Q2 2026 Xenia Hotels & Resorts Inc Earnings Call

July 30, 2026

Jen: Thank you for joining us, welcome to Xenia Hotels & Resorts Q2 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Aldo Martinez, Director of Finance. Aldo, please go ahead.

Operator: Thank you for joining us, welcome to Xenia Hotels & Resorts Q2 2026 earnings conference call. After today's prepared remarks, we will host a question-and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Aldo Martinez, Director of Finance. Aldo, please go ahead.

Speaker #1: If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. I will now hand the conference over to Aldo Martinez, Director of Finance.

Speaker #1: Aldo, please go ahead.

Speaker #2: Thank you, Jen. And welcome to Xenia Hotels & Resorts' second quarter 2026 earnings call and webcast. I'm here with Marcel Verbaas, our Chairman and Chief Executive Officer; Barry Bloom, our President and Chief Operating Officer; and Atish Shah, our Executive Vice President and Chief Financial Officer.

Aldo Martinez: Thank you, Jen, welcome to Xenia Hotels & Resorts Q2 2026 earnings call and webcast. I am here with Marcel Verbaas, our Chairman and Chief Executive Officer, Barry Bloom, our President and Chief Operating Officer, Atish Shah, our Executive Vice President and Chief Financial Officer. Marcel will begin with a discussion on our performance. Barry will follow with more details on operating trends and capital expenditure projects. Atish will conclude today's remarks on our balance sheet and outlook. We will then open the call up for Q&A. Before we get started, let me remind everyone that certain statements made on this call are not historical facts and are considered forward-looking statements.

Speaker #2: Marcel will begin with a discussion on our performance. Barry will follow with more details on operating trends and capital expenditure projects. Atish will conclude today's remarks on our balance sheet and outlook.

Speaker #2: We will then open the call up for Q&A. Before we get started, let me remind everyone that certain statements made on this call are not historical facts and are considered forward-looking statements.

Speaker #2: These statements are subject to numerous risks and uncertainties, as described in our Annual Report on Form 10-K and other SEC filings, which could cause, or actually result in, materially different results from those expressed in or implied by our comments.

Aldo Martinez: These statements are subject to numerous risks and uncertainties as described in our annual report on Form 10-K and other SEC filings, which could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued this morning, along with the comments on this call, are made only as of today, 30 July 2026, we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find the reconciliation of non-GAAP financial measures to net income and definitions of certain items referred to in our remarks in our Q2 earnings release, which is available on the investor relations section of our website. The property-level information we will be speaking about today is on a same property basis for all 30 hotels, unless specified otherwise.

Speaker #2: Forward-looking statements in the earnings release that we issued this morning, along with the comments on this call, are made only as of today, July 30, 2026, and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold.

Speaker #2: You can find the reconciliation of non-GAAP financial measures to net income and definitions of certain items referred to in our remarks in our second quarter earnings release, which is available on the investor relations section of our website.

Speaker #2: The property-level information we will be speaking about today is on the same-property basis for all 30 hotels, unless specified otherwise. An archive of this call will be available on our website for 90 days.

Aldo Martinez: An archive of this call will be available on our website for 90 days. I will now turn it over to Marcel to get started.

Speaker #2: I will now turn it over to Marcel to get started.

Speaker #3: Thanks, Aldo. Good afternoon, everyone. We are pleased to report another quarter of solid operating performance, with REVPAR, adjusted EBITDAre, and adjusted FFO per share modestly exceeding our expectations from when we last reported in May.

Marcel Verbaas: Thanks, Aldo, and good afternoon, everyone. We are pleased to report another quarter of solid operating performance with RevPAR, adjusted EBITDARE, and adjusted FFO per share modestly exceeding our expectations from when we last reported in May. Same property RevPAR for the quarter was $206.54, an increase of 5.6% compared to the same period last year, driven entirely by rate. Same property ADR was up 5.7% year over year, while occupancy held essentially flat. On a GAAP basis, we reported a net loss attributable to common stockholders for the quarter of $19.3 million as a result of a non-cash impairment charge related to the sale of Kimpton RiverPlace Hotel, which I will touch on later in my remarks. Adjusted EBITDARE for the quarter was $78.1 million, about $1 million ahead of the expectations we set when we reported Q1 results.

Speaker #3: Same property ref bar for the quarter was $206.54, an increase of 5.6% compared to the same period last year. Driven entirely by rate. Same property ADR was up 5.7% year over year, while occupancy held essentially flat.

Speaker #3: On a GAAP basis, we reported a net loss attributable to common stockholders for the quarter of $19.3 million. As a result of a non-cash impairment charge, related to the sale of Kimpton Riverblaze Hotel, which I will touch on later in my remarks.

Speaker #3: Adjusted EBITDA-RE for the quarter was $78.1 million, about $1 million ahead of the expectations we set when we reported first quarter results. Adjusted FFO per share for the second quarter was $0.61, a 7% increase compared to the second quarter of last year, due to our positive operating results and a lower share count after significant share repurchases at a very attractive price in 2025.

Marcel Verbaas: Adjusted FFO per share for Q2 was $0.61, a 7% increase compared to Q2 of last year due to our positive operating results and a lower share count after significant share repurchases at a very attractive price in 2025. Our same property Total RevPAR grew 3.3% in the quarter, trailing our same property RevPAR growth of 5.6%. Food and beverage and other revenues grew only modestly in Q2. This modest growth in non-rooms revenues was largely a result of more subdued group demand in the quarter, which faced a tough comparison to last year. Our RevPAR growth for the quarter consisting entirely of ADR growth. We expect to see more robust growth in non-rooms revenues again for the remainder of the year.

Speaker #3: Our same property total RevPAR grew 3.3% in the quarter, trailing our same property RevPAR growth of 5.6%. Food and beverage and other revenues grew only modestly in the second quarter.

Speaker #3: This modest growth in non-rooms revenues was largely a result of more subdued group demand in the quarter, which faced a tough comparison to last year, and our RevPAR growth for the quarter consisting entirely of ADR growth.

Speaker #3: We expect to see more robust growth in non-rooms revenues again for the remainder of the year. Both our group rooms revenue pace and our banquets and catering pace are quite strong for the third and fourth quarters.

Marcel Verbaas: Both our group rooms revenue pace and our banquets and catering pace are quite strong for Q3 and Q4, which has been reflected in our updated full year guidance. The transient segments led RevPAR growth in the quarter, bolstered by the unique demand dynamics from the FIFA World Cup. Transient same-property RevPAR growth of 6.9% outpaced group RevPAR growth of 3.4% for the quarter. We had anticipated that Q2 would be our weakest from a group perspective on a year-over-year basis, particularly after FIFA released a number of large room blocks as the World Cup approached. Despite the slower growth in group RevPAR in Q2, it is worth noting that group business continued to build on the 15.6% group rooms revenue growth we experienced in Q2 of 2025.

Speaker #3: Which has been reflected in our updated full-year guidance. The transient segments led RevPAR growth in the quarter, bolstered by the unique demand dynamics from the FIFA World Cup.

Speaker #3: Transient same property RevPAR growth of 6.9% outpaced group RevPAR growth of 3.4% for the quarter. We had anticipated that the second quarter would be our weakest from a group perspective on a year-over-year basis.

Speaker #3: Particularly after FIFA released a number of large room blocks as the World Cup approached. Despite the slower growth in group RevPAR in the second quarter, it is worth noting that group business continued to build on the 15.6% group rooms revenue growth we experienced in the second quarter of 2025.

Speaker #3: Group pace for the second half of the year strengthened during the quarter, and we continue to see no signs of pullback from the higher-end consumer, which gives us continued confidence in the health of demand across our portfolio.

Marcel Verbaas: Group pace for H2 of the year strengthened during the quarter, we continue to see no signs of pullback from the higher-end consumer, which gives us continued confidence in the health of demand across our portfolio. June was the strongest RevPAR growth month of the quarter, somewhat bolstered by the FIFA World Cup, as games were played in six of our markets. Our same-property portfolio achieved nearly 9% growth in average daily rate in June versus the same month last year. While the World Cup certainly provided compression and rate growth around game days, the overall positive impact on our portfolio was limited. Group business in most of our World Cup markets was weaker, not only because of the FIFA room blocks issue, also a hesitancy from other potential customers to book in those markets during and around the time of the event.

Speaker #3: June was the strongest RevPAR growth month of the quarter, somewhat bolstered by the FIFA World Cup, as gains were posted in six of our markets.

Speaker #3: Our same property portfolio achieved nearly 9% growth in average daily rate in June versus the same month last year. While the World Cup certainly provided compression and rate growth around game days, the overall positive impact on our portfolio was limited.

Speaker #3: Group business in most of our World Cup markets was weaker, not only because of the FIFA room blocks issue, but also due to a hesitancy from other potential customers to book in those markets during and around the time of the event.

Speaker #3: While transient demand filled the gap, this came at the expense of out-of-room spend that had been very strong in prior quarters. As a result, most of our large, group-focused hotels and World Cup markets relatively underperformed, while some of our transient-focused, smaller hotels with exposure to the games boasted strong results.

Marcel Verbaas: While transient demand filled the gap, this came at the expense of out-of-room spend that had been very strong in prior quarters. As a result, most of our large group-focused hotels and World Cup markets relatively underperformed. While some of our transient-focused smaller hotels with exposure to the games posted strong results. RevPAR strength for the quarter as a whole was broad-based from a market perspective, with Philadelphia leading our portfolio with same-property RevPAR growth of 22%, followed by Salt Lake City at 13.1%, Phoenix at 12.7%, and Birmingham at 12.2%. We also saw healthy high single digits to double-digit percentage RevPAR increases in several other markets, including Santa Clara, Washington, D.C., and San Diego. Performance in Phoenix continues to be aided by the successful ramp at Grand Hyatt Scottsdale Resort, which is tracking favorably towards stabilization.

Speaker #3: RevPAR strength for the quarter as a whole was broad-based from a market perspective, with Philadelphia leading our portfolio with same property RevPAR growth of 22%, followed by Salt Lake City at 13.1%, Phoenix at 12.7%, and Birmingham at 12.2%.

Speaker #3: We also saw healthy high single-digit to double-digit percentage RevPAR increases in several other markets, including Santa Clara, Washington, D.C., and San Diego. Performance in Phoenix continues to be aided by the successful ramp at Grand Hyatt Scottsdale Resort, which is tracking favorably toward stabilization.

Speaker #3: The year is shaping up to be the strongest group year in the resort's history, while group pace for future periods remains encouraging as well.

Marcel Verbaas: The year is shaping up to be the strongest group year in the resort's history. While group pace for future periods remains encouraging as well. Turning to margins, same-property hotel EBITDA margin was 28.7% in Q2, down 65 basis points from a year ago. The lapping of approximately $1.5 million in real estate tax refunds that we received during Q2 of 2025, an increase in expenses during the startup phase of the food and beverage repositioning at W Nashville, were the most significant reasons for our margin decline for the quarter. We remain focused on the expense levers within our control and continue to work with our operators to manage discretionary spending appropriately. Turning to capital projects, we continue to reinvest in our portfolio during the quarter, we have two significant renovations set to begin in Q4.

Speaker #3: Turning to margins, same property hotel EBITDA margin was 28.7% in the second quarter, down 65 basis points from a year ago. The lapping of approximately $1.5 million in real estate tax refunds that we received during the second quarter of 2025, and an increase in expenses during the startup phase of the food and beverage repositioning at W Nashville, were the most significant reasons for our margin decline for the quarter.

Speaker #3: We remain focused on the expense levers within our control and continue to work with our operators to manage discretionary spending appropriately. Turning to capital projects, we continue to reinvest in our portfolio during the quarter.

Speaker #3: And we have two significant renovations set to begin in the fourth quarter. The first phase of a two-phase, comprehensive renovation of guest rooms and corridors at Andaz Napa, and a renovation of guest rooms, corridors, and meeting space at The Ritz-Carlton, Denver.

Marcel Verbaas: The first phase of a two-phase comprehensive renovation of guest rooms and corridors at Andaz Napa, a renovation of guest rooms, corridors, and meeting space at The Ritz-Carlton, Denver. Both of these renovation projects reflect our ongoing commitment to protecting and growing the long-term value of our portfolio. Given the timing of these renovations during lower demand periods in Napa and Denver, we expect limited cash flow disruption from these projects this year. Barry will provide additional details on all of our capital projects during his remarks. On the transaction front, last week we completed the sale of the 85-room Kimpton RiverPlace hotel in Portland, Oregon for $11 million, or approximately $129,000 per key. The $11 million sale price represented a 19.4x multiple on hotel EBITDA and a 2% capitalization rate on net operating income for the trailing 12 months ended 30 June 2026.

Speaker #3: Both of these renovation projects reflect our ongoing commitment to protecting and growing the long-term value of our portfolio. Given the timing of these renovations—during lower demand periods in Napa and Denver—we expect limited cash flow disruption from these projects this year.

Speaker #3: Barry will provide additional details on all of our capital projects during his remarks. On the transaction front, last week we completed the sale of the 85-room Kimpton RiverPlace Hotel in Portland, Oregon, for $11 million.

Speaker #3: Our approximately $129,000 per key. The $11 million sale price represented a 19.4x multiple on hotel EBITDA and a 2% capitalization rate on net operating income for the trailing 12 months ended June 30, 2026.

Speaker #3: River Place was an asset that we acquired in 2015 in a three-property portfolio transaction. While the hotel performed well historically, it significantly underperformed in the last few years due to market challenges, its location becoming less desirable, and new competitive supply additions.

Marcel Verbaas: RiverPlace was an asset that we acquired in 2015 in a three-property portfolio transaction. While the hotel performed well historically, it significantly underperformed in the last few years due to market challenges, its location becoming less desirable, and new competitive supply additions. The hotel contributed minimal hotel EBITDA and was facing substantial near-term capital expenditure requirements and a challenging outlook over the next several years. We continue to maintain exposure to the recovering Portland market through the ownership of our 600-room Hyatt Regency Portland, which benefits from its location adjacent to the Oregon Convention Center and near the Moda Center. The overall transaction environment appears to be a bit more robust than it has been over the past several years.

Speaker #3: The hotel contributed minimal hotel EBITDA and was facing substantial near-term capital expenditure requirements and a challenging outlook over the next several years. We continue to maintain exposure to the recovering Portland market through the ownership of our 600-room Hyatt Regency Portland, which benefits from its location adjacent to the Oregon Convention Center and near the Moda Center.

Speaker #3: The overall transaction environment appears to be a bit more robust than it has been over the past several years. We continue to evaluate opportunities to further enhance the quality of our portfolio and drive superior FFO growth through both external and internal drivers.

Marcel Verbaas: We continue to evaluate opportunities to further enhance the quality of our portfolio and drive superior FFO growth through both external and internal drivers. Throughout the history of our company, we have been active on both the disposition and acquisition fronts in an effort to achieve these objectives. We expect to take advantage of similar opportunities when they arise in the years ahead. We will remain prudent in our evaluation of these opportunities, and we'll continue to focus on maintaining a strong and flexible balance sheet to support our capital allocation decisions. Looking ahead, given the strength of our performance in the H1 of the year, continued favorable market conditions, and a very strong group demand outlook for the H2 of the year, we are raising the midpoint of our current full year 2026 adjusted EBITDARE guidance by $7 million.

Speaker #3: Throughout the history of our company, we have been active on both the disposition and acquisition fronts, in an effort to achieve these objectives. And we expect to take advantage of similar opportunities when they arise in the years ahead.

Speaker #3: We will remain prudent in our evaluation of these opportunities, and will continue to focus on maintaining a strong and flexible balance sheet to support our capital allocation decisions.

Speaker #3: Looking ahead, given the strength of our performance in the first half of the year, continued favorable market conditions, and a very strong group demand outlook for the second half of the year, we are raising the midpoints of our current full-year 2026 adjusted EBITDA-RE guidance by $7 million.

Speaker #3: Atish will walk through all of our updated 2026 guidance items in more detail during his remarks. We continue to see encouraging trends into the third quarter, which gives us confidence in our improved outlook for the remainder of the year.

Marcel Verbaas: Atish will walk through all of our updated 2026 guidance items in more detail during his remarks. We continue to see encouraging trends into the Q3, which gives us confidence in our improved outlook for the remainder of the year. The Q3 is off to a very strong start as we estimate that July RevPAR growth for our same-property portfolio, which now excludes Kimpton RiverPlace, will be approximately 10% compared to the same period last year, with both leisure and group demand contributing to this increase. We believe that our high-quality portfolio continues to be well-positioned to take advantage of a low supply growth environment and a positive backdrop in all segments of hotel demand, especially on the higher end.

Speaker #3: The third quarter is off to a very strong start, as we estimate that July ref bar growth for our same property portfolio - which now excludes Kimpton River Place - will be approximately 10% compared to the same period last year.

Speaker #3: With both leisure and group demand contributing to this increase, we believe that our high-quality portfolio continues to be well positioned to take advantage of a low supply growth environment and a positive backdrop in all segments of hotel demand, especially on the higher end.

Speaker #3: We have experienced strength in both transient and group demand this year, and future indicators continue to support our expectation that our portfolio is poised for meaningful growth during the remainder of this year and in the years ahead.

Marcel Verbaas: We have experienced strength in both transient and group demand this year, and future indicators continue to support our expectation that our portfolio is poised for meaningful growth during the remainder of this year and the years ahead. With that, I'll turn the call over to Barry to walk through our operating results and capital expenditure projects in more detail.

Speaker #3: With that, I'll turn the call over to Barry to walk through our operating results and capital expenditure projects in more detail.

Speaker #2: Thank you, Marcel. Good afternoon, everyone. For the second quarter, our 30-hotel same-property portfolio RevPAR was $206.54, an increase of 5.6% compared to the second quarter of 2025, with growth entirely rate-driven.

Barry Bloom: Thank you, Marcel. Good afternoon, everyone. For Q2, our 30-hotel same-property portfolio RevPAR was $206.64, an increase of 5.6% compared to Q2 2025, with growth entirely rate driven based on occupancy at 72.3%, flat with last year, and an average daily rate of $285.71, up 5.7%. As Marcel mentioned, Q2 saw an anticipated shift in non-room spend with same-property total RevPAR of $366.17, an increase of 3.3% compared to last year's Q2. This modest growth in non-room spend reflects a shift in mix related to an increase in transient demand and an anticipated mix of association versus corporate group demand, resulting in a difficult comparison to the same quarter last year. Looking at the quarter compared to 2025 on a same-property basis, April RevPAR was $219.74, up 6%, and May RevPAR was $199.78, up 2.6%.

Speaker #2: Based on occupancy, at 72.3% flat from last year, and an average daily rate of $285.71, up 5.7%. As Marcel mentioned, the second quarter saw an anticipated shift in non-room spend, with same property total RevPAR of $366.17, an increase of 3.3% compared to last year's second quarter.

Speaker #2: This modest growth in non-room spend reflects a shift in mix related to an increase in transient demand and an anticipated mix of association versus corporate group demand, resulting in a difficult comparison to the same quarter last year.

Speaker #2: Looking at the quarter compared to 2025 on a same-property basis, April RevPAR was $219.74, up 6%, and May RevPAR was $199.78, up 2.6%.

Speaker #2: June was the strongest performing month in terms of growth, with RevPAR of $200.32, up 8.6%, with occupancy relatively flat. Nineteen of our twenty-two markets posted positive RevPAR growth for the quarter.

Barry Bloom: June was the strongest performing month in terms of growth, with RevPAR of $200.32, up 8.6%, with occupancy relatively flat. 19 of our 22 markets posted positive RevPAR growth for the quarter. Palomar Philadelphia led our portfolio with same-property RevPAR growth of 22%, while Monaco Salt Lake City followed at 13.1%. Our Phoenix properties grew at a combined 12.7%. We also saw double-digit percentage growth at Grand Bohemian Mountain Brook of 12.2%, Park Hyatt Aviara up 11.3%, and Hyatt Regency Santa Clara up 11.1%. The Ritz-Carlton Pentagon City was up 8.4%, and Ritz-Carlton Denver and Fairmont Pittsburgh also posted healthy growth of 7.2% and 7.1% respectively. Growth was fairly balanced on day of week trends in the quarter. For all segments on a same-property basis, weekday RevPAR, Sunday through Thursday, was up 5.9%, while weekend RevPAR, Friday and Saturday, was up 5.2%.

Speaker #2: Palomar Philadelphia led our portfolio with same-property RevPAR growth of 22%, while Monaco Salt Lake City followed at 13.1%. Our Phoenix properties grew at a combined 12.7%.

Speaker #2: We also saw double-digit percentage growth at Grand Bohemian Mountain Brook of 12.2%, Park Hyatt Aviara was up 11.3%, and Hyatt Regency Santa Clara was up 11.1%.

Speaker #2: The Ritz-Carlton Pentagon City was up 8.4%, and The Ritz-Carlton Denver and Fairmont Pittsburgh also posted healthy growth of 7.2% and 7.1%, respectively. Growth was fairly balanced on day-of-week trends in the quarter.

Speaker #2: For all segments on the same property basis, weekday ref bar, Sunday through Thursday, was up 5.9%, while weekend ref bar, Friday and Saturday, was up 5.2%.

Speaker #2: Rate growth was broad-based and well-balanced across every day of the week, ranging from just under 5% on Thursdays to nearly 7% on Mondays. On the expense side, total same-property hotel operating expenses were $210.6 million for the quarter, an increase of 4.2%, outpacing our 3.3% revenue growth and resulting in 65 basis points of margin decline, with the largest single factor being the lapping of a significant real estate tax credit in the second quarter of last year.

Barry Bloom: Rate growth was broad-based and well-balanced across every day of the week, ranging from just under 5% on Thursdays to nearly 7% on Mondays. On the expense side, total same-property hotel operating expenses for $210.6 million for the quarter, an increase of 4.2%, outpacing our 3.3% revenue growth, resulting in 65 basis points of margin decline, with the largest single factor being the lapping of a significant real estate tax credit in Q2 of last year. Looking at the individual components, rooms expense grew approximately 4% on a per occupied room basis, while food and beverage expenses grew 3.3%, greater than the 1% growth in food and beverage revenue, which impacted F&B profitability. This was a direct result of a 1.5% increase in less profitable outlet business and a 1.1% decline in typically more profitable banquet business.

Speaker #2: Looking at the individual components, rooms expense grew approximately 4% on a per-occupied room basis, while food and beverage expenses grew 3.3%, which was greater than the 1% growth in food and beverage revenue. This impacted F&B profitability.

Speaker #2: This was a direct result of a 1.5% increase in less profitable outlet business and a 1.1% decline in typically more profitable banquet business.

Speaker #2: Miscellaneous income declined nearly 12%, due primarily to less cancellation and attrition revenue compared to last year, but is expected to balance itself out over the course of the full year.

Barry Bloom: Miscellaneous income declined nearly 12%, due primarily to less cancellation and attrition revenue compared to last year, but is expected to balance itself out over the course of the full year. A&G expenses grew approximately 7.9% for the quarter, due in large part to higher credit card commissions related to the higher transient mix. Sales and marketing expenses continue to be well controlled and were nearly flat to last year. Property operations and maintenance expenses declined just over 1% for the quarter, while energy expenses increased nearly 11%, due primarily to significant increases in gas and water expenses, offset by a more moderate 4% increase in electricity due in part to efficiencies from our ongoing refurbishment and replacement of chillers at many of our properties. Same-property EBITDA was $84.9 million for the quarter, an increase of 1% and a margin of 28.7%.

Speaker #2: A&G expenses grew approximately 7.9% for the quarter, due in large part to higher credit card commissions related to the higher transient mix. Sales and marketing expenses continued to be well controlled and were nearly flat compared to last year.

Speaker #2: Property operations and maintenance expenses declined just over 1% for the quarter. While energy expenses increased nearly 11%, due primarily to significant increases in gas and water expenses, this was offset by a more moderate 4% increase in electricity, due in part to efficiencies from our ongoing refurbishment and replacement of chillers at many of our properties.

Speaker #2: Same property EBITDA was $84.9 million for the quarter, an increase of 1%, at a margin of 28.7%. Turning to CapEx, we invested $15.4 million in portfolio improvements during the second quarter, bringing our year-to-date total to $30.6 million.

Barry Bloom: Turning to CapEx, we invested $15.4 million in portfolio improvements during Q2, bringing our year-to-date total to $30.6 million. During Q2, we finalized planning at Royal Palms Resort and Spa for the renovation of guest rooms and corridors in the 68-room Monte Vista Building, and a renovation of T. Cook's Restaurant, which will take place during Q3. Additional ongoing upgrades across the portfolio include upgrading mechanical systems at eight hotels and ongoing minor improvements to guest rooms at three hotels. Looking ahead to Q4, we have two significant renovations scheduled to begin, both of which are currently on track. We will perform the first of two phases of a comprehensive room renovation of corridors and guest rooms at Andaz Napa, and a renovation of guest rooms, corridors, and meeting space at The Ritz-Carlton, Denver.

Speaker #2: During the second quarter, we finalized planning at Royal Palms Resort & Spa, with a renovation of guest rooms and corridors in the 68-room Monavista building, and a renovation of T.

Speaker #2: Cook's Restaurant, which will take place during the third quarter. Additional ongoing upgrades across the portfolio include upgrading mechanical systems at eight hotels and ongoing minor improvements to guest rooms at three hotels.

Speaker #2: Looking ahead to the fourth quarter, we have two significant renovations scheduled to begin, both of which are currently on track. We will perform the first of two phases of a comprehensive room renovation—including corridors and guest rooms—at Andaz Napa, and a renovation of guest rooms, corridors, and meeting space at The Ritz-Carlton Denver.

Speaker #2: We continue to expect full-year capital expenditures of between $70 million and $80 million, unchanged from our prior guidance. Before I conclude, I want to provide an update on our four Marriott Autograph Collection hotels.

Barry Bloom: We continue to expect full-year capital expenditures of between $70 million and $80 million, unchanged from our prior guidance. Before I conclude, I want to provide an update on our four Marriott Autograph Collection hotels. These four hotels have been strong performers, and we are in the midst of further strengthening these hotels by evolving their individual names and positioning to better tie to their local markets. The hotels will continue to maintain their Autograph Collection branding, but the new names and positioning will better fit Autograph Collection's philosophy, with each hotel being distinctive in part by capturing the local essence of each market in which they reside. The first step of this effort began earlier this year when we transitioned property management to Davidson Hospitality Group. That transition went smoothly with no disruption to hotel performance. In the next few months, we will be renaming these four unique properties.

Speaker #2: These four hotels have been strong performers, and we are in the midst of further strengthening these hotels by evolving their individual names and positioning to better tie to their local markets.

Speaker #2: The hotels will continue to maintain their Autograph Collection branding, but the new names and positioning will better fit Autograph Collection's philosophy of each hotel being distinctive, in part by capturing the local essence of each market in which they reside.

Speaker #2: The first step of this effort began earlier this year when we transitioned property management to Davidson Hotel Group. That transition went smoothly, with no disruption to hotel performance.

Speaker #2: In the next few months, we will be renaming these four unique properties. As with the management transition, we do not anticipate any meaningful disruption to hotel operations and look forward to even stronger performance from each of these hotels under Davidson’s management, as they continue to be part of Marriott’s Autograph Collection. With that, I will turn the call over to Atish.

Barry Bloom: As with the management transition, we do not anticipate any meaningful disruption of hotel operations and look forward to even stronger performance from each of these hotels under Davidson's management as they continue to be part of Marriott's Autograph Collection. With that, I will turn the call over to Atish.

Speaker #3: Thank you, Barry. I will provide an update on our balance sheet, touch on the second quarter versus our prior expectations, and then walk through our updated 2026 guidance.

Atish Shah: Thank you, Barry. I will provide an update on our balance sheet, touch on Q2 versus our prior expectations, and then walk through our updated 2026 guidance. At quarter end, we had approximately $1.4 billion of outstanding debt. Approximately three quarters of our debt was at fixed interest rates. Our weighted average interest rate at quarter end was about 5.5%. Our leverage ratio, as calculated under our credit facility, was approximately 4.8 times trailing 12 months net debt to EBITDA. Over time, we expect our leverage ratio to achieve our long-term target of sub four times net debt to EBITDA. As a reminder, we have no preferred equity or senior capital. During the quarter, we further resized the Andaz Napa mortgage loan by paying it down by approximately $5 million ahead of the hotel's planned renovation, which is scheduled to begin next quarter.

Speaker #3: At quarter-end, we had approximately $1.4 billion of outstanding debt. Approximately three-quarters of our debt was at fixed interest rates. Our weighted average interest rate at quarter-end was about 5.5%.

Speaker #3: Our leverage ratio, as calculated under our credit facility, was approximately 4.8 times trailing 12 months net debt to EBITDA. Over time, we expect our leverage ratio to achieve our long-term target of below 4 times net debt to EBITDA.

Speaker #3: As a reminder, we have no preferred equity or senior capital. During the quarter, we further resized the Andaz Napa mortgage loan by paying it down by approximately $5 million ahead of the hotel's planned renovation, which is scheduled to begin next quarter.

Speaker #3: Approximately 7% of our debt matures next year, with our most significant maturities in 2029 and 2030. We continue to believe our capital structure is a source of strength, given we have a mostly unencumbered asset base, a well-laddered maturity profile, and a strong syndicate of banking partners.

Atish Shah: Approximately 7% of our debt matures next year, with our most significant maturities in 2029 and 2030. We continue to believe our capital structure is a source of strength, given we have a mostly unencumbered asset base, a well-laddered maturity profile, and a strong syndicate of banking partners. At quarter end, available cash was $112 million, and our $500 million revolving line of credit was fully undrawn, which resulted in total liquidity of $612 million. We did not repurchase or issue any shares during the quarter. We have $97.5 million remaining on our buyback authorization and $200 million of capacity under our ATM offering program. We paid a Q2 dividend of $0.14 per share. If annualized, this reflects an approximate 2.5% yield on our share price. We continue to balance dividend level with the utilization of significant COVID era NOLs.

Speaker #3: At quarter-end, available cash was $112 million, and our $500 million revolving line of credit was fully undrawn, which resulted in total liquidity of $612 million.

Speaker #3: We did not repurchase or issue any shares during the quarter. We have 97 and a half million dollars remaining on our buyback authorization, and 200 million dollars of capacity under our ATM offering program.

Speaker #3: We paid a second quarter dividend of 14 cents per share, if annualized, this reflects an approximate 2 and a half percent yield on our share price.

Speaker #3: We continue to balance dividend levels with the utilization of significant COVID-era NOLs. We also continue to prioritize ways in which we can drive shareholder value, such as reinvestments in our existing assets or share repurchases.

Atish Shah: We also continue to prioritize ways in which we can drive shareholder value, such as investment in our existing assets or share repurchases. As a reminder, in 2025, we finished the Grand Hyatt Scottsdale project, which we are benefiting from now, and as we wrap that up, we turn more aggressively to share repurchases, buying approximately 9% of our outstanding shares last year at a sub $13 weighted average price per share. Moving ahead to the Q2 relative to prior expectations, just two points to frame the discussion ahead on guidance. First, as Marcel mentioned, Q2 results came in slightly ahead of our expectations, with better RevPAR and EBITDA margin than expected, resulting in a $1 million beat to the adjusted EBITDARE implied by the quarterly weighting that we had previously indicated.

Speaker #3: As a reminder, in 2025, we finished the Grand Hyatt Scottsdale project, which we are benefiting from now. And as we wrap that up, we turn more aggressively to share repurchases, buying approximately 9% of our outstanding shares last year at a sub-$13 weighted average price per share.

Speaker #3: Moving ahead to the second quarter, relative to prior expectations, just two points to frame the discussion ahead on guidance. First, as Marcel mentioned, second quarter results came in slightly ahead of our expectations, with better RevPAR EBITDA margin than expected, resulting in a $1 million beat to the adjusted EBITDA RE implied by the quarterly weighting that we had previously indicated.

Speaker #3: Second, regarding our expectations for event-driven demand this year, we previously guided to a range of 25 to 50 basis points of RevPAR growth due to special events.

Atish Shah: Second, as to our expectation for event-driven demand this year, we had previously guided to a range of 25 to 50 basis points of RevPAR growth due to special events. Our current estimate is that event-driven demand materialized at the low end of that range, and the mix of business being more transient than group didn't provide as much of a total revenue lift as had been anticipated. Turning next to our 2026 guidance. We've raised our full year adjusted EBITDARE guidance by $7 million to $273 million at the midpoint. The $7 million increase to adjusted EBITDARE guidance is on top of the $6 million increase we made last quarter. Our adjusted EBITDARE expectation has moved up approximately 2.5% since last quarter, or 5% since we initially provided full year guidance in February.

Speaker #3: Our current estimate is that event-driven demand materialized at the low end of that range, and the mix of business being more transient than group didn't provide as much of a total revenue lift as had been anticipated.

Speaker #3: Turning next to our 2026 guidance. We've raised our full-year adjusted EBITDA RE guidance by 7 million dollars to 273 million dollars at the midpoint, the 7 million dollar increase to adjusted EBITDA RE guidance is on top of the 6 million dollar increase we made last quarter, our adjusted EBITDA RE expectation has moved up approximately 2 and a half percent since last quarter, or 5% since we initially provided full-year guidance in February.

Speaker #3: As to the weighting by quarter for the remainder of the year, we expect to earn in the high-teens percentage range of full-year adjusted EBITDA RE in the third quarter, and just under a quarter of full-year adjusted EBITDA RE in the fourth quarter.

Atish Shah: As to the weighting by quarter for the remainder of the year, we expect to earn in the high teens percentage range of full-year adjusted EBITDARE in the Q3, and just under a quarter of full-year adjusted EBITDARE in the Q4. As to RevPAR growth, we've increased the midpoint by 150 basis points to 5.5%. As we look ahead, a couple of things give us confidence in our outlook. First, group room revenue pace for the H2 was up 12% at the end of June versus the year prior. That reflects a 300 basis point increase from where it stood a quarter ago. The pace increase is 80% demand-driven and 20% rate-driven.

Speaker #3: As to rev par growth, we've increased the midpoint by 150 basis points to 5 and a half percent. As we look ahead a couple of things give us confidence in our outlook.

Speaker #3: First, group room revenue pace for the second half was up 12% at the end of June versus the prior year. That reflects a 300-basis-point increase from where it stood a quarter ago.

Speaker #3: The pace increase is 80% demand-driven and 20% rate-driven. This higher pace reflects strong production in the second quarter, with group room revenue production up over 25% for the back half of this year, compared to production in the second quarter of 2025 for the back half of 2025.

Atish Shah: This higher pace reflects strong production in Q2, with group room revenue production up over 25% for the H2 of this year compared to production in Q2 2025 for the H2 2025. We have more than three-quarters of our expected H2 group business already booked. Second, we continue to see strong transient demand reflected both by results from our more transient-oriented hotels and overall transient pace. Based on our July projected RevPAR, several of our transient-oriented hotels, excluding those that benefited from special events, showed strong year-over-year gains. Those properties include our hotels in Salt Lake City, Pittsburgh, and downtown Orlando. As to transient pace at the end of June, it was up in the high single-digit percentage range for both August and September.

Speaker #3: We have more than three-quarters of our expected second-half group business already booked. Second, we continue to see strong transient demand, reflected both by results from our more transient-oriented hotels and overall transient pace.

Speaker #3: Based on our July projected RevPAR, several of our transient-oriented hotels—excluding those that benefited from special events—showed strong year-over-year gains. Those properties include our hotels in Salt Lake City, Pittsburgh, and downtown Orlando.

Speaker #3: As to transient pace, at the end of June, it was up in the high single-digit percentage range for both August and September. Turning next to our expectation for total RevPAR, we have increased our total RevPAR growth guidance by 75 basis points to 5.75% at the midpoint.

Atish Shah: Turning next to our expectation for Total RevPAR, we have increased our Total RevPAR growth guidance by 75 basis points to 5.75% at the midpoint. The variance in growth of RevPAR versus Total RevPAR reflects Q2 transient versus group mix. We expect H2 Total RevPAR to grow about 200 basis points more than RevPAR. None of our other guidance assumptions have changed. Guidance for interest expense, G&A expense, income tax expense, and capital expenditures are all the same as a quarter ago. We expect adjusted FFO for diluted share of $2.02 at the midpoint, which is an increase of $0.08 at the midpoint. That expectation reflects about 15% growth in FFO per share relative to 2025. In closing, our high-quality, well-located portfolio of luxury and upper upscale hotels affiliated with strong brands and managers makes us well positioned for growth, particularly given the supply backdrop and fundamentals.

Speaker #3: The variance in growth of rev par versus total rev par reflects second quarter transient versus group mix. We expect second half total rev par to grow about 200 basis points more than rev par.

Speaker #3: None of our other guidance assumptions have changed. Guidance for interest expense, G&A expense, income tax expense, and capital expenditures are all the same as a quarter ago.

Speaker #3: We expect adjusted FFO per diluted share of $2.02 at the midpoint, which is an increase of 8 cents at the midpoint. That expectation reflects about 15% growth in FFO per share relative to 2025.

Speaker #3: In closing, our high-quality, well-located portfolio of luxury and upper-upscale hotels, affiliated with strong brands and managers, makes us well positioned for growth, particularly given the supply backdrop and fundamentals.

Speaker #3: We will now open the call for questions. Jen, may we please start the Q&A session?

Atish Shah: We will now open the call for questions. Jen, may we please start the Q&A session?

Speaker #1: Of course. We will now begin the Q&A session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand.

Jen: Of course. We will now begin the Q&A session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Chris Darling with Green Street. Chris, your line is open. Please go ahead.

Operator: Of course. We will now begin the Q&A session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Chris Darling with Green Street. Chris, your line is open. Please go ahead.

Speaker #1: To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality.

Speaker #1: If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Chris Darling with Green Street.

Speaker #1: Chris, your line is open. Please go ahead.

Speaker #3: Hi. Thanks for taking the question. Marcel, the transaction market these days, both maybe from a pricing perspective but also in terms of depth of the bidding tent, and anything else that has caught your eye?

Chris Darling: Hi. Thanks for taking the question. Marcel, hoping you could talk a little bit more about what you're seeing in the transaction market these days, both maybe from a pricing perspective, but also in terms of depth of the bidding tent, and anything else that has caught your eye.

Speaker #2: Yeah, sure. Thanks. Thanks for the question, Chris. Yeah, like I said in my prepared remarks, I do think we're seeing a slightly more robust transaction market than we've seen, I would say, over the past several years.

Marcel Verbaas: Yeah, sure. Thanks for the question, Chris. Yeah, like I said in my prepared remarks, I do think we're seeing a slightly more robust transaction market than we've seen over the past several years. I think some of that obviously has to do with the fact that we are overall, as an industry, seeing some pretty good sustained growth over the last couple of quarters. I think that this creates an environment where it does become a little bit easier for buyers and sellers to potentially find each other and end up with pricing that could work on both sides. It's obviously a little bit easier to look at a property that you can point a little bit more easily towards growth over the next several years to give you some more confidence about completing a transaction.

Speaker #2: And I think some of that obviously has to do with the fact that we are, overall as an industry, seeing some pretty good, sustained growth over the last couple of quarters.

Speaker #2: I think that this creates an environment where it does become a little bit easier for buyers and sellers to potentially find each other and end up with pricing that could work on both sides.

Speaker #2: It's obviously a little bit easier to look at a property that you can point a little bit more easily towards growth over the next several years, to give you some more confidence about completing a transaction.

Speaker #2: And it also may end up getting to pricing that actually makes more sense for a seller in that situation. So, overall, I think we're just seeing, like I said, a little bit more robust market. Certainly, it allows us to build the pipeline a little bit more than what we've seen over the last several years, and dig a little bit deeper into some of those opportunities.

Marcel Verbaas: It also may end up getting to pricing that actually makes more sense for a seller in that situation. Overall, I think we're just seeing, like I said, a little bit more robust markets. Certainly allows us to build the pipeline a little bit more than what we've seen over the last several years and dig a little bit deeper into some of those opportunities.

Speaker #3: Yeah, it's helpful. And maybe a question for Barry here, but as it relates to expense growth, you spoke about some of the moving pieces this quarter.

Chris Darling: Yeah, it's helpful. Maybe a question for Barry here, but as it relates to expense growth, you spoke about some of the moving pieces this quarter, and how that may have been a bit of a headwind in Q2. How should we be thinking about OpEx per occupied room on a go-forward basis for the portfolio, both H2 and then sort of on a run rate basis?

Speaker #3: And how that may have been a bit of a headwind in the second quarter. How should we be thinking about opex per occupied room on a go-forward basis for the portfolio?

Speaker #3: Both the second half of the year and then, sort of, on a run-rate basis.

Speaker #4: Yeah, I think on per occupied room basis, I think things are overall relatively normalized and that we're seeing per occupied room growth in the three to four percent range.

Atish Shah: I think on per occupied room basis, I think things are overall relatively normalized and that we're seeing per occupied room

Barry Bloom: I think on per occupied room basis, I think things are overall relatively normalized and that we're seeing per occupied room

Barry Bloom: growth in the 3% to 4% range. That's tempered obviously, and varies by quarter, given how much occupancy growth there is. Obviously this quarter, we had flat occupancy, so the overall expense levels were a little bit higher than we would've hoped for. I think embedded in the guidance and forecast is that we're going to drive a little more occupancy over prior year in Q3 and Q4, and that should help make or certainly assist in, at least on a per occupied room basis, the expense levels being kind of toward the lower end of that range.

Speaker #4: Now, that's tempered, obviously, and varies by quarter, given how much occupancy growth there is. So, obviously, this quarter we had flat occupancy, so the overall expense levels were a little bit higher than we would have hoped for.

Speaker #4: I think embedded in the guidance and forecast is that we're going to drive a little more occupancy over the prior year in Q3 and Q4, and that should help make, or certainly assist in, at least on a per occupied room basis, the expense levels being toward the lower end of that range.

Speaker #3: All right, understood. Thanks for your time.

Chris Darling: All right. Understood. Thanks for the time.

Speaker #1: Your next question comes from the line of David Katz with Jefferies. David, your line is open. Please go ahead.

Jen: Your next question comes from the line of David Katz with Jefferies. David, your line is open. Please go ahead.

Operator: Your next question comes from the line of David Katz with Jefferies. David, your line is open. Please go ahead.

Speaker #5: Thanks very much for taking my question. I appreciate all the detail. You've, I think, done a very solid job with your existing portfolio, and I know that history suggests otherwise, but is the prospect of any corporate M&A on or off the table?

David Katz: Thanks very much for taking my question. Appreciate all the detail. You've, I think, done a very solid job with your existing portfolio, and I know that history suggests otherwise, but is the prospect of any corporate M&A on or off the table?

Speaker #2: Well, I think as we've talked about in the past, corporate M&A is really driven by what the overall environment looks like from potential buyer and seller interest, obviously.

Marcel Verbaas: Well, I think as we've talked about in the past, corporate M&A is really driven by what the overall environment looks like from potential buyer and seller interest, obviously. I think we've focused very much on continuously upgrading the portfolio, making the portfolio as robust against potential challenges, and similarly positioning it well for future FFO growth, through continuously upgrading our portfolio and making sure it's an attractive portfolio from whatever perspective. We, as Atish had pointed out, have grown FFO pretty significantly over the past several years. We're on a day-to-day basis just doing all the things that we think are going to drive value for us in this portfolio over time, no matter in what form, that ultimately benefits all of our shareholders.

Speaker #2: I think we've focused very much on continuously upgrading the portfolio, making the portfolio as robust as possible against potential challenges, and similarly positioning it well for future FFO growth.

Speaker #2: Through continuously upgrading our portfolio and making sure it's an attractive portfolio from whatever perspective, we, as Atish pointed out, have grown FFO pretty significantly over the past several years.

Speaker #2: And we're, on a day-to-day basis, just doing all the things that we think are going to drive value for us in this portfolio over time.

Speaker #2: No matter in what form, that ultimately benefits all of our shareholders. So, I think what you've seen in the overall transaction environment is that you're still not seeing a lot of large portfolio transactions that people are pursuing on the buy or sell side.

Marcel Verbaas: I think what you've seen in the overall transaction environment is that you're still not seeing a lot of large portfolio transactions that people are pursuing on the buy or sell side. There's just been more focus on individual properties or smaller portfolios just overall in the transaction market. Currently, I don't have an expectation of that significantly changing or shifting here in the near term.

Speaker #2: And there's just been more focus on individual properties or smaller portfolios just overall in the transaction market. And I don't have a currently, I don't have an expectation of that significantly changing or shifting here in the near term.

Speaker #5: Understood. And just in a different direction, the conversation generally speaking around fee structures, and what I'll refer to as owner consternation over certain aspects of the fee costs and fee streams, etc.—I'd love whatever shareable perspective you may have about that issue, and whether all of us are spending more time and attention on it than it deserves, or if it's really a thing.

David Katz: Understood. Just in a different direction, the conversation around, generally speaking, fee structures and what I'll refer to as owner consternation over certain aspects of the fee costs and fee streams, et cetera. I'd love whatever shareable perspective you may have about that issue and whether all of us are spending more time and attention to it than it deserves or it's really a thing.

Speaker #2: Well, from an ownership perspective, obviously we are looking for ways to grow value in a portfolio, and that includes every single element of operations.

Marcel Verbaas: Well, from an ownership perspective, obviously, we are looking for ways to grow value in a portfolio. That includes every single element of operations. It's extremely important for us over time to make sure that we keep our expenses under control and that the growth and expenses over time has obviously been pretty significant in every aspect of the income statement. Similarly, especially in an environment like today, we want to make sure that we have all the right channels in place and all the opportunity to drive as much on the sales side as possible at the lowest acquisition cost possible. There's nothing new or different about that.

Speaker #2: So it's extremely important for us, over time, to make sure that we keep our expenses under control, and that the growth in expenses over time has obviously been pretty significant in every aspect of the income statement.

Speaker #2: And similarly, especially in an environment like today, we want to make sure that we have all the right channels in place and all the opportunity to drive as much on the sales side as possible at the lowest acquisition cost possible.

Speaker #2: So there's nothing new or different about that. I think everyone knows that, over time, there has been a lot of pressure on owners to bring down revenues to the largest percentage possible to the bottom line.

Marcel Verbaas: I think everyone knows that over time, there has been a lot of pressure for owners on bringing down revenues to the largest percentage possible to the bottom line. That's something that we're all focused on, obviously. I don't think it's anything unusual that we would look at every aspect of that as owners to make sure that we are doing right by ourselves and our shareholders.

Speaker #2: And that's something that we're all focused on, obviously. So I don't think it's anything unusual that we would look at every aspect of that as owners, to make sure that we are doing right by ourselves and our shareholders.

Speaker #5: Understood. Thank you.

David Katz: Understood. Thank you.

Speaker #1: Your next question comes from the line of Michael Bellisario with Baird. Michael, your line is open. Please go ahead.

Jen: Your next question comes from the line of Michael Bellisario with Baird. Michael, your line is open. Please go ahead.

Operator: Your next question comes from the line of Michael Bellisario with Baird. Michael, your line is open. Please go ahead.

Speaker #6: Thanks. Good afternoon, everyone. I want to focus on the second half group pace commentary—sort of a two-part series. One, where are you seeing that pickup in terms of markets?

Michael Bellisario: Thanks. Good afternoon, everyone. I want to focus on the H2 group pace commentary. Sort of 2 parts here. One, where are you seeing that pickup in terms of markets? Two, how does that pickup maybe change sort of operator confidence or sort of pricing strategies into the H2 of the year?

Speaker #6: And then, two, how does that pickup maybe change, sort of, operator confidence or pricing strategies into the back half of the year?

Speaker #4: Yeah, good questions, Mike. So the strength is pretty broad-based. As I mentioned, the pickup was a few hundred basis points from a quarter ago.

Atish Shah: Good questions, Mike. The strength is pretty broad-based. As I mentioned, the pickup was a few hundred basis points from a quarter ago, the production was pretty evenly distributed between Q3 and Q4 and across a variety of markets. As you know, group has been a source of strength for us now, in particular last year and this year. Seeing this kind of momentum has been quite positive for us. I don't know, Barry, if you have anything to add on the group side.

Speaker #4: And the production was pretty evenly distributed between third quarter and fourth quarter, and across a variety of markets. And frankly, as you know, group has been a source of strength for us now—in particular last year and this year.

Speaker #4: So, seeing this kind of momentum has been quite positive for us. So that's—I don't know if Barry, if you have anything to add on the group side.

Speaker #3: No, I think I'd

Barry Bloom: No, I think I'd emphasize one

Speaker #4: Emphasize, one, very broad-based across almost all of our properties. And two, certainly, a lot of it depends on the rate and how properties maximize rate with group.

Barry Bloom: Very broad-based across almost all of our properties. Two, certainly, a lot of it depends on, in terms of rate and how properties maximize rate with group. The question really at this point, given the high levels of group business on the books, where those holes are. If there are holes in places where a market's compressed, but maybe our hotel hasn't been able to yet put a group in, we're going to be able to capture that group at a very high rate. Conversely, when you look at a lot of those markets where we have very good group pace, the holes are in pieces and places that are hard to fill.

Speaker #4: The question really, at this point, and given the high levels of group business on the books, is where those holes are. So, if there are holes in places where markets compressed but maybe our hotel hasn't yet been able to put a group in, we're going to be able to capture that group at a very high rate.

Speaker #4: But conversely, when you look at a lot of those markets where we are, where we have very good group pace, the holes are in pieces and places that are hard to fill.

Speaker #4: So, while we may continue to fill more group nights, in particular in periods coming in and out of holidays—which is obviously prevalent both in the third and fourth quarter—we may or may not achieve significant rate growth on those compared to the overall rate platform. But we're booking business that we otherwise wouldn't book.

Barry Bloom: While we may continue to fill more room nights, in particular periods coming in and out of holidays, which is obviously prevalent both in Q3 and Q4, we may or may not achieve significant rate growth on those compared to the overall rate platform, but we're booking business that we otherwise wouldn't book. That's really the puzzle for each property, is how best to do that and how to drive overall RevPAR.

Speaker #4: And that's really the puzzle for each property: how best to do that and how to drive overall RevPAR.

Michael Bellisario: Got it. That's helpful. Then just a follow-up on capital allocation. Sort of how do you think about the funding sources for any potential deals? Then for things that are in your pipeline, how have maybe underwritten returns or maybe seller expectations changed over the last 90 days? Thank you.

Speaker #6: That's helpful. And then just a follow-up on capital allocation, sort of how do you think about the funding sources for any potential deals? And then for things that are in your pipeline, how have maybe underwritten returns or maybe seller expectations changed over the last 90 days?

Speaker #6: Thank you.

Speaker #4: Yeah, so I'll take the first part of that. In terms of funding of deals, as we talked about, we have a healthy amount of liquidity. Our leverage ratio is still above where our target is, but certainly sub five times.

Atish Shah: Yeah. I'll take the first part of that. In terms of funding of deals, as we've talked about, healthy amount of liquidity, leverage ratio that's kind of still above where our target is, but certainly sub five times, so some capacity there. I think we'd look to existing resources, if not potentially, additional dispositions over time as ways to fund any acquisitions. I think with regard to pipeline, maybe if you have anything to add there.

Speaker #4: So, some capacity there. So I think we'd look to existing resources, if not potentially additional dispositions over time, as ways to fund any acquisitions.

Speaker #4: And I think with regard to pipeline, maybe if you have anything to add there.

Speaker #2: Yeah, as it relates to pipeline and expectations, like I pointed out, I think we're seeing probably a little bit more activity out there that probably gives a little bit more of an expectation of where things could be pricing.

Marcel Verbaas: Yeah. As it relates to pipeline and expectations, like I pointed out, I think we're seeing probably a little bit more activity out there that probably gives a little bit more of an expectation of where things could be pricing. It's hard for me to point to anything specific and say seller expectations have really dramatically changed over the last 60, 90 days. It's really hard to point to kind of any individual transactions to really talk about that in detail. Clearly, to my point, there's obviously a little bit more optimism about the health of the lodging industry overall and the growth that we've seen over the last several quarters. I think that just provides, in general, generally a little bit more of a backdrop to be for some productivity on the transaction side, I'd say.

Speaker #2: I wouldn't say it's hard for me to point to anything specific and say seller expectations have really dramatically changed over the last 60 or 90 days.

Speaker #2: It's really hard to point to any individual transactions to really talk about that in detail. Clearly, to my point, there's obviously a little bit more optimism about the health of the lodging industry overall and the growth that we've seen over the last several quarters.

Speaker #2: So I think that just provides, in general, a little bit more of a backdrop to be—for some productivity on the transaction side, I'd say.

Speaker #1: Your next question comes from the line of Austin Verschmidt with KeyBank Capital Markets. Austin, your line is open. Please go ahead.

Jen: Your next question comes from the line of Austin Wurschmidt with KeyBanc Capital Markets. Austin, your line is open. Please go ahead.

Operator: Your next question comes from the line of Austin Wurschmidt with KeyBanc Capital Markets. Austin, your line is open. Please go ahead.

Speaker #6: Thanks. Good afternoon, everyone. Atish, you referenced that the transient pace for August and September was tracking in the high single-digit range. I believe you said that was as of the end of June.

Austin Wurschmidt: Thanks. Good afternoon, everyone. Atish.

Atish Shah: Yes.

Austin Wurschmidt: You had referenced that the transient pace for August and September was tracking the high single-digit range. I believe you said that was as of the end of June. Can you just give us a sense how that's materialized for transient pace, looking 60 to 90 days out here more recently? Have you seen things continue to strengthen? Have you given some of that back? Just give us a sense and kind of frame that up a little bit.

Speaker #6: Can you just give us a sense of how that's materialized for transient pace, looking 60 to 90 days out here more recently, and if you think that's—have you seen things continue to strengthen?

Speaker #6: Have you given some of that back? Just give us a sense, and kind of frame that up a little bit.

Speaker #4: Yeah. I mean, first, I would preface it by saying transient pace is not necessarily—it does move around a bit. So it's not always the best direct indicator, but it has strengthened.

Atish Shah: Yeah. First, I would preface it by saying transient pace is not necessarily, it does move around a bit, so it's not always the best direct indicator. It has strengthened. It's moving in the right direction. I think it reflects kind of the actualized results that we're seeing. If you look at what our transient pace was going into July and how July came out, I think it is a good indicator. It's one of the things that frankly, one of the many data points we look at to think about our guidance, and obviously, since we took it up, we were looking at all the various data points and input we have, and that was one of the ones I mentioned. I would view it in the context of that.

Speaker #4: It's moving in the right direction, and I think it reflects the actualized results that we're seeing. So if you look at what our transient pace was going into July and how July came out, I think it's a good indicator.

Speaker #4: So, it's one of the things that, frankly, is one of the many data points we look at to think about our guidance. Obviously, since we took it up, we were looking at all the various data points and input we have, and that was one of the ones I mentioned.

Speaker #4: So, I would view it in the context of that. But also, I would just say that we do have a healthy level of confidence in the outlook, and transient is one piece of it.

Atish Shah: Also, I would just say that we do have a healthy level of confidence in the outlook, and transient's one piece of it and obviously, what we've been talking about on the group side is the other.

Speaker #4: And obviously, what we've been talking about on the group side is the other.

Speaker #6: Yeah, very helpful. And then, with respect to the guidance revision, can you talk a little bit about how the contribution at the Grand Hyatt Scottsdale has changed for this year?

Austin Wurschmidt: Yeah. Very helpful. Then with respect to the guidance revision, can you talk a little bit about how the contribution of the Grand Hyatt Scottsdale has changed for this year? I think initially at the outset of the year, you had around that hotel contributing towards the low $30 million range. What's sort of the new-

Speaker #6: I think initially, at the outset of the year, you had around that hotel contributing toward the low $30 million range. What’s the new expectation, given it seems like things are trending well there?

Atish Shah: Yeah

Atish Shah: expectation given it seems like things are trending well there?

Speaker #4: Yeah, we're a smidge higher. We're still in the low $30 million range, but kind of $32-ish million, so to speak. So I think we're sort of in that range that we talked about before.

Atish Shah: Yeah. We're a smidge higher. We're still in the low $30 million range. Kind of $32-ish million, so to speak. I think we're sort of in the range that we talked about before. Grand Hyatt Scottsdale is tracking really well. The guidance revision really has as much to do with the rest of the portfolio and what we're seeing more broadly.

Speaker #4: I mean, Grand Hyatt Scottsdale is tracking really well. But the guidance revision really has much to do with the rest of the portfolio, and what we're seeing more broadly.

Speaker #6: That's all for me. Thank you.

Austin Wurschmidt: That's all for me. Thank you.

Speaker #1: A reminder: if you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again.

Jen: A reminder. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. Your next question comes from the line of Ari Klein with BMO Capital Markets. Ari, your line is open. Please go ahead.

Operator: A reminder. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. Your next question comes from the line of Ari Klein with BMO Capital Markets. Ari, your line is open. Please go ahead.

Speaker #1: Your next question comes from the line of Ari Klein with BMO Capital Markets. Ari, your line is open. Please go ahead.

Speaker #6: Thank you. And good afternoon. Barry, I think you mentioned some hesitancy amongst groups in the second quarter around World Cup markets. I'm curious what that looked like, maybe outside of World Cup markets.

Ari Klein: Thank you, and good afternoon. Barry, I think you mentioned some hesitancy amongst groups in Q2 around World Cup markets. Curious what that looked like maybe outside of World Cup markets. Then, Jeff, is some of the strength in group pace you're seeing in H2 related to maybe a shift, just in where the group ends up coming in. Just on that topic in general, 2027, how is that shaping up for group? Just maybe growth tailwinds in general, how are you thinking about that for next year?

Speaker #6: And then, just — is some of the strength in group pace you're seeing in the second half of the year related to maybe a shift in where the group business is coming in? And just on that topic in general.

Speaker #6: 2027—how is that shaping up for group or just maybe growth tailwinds in general? How are you thinking about that for next year?

Speaker #2: Well, yeah, let me start off with that and then Barry can jump in. So, I did mention in my comments that we certainly saw a little bit of a pullback in group around the World Cup markets around the time of the World Cup, which we did attribute to some extent to groups obviously wanting to stay away from some of those markets.

Marcel Verbaas: Well, yeah. Let me start off with that, and then Barry can jump in. I did mention in my comments that we certainly saw a little bit of a pullback in group in the World Cup markets around the time of the World Cup, which we did attribute to some extent to groups obviously wanting to stay away from some of those markets. Frankly, that you're also obviously driving rates and trying to get more transient in as a result of that, too. That definitely was something that impacted June in the World Cup markets. I did mention, and I think it's fair to say, that some of the softness in group in Q2 wasn't just related to that. May had always shaped up to be one of our weaker group markets from a growth perspective.

Speaker #2: And frankly, you're also obviously driving rates and trying to get more transient in as a result of that, too. So, that definitely was something that impacted June in the World Cup markets.

Speaker #2: I did mention, and I think it's fair to say, that some of the softness in group in the second quarter wasn't just related to that.

Speaker #2: May has always shaped up group markets from a growth perspective. We had a particularly strong second quarter last year on the group side. It was hard to replicate some of that.

Marcel Verbaas: We had a particularly strong Q2 last year on the group side. It was hard to replicate some of that, and we had some holes in various properties in the month of May that just never really filled. We saw some weaker group, specifically in the FIFA World Cup markets around the FIFA World Cup, also saw some softness in the month of May kind of throughout the portfolio. It is always hard to say whether things shift or not, but what we can say is we obviously had pretty good group pace in the Q1. Q2 was a little weaker. That is really how we came into the year already. The Q2 always looked to be the weakest quarter from a group perspective.

Speaker #2: And we had some holes in various properties in the month of May that just never really filled. So we saw some weaker group, specifically in the World Cup markets around the World Cup, but then also saw some softness in the month of May throughout the portfolio.

Speaker #2: So, it's always hard to say whether things shift or not, but what we can say is we obviously had pretty good group pace in the first quarter.

Speaker #2: The second quarter was a little weaker, and that's really how we came into the year already. The second quarter always looked to be the weakest quarter from a group perspective.

Speaker #2: The second half has always looked strong. What was particularly encouraging, obviously, is that we actually saw group production pick up in the second quarter, and it even strengthened into the second half.

Marcel Verbaas: H2 has always looked strong, but what is particularly encouraging, obviously, is that we actually saw group production pick up in the Q2 and even strengthen that into the H2. Whether that is any kind of shifting, as Barry, I think, pointed out too, it is pretty broad-based in the portfolio. It is not just that you are saying, "Okay, we are lost out in these FIFA World Cup markets and group, and now that is kind of picking up there." We really have broad-based strength in the portfolio on the group side.

Speaker #2: So, whether that's any kind of shifting, as Barry I think pointed out too, it's pretty broad-based in the portfolio. So it's not just that you're saying, "Okay, we lost out in these World Cup markets on group, and now that's kind of picking up there." We really have broad-based strength in the portfolio on the group side.

Speaker #6: Thanks. And then just maybe on the Autograph Collection name changes and Davidson shift, just curious, is there anything meaningful that you expect to come out of it that you can quantify?

Ari Klein: Thanks. Just maybe on the Autograph Collection name changes and Davidson shift. Just curious, is there anything meaningful that you expect to come out of it right now that you can quantify?

Speaker #4: I think it’s hard to quantify in the near term. Our expectations are really more around a little bit of the mid- to longer-term, in terms of bringing in Davidson as a management company that we’ve worked with previously with great success, and then really taking this opportunity to rebrand the hotels—where we rename the hotels—so each property has its own unique identity that’s local to its marketplace, but continues to be part of the Autograph Collection.

Barry Bloom: I think it is hard to quantify in the near term. Our expectations are really more around a little bit of the mid to longer term in terms of bringing in Davidson as a managing company that we have worked with previously with great success, really taking this opportunity to rename the hotels, where each property has its own unique identity that is local to its marketplace, continues to be part of the Autograph Collection. We think that ultimately pays significant dividends both on driving revenue through connection with local market, enhanced level of activity in the properties, special events programming that fits in with the local markets and attracts guests, with Davidson and their ability to both sell that as well as help us on the cost control side.

Speaker #4: We think that ultimately pays significant dividends, both in driving revenue through connection with the local market and with an enhanced level of activity in the properties, as well as special events programming that fits in with the local markets and attracts guests. Then, with Davidson and their ability to both sell that as well as help us on the cost control side.

Speaker #4: And again, these are properties that have done very well for us. We just think it's an opportunity to really enhance them and drive more out of them going forward.

Barry Bloom: Again, these are properties that have done very well for us. We just think it's an opportunity to really enhance them and derive more out of them going forward.

Speaker #6: Great. Thank you.

Ari Klein: Great. Thank you.

Speaker #1: Your next question comes from the line of Jack Armstrong with Wells Fargo. Jack, your line is open. Please go ahead.

Jen: Your next question comes from the line of Jack Armstrong with Wells Fargo. Jack, your line is open. Please go ahead.

Operator: Your next question comes from the line of Jack Armstrong with Wells Fargo. Jack, your line is open. Please go ahead.

Speaker #5: Hey, good afternoon, and thanks for taking the question. Given the strength in your shares this year, can you talk a little bit about your preferred use of incremental capital at this point, and how you might rank acquisitions, ROI capex, and deleveraging?

Jack Armstrong: Hey, good afternoon, thanks for taking the question. Given the strength in your shares this year, can you talk a little bit about your preferred use of incremental capital at this point and how you might rank acquisitions, ROI, CapEx, and deleveraging?

Speaker #2: Yeah, I think—thanks, Jack, for the question. I appreciate it. You spoke about it a little bit earlier. Clearly, we're quite pleased with the result of our elevated CapEx spending that we had a few years ago, that was particularly tied to Grand Hyatt Scottsdale.

Marcel Verbaas: Yeah. Thanks, Jack, for the question. Appreciate it. Atish spoke about it a little bit earlier. Clearly, we're quite pleased with the result of our elevated CapEx spending that we had a few years ago that was particularly tied to Grand Hyatt Scottsdale. If you look at the last couple of years, if you look at the trajectory of where the focus has been, it was obviously a good amount of capital going out for those ROI projects. We kind of followed that up as that started coming down by using some more capital for share repurchases like we did last year. Certainly, we thought the pricing was pretty attractive back then, and obviously feel so even more strongly now, being able to buy back as much as we did at that sub 13 level.

Speaker #2: So if you look at the last couple of years, if you kind of look at the trajectory of where the focus has been, there was obviously a good amount of capital going out for those ROI projects.

Speaker #2: We kind of followed that up, as that started coming down, by using some more capital for share repurchases like we did last year. And certainly, we thought the pricing was pretty attractive back then.

Speaker #2: And then, obviously, we feel so even more strongly now, being able to buy back as much as we did at that sub-$13 level. Clearly, the stock price has moved up.

Marcel Verbaas: Clearly the stock price has moved up, so it becomes a little bit more interesting to start looking at potential acquisitions and external growth as part of the capital allocation decision going forward. Whereas before, that was really clearly a much inferior way to spend our capital than the few things that we did over the last several years. We're continuing to look at it from a very balanced perspective. We certainly still believe that there's value in the stock. We are still, and Atish can certainly jump in there as well, but again, we will continue to look at it on a balanced basis to the extent that we now find an opportunity that we think is going to drive good external growth for us. It just becomes a little bit more likely than what we've seen over the last several years.

Speaker #2: So it becomes a little bit more interesting to start looking at potential acquisition and external growth as part of the capital allocation decision going forward.

Speaker #2: Whereas before, that was really clearly a much inferior way to spend our capital, and then the few things that we did over the last several years.

Speaker #2: So, we'll continue to look at it from a very balanced perspective. We certainly still believe that there's value in the stock. We are still at these—can certainly jump in there as well, but again, we'll continue to look at it on a balanced basis.

Speaker #2: To the extent that we now find an opportunity that we think is going to drive good external growth for us, it just becomes a little bit more likely than what we've seen over the last several years.

Speaker #4: Yeah, I mean, the only thing I would add is, if you look back historically, we have taken sort of a balanced approach and utilized all those tools to grow value, whether it be transactions, share repurchases, or deploying capital into our assets.

Atish Shah: Yeah. The only thing I would add is, if you look back historically, we have taken a balanced approach and utilized all those tools to grow value, whether it be transactions, share repurchases, deploying capital into our assets. I think, as we look back over the last couple of years, obviously some of these tools were just much more desirable in terms of a value accretion perspective, you saw us step on the gas pedal, so to speak, for share repurchases. I think now we're in an environment where it's definitely more opportunistic and it's case by case, and we'll toggle between those levers as we have historically done. I will say, just in terms of current valuation, since you mentioned it, we currently trade at about $350,000 a key with a portfolio cap rate in the mid sevens, and a hotel EBITDA multiple, south of 11 times.

Speaker #4: I think, as we look back over the last couple of years, obviously some of these tools were just much more desirable in terms of a value accretion perspective, and so you saw us step on the gas pedal, so to speak, for share repurchases.

Speaker #4: I think now we're in an environment where it's definitely more opportunistic, and it's case by case. We'll toggle between those levers, as we have historically done.

Speaker #4: I will say, just in terms of current valuation, since you mentioned it, we currently trade at about $350,000 a key, with a portfolio cap rate in the mid-sevens, and a hotel EBITDA multiple south of 11 times.

Speaker #4: So as you think about that, I mean, certainly, while the share prices have moved, we're still trading within the range of the more broadly historic range.

Atish Shah: As you think about that, certainly, while the share prices have moved, we're still trading within the range of, more broadly, a historic range. If you think about the fundamentals and the supply outlook and where we trade relative to NAV, both our internal NAV and the freshest external NAV estimates, I think you find that even now, after the appreciation, we're still trading at a very reasonable level, and there's still a gap between where we currently trade and NAV. I think that also may be as helpful to you as you think about how we think about the stock price and capital allocation.

Speaker #4: And if you think about the fundamentals and the supply outlook, and kind of where we trade relative to NAV—both our internal NAV and the freshest external NAV estimates—I think you'll find that even now, after the appreciation, we're still trading at a very reasonable level.

Speaker #4: And there's still a gap between where we currently trade and NAV. So I think that also maybe is helpful to you as you think about how we think about the stock price and capital allocation.

Speaker #5: No, really helpful there. And then just one follow-up: can you talk a little bit about what you're seeing in the Nashville market, and when we should expect to see the incremental EBITDA from the F&B capex you've put in at the W?

Jack Armstrong: No, really helpful there. Just one follow-up. Can you talk a little bit about what you're seeing in the Nashville market, and when we should expect to see the incremental EBITDA from the F&B CapEx you've put in at the W?

Speaker #4: Yeah. So, obviously, we're very pleased with how smoothly the transition went. The work that we did on the capital side, the look and feel of the restaurants is tremendous.

Barry Bloom: Yeah. Obviously, we're very pleased with how smoothly the transition went, the work that we did on the capital side. The look and feel of the restaurants is tremendous, and the initial reviews in the local market have been great. As I think you know, two of the outlets are run by Marriott, two are run by José Andrés Group, and each of those outlets has had, I think, really good success in terms of connecting with the local community. Obviously, each outlet, when you're opening four outlets really at the same time, each outlet is coming online at a different pace, based in part on what its demand generators are. What our team has done, I think, has done a really good job on working with both Marriott and José Andrés Group on looking at how we can drive revenue into those outlets.

Speaker #4: And the initial reviews in the local market have been great. As I think you know, two of the outlets are run by Marriott and two are run by José Andrés Group.

Speaker #4: And each of those outlets has had, I think, really good success in terms of connecting to the local community. Obviously, each outlet, when you're opening four outlets, really at the same time, each outlet is coming online in kind of a different pace based in part on what is the demand generators are, what our team has done, I think has done a really good job on working with both Marriott and José Andrés Group on looking at how we can drive revenue into those outlets.

Speaker #4: So in some cases where an outlet may not have gotten off to exactly the same start we had expected, we've spent a huge amount of time working with the JAG team on local influencers, social media marketing, things like that, and have seen really immediate kinds of returns from those.

Barry Bloom: In some cases, where an outlet may have not gotten off to exactly the same start we had expected, spent a huge amount of time working with the JAG team on local influencers, social media, marketing, things like that, and have seen really immediate returns of those. We had always forecasted this year to be really a ramp-up year in terms of the food and beverage operation. I think as we look ahead to 2027 there, that's when we're going to get to the point of what we expect the restaurants to do and be getting both the contribution from the restaurants, but more importantly, getting to the contribution expected on the hotel side.

Speaker #4: We had always forecasted this year to be really a ramp-up year in terms of the food and beverage operation. But I think as we look ahead to '27, that's kind of when we're going to get to the point of what we expect the restaurants to do in the beginning—both the contribution from the restaurants, but more importantly, getting to the contribution expected on the hotel side.

Speaker #4: And we've had some great success so far in terms of what we expected, which is the ability to use each of the outlets for private events related in part to both outside catering, but more importantly, to in-house group business.

Barry Bloom: We've had some great success so far in terms of what we expected, which is the ability of using each of the outlets for private events related to, in part to both outside catering, but more importantly, to in-house group business. That we've seen significant uplift and interest in our group leads that relate to groups that are generally smaller sized but want to take advantage of the opportunity to dine in José Andrés outlets, experience those menus and things like that. On the leisure side, we've got a lot of creative offerings in the market that are driven around experiencing each, or all, of the José Andrés outlets as part of promotions and packages. Hope that answers the question.

Speaker #4: And that we've seen significant uplift and interest in our group leads that relate to groups that are generally smaller in size but want to take advantage of the opportunity to dine in the José Andrés outlets, experience those menus, and things like that.

Speaker #4: And on the leisure side, we've got a lot of creative offerings in the market that are driven around experiencing each or all of the José Andrés outlets as part of promotions and packages.

Speaker #4: So, I hope that answers the question.

Speaker #2: Yeah, I would just add that I mentioned in my remarks too that part of the pressure on margins in the second quarter was because we had some higher expenses related to the food and beverage operations there, particularly as things are just starting up.

Marcel Verbaas: Yeah, I would just add that I mentioned in my remarks too that part of the pressure of margins in Q2 was because we have some higher expenses related to the food and beverage operations there, particularly as things are just starting up and everything is getting right-sized over time, and as the revenues are obviously building up. We certainly expect that shorter term, that obviously puts a little bit of pressure on those numbers. Over time, we expect the revenue to grow to really get to the right margins there and make sure that not only we see more profitability on the F&B side, but much more importantly, how this is going to have this halo effect for the property overall and start really building up the room side over the next several years. That is certainly not a this year story.

Speaker #2: And everything is getting kind of right-sized over time, and as the revenues are obviously building up. So we certainly expect that, shorter term, that obviously puts a little bit of pressure on those numbers.

Speaker #2: But then, over time, we expect the revenue to grow to really get to the right margins there and make sure that not only do we see more profitability on the F&B side, but, much more importantly, how this is going to have this halo effect for the property overall and start really building up the room side over the next several years.

Speaker #2: So there's certainly not a it's not a this year story. It's not even really a fully getting there next year story. That's going to take a couple of years.

Marcel Verbaas: It's not even really a fully getting there next year story. That's going to take a couple of years. That just has to build and really help us much more from a profitability standpoint on the room side, even more so than on the F&B side.

Speaker #2: I mean, that just has to build and really kind of help us much more from a profitability standpoint on the room side, even more so than on the F&B side.

Speaker #5: Appreciate the color. Thanks for your time.

Jack Armstrong: Appreciate the color. Thanks for the time.

Speaker #1: There are no further questions at this time. I will now turn the call back to Marcel Verbaas, Chairman and CEO, for closing remarks.

Jen: There are no further questions at this time. I will now turn the call back to Marcel Verbaas, Chairman and CEO, for closing remarks.

Operator: There are no further questions at this time. I will now turn the call back to Marcel Verbaas, Chairman and CEO, for closing remarks.

Speaker #2: Thank you, Jen. Thanks, everyone, for joining us today. I hope everyone enjoys the rest of their summer, and we look forward to speaking with you again over the next several months. We are also looking forward to, hopefully, what is a very promising second half of the year.

Marcel Verbaas: Thank you, Jen. Thanks, everyone, for joining us today. I hope everyone enjoys the rest of their summer, and we look forward to speaking with you again over the next several months and look forward to hopefully what is a very promising H2. Thank you.

Speaker #2: Thank you.

Jen: This concludes today's call. Thank you for attending. You may now disconnect.

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

Q2 2026 Xenia Hotels & Resorts Inc Earnings Call

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