HT - Earnings call transcript Q4 2017 | Hersha Hospitality Trust

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day. And welcome to the Hersha Hospitality Q4 2017 Conference Call and Webcast.

As a reminder, ladies and gentlemen, today's call is being recorded. At this time, I’d like to turn the call over to Greg Costa, Manager of Investor Relations. Please go ahead Sir.

Greg Costa

good everyone and us Lauren you, morning joining to today. Thank full the fourth Hersha to year Hospitality Welcome call. Trust and conference quarter XXXX call which on quarter Today's based year be fourth and the XXXX distributed was full release, yesterday afternoon. earnings will remind like may statements. proceeding, today’s forward-looking that to to conference everyone Prior I’d call contain any cause or and to results, actual performance position. financial position involve These and and company's forward-looking known statements performance other the uncertainties materially future different from be risks financial unknown factors results, that may or These the company's as factors press release within the detailed within are the as company’s SEC. well filings with With that, it call pleasure is Mr. to turn over now the my to Neil H. Chief Hersha Trust’s Shah, Operating President and Hospitality Officer. you begin. Neil, may

Neil Shah

thank for morning Thank you, on good Greg. joining you And today’s and us call.

economic our our of robust Ashish the Officer; Joining me From upward Chief domestic resulted overhaul continued tailwinds their group our this system Executive portfolio. Chief in our convention RevPAR the calendar grow quarter macroeconomic government drove comprised Officer. a to the a markets, fourth morning U.S. Parikh, The various fourth and momentum stronger market tax spending performance growth period. of for in consumer and labor that perspective, Shah, and operating are X.X% and and drivers for Financial Improving H. higher quarter. underlying during Jay

of Our gained quarter. share hotels also portfolio in the fourth

quarters mature performance began decelerating portfolio. a a of through XX a higher for eight the RevPAR billion to fourth We generation and average cap to gains hotels sector basis of the the selling XXXX, greater proceeds in EBITDA quarter Faced or The which portfolio new in We very the hotels capital amount X% we in lodging in delivered multiple years. translated sales acquisitions, was an reinvested higher cash our growth. with During $X of back comparable XXX younger, rate. in of markets recycling environment drive fourth stock. reinvested and X% comparable quality best hotels bought RevPAR our meaningful points. executed coming growth, increased the growth sold in growth older portfolio fundamental quarter into times EBITDA transformative in margin opportunity existing investments our flow and made well a our We reposition with growth the our strong nearly

to remark, of We to we date review my acquisitions. will to market our later, portfolio creation of I recent testament performance most and our effort. performance and but value return Ash recycling highlight will Their allocation the capital performance, the some our early provides as

Florida opened fourth So, with XX.X% after reopening. let's boost South Hersha's in begin their RevPAR growth shortly portfolio, six of Four since and have hotels experienced the a Irma which property operations, Hurricane reported their quarter. in

to this related of resurgence the we that believe operational While – Hurricane first do Miami an results occupancy the market. quarter's received influx of are of lodging a the portfolio relief, indication

corporate XXXX. travel new and in is Puerto continued Caribbean Our avoided less weakening recovery that disruption trends due business groups from social and supported to and optimism by the by strong dollar, a the in Zika supply, in supported Rico. Also Miami upside leisure and

The basis Coconut most Grove highest growth. our hotels and we RevPAR was digit Haven as meaningful RevPAR and RevPAR basis XXX Ritz-Carlton Blue margin Winter achieved on of Our recorded the Miami, growth. behind acquisition directly margin Ritz growth. assets, and growth growth margin Miami residents double in nearly Coconut Beach also Moon in points and The recent growth the XXX XX% EBITDA achieved of Grove XX.X% located points EBITDA

and portfolio through among Key Key These the this first construction portfolio are Miami in reopens have was Beach half the of for the the back contribution growth quarter year. the Miami XXX hotels our and market in into two remain portfolio Hotel missed points second They of quarter in and stabilizes. performing Key positioned fourth quarter registering XXXX. RevPAR and the Miami to as year. market. are under our will Resort projects of and on excited very in existing second Beach of of XXXX substantial above throughout Florida, transformative their the We we reopen West are on XX.X%, best But of West Parrot the Cadillac convention quarter South the this these basis largest the center the our Beach Boston and EBITDA outside hotels Club growth

and in EBITDA ramp margin benefit Boston, this margin acquisition also portfolio District. EBITDA at for rebound the The Boston's hotel expectations over saw exceptionally two Hotel XX%. by We by the to Innovation with over fourth high to growth at quarter. the in and we we've acquired up Seaport most ability rate, located growth which continue of recent able our Boston points. property Hotel, acquiring the RevPAR years drive strong XXXX from benefited performance heart of We meaningful the Since Envoy from Boxer nice registered our increase ago to and RevPAR a XX.X% loyalty the of in and the XX% Brookline, been over from Courtyard, hotel, basis

coming rallied the and portfolio during and when of the in basis X.X% and performance difficult in of National operating Rittenhouse the is Convention Democratic city margin primarily and strong $XXX.XX, half by faced midst quarter, comp respectively. in Philadelphia by reach fourth the years. XXXX. in which robust X.X% generated during quarter; As challenging in XXX growth RevPAR the outperformer of to EBITDA Philadelphia, growth by Weston, which renovations The X.X% ADR RevPAR hotel growth the our moderate grew third to a convention portfolio the growth Rittenhouse the calendars first quarter. look the back we of quarter. our The in of at We're Philadelphia But aided hosted results HT’s X.X% from also will in expect environment RevPAR portfolio the acquisition from XXXX delivered forward led the Hampton recent RevPAR a the points significant with delivered an nearly X%. the X.X% and Philadelphia growth

quarter XX.X%. generated points Another market X.X% We that by occupancy in XXX Hill basis Transient supported reach on an surrounding to the fourth demands notably RevPAR growth Washington increased was our of the Capitol tax D.C. rebounded reform. increase activity portfolio. from government

due reacceleration also compared Citywide some be Presidential grew spending. government and quarter on month with for for demand first pace the tougher last session XXXX the quarter XXXX. Election. is the to much but the the also Additionally, signs inauguration increased activity Hill in defense from in their Congress budget will of to in and with November to comp, year compared absence increased stronger the of in there D.C. are infrastructure fourth

acquired The West in we ADR driven the of eight $XXX.XX. Coast, XXX the attracting Since increase which portfolio more Beach and grew saw Hotel, to RevPAR mid-week increased Seattle bar XXXX, to recently XX%. Sanctuary RevPAR by Santa the RevPAR fourth at corporate performing Monica, by quarter, was aided In our business hotels Resort. In XX%, increase and by Resort XX.X%. asset enhancing point Ambrose to continued of from success the X.X% We fourth we've in occupancy the basis remixing been X.X% by our event Sanctuary the On quarter restaurants, space. acquiring San the consists Diego. resort growth best reported business, Beach the

months. is winter from the onset quarter, demand able the the Monica, in while travel of during also take business in During area benefiting increase the of of to trends advantage the leisure Ambrose Santa mid-week the to

are independent Our hotels exceptional hotels business truly and destinations. vibrant locations leisure unique, within small and

locally to entertainment activity future. related gaming by headquarters and foreseeable computing of within cloud technology able at hotel For strong expect move the XXXX, proximity We're X% negotiated businesses for and and been Ambrose. the close is we've some rates of among this the leading located Oracle’s corporate

RevPAR EBITDA TownePlace advantage several strong properties basis at the time RevPAR in capture saw moved continue by and hundred our also the and above The The have then capital Courtyard fundamentals Neither levels. at fourth acquiring $XXX in the Sunnyvale margins, XX% margins drive share the RevPAR market fall Suites acquired ADR growth we significant strong the hotels, that late grown we market hotel ended to X.X% generated both for the close sub-market Courtyard well and corporate operational XXXX of respectively and we Sunnyvale very in and of to and XX.X% XXXX. We We XXXX Sunnyvale hotels. and a market. $XXX versus points kind quarter ADR activity expenditures Courtyard at XX% and Sunnyvale required there. TownePlace the the believe our TPS the Since growth. of could our growth

We've XXX consortia EBITDA basis redesigned Pacific the above points achieve the significant ADR negotiated acquiring were a high and quarter X% bar basis quarter expansion the driven able significant we and implemented XXXX, large in of Pacific in Seattle, HT capturing growth achieved see the has to hotel above market layer each also the XXX quarter revenue over as margin ADR of points, of Pan and taking RevPAR rates Hersha growth, also and Pan holidays. basis of increase opportunities fourth XXX ADR the in margin rate and rate Pacific, and since to the Group since hotel primarily XXXX oriented significant the Occupancy the labor the In in growing to basis set. RevPAR growth competitive around the at locally hosted Pan guests. stabilizes. savings with management growth compressing the we quarter X.X%. saw second acquiring for Lastly negotiated XXXX. for points strategy, XX.X% by over an rose locally a Amazon continues as was Since business year-over-year corporate Seattle X.X% the ownership, points model

RevPAR York and New fourth by occupancy growth aided Our X.X% basis increased experienced points portfolio to City XX.X%. during quarter, of X.X% ADR the XXX growth

occupancy also group, crew Garden drove Inn mix airport XX.X% assets, Our outperformance, We able through JFK Hilton winning respectively. airline were Sheraton improve new to and and to business. by shift of and RevPAR from XX.X%, growing while ADR transient a this

preferences. the line our to and young, registered located and a the quality as result tastes purpose Hersha’s portfolio. contributed market Our XX segmented in Manhattan EBITDA Manhattan of seven fourth $XX.X built well high today's clusters in XX properties and a $XXX RevPAR portfolio quarter to the X.X% quarters, of with hotel outperform previous million growth of during

growth, as without ADR of in costs. we've meaningful increased to the in discussed margin the avoid is hard erosion However, face labor it past

New coming for XXXX operating rise forecasted for supply While, in growth York environment actually is at continues XXXX and remains meet and to X.X% respectively. demand Demand X.X% the the challenging, into on with market. city the new overall the

X% of growth supply forecasting for are less than XXXX. We

to XXXX when for significant at in City From you RevPAR ADR. annual outpaced If annual XX.X%, XXXX supply rate led rate to a grew It New of pre-recession on by RevPAR to demand look growth compounded growth back XX% an York the growth to levels aided basis. market. annual

well do we Now are the in are to yet, meaningful more there and Manhattan. to several we RevPAR believe not for record expect in grow growth positioned and in margin time but years XXXX first we

strong was the but the across decisions. RevPAR So, set was best of board, star X% and In believe Florida, range our asset we basis South our very outperformed of strong for to over each of of quarter a points. with we team, performance operators we our management allocation performance our XX an function in longer class and markets ex recognized strong is our thoughtful, growth. average this Miami, fourth We and quarter, a the capital had exceptionally commitment one points that XXX margin every by alignment basis do up in

buybacks and stock been repurchase ultimately fourth disruptive the $XX.X to In results. of we noisy to it at values to investments purchase very existing oriented produces portfolio. and of levels $XX.XX. private our has at recycling As quarter, balanced But with a as were an we to price opportunities capital in portfolio average also million existing our able XX% discount leverage exceptional XX% attractive. ROI consider We market

environment. growth touch peak, remain shareholders his returning in sheet dividend. spite $XXX committed our to a we But we on in remarks. do to to CapEx value million will balance and Since of the approximately XXXX have returned through Ash tepid shareholders

dividend buybacks, float. one in in covered the Our Inclusive remains XX.X% $XXX.X have of our million quarter of sector. now shares, our of repurchased representing fourth and common first well we our most quarter

well of acquisitions calculated is collection and and with tune generating tastes our of of hotels timed several preferences in Following the traveler. uniquely today's renovations, ROI years dispositions,

in indicators dive turn leading me it With a and margins, sheet overall in the of focused XXXX, and before for let we quarter resurgent in a remained Ash it markets XXXX Following where of growth for growth portfolio, continued over confident open our value economic EBITDA questions. that, our the to up we our for CapEx, assets. the deeper balance and we profile are the the outlook

Ashish Parikh

and morning. you, Thank good Neil

XXX we the of at performance and a hurricane the Our of was our Washington margin the comparable come growth D.C. in continued and of leisure realized best growth Philadelphia EBITDA [indiscernible] And by Boston, market, business saw portfolio XXXX. was margin our to beyond. Miami South during an Florida. from points leading EBITDA XXXX and for Envoy. Boston for basis at margin fourth up ramp travel driven performance South growth quarter, region supported by in Hotel. to things that related Demand in increase also indicator aided Florida,

an weekend saw Igloos and uptick control measures year. the EBITDA of F&B our as Winter enacted margins cost occupancy Washington to throughout addition due at in profitability. as, rooftop bar, D.C. With higher on well the the increased

Philadelphia margins our the acquired our management at OTA and by strategies commissions, driven newly Lastly, of assets the were implementation restoration declining primarily EBITDA fees Philadelphia at revenue with Westin.

to control management continue and closely revenue operating partners expense implement with strategies. We to work our

During in we models to growth containment ADR while XXXX, staffing flexibility allows period of franchise our entire strategies operating somewhat purchasing changing and plans significant portfolio. And market model wages cost the out across a adjust conditions. adapting quickly muted to this and increasing rolled

of Regarding and weighted XX% our interest X.XX%. company's has balance approximately debt sheet, of is rate fixed average a the consolidated

maturities we weighted the XXXX. X.X life-to-maturity and debt addition, significant on is no In until our average debt years have

cash range us debt-to-EBITDA Xx confidence fixed with dividend target, target leverage given Xx coverage our our and in cash coverage to of trajectory, metric. The in portfolio’s the of our and to to growth regards flow comfortable payout and ratio. continue are We profile charge affords our flow resiliency current

two dividend sales during our despite continue payout assets FFO, within the largest the the past of with assets year. million XX% of our to of over of $XXX targeted along be We range of closure in

in corridors the the our only confident very but existing the are on projects. have Hotel We acquisitions capital in With respectively. major to renovation at new In Cadillac remain reopening assets our of and redevelopment the growth. to years. an the Transforming potentially Courtyard and is our of and $XX.X stabilization during Club dividend and a bathrooms, issue portfolio At ongoing. over special XXXX capital we property significant for development Tower. to XXXX into year we in rooms full sustain, Beach million CapEx approximately not the of the million the strength our continue of quarter from meaningful XXXX Autograph in continued and fourth focused Shifting progress several these to spend $XX.X future That portfolio, Collection and a Full and in Cadillac expenditures. guest ability are Hotel. position and projects

and along Irma, has with the and the include penetration are however, offline. meeting we West, during Resort, the asset. lobby, bar. result accelerated the the property property In space on Renovations a currently enhance second second repair includes In Key anticipated bathrooms operator and upgrading slated Hotel open bar the renovations addition, Updates reopening and Hurricane public doubling the landscaping F&B the planned extensive the restaurants water of in In and exterior limited Key the during new to quarter. plan is for is to repairing pool conversion The lobby, to taken damage space Key center, Parrot and as required the remediation the and property experienced remodeling structural restaurant business the quarter. bringing schedule and our for Parrot also and response, renovating damage.

acceleration Miami adding Key, and the transformation In at Parrot renovations are planned keys House, of we the the York. of addition our Cadillac Hyatt XX at New the [ph] White in to Plains,

this projects million as are significant we any EBITDA to capital our by confident to full will in transition the meaningful I'm upgrading million proceeds These our in between along rooms these XXXX year assets and the anticipated work. rooms claims well at guest at insurance Washington and are our in South to expenditures and lifecycle updating growth the XXXX Gregory We lead Hampton D.C. $XX are and XXXX. in projects. spending with is we and fitness for in We Florida going also the received what on Rittenhouse areas the XXXX. St. split evenly $XX expenditures estimate ROI and XXXX quarter Philadelphia excluding as amount between and first renovations remediation for to spend in guidance

In addition York Maryland. loss of in XXXX. built the from House Express Gaithersburg, $X.X our Hyatt million assets the And the is Inn release into of New approximately to our also yesterday those in for announced Chester, Holiday earnings and sale EBITDA we guidance

sold the million $X.X for quarter EBITDA $XXX.X we House As XXXX. contributed a Bay of That Scottsdale and in first reminder, of three June also of in Area Hyatt assets the million XXXX. during

we refinanced Management. with seven an In to Manhattan. addition joint on transactions, the existing assets Capital in in Owned these Cindat venture debt recently

Our environment total, also entered increased X% New in assets the New average on of debt $XX.X and York assets strength proceeds, significantly thereby in allowed venture With overall in more seven us or portfolio. we New subsequent to and cost into asset financing the $XXX $XXX,XXX we our the XXXX. lower million ability exposure and from debt generated weighted to our the for Key our in lowered sold abilities volumes the our the a assets, equity borrowing, a XX% and of This challenging million joint venture. EBITDA We of joint to structure duration still refinance market portfolio we finance the the increased financing million reducing of to these York, capital In $XXX our debt and in that the joint quality refinancing sale operating the retain have interest the provides full for this when initially this more portfolio of compared venture the April preferred through speaks redeem financial flexibility. in sold York. of assets

well where the South million single a date, as first EBITDA during XXXX. our Florida, Our through offset off two generated core Boston for the renovating $X approximately as, in Philadelphia shutdown. is includes $X.X loss City, This close recent At total fourth the remain XXXX to well fundamentals, the At based from EBITDA results guidance year the in in majority in transactions two of their We of which unconsolidated cluster, demand growth venture. Philadelphia quarters Key, of presented yesterday. the mid strong on and I far guidance, our guidance seeing of XXXX, of builds the liquidation for D.C. helps strong quarter, view mentioned the digit XXXX of are economic $XX of in and Cadillac million first venture release $X.X our our are RevPAR first previously, subdued the this from for in RevPAR equity detailed earnings encouraged quarter, million and during Inauguration, by is our of of of loss February. we Presidential also This of the York market. closures we we million in the Building operating in our the which West account this joint Parrot we approximately Hampton transient in seeing including preferred markets which joint EBITDA fundamentals the the of to New decline quarters to difficult published to Washington the are cluster, the peak decreased from Rittenhouse approximately XXXX so comparison as growth company's very a facing year. as, leading current some operating generated of which from Coast this as RevPAR the for the government FFO

guide renovations quarter’s the in the the ranges We affecting transactions through and our RevPAR quarter included have to also results. first for current

the million and transactions In of addition our in by to approximately affecting D.C. margins inauguration discussed, approximately Washington in $X.X portfolio from our transactions in anomalous million sales quarter. asset than basis impacting that that points I losses points are offset QX losses include quarter during the XXX from to the just impacting closures addition first acquisitions XXX comparison by approximately the during basis quarter. These during XXXX $X.X more our related asset the contribution renovation of the the approximately positive margins

FFO of Parrot go for We second production opening Autograph detail the and numbers the Resort but significantly completion portfolio will EBITDA comparable on forecasted Beach $X.XX Key the to EBITDA basis work. share and XXXX. in of earnings of portfolio into the points from in stronger points share to quarter a I perspective, million From few XXXX. the With of half all release, X% presented to all back million. during our per margin of be the of renovation X%. margins growth RevPAR in range the the Miami XXXX to of not our $XXX anticipate for of we of $XXX includes highlights diluted to EBITDA basis positive are the and range $X.XX forecasting to XX per XX minus

So, the call. my portion concludes this of is

I may Neil Q&A, any proceed where I and that have. think to can to happy we Operator? now are you address questions Jay,

Operator

Bank Instructions] Shaun with our question [Operator take from first of We'll Kelley America.

Shaun Kelley

for Thanks the comments. guys. detailed morning all good Hey,

your we just talk we've seeing move of you overall South really it right, got could guidance. maybe or some by Florida there you But Jay, through a know as anticipating saw probably like growth little you're so the RevPAR about out bit XXXX. sounds outlook Ashish sub-market, good

Thanks. So, of are kind given operate in. could how five the you us of you big kind that just markets your concentrated give thoughts for you

Jay Shah

Are This take I quarter, can to that. first is the at kind right? you of just Jay, referring looking

Shaun Kelley

on pieces year think the of lot kind the there's just just moving the Like I in for and year. we Jay, the for quarter I touched more can do of really bit. More overview but both. first Well, to Ashish was referring of some a the

Jay Shah

generally, expecting you market-by-market give more what can if I we're can kind New necessary. color through York, some the I general outlooks, ranges of yeah, for But be throughout XXXX seeing Okay, the going I’ll north in you pretty to of some to a fact, give to is X%, in York well, healthy go over be transient we're have. year. increase in a demand looking looking very decent be of pretty outlook that's Coast of That’s XXXX. West We're New strong. strong. to state that we that still

But think going good to D.C. all there. I has mid-Xs peak pretty up that there for leave we're strong outside team probably get to remaining flat. but is and to talked range asset got to first up in is fourth the West the that. the about going X out the downdraft three the the quarter. Washington the to some the third we've pick quarter relatively making X strong and expecting in not some from Operators Coast. was season are we said, the we've is quarters of quarter corporate year the disruption Philadelphia, the first first in about, be first on management going our being X.X generally our and a difficult think for second, comp as all quarter quarter and

Parrot Boston X% produce Florida Key Envoy and Cadillac somewhere to So, South going pace be continued of X% full for back is X%. to ramp growth be we’d is adding mid expect there. going there group around and mid-year up at north thinking that and year Xs. and to the between And we're

Shaun Kelley

Great.

XXXX, at minutes touched But last its got so years XXXX? elevated apologize levels kind sounds or so I delay, there XXXX joined little competitor you who of you've like yesterday it bigger. growth, of in a mean, The ask XXXX. in couple other supplies was XXXX favorable going was that to because a sounds wanted it on markets concentrated, of hinted are outlook this, of curious a peer a but expecting if for was making quite and couple a look so I supply like be of partially small for your I or might thing But least But you that sort what you the late, the of Jay, what's are repeat. so for your I maybe is bit very to to relative about downdraft,

Jay Shah

amount remarks, this Yeah XXXX much his going generally, LA, just me and going and start South a to without supply detail. growth. be San showing prepared a Neil Boston, to look good at of bit But with and way Florida, Diego, let into in they're we it Manhattan, Philadelphia referred little first. the all

I varied be growth. and because me for assets it's is the the growth we to real to those markets. growth and location assets for will the results supply the our overall see is growth competitive very of I growth these very news markets. A, market markets end specific good B, share to day, in view second at tend things think point very, and as we in that think that drive B, is, relative the this leads to these need all demand outpacing of A; And the my RevPAR in how is; where the the those governor are located

is position generally Silicon very, be But has on. demand even a location very XXXX market and growth all Most and that supply/demand lot in San the again in that demand Convention area our have extremely Pacific of of Gates with concerned sort there Lake located we're I Valley, drivers those Seattle the in there. less we supply supply/demand Jose dynamic of is Pan because the well South Foundation makes far Union significant for in think with and Amazon believe area of So, that on downtown us the Sunnyvale the and markets. the Seattle a one own very, going block going In competitive comfortable our and is Seattle, a Center prominently to there. more believe very and lot hotels negative imbalance and that hotel markets Bill we we located. is in in Melinda in supply, it again, are those feel of around Seattle area in located we outpacing we coming is

it's so at of of branded both in are sort and zero hotels located two Sunnyvale. Camino the Mathilda, corner and Our Real ground

I X is office on little X supply a that think the different and miles mile and or central focused those of into new industrial more a markets coming outside it's a or of parks. that’s lot location

And don't variety they we so have to the access that demand the do. generators

supply, into Some think probably are suggesting XXXX. forecasters XXXX, lot these of will a I move of that the for

I general the supply apply demand we should expect markets. would as well, encouraging dynamics see demand continue as to think to similar that for continue We those will indicators outpace in growth. there corporate

of as whether beyond reconsider some I think interest to with pencil. people their also even these may projects are XXXX rates, rising projects going be pushed

Operator

next comes Barclays. from question Our with Powell Anthony

Anthony Powell

Hi, release that talk seeing good of for to Could you other morning more which kind for companies. also of international international your different you portfolio? generally In travel mentioned for talk that? travel South about inbound a about picture And kind guys. you’re international Florida, a is more than the

Neil Shah

Yeah, we're what Florida, any around South acceleration you there's kind still early having country. know all Anthony, we’re seeing to international the this is demand Neil. is meaningful that say In of in

Latin America them. the out and for of are we data there Venezuela at a of pretty international for stabilized and other and Argentina you when decelerated to various market-by-market domestic by But many things. and looking some That good from Venezuela. due of to in dominated travel in as the look assignment in You issues of countries. years Colombia one. kind Brazil. travel stories dynamic data strong and was kind and seen Miami data the is is after have and significantly look one data of Brazil, up bit there is increases A Argentina, old due that's lot Two, most Miami inbound made has in XXXX dollar, you

kind back XXXX/XX of also American anywhere in growth are levels. Miami. not flights from We're seeing of various increasing it's seeing non-stop But travel some seeing to we're in we Latin into So, other number Miami countries. new

that coming flights top I the of last become quarter inbound it there's used think to increasing largest we the the the of of Similarly, list. result in Miami well. Netherlands talk demand flights. some has one mentioned Asian about even there's XX inbound into be and across when not But flights how was countries XXXX as generators

there. that The time. momentum will weakening positive good some seeing we're over dollar So, help

decline might know markets As shock know kind from Britain. from been travel maybe countries. we even of a some we've already think clearly people I there in felt have of feeling clearly Trump international from been look some welcome into from for there's kind other There's Great you that, you been travel effect Whatever it. inbound other

years And lot we We’ve reliance to would proactively dollar, couple reduced suspect hard on travel. event. York, getting have where with in we so weakening last than our it's gets any that In New very imagine of it better. of a it international the the across particular, international worse

pattern I because couple and who a traditionally more think price trying paying York demand in that very calls were where things predictable. guests, remix New – bit a to to traveler international our been little we sensitive kind last international the has been are was we years in been traveler change have predicting are higher inventory of because of on mentioning for there any this not the we've – the it's were we

that on York the social more and a really New reduce a international we our which on strengthened grouping up groups demand reliance little yet, and market even been airport bit some and marketplace. that taking government significantly in rate So, City crews to have the in is at hasn't

I to think like it’s clearly firming accelerating, it say it's it's early but feels So, too up.

Anthony Powell

on X targeted your said your I Thank lever to times is And believe just you. you ratio Got is times. X it.

XXXX of to I north think you’re now shares. based you’re buy EBITDA X and guidance continuing your on back

down the your to to plan get you do how target So, say levers levels?

Ashish Parikh

that buybacks, you when We think two works stabilization the leverage and us $XX asset you is is that leverage of leads million of for of South to the will used we XXXX you do to EBITDA. a the there that flow pay elevated as right to to Anthony, that down share the loss in can at of generate as, that the decrease if should EBITDA of sub-market some know redemption of level sales look preferred portfolio, assets be free the well that cash interest acquisitions, the due be starting for know, now the able in profile. addition Florida, to the or purchase

and do where X we X to is pathway that. to be it So, few radical going next our down over times years, this times, see to a do we get look something plan but to isn't a the bullet doing

Operator

Fargo. from Jeff with Our Wells Donnelly next question comes

Jeff Donnelly

Shaun’s I wanted there reacceleration peak. construction starts I out you about room or you financing think around do your guys. Do for feels, the post morning a lead that reacceleration feel just on actually to in follow-up appetite availability? a guess, to Good construction answer hotel optimism Or to supply. the question demands starts could in

Neil Shah

I this They, Neil. Jeff, it get can is started,

limiting and construction has one of of tight. factors significant been the one limiting financing very think the that remains most that I factors

urban haven't appetite, construction shift We XXXX. in dried kind major at financing really least any in up seen markets across of noticeable which

there. the on have in to some lot is big concerns multi-family, the able In Miami, kind lot there a construction next in So, there's there construction, appetite and and in cities year and immigration construction hotel pricing is labor of particular, cities just seen markets. of we in the to now. And spending but that transactions so for we're just finding some or shift limiting of force the seen Miami bill like we be lot like around haven't we there's factor pencil major there's two. where even But developers going believe in a not country big with they're around, what infrastructure challenging is in more what right a a the markets office across going a around that still

make for post to feel values So, to And a peek lender’s from developer's build close anywhere very that we market difficult it perspective, assets very construction the think from it a today. costs does perspective.

Jeff Donnelly

be in years, been have you story, have faring? versus sort because about thinking gears can the a Thanks. us on was I a at if last of and little the was I'm undertaken just Is of were a you’ve you specifically of are certainly the of few the you acquisitions That's helpful of original recycling maybe lot of what how Ambrose, you'd and this there more at assets any color and post-op you underwriting some switch us ramping what give those underwriting wondering aggressive sort fared Envoy. how give point a on around them thought acquisitions original of noteworthy Georgetown, the capital. kind guys that the maybe bit Ritz, could

Jay Shah

the Jeff, call Sure. you today? were earlier on

Jeff Donnelly

I to got on a little some late handling. as got I've challenges well,

Jay Shah

highlight went you save the transcript markets. to we will least many as just of know Okay, acquisitions the on at through our recent performance the

repeat we've investment way And not ramp is, look most all community. you it, about in that how acquisitions you up our RevPAR of think of, showing if it's to the of I to the to of our at our grown at up recent numbers. portfolio just one acquisitions. by thinking look and express If been we there's most are in the our just six we've at, – looking and this that assets But XX They've overall recent months portfolio X%. last take think made, recent kind

margin than higher and growth. also couple our meaningfully hundred So, of had of a they portfolio points basis existing

into double three each but yield. so X% and rate years, experiencing assets or We're or recently hotel. two challenging that feeling to working. EBITDA that kind the much two digit by We were Westin. year the that back acquiring on suspect what We X% impact the business you It's the very a Envoy a could to the stabilize, at of I there an of XX% percent a more year feel in process. our D.C. them. between know on X% about we've in levered Ritz these good purchasing nearly assets ones been we we moved that year since have a Eastern about or acquisitions, about XX%, of every couple did at most Middle and one its and felt And of we plan. We've the of think on an closer as to cap We're at are they Washington not travel look been and last X% we rate So, D.C. Georgetown. cap were would be that They’re it

probably that our hitting one the So, isn't our now. is list expectations only XXXX that’s right of

midst actually of We that Georgetown XXXX/XXXX the approvals into expect of expansion space for there. we're in turn meeting on a securing to the major and Ritz our

And feel real effort asset, we the if a we good months on go out now. for about we hope are going I concerted across lay community. year XXXX least that that to each value, we not more suffices the So, to have history answer But trailing EBITDA. this and Jeff, XX estate make for at as investment

Jeff Donnelly

circle and the to Yeah, part Thank the of that's I’ll back terrific call. earlier you. obviously

Operator

from comes with Riley question next Our Bryan FBR. Maher

Bryan Maher

morning. good Yes,

South quarter, the second reopen it’d it's as they to should that Florida whether assets, should Parrot and quarter. a in of be number? color two How model Cadillac you Just the the on because through quick question the have expect about the not Do think to said earlier you end Key, mid-way any just insignificant the in that we quarter, the we quarter? an

Jay Shah

have of construction them. lot The to a uncertainty projects

of the for the quarter. second quarter, Key close expectation be end the Hotel very Our model to is to so the for Parrot I anything wouldn’t

second is Cadillac, the of quarter. our early the the expectation currently part On

that getting finalized. it’s Miami when looking But shift of tough early is second planning end we quarter. hotels, were develop that very very a difficult for quarter from now opening, environment everything is first note it’s permitting and a like a You'll an last to quarter with place just Beach

to So, there in risk is quarter. would I some model say income month the second that. of a

Operator

Our from with next our comes Bellisario question next Michael Baird.

Michael Bellisario

context kind on in one you think two sold. you that deals make those of for two got capacity front, for moving the stock ramp of of asset on repurchasing Just more follow-up kind more about pricing you the maybe sale just harder process smaller did But even [ph] the the that? also assets, assets attractive

Jay Shah

developer hotels, developer, assisted two these they were opportunities Gaithersburg living was unique of Yeah, by living purchased Hyatt an the facilities. of Place, assisted

view market’s attractiveness type. this and rate the able on a on value replacement less to product purchased were their so And for cap they and more

that several do a kind We're and acquisitions have assets so exceptional more Express And on was dispositions. a buying clearly declining people now, a discussing on Chester we of market, capital supply feel kind Inn coming there's good motivation requirements, hotel in The that a are of We enquiring owner it Holiday result. or market operator down sell, was the cash-on-cash of the always the new both about where yield. fairway taken was with to there's the we're care But of folks. we've there's most somewhere. right dispositions like that a where in upcoming real

everything we we seeing EBITDA is more we that quickly. think it imagine portfolio, two in be year opportunistic, the pipeline us And of Not that the may across now opportunistic compelling two assets. or probably do but to will out one assets. we we or acquisitions our move as on So, that look not a have amount likely, sales. meaningful else much we how right would We're sell be one

better assets could I think if If our about transact is extremely the liquid about concerned the we could we the there other more environment, EBITDA opportunities, more were became to absolutely hand. leverage overall the or sell in we and feel now acquisition But and much extremely portfolio acquire have today. right hotels. cash hotels are growth to on portfolio good we just profile very more attractive of that

Michael Bellisario

kind you think of NAV what from topic, is then you XX% guys guys market discount, that And just and real talk missing valuation. terms is get will kind do close to onboard the And your same then how it of over in time. investors do of about on That's you XX%, the seats helpful. that buyback

Jay Shah

these Parrot catalyst Michael, assets. for Beach those for his $XX.X in Cadillac Hotel in quarters of year Resort one big Club, assets back million of be first HT the first EBITDA the reopening the in are prepared these Key two extremely these produced the when of I going quarters. to is are I two portfolio two mentioned out Ash the the side remarks, of think XXXX, as think two couple major are and That very productive hotels &

productive – And of so up our story that’s investors ramp hotels the our XX% XX%, and probably represent our benefits recycling assets, of are portfolio. now We’re for out up have see embedded difficult and in these very it these will repositioning more to has those being the EBITDA. made

fewer some So, also just takes. requires and it think puts I

and some could been think market, in I make with But especially it’s buy of as as to sales in bit above We’ve the hurricane, little and the a on quarter take of and the we ours, lean we public we But choppy least XX% at we you it's investors billion without like personally $X individual earlier it. know, back community. we have over you company, bought a stock. buy, research for probably earlier. lot conviction choppy of would trade. a We of assets takes there this able company a the have and We gotten it have well of recycling demonstrate churn. a where focused,

raise – And patient, we’re momentum think we on, some the year we're equity believe that so, don't to I as build. goes will capital But do XXXX need and so patient. we

and fourth XXXX see line XXXX that into think will up growth. and get for people will As we I quarter, significant the very third

imagine it that million, do months at growth point, it. EBITDA market. we without million the a months, takes As $XXX XX we're at the But on Whether and bit not to this or quarterly help that producing portfolio this have of portfolio, XX depends additional any show basis, $XXX this sure bridge just on acquisitions. we a look you

Ashish Parikh

that. Hey Michael, let add me to

about at times sales years, mentioned, data X couple as of York that our sold Just when some XX portfolio. had from you look points includes at Neil also the last over New our multiple we cap

we’ve gap times. built when we were York, helps bridge our quartile But private New clearly to when market disconnect there a Hopefully lower its when clearly in public portfolio is at really XX it of when and that comes values, X was so for data portfolio. you what these low a last at think sold we between at the at sold cap the that market our very, sold So, a look two cap look points. very market That looks I private rate. that the someone

Operator

Raymond next our [Operator question take James. from with Crow Bill We'll Instructions]

Bill Crow

guys. morning Good

are there, ADR ADR it question a Real The Just all think Westin. was on driven. good results quick I Philadelphia driven mostly or

new that a that something other acquire work that you just or when Is hotel? of if implemented curious that's you that you’ve asset hotels? of market strength kind philosophy whether Just a management on

Jay Shah

things the Certainly This is okay main. Philadelphia by driven Westin did think the the the three The in in very fourth there, of quarter outperformance market Jay. was but much I

there. yield of more reduced been group OTA's significantly. prescribers part us really we direct to all, order and very, optimize try strategy, into heads bookings our there management channel OTA a as We First you focus been, hotel. drive we with was of driving plan Replaced our was do went a a beds and in not have the RevPARs lot can. big consortia, and the very that EBITDA some reliance And and big it mix know business we're of for a have best sales thesis

ramp regard. of think was discipline results that – that's to or some We continue. some a great good going in quarter and see pretty of I there. in the really fourth There some lot opportunity that

of It and banquet social us great point that which has some know hotel help going without the there’s catering space on a there more amount a drive and you to weekends, and loyalty, on drive more to we Secondly, necessarily we increased the there. focus driving and cost believe has operators hotel. do just encouraging have opportunity business is for the lot and levels order preference in which meeting to great delivery, service been social has weak service to really

we’re catch on smallest to us. hotel, more on procurement really how the I a levels, efficient continuing think opportunity focus very So, to just Then be able focus normalized probably as and were but cost at right-sized service operating and This and at possible. the made was that how there. for the efficient can we we as elevating look was thirdly, staffing controls and And models, good supplies.

So, three the there. driving elements that are fourth in I really results those the think it's quarter

I going business be fruit think focused plan; something bear more It's I to even it'll remain our on. we're year. that coming to going it's in think the

Bill Crow

some the in some In seeing particular, assets? negative any merger from hotel hearing we're Marriott-Starwood impact Starwood of on impact that maybe that are there's you the

Jay Shah

market-by-market, positive. be heart a could In the it the kind of of it positive of and the financial the as select airport, go The in around of the in big we and heart the is Marriot you service case this the think Marriot is properties Philadelphia. real only in think property Marriot this or district case, This Westin I negative. Comcast most the is of becomes portfolio-by-portfolio only in product. City Convention Center area, Innovation Philadelphia's the kind the this District right the of Hall. the But at of related

So, loyal benefit I guests our think that there's some staying from Marriot now hotel. at

other the OTA commissions. benefit think significant I is

reliance much this have we to one reductions cost stay less OTA big be Marriot as and of hotel a guests and rates opportunities OTAs. year bit there Expedia premium have We little need as things on on move much next a thought we exceptionally OTA. because RevPAR that at use opportunity down quickly. the be further are it didn't located moved of of even consider to pretty coming We that that a to We to think But the and times all Marriot from and programs at across lower they're or may two. the need

a feel positive we Marriot for net-net So, has like merger been the the Westin.

Operator

Chris from comes question with Deutsche next Bank. Woronka Our

Chris Woronka

But the don't in union the of moving could some second, the in as I for in of kind maybe Thanks. your if guidance to give played how us some are that throughout versus margins. year? guys. in XXXX RevPAR Hey, exposure, expectations? there? a look Given little And initial have wanted what on terms good unexpectedly of morning out we the you zoom towards XXXX understand and of the on bit some parts things of costs we rewind just a your of could. are that what Then a markets change

Neil Shah

similar starting some a and We and next Boston, places year. New in away in increase and in almost another Seattle, going XXXX do know all minimum LA XXXX $XX to market see we increases markets minimum this of to think like our wage But does wage XXXX get like up go York, not in year. pretty you that that are we saw of in

So, X% X% with going have. going looking and the range, wages be closer to managerial wage to our our keeping We're with there in more to employees that early along up doing X% salaried it pressure. is of we the more kind where continued at

X% that to our trying overall. in type So, to range keep overall of X% growth wage

market very of these shifts think mandated. wage increases minimum don't all that the We So, it's dramatically, labor are already tight.

into I and tight guidance. think that's it built remains our

Chris Woronka

Thanks. Okay. Very good.

Operator

back there It to I'd questions turn time. to appears at are any remarks. no or conference the additional further management closing like this for

Neil Shah

thank Well, more no like would time questions, we morning. to you your busy take to moment for this with a

always to free As with call any Ash feel Jay, you. questions. I or further Thank

Operator

This your concludes you Thank participation. today's conference. for

disconnect. now may You

Hersha Hospitality Trust (HT) 22 Feb 182017 Q4 Earnings call transcript