marriott with overflow when we have those type of groups.

Speaker #4: Thanks, Tom. Shifting gears, I'd like to ask you about another market with some changes to their convention pace, and that's Austin. Now, I believe we're past the one-year mark since the temporary closure of the Austin Convention Center for its renovation.

Gregory Miller: Thanks, Tom. Shifting gears, I'd like to ask you about another market with some changes to their convention pace, and that's Austin. Now I believe we're past the 1-year mark since the temporary closure of the Austin Convention Center for its renovation. Could you provide an update on how your downtown hotels are performing, and sort of expectations for the rest of the year in that market as well? Thank you.

Speaker #4: Could you provide an update on how your downtown hotels are performing, and sort of expectations for the rest of the year in that market as well?

Speaker #4: Thank you.

Speaker #2: No, and again, we're adjacent to the convention center for two of our assets, as you know. And then we have one other asset that's right by the state capitol and near the University of Texas.

Tom Bardenett: Again, we're adjacent to the convention center for two of our assets, as you know, and then we have one other asset that's right by the state capitol and near University of Texas. To your point, the closure occurred in March of 2025, right after the South by Southwest. The new construction is underway in regards to the convention center. I think what we're most excited about with Austin is it's going to double the size on the square footage, and more importantly, it's going to have the ability to host over 1,200 exhibits. That's really important when you think about association business. For instance, Austin, which is the 11th largest city in the country, had the 59th largest convention center. Now it's going to be more appropriately aligned with the space and the size of what's needed.

Speaker #2: To your point, the closure occurred in March 2025, right after South by Southwest. And the new construction is underway in regards to the convention center.

Speaker #2: I think what we're most excited about with Austin is it's going to double the size in square footage, and more importantly, it's going to have the ability to host over 1,200 exhibits.

Speaker #2: And that's really important when you think about association business. For instance, Austin, which is the 11th largest city in the country, had the 59th largest convention center.

Speaker #2: So now it's going to be more appropriately aligned with the space and the size of what's needed. And as an example, Greg, 50% of the leads in the past couldn't even be accommodated based on the space that we didn't have.

Tom Bardenett: As an example, Greg, 50% of the leads in the past couldn't even be accommodated based on the space that we didn't have. In addition to the convention center, we're excited about the fact that Austin continues to grow. People wanna live there. The airport expansion is gonna have more flights, and 20 more gates will be aligned with the convention center opening. That's gonna bring 22 million passengers up over 30 million passengers, which is gonna be a highlight in regards to the more demand that's gonna come in because of that convention center. In the interim, to your point, we are focused on self-contained group business at our two assets adjacent to the center.

Speaker #2: In addition to the convention center, we're excited about the fact that Austin continues to grow. People want to live there. The airport expansion is going to have more flights.

Speaker #2: And 20 more gates will be aligned with the convention center opening. And that's going to bring 22 million passengers up over 30 million passengers, which is going to be a highlight in regards to the more demand that's going to come in because of that convention center.

Speaker #2: But in the interim, to your point, we are focused on self-contained group business at our two assets adjacent to the center. There's been a great campaign on marketing and dollars that are allowing us to offer incentives to groups, not only for our hotels but for the city, because of the opening right now that we have for the next few years.

Tom Bardenett: There's been a great campaign on marketing and dollars that are allowing us to offer incentives to groups, not only for our hotels, but for the city because of the, you know, opening right now that we have for the next few years. The DoubleTree that we have over by the Capitol, that was renovated about a year ago, the property looks great. It's getting really nice ramp from University of Texas as well as being adjacent to the Capitol. This year, Q1 had the legislation, every other year, we did the renovation to make sure that we benefited from that. That'll happen in 2027.

Speaker #2: And then the DoubleTree that we have over by the Capitol—that was renovated about a year ago. So the property looks great. It's getting really nice ramp from University of Texas as well as being adjacent to the Capitol.

Speaker #2: So this year, the first quarter had the legislation. And so, every other year, we did the renovation to make sure that we benefited from that. That'll happen in 2027.

Leslie Hale: The only thing I would add is that, you know, based on all the good nuggets that Tom laid out, we are expecting Austin to be positive for the remainder of the year.

Speaker #1: The only thing I would add is that, based on all the good nuggets that Tom laid out, we are expecting Austin to be positive for the remainder of the year.

Speaker #4: That's very helpful. Thank you both.

Gregory Miller: That's very helpful. Thank you both.

Speaker #3: Our next question comes from Lion of Ken Billingsley with Compass Point. Please proceed with your question.

Operator 3: Our next question comes from line of Ken Billingsley with Compass Point. Please proceed with your question.

Operator: Our next question comes from line of Ken Billingsley with Compass Point. Please proceed with your question.

Speaker #5: Hey, good morning. Two quick questions. One, just to follow up—you said second quarter adjusted EBITDA is expected to be below last year. Is that just primarily on room count being down?

Ken Billingsley: Hey, good morning. 2 quick questions. One, just to follow up, you said Q2 adjusted EBITDA is expected to be below last year. Is that just primarily on room count being down?

Leslie Hale: It's a, it's a function of Q1 being stronger than our original expectations. Last quarter we had guided that Q2 would be in line with last year's contribution, and now it's gonna be slightly below because Q1 is stronger.

Speaker #1: It's a function of Q1 being stronger than our original expectations. And so, last quarter, we had guided that Q2 would be in line with last year's contribution, and now it's going to be slightly below because Q1 is stronger.

Speaker #5: Okay. Okay. And the other question I have is, could you just talk about Pittsburgh? The draft occurred and had record numbers. Can you just talk about how that translated into your expectations and maybe the results of what developed out of Pittsburgh?

Ken Billingsley: Okay. The other question I have is, could you just talk about Pittsburgh? The draft occurred and had record numbers. Can you just talk about how that translated into your expectations and maybe the results of what developed out of Pittsburgh?

Speaker #2: Yeah, I'm glad you were paying attention. The draft was a great event for us. We have three assets in Pittsburgh, a few. Ken, you're aware that Leslie earlier stated about our opportunity to convert a Renaissance to an Autograph.

Tom Bardenett: Yeah, I'm glad you were paying attention. The draft was a great event for us. We have three assets in Pittsburgh. If you, Ken, you're aware that Leslie earlier stated about our opportunity to convert a Renaissance to an Autograph, and that is downtown looking over Three Rivers and the ball field where the Pirates play, as well as Heinz Field. The draft was closer to Heinz Field this year, outdoor arena, but the activation was all in and around the convention center and as well as our location there. Not only do.

Speaker #2: And that is downtown, looking over the Three Rivers and the ball field where the Pirates play, as well as Heinz Field. So, the draft was closer to Heinz Field.

Speaker #2: This year, outdoor arena, but the activation was all in and around the convention center as well as our location there. Not only did.

Speaker #5: Hello?

Ken Billingsley: Hello?

Operator 3: Ladies and gentlemen, please stand by. Your conference will resume momentarily. Ladies and gentlemen, please continue to hold. Your conference will resume momentarily. Once again, ladies and gentlemen, please continue to hold. Your conference will resume momentarily.Ladies and gentlemen, please continue to hold. Your conference will resume momentarily.

Operator: Ladies and gentlemen, please stand by. Your conference will resume momentarily. Ladies and gentlemen, please continue to hold. Your conference will resume momentarily. Once again, ladies and gentlemen, please continue to hold. Your conference will resume momentarily. Ladies and gentlemen, please continue to hold. Your conference will resume momentarily.

Speaker #3: Ladies and gentlemen, please stand by. Your conference will resume momentarily. Ladies and gentlemen, please continue to hold. Your conference will resume momentarily. Once again, ladies and gentlemen, please continue to hold.

Speaker #3: Your conference will resume momentarily. Ladies and gentlemen, please continue to hold. Your conference will resume momentarily.

Speaker #5: Hello. Can you hear us, operator?

Leslie Hale: Operator?

Tom Bardenett: Can you hear us, operator?

Speaker #3: Yes, you are live.

Operator 3: Yes, you are live.

Operator: Yes, you are live.

Speaker #5: Okay. So we were just finishing up Pittsburgh, and wanted to make sure you heard the last piece, which was we're excited about what's happening, but the NFL Draft was very successful this year.

Tom Bardenett: Okay.

Leslie Hale: On Pittsburgh.

Tom Bardenett: We were just finishing up Pittsburgh and wanted to make sure you heard the last piece, which was we're excited about what's happening, but the NFL Draft was very successful this year, and our three assets saw significant demand due to that. I'll go back to the operator for future questions.

Speaker #5: And our three assets saw significant demand due to that. So I'll go back to the operator for future questions.

Speaker #3: Mr. Billingsley, does that complete your question?

Operator 3: Mr. Billingsley, does that complete your question?

Operator: Mr. Billingsley, does that complete your question?

Ken Billingsley: It does. Thank you.

Speaker #5: It does. Thank you.

Ken Billingsley: It does. Thank you.

Speaker #1: And then I just want to make sure that on your prior question, you were talking about contribution for the second quarter. That's what we were referring to in our prepared remarks.

Leslie Hale: Ken, I just want to make sure that on your prior question that you were talking about contribution for Q2. That is what we were referring to in our prepared remarks. It was contribution for the year.

Speaker #1: It was contribution for the year. Okay.

Ken Billingsley: Oh, I understand. Great.

Speaker #5: Oh, I understand. Great. Thank you.

Ken Billingsley: Oh, I understand. Great.

Leslie Hale: Okay.

Ken Billingsley: Thank you.

Speaker #1: Okay. All right. Sorry for the technical difficulty, everyone. Operator?

Ken Billingsley: Okay. All right. Sorry for the technical difficulty, everyone. Operator?

Leslie Hale: Okay. All right. Sorry for the technical difficulty, everyone. Operator?

Speaker #3: Our next question comes from Lion of Flores Van Dijkum with Lattenberg Dallman. Please proceed with your question.

Operator 3: Our next question comes from the line of Floris van Dijkum with Ladenburg Thalmann. Please proceed with your question.

Operator: Our next question comes from the line of Floris van Dijkum with Ladenburg Thalmann. Please proceed with your question.

Speaker #4: Thanks, guys. Question on the capital allocation—getting back to the capital allocation. Could you maybe just remind us of what you've spent on your renovations, and what the EBITDA return or yield is on those renovations today as we stand?

Floris van Dijkum: Thanks, guys. Question on the capital allocation, getting back to the capital allocation. You know, could you maybe just remind us of your what you've spent on your renovations, what the EBITDA return or yield is on those renovations today as we stand? Also what. You mentioned two more projects that you're gonna announce later on this year. What's sort of the aggregate amount that we could expect, you know, RLJ to invest in repositioning assets, and relative to the, you know, sort of the maintenance CapEx?

Speaker #4: And also, you mentioned two more projects that you're going to announce later on this year. What's sort of the aggregate amount that we could expect RLJ to invest in repositioning assets?

Speaker #4: And relative to the sort of the maintenance CapEx.

Leslie Hale: Yeah. I would say that in general, Floris, that we gave a guidance of $80 to 90 million of capital spend for 2026, and the vast majority of that is focused on ROI related renovations. From there, we generally target high double-digit returns on general investments. On our ROI conversions, we're generally seeing north of 40% returns on the incremental capital that we're putting in the assets in order to effectuate these conversions.

Speaker #1: Yeah, I would say that in general, Flores, we gave a guidance of $80 to $90 million of capital spend for 2026. And the vast majority of that is focused on ROI-related renovations.

Speaker #1: From there, we generally target high double-digit returns on general investments and on our ROI conversions. We're generally seeing north of 40% returns on the incremental capital that we're putting in the assets in order to effectuate these conversions.

Speaker #4: And just to be.

Tom Bardenett: Just, Floris.

Floris van Dijkum: Yeah. Sorry, Tom.

Speaker #5: Flores, we mentioned one additional conversion that will be announced—I just want to correct you on that, in regards to later this year.

Floris van Dijkum: Yeah. Sorry, Tom.

Tom Bardenett: we've mentioned one additional conversion that will be announced. I just want to correct you on that in regards of later this year.

Speaker #4: Got it. And so the 40%—is that what we should be expecting from the Wyndham Boston conversion, or is that just for the Renaissance that's going to become the Marriott Autograph in Pittsburgh?

Floris van Dijkum: Got it. The 40% is what we should be expecting from the Wyndham Boston conversion, or is that just for the Renaissance and that's going to become the Marriott Autograph in Pittsburgh?

Speaker #1: Yes. So what we've talked about with Boston is that we think there is 40% upside in the EBITDA on that asset. Again, keep in mind that on some of these conversions, in the case of Mills House, we doubled the EBITDA on that asset.

Leslie Hale: Yeah. What we've talked about with Boston is that we think that there is 40% upside in the EBITDA on that asset. You know, again, keep in mind that on some of these conversions, in the case of Mills House, we double the EBITDA on that asset. Boston's in that category of how strong we think the asset will perform in a post-converted state.

Speaker #1: Boston's in that category of how strong we think the asset will perform in a post-converted state.

Speaker #4: And then how you did mention the dispositions, obviously, as well. And I suspect if the disposition market were to pick up a little bit later this year, would that cause you to accelerate some of your repositionings as well, or is that still the buybacks obviously being in other potential source, but 40% returns are just tough to beat that anywhere else.

Floris van Dijkum: You did mention the dispositions obviously as well, I suspect if the disposition market were to pick up a little bit later this year, would that cause you to accelerate some of your repositionings as well, or is that still the buyback obviously being another potential source? You know, 40% returns there, it's tough to beat that anywhere else. Why wouldn't you lean into that even more?

Speaker #4: I mean, why wouldn't you lean into that even more?

Speaker #1: Yeah, I think what we've said before, Flores, is that we try to strive to have two conversions per year. Our conversion cadence is influenced by when franchise agreements expire and other elements that have it stack up at about two per year.

Leslie Hale: Yeah. I think what we've said before, Floris van Dijkum, is that, you know, we try to strive for to have two conversions per year. Our conversion cadence is influenced by when franchise agreements expire, and other elements that, you know, have it stack up at about two per year. You know, we're on that pace. We're gonna be announcing our next conversion on our next earnings call. I think that when we look at, you know, when the franchises become available and when it makes sense from a seasonality perspective, you know, for example, we wanted to wait until after World Cup for Boston. We're trying to be strategic and thoughtful about when we execute the conversions.

Speaker #1: We're on that pace. We're going to be announcing our next conversion on our next earnings call. And so I think that when we look at when the franchises come available and when it makes sense from a seasonality perspective—for example, we wanted to wait until after World Cup for Boston.

Speaker #1: So we're trying to be strategic and thoughtful about when we execute the conversions.

Speaker #4: Thanks, Leslie. And maybe last question, just to follow on. The actual demand—from everybody's been talking about the fact that there's going to be last-minute bookings, presumably to watch the World Cup.

Floris van Dijkum: Thanks, Leslie. Maybe last question, just to follow on the actual demands from. Everybody's been talking about the fact that there's gonna be last-minute bookings presumably to watch the World Cup. Can you talk maybe about some of the FIFA bookings that you've already done? Do you have any teams or anything like that staying in your hotels, or what tangible information can you give us on the potential upside it sounds like from the World Cup on your expectations?

Speaker #4: Can you talk maybe about some of the—you mentioned some of the FIFA bookings that you've already done. Do you have any teams or anything like that staying in your hotels, or what tangible information can you give us on the potential upside, it sounds like, from the World Cup, on your expectations?

Speaker #1: Yeah. As I mentioned before, Flores, it's early, but we're encouraged because we were very thoughtful about making sure that the types of blocks we took were focused on teams and media.

Leslie Hale: Yeah. As I mentioned before, Floris, is that it's early, but we're encouraged. Because we were very thoughtful about making sure that the types of blocks we took were focused on teams and media, you know, we're starting to see those blocks pick up, and we started to receive deposits. I'll let Tom give some color on that. As it relates to the transient demand, what I said is that what we're seeing is very promising, but it's really early, in that we expect most of the benefit to really come in rate because these are happening in high occupancy markets for us, and the markets I was talking about was LA, New York, and Miami.

Speaker #1: We're starting to see those blocks pick up when we started to receive deposits. I'll let Tom give some color on that. And then as it relates to the transient demand, what I said was that what we're seeing is very promising, but it's really early.

Speaker #1: And we expect most of the benefit to really come in rate because these are happening in high-occupancy markets for us. And the markets I was talking about were LA, New York, and Miami.

Speaker #4: And just to give you a little color on the group side, it's interesting, Flores. When groups, teams stay with you, they actually encourage fans to stay where the teams stay.

Tom Bardenett: Just to give you a little color on the group side, it's interesting, Floris, when groups teams stay with you, they actually encourage fans to stay where the teams stay. That's a positive, and we actually have locked in deposits for teams in 3 of those 9 markets that we have. We're really encouraged that not only will you have teams, but you'll have fans that will wanna stay with the teams. We're also encouraged, as Leslie talked about, on the transient pace, you know, when you think about the leisure side of it and where ticket sales as well as how we're doing length of stay. We're seeing ADR increasing in those time frames when people are gonna have the most amount of demand.

Speaker #4: So that's a positive. And we actually have locked-in deposits for teams in three of the nine markets that we have. So we're really encouraged that not only will you have teams, but you'll have fans that will want to stay with the teams.

Speaker #4: We're also encouraged, as Leslie talked about on the transient pace. When you think about the leisure side of it and where ticket sales are, as well as how we're doing on length of stay.

Speaker #4: So we're seeing ADR increasing in those timeframes when people are going to have the most amount of demand. And then making sure that we're providing the opportunity to take other business outside of those games, whether it's group or BT, to make sure that we're layering in the process of making sure we take advantage of not only the special events, but other demand as it comes, because those are high-occupancy locations that Leslie mentioned earlier.

Tom Bardenett: Making sure that we're providing the opportunity to take other business outside of those games, you know, whether it's group or BT, to make sure that we're layering in the process of making sure we take advantage of not only the special event, but other demand as it comes, because those are high occupancy locations that Leslie mentioned earlier. It's a busy time of year. In addition to 250th anniversary will be over that same timeframe. We're really doubling down on strategy.

Speaker #4: So it's a busy time of year. In addition to the 250th anniversary, it'll be over that same timeframe. So we're really doubling down on strategy.

Speaker #4: Thanks, Tom. Thanks, Leslie.

Floris van Dijkum: Thanks, Tom. Thanks, Leslie.

Operator 3: Our next question comes from the line of Chris Woronka with Deutsche Bank. Please proceed with your question.

Speaker #5: Our next question comes from the line of Chris Morocco with Deutsche Bank. Please proceed with your question.

Operator: Our next question comes from the line of Chris Woronka with Deutsche Bank. Please proceed with your question.

Speaker #6: Hey, good morning, everyone. Thanks for taking my question. I was hoping we could spend a minute talking about, kind of, the Silicon Valley market.

Chris Woronka: Hey, good morning, everyone. Thanks for taking my question. I was hoping we could spend a minute talking about kind of the Silicon Valley market you talked about with growth in AI. I think you guys have probably 4 or 5 hotels in that area proper. You know, you mentioned you saw nice lift in Q1. Kind of curious what's embedded in your outlook for the rest of the year. You know, may sound like a silly question now, do you worry at all, are you seeing any signs of froth kind of that area had some extremely high RevPAR growth back in 1999 and 2000, as I recall. Any thoughts on your outlook beyond the current quarter? Thanks.

Speaker #6: You talked about, with growth in AI, I think you guys have probably four or five hotels in that area proper. You mentioned you saw a nice lift in the first quarter. Kind of curious what's embedded in your outlook for the rest of the year.

Speaker #6: And you've made it sound like a silly question now, but are you worried at all based on these signs of froth? That area had some extremely high RevPAR growth back in 1999 and 2000, as I recall.

Speaker #6: So, any thoughts on your outlook beyond the current quarter? Thanks.

Speaker #1: Yeah, I mean, we are very encouraged by what we're seeing in the San Francisco area—the Northern California market for us broadly. Clearly, the recovery is well underway. As we mentioned before, all of our assets were up 27% in the first quarter.

Leslie Hale: Yeah. I mean, we are, you know, very encouraged by what we're seeing in San Francisco area, the Northern California market for us broadly. You know, clearly, the recovery is well underway. As we mentioned before, all of our assets were up 27% in Q1. Clearly, it was benefiting from Super Bowl, and some major conventions in RSA and J.P. Morgan. I would also just say more broadly, and this is goes to your Silicon Valley comment, you know, BT is, you know, very much in full swing. Given the fact that you have a better overall environment, you have better local advocacy with good policy. You talked about the AI investment. You know, we're seeing clearly return to office trends and record office leasing.

Speaker #1: Clearly, it was benefiting from the Super Bowl, and some major conventions like RSA and JPMorgan. But I would also just say more broadly—and this goes to your Silicon Valley comment—BT is very much in full swing.

Speaker #1: Given the fact that you have a better overall environment, you have better local advocacy with good policy, you talked about the AI investment. We're seeing clearly return-to-office trends and record office leasing.

Speaker #1: And so the BT momentum is strong, and we're also starting to see pricing power return. I'll let Tom add some comments.

Leslie Hale: The BT momentum is strong. We're also starting to see pricing power return. I'll let Tom add some comments.

Speaker #4: Yeah. The campaign that they're really behind in San Francisco is 'Believe in San Francisco.' And when you think about what Leslie was talking about, it's happening locally from a community as well as politically, where BART ridership is up, foot traffic is increasing in the CBD.

Tom Bardenett: Yeah. You know, the campaign that they're really behind in San Francisco is Believe in San Francisco. When you think about what Leslie was talking about, it's happening locally from a community as well as politically, where, you know, BART ridership is up, foot traffic is increasing in CBD. When you think about what's happening around Moscone, they got a healthy pace for 2027 and 2028. The type of conventions that are coming are association, corporate, medical, and then most importantly, high tech, to your point. You know, just an example to give you an idea on growth, Databricks in 2023 had about 11,000 room nights, and in 2026 they're gonna have 25,000 room nights.

Speaker #4: When you think about what's happening around Mosconi, they've got a healthy pace for '27, '28. And the type of conventions that are coming are association, corporate, medical, and then most importantly, high-tech.

Speaker #4: To your point, just an example to give you an idea on growth: Databricks in 2023 had about 11,000 room nights, and in 2026 they're going to have 25,000 room nights.

Speaker #4: So, you can see there's an evolution happening because venture capital money is all coming to San Francisco. And it's basically, when you think about where the city is thriving, it's also spilling out to Silicon Valley and the outlying areas, where we have a bigger footprint. As you know, Chris, we have some airport hotels as well as in Silicon Valley and CBD.

Tom Bardenett: You can see there's an evolution happening because venture capital money is all coming to San Francisco, and it's basically, you know, when you think about where the city is thriving, it's also spilling out to Silicon Valley and the outlying areas, where we have a bigger footprint, as you know, Chris, where we have some airport hotels as well as Silicon Valley and CBD. We're encouraged with what's happening, and we're trying to make sure that we're capturing all the different types of demand that's now coming there, with the last catalyst hopefully being international. We are seeing some growth, you know, coming from Mexico, UK, India, and China will be the last step, hopefully, where we can see that start to come back, because it's still a significant amount of spend that comes to San Francisco.

Speaker #4: So we're encouraged with what's happening, and we're trying to make sure that we're capturing all the different types of demand that's now coming there, with the last catalyst hopefully being international.

Speaker #4: We are seeing some growth coming from Mexico, the UK, and India. And China will be the last step, hopefully, where we can see that start to come back, because it's still a significant amount of spend that comes to San Francisco.

Speaker #6: Okay, super helpful. And then just another question on conversion. When you guys talk about planned conversions, should we generally assume that that refers to the Wyndham—as you still have unconverted—or either you do have a few independents and things affiliated with non-Marriott, Hilton, Hyatt brands? Just hoping to get a little bit of clarification.

Chris Woronka: Okay. Super helpful. Just another question on conversion. When you guys, you know, talk about planned conversions, should we generally assume that refers to the Wyndham that you still have unconverted? You do have a few independents and things affiliated with non-Marriott, Hilton, Hyatt brands. Just hoping to get a little bit of clarification. Thanks.

Speaker #6: Thanks.

Speaker #1: Yeah. I mean, we publish in our management presentation a list of the potential conversions in our portfolio. We're obviously looking at the Wyndhams, but we're also looking at current assets as the franchise agreements expire to see what else, what other lifestyle brands are available or make sense for that physical asset.

Leslie Hale: Yeah. I mean, we have, you know, we publish in our management presentation a list of the potential, you know, conversions in our portfolio. We're obviously looking at the Wyndhams, but we're also looking at current assets, you know, as the franchise agreements expire to see, you know, what else, what other lifestyle brands are available and make sense for that physical asset. It's not just all, you know, Wyndham assets, it's other assets within our portfolio, where the franchise agreement may be expiring.

Speaker #1: So, it's not just all Wyndham assets. It's other assets within our portfolio where the franchise agreement may be expiring.

Speaker #6: Okay. Gotcha. Very good. Thanks, Leslie. Thanks, Tom.

Chris Woronka: Okay. gotcha. Very good. Thanks, Leslie. Thanks, Tom.

Speaker #1: Thank you.

Tom Bardenett: Thank you.

Speaker #5: Our next question comes from the line of Chris Darling with Green Street. Please proceed with your question.

Operator 3: Our next question comes from the line of Chris Darling with Green Street. Please proceed with your question.

Operator: Our next question comes from the line of Chris Darling with Green Street. Please proceed with your question.

Speaker #4: Hey, thanks. Good morning. Just a couple of quick follow-ups from me. First, Leslie, you mentioned being constructive on asset sales. Hoping you could just give an update on the broader transaction market—whether you've seen anything change on the margin given a more favorable RevPAR backdrop, whether that's pricing, depth of the bidding tent, or anything else.

Chris Darling: Hey, thanks. Good morning. Just a couple quick follow-ups for me. First, Leslie, you mentioned, you know, being constructive on asset sales. Hoping you could just give an update on the broader transaction market, whether you'd seen anything change on the margin, given a more favorable RevPAR backdrop, whether, you know, that's pricing, depth of the bidding tent, anything else.

Speaker #1: Yeah, sure, Chris. For sure, the transaction market has improved. Obviously, it's still not as robust as it was in the past, but it's definitely improved in general.

Leslie Hale: Yeah, sure, Chris. For sure, the transaction market, you know, has improved. You know, obviously it's still, you know, not, you know, as robust as it was in the past, but it's definitely improved in general. What I would say the key driver of that is really the debt market. There are so many debt providers today as people have tried to play sort of the credit trade, if you will. It's creating competition, and it's helping spreads tighten. Even though the Fed has not, you know, cut rates, because there's competition among providers, we've seen spreads tighten. That's allowing buyers, potential buyers to still underwrite lower interest expense.

Speaker #1: And what I would say the key driver of that is really the debt market. There are so many debt providers today, as people have tried to play sort of the credit trade, if you will.

Speaker #1: It's creating competition, and it's helping spreads tighten. So even though the Fed has not cut rates, because there's competition among providers, we've seen spreads tighten.

Speaker #1: And so that's allowing buyers—potential buyers—to underwrite lower interest expense. And then you layer on better fundamentals, which is giving potential buyers confidence in the ability to underwrite.

Leslie Hale: You layer on better fundamentals, which is giving potential buyers confidence in the ability to underwrite. I think that's just a better overall sentiment, you know, relative to the transaction environment. I think owner-operators continue to be, you know, the primary buyer, but we're seeing the buying pool, you know, expand. Single assets are still more prevalent, but, you know, you could see some small portfolios, you know, start to emerge, you know, later this year. In general, I would just say that, you know, the transaction market has improved.

Speaker #1: So I think that's just a better overall sentiment. Relative to the transaction environment, I think owner-operators continue to be the primary buyer, but we're seeing the buying pool expand.

Speaker #1: Single assets are still more prevalent, but you could see some small portfolios start to emerge later this year. But in general, I would just say that the transaction market has improved.

Speaker #4: Okay, I appreciate those thoughts. And then just to put a finer point on the guidance discussion, if I look at the midpoint of the revised hotel EBITDA range, it suggests a modest decline, I think, for the rest of the year.

Chris Darling: Okay. I appreciate those thoughts. Just to put a finer point on the guidance discussion, if I look at the midpoint of the revised hotel EBITDA range, it suggests a modest decline, I think, for the rest of the year. Hoping you could frame this outlook, and in particular, I'm thinking about the Q3, where at least in theory, I'd think you'd be lapping an easier comp. Maybe just a discussion of some of the puts and takes that maybe I'm not totally thinking about.

Speaker #4: Hoping you could frame this outlook and, in particular, I'm thinking about the third quarter, where at least in theory I'd think you'd be lapping an easier comp.

Speaker #4: So maybe just a discussion of some of the puts and takes that maybe I'm not totally thinking about.

Leslie Hale: Well, I would say, you know, in general, don't forget that we had, you know, that we had a tax credit in last year. When you look over, you know, year-over-year, we actually have, you know, EBITDA growth. Even with that out that we still at the midpoint are having EBITDA growth. What was the second part of your question related to Q3?

Speaker #1: Well, I would say in general, don't forget that we had that we had a tax credit in the last year. So when you look over look year over year, we actually have EBITDA growth.

Speaker #1: And even without that, we still, at the midpoint, are having EBITDA growth. What was the second part of your question related to the third quarter?

Speaker #4: Well, I think last year, you had a particularly tough year-over-year growth percentage in Q3 '25, and so I would think, in theory, it might be an easier comp this year.

Chris Darling: Well, I think last year, you know, you had a particularly tough year-over-year growth percentage, in 3 to 25, I would think in theory, it might be an easier comp this year. That's where I wanted to get a little bit of context.

Speaker #4: And that's where I wanted to get a little bit of context.

Speaker #1: Yeah, I would say that in the third quarter, as I mentioned before, we do expect the third quarter to benefit from the World Cup.

Leslie Hale: Yeah, I would say that, you know, in, you know, in Q3, as I mentioned before, that we do expect Q3 to benefit from World Cup. It is also going to benefit from the 250th anniversary, which is on top of Fourth of July weekend, and then we also have Salesforce, that, you know, that we will benefiting from in Q3.

Speaker #1: It is also going to benefit from the 250th anniversary, which is on top of Fourth of July weekend. And then we also have Salesforce that we will be benefiting from in the third quarter.

Speaker #4: Okay. I appreciate the thoughts. That's it for me.

Chris Darling: Okay. Appreciate the thoughts. That's it for me.

Speaker #5: Thank you. We have no further questions at this time. Ms. Hale, I'd like to turn the floor back over to you for closing comments.

Operator 3: Thank you. We have no further questions at this time. Ms. Hale, I'd like to turn the floor back over to you for closing comments.

Operator: Thank you. We have no further questions at this time. Ms. Hale, I'd like to turn the floor back over to you for closing comments.

Speaker #1: Thank you all for your interest today in joining our call. We look forward to connecting with many of you at our upcoming conferences. And I hope all of you have some summer travel planned over the next few months.

Leslie Hale: Thank you all for your interest today in joining our call. You know, we look forward to connecting with many of you at our upcoming conferences. I hope all of you have some summer travel planned over the next few months and, you know, have a good day. Thanks, everybody.

Speaker #1: And have a good day. Thanks, everybody.

Speaker #5: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

Operator 3: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.

Operator: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.