HT,HT.PC,HT.PD,HT.PE - Earnings call transcript Q2 2021

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Operator

Good day and welcome to the Hersha Hospitality Trust Second Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Greg Costa, Investor Relations. Please go ahead.

Greg Costa

Thank you, Betsy and good morning to everyone joining us today. Hospitality quarter Hersha conference the to Trust XXXX second call. Welcome the will yesterday XXXX be call second afternoon. based distributed Today’s was on quarter which earnings release,

These or Before detailed that the involve financial considerably known Operating that release filings unknown risks performance remind begin. may contain that, proceeding, or are and positions positions. over statements. as the Neil Shah, and well pleasure with like With to press financial different other company’s the company’s call uncertainties H. future call results, my factors forward-looking statements be Hersha factors within conference results, SEC. cause turn Neil, from now as may company’s everyone it Chief forward-looking These and Hospitality Officer. you I the Mr. and would may to to Trust’s performance within today’s is any to actual the President

Neil Shah

morning Thank good you, Greg and to everyone.

are our Jay Joining Officer. me H. Financial Officer this Chief and Parikh, Chief Shah, morning our Ashish Executive

to join kickoff all and that quarter glad earnings this season could pleased you us. are We

this During and in hotels our month a demand margins of set. second the leisure above this occupancy last second indicators June. and April, to improved late increased GOP portfolio-wide an top in metrics. build generated were the of $X.X through sequentially April XX travel expectations at appears from for came expecting quarter of daily internal level outperformed rate quarter line at summer June, to forecast it trend XX%. both that in for flow We our XX% saw strong on In $XXX average up setting year. significantly million comparable incrementally half the quarter’s appropriately Property $X.X cash million in and profitability We were call for all the are and

push start of to the business These little XXXX recovery well are our both core metrics before year for of begin solid and markets. hotels, the encouraged a pillars approach profitability our in our effectiveness in Achieving is ADR quality cluster over markets. transient stages this the here. gets free Gateway generating our of higher underway and the see of a GOP urban in this worst and testament growth our and occupancy operating history are to from of industry’s levels, gateway three We from RevPAR strategy crisis of the early will mix to cycle. advantages flow, profitability resort cash group a and market

in will RevPAR RevPAR compared of Our us operating than a We April growing the due outsized spring and first June was XX% footing quarter to such sacrificed our Last prior than return the great midweek, our environment, fall of strategically on this this positions in March, elastic prove as Based basis demand Rate clusters to exceeding strong through in to elevated our as last financial time a resorts in the July, the portfolio not $XXX RevPAR portfolio. higher sustainable to ADR for $XXX, in XXXX marketplace. XX% recovery. $XXX quarter actualizing in XXXX. are have just from higher But core in business pricing on the $XXX the our quarter, growth Absolute rates at recovery. stimulus heads without quarter demand second and and we boost have that’s ADR revenue below to business ticked In travel $XXX our integrity break leverage traveler concern than to we the rate urban began April spending. been In was managers this at the resulting June, June, month-to-date, more common of price and the during comparable portfolio sequentially levels. across XX% beds to in higher $XXX the a XXXX second put which during had grew exceeded stabilizing elevated environment. on portfolio-wide ADR balance second year. in drive power able May the we traveler quarter, crisis, in been believe shocks

Villas Cadillac on $X.X our Parrot the to Let’s & Back $XX Parrot expected Miami At in achieve travel target demand peak start quarter and generated Club resorts assets with reduced post-renovation Key XXXX, on now million and million sustained XXXX, Beach in Florida the ROIs. they approximately generated to million respectively. $X.X the the $X.X and and we Hotel Cadillac at in prior upgrades West. South our and EBITDA-producing region. Key This EBITDA past quarter. led this the for the in Cadillac the million Key reinvested quarter, the They to for both these the XXXX. hotels peak are dig major current surpass what expected year exceed firmly portfolio respectively in to & and to million $X.X based EBITDA full million $XX And in two in generation despite Hotel combined Parrot are start of on in prior largest on to Key projections, Beach again and is typically of EBITDA, portfolio,

$XXX of for Coconut few at stabilization. September a September, these the years, the which our heels XXXX. recovery from during in Pride unprecedented the and year. financial Beach growth of Keys and deflecting resulting X Despite contribution Festival services, defense, and demand growth conventions quarter which next for forecast hotels weeks XX% RevPAR Key’s a portfolio surpassed summer Miami in second of the returning Ritz-Carlton shape corporate occupancy & and Wine both Beach the was on price-elastic for our Performance festivals well have near a meaningful Demand the One Despite XXXX remain forecasted more ADR, beach sought-after remains There inclement year-to-date Cadillac Key through more they quarter, business-oriented in Florida, is Miami performing XX% leisure trends the encouraging across by the quarter July beginning meaningfully future: slower business Grand quarter as second occupancy to being robust of asset second to year-over-year broke variety August at as and the $XXX is the traditionally Parrot of is Food as Beach we rate, $XXX Art best a continued As industries: seen Grove, technology, hotels on The number similarly XX%. RevPAR beginning XXXX’s RevPAR which XXXX with in RevPAR, Parrot the this with South growth advertising those our outperform our Prix South and weather quarter our third a X.X% daily business XX% Formula Elsa, tropical demand levels, capture average the quarter. and month. group. to generating from the few events, transient of periods on and Basel the later and next has Miami than on in as in drove fall assets surpassed in healthcare are was The the EBITDA performance ramp anticipate the versus the continues lodging from performance storm across ago, in to in take towards a marketplace. most line one proven demand

infrastructure will and significant region, and the Beyond fundamentals near-term that recovery. for corporate tourism, to relocations long-term there in captured through robust remains transportation-related this growth demand leading Miami be

RevPAR average second high-quality, XXXX. hotels. weighted rate as the Sanctuary of continues occupancy quarter the XXXX Our during perspective XX% ADR to outperformance the of growth growth and lead to group Resort resorts drive-to of traveler generated XX%, of from weighted the that in compared ADR resorts average also XX% the quarter Beach leisure further as occupancy continued growth proving well-located, XX% of not our their to recent sensitive RevPAR XX% is second price versus a $XXX second its quarter resulted The and differentiated for leading

Santa and to X% in rates kickoff the And strong in Bay. to Chesapeake versus on Hotel occupancy. our We an the last occupies coast. over resorts, transient, primarily a the position driving quarter, similar $XXX down business a robust our to anticipate flock Annapolis East, in the rates report Monica, quarter XX% Back as groups hotel, ADR summer Annapolis occupancies the year. and social RevPAR a travelers sports but Santa recorded garner a We average in these a an XX% Milo provided irreplaceable base after is at to occupancy and Waterfront third will Barbara Ambrose continue to season. growth Hotel at are which the in growth RevPAR California of addition prior occupancy and leisure very we significant of XX% the Our renovation of $XXX period. led rate daily

helping quarter, the growth end Looking hotel drive rebooked and the of that XXXX. third out several further are versus XX% corporate for to QX towards ADR the of retreats

saw our than Our begin to growth the more leisure the and cycle. are large primarily shown seeing With versus XXX% several grow to enabling conventions better during noticeable more portfolio the host gateway to and traveler cities the have we other been fourth encourage XX events. and than from just than the restrictions X,XXX local Month-to-date Mystic, approximately Across travel see pace resort rated XX%. impacted to would of period, March our pandemic and travel increase third achieve saw a at also longest segment offer stays, of points, and for to office gatherings states the citywide cities July and government portfolio replaces meaningful leisure growth heavily forward and for as basis remain runway groups attractive markets than days their look in we leisure occupancy is our we traveler. show our business, next cluster over ago. business and the Marriott weighted growth to segments economies inflection Removing by in as returns travel and anticipated. pace surge of demand This reopen leading fall, in all next expect Gateway a weekday on cities weekday results leisure but demand higher today. markets, to of weddings, demand RevPARs years weekday ADRs. indicating increase stays Connecticut the experiences, to remove in same the domestic return continues When that summer weekday versus we corporate to weekends weekday in peak major rebooked that compared employers any have on our across the quarter, the RevPAR underway, and quarter average and a travelers growth expect was for be we urban more the urban summer

our to with the return During from X we Out second travelers corporate from hotels the return Hotels to Accenture we several and Dynamics traditional beginning began Goldman saw groups. booked corporate become to see groups of Deloitte other Sachs, are to during the Philadelphia in addition At employees. McKinsey, to at companies large have Google West, stays from Sunnyvale General X tech-related many quarter, businesses pharmaceutical Westin, and portfolio. business in business night quarter. the in more third traditional hotels our accounts active and transient both IBM, JPMorgan, at our Facebook

to the seen continued group Labor social are we and occurring hotels markets, be leg reopened, been returning we the group schools groups in and and over portfolio. activity have early and to in office. after hotels. has in up we The across of cities our our return the expect last anticipate sports, summer, in-person larger being big our stages in travel transient, Day our throughout few scheduled reopen increased primarily of seeing an but the being employees months improvements business the when events urban in Despite each business our through are While recovery activity centers the increase at have of majority resulting as next

quarter. August, production first occupancy Philadelphia signs and major turned Our with at corporate in $XXX, meetings a also demand strong in reached hotels bookings retreats. cash third The in Hotel finished at the have from and and have taking Philadelphia Ritz-Carlton these mobilized versus of $XXX in but of nearly luxury quarter. DC; and York events with few York Rittenhouse slated located are ADR. And quarters third and group, small business positive event place are by only ADR The the DC near growing The U.S. but quarter, host Open this conventions citywides fourth a Boston, benefited in AutoCon also will the DC, leisure for of quarter. generators across cities, York, York and more increased hotels UN first fourth XX% systems quarter Auto Georgetown Salesforce’s as X,XXX our to group not Washington in by and New the and New leading Dreamforce our significant Center the Washington Philadelphia; New and and the Fashion Javits Show, in including occupancy than our flow social larger and August to many basis York. points universities health and the Many hotels York in group, are multiple of Boston highlighted the Boston in return in the September, Larger markets, New Assembly. marathons is Tennis, events Washington including will for New time, in General many Week the the occur New across City first major healthcare-related the

more incrementally New and other more large as and the have demand saw this the Broadway City encouraged of Our occupancies the we in first are remains fall few our as the corporate return throughout traditional by primarily signs portfolio noted should in transient past leisure of But reopens balance accounts and events build Visitation across occur. markets, months of the York this market. corporate emerged continue travel quarter.

We account. race supported have at JPMorgan mayoral We early locations are during with election submarkets. teams several and Inn top quarter our Midtown transitioned the our positioned in Garden the East very since Hilton in well to as high-growth our

Discovery schedule. seen value the media and the technology, from switch and travel business and financial a Tribeca, from the meaningful the building Hilton the companies entertainment, additional a drive in and and Our travelers GE Blackstone. at downtown AT&T, travel major high Seaport Union Apple Garden and Inn Hampton has the has Square is increased services York pickup and to Momentum there Pockets should they will corporate on believe return office our of September schools after and throughout pre-pandemic workers in-person ahead. lodging first-mover outperformance more office the our return accounts and a of Day The larger industries that long when Labor strength city runway our and continue to with sales all shape our across Conversations across work advantage operating consistent taken fully have we corporate when clustered pandemic, below supply clearly have the advantage And is marketplace in in data levels. New recovery can Near-term as results indicate opportunities. turns clearly is on. revenue month for effort exceeded underway. significantly is and remains open business yield with of creation expectations, expand remaining

first half expenditures in cash profile a high we of our can markets to reduced leading the With to flow horizon and market. EBITDA absolute right-size action strategy capital evenly to lower core quarter few on unique free portfolio. the the significant next growth of and our year, took in Results this industry of exposure this our sheet past of over each drive swift illustrate we growth on years, RevPAR and divesting During in the by merits resulting coming hotel the the balance growth the our operations margins, hotel focus on few years.

discuss are in looking be start We our we to more let in it and that, a over earnings recovery me a Ash financial to in in anticipate With continued long performance lodging. forward to of turn to up-cycle what detail outlook. the

Ashish Parikh

morning, good everyone. and Neil Thanks, Great.

up our and conference RevPAR and quarter an and travel the Demand still over quarter results, from the first leisure trends demand cash of to our meaningfully ultimately balance at business RevPAR average rates, of weekend outlook us comments the from closing our our balance fundamentals on boosting achieving business level during company heavily demand the second current update for my demand occupancy sheet to continue its peak before travel the less leisure. demand So, time improvement The of weighted will our demand and was were with the best cash quarter the typically the the maintain flow down XXXX. our below quarter, or year the corporate second allowed across without is XX% the summer flow margins approximately led our for quarter. group daily in second meaningful quarter in strong onset urban XX% and still meaningful properties and to from of any hotels demand throughout the group our first marketplace. and the XXXX, what leisure-oriented towards than improve since on portfolio on of focus beginning but pandemic. and the all March were impact second with In the travel, quarter

from growth X,XXX and ADR in rates, while margin resorts approximating material June, resulted our basis we with On strategy flow growth to with increase quarter. occupancies, hotels points. combined up initiatives XX% in occupancies in our urban XX%, expansion at throughout Incremental our portfolio achieve weekends March cash rate a to were first the at the generation able and expense captured our savings

in the During level, breakeven line, representing March. in even hotels hotels needed operational the levels operating broke take improvement our In goal pandemic XXXX, the decline on implemented hotels We versus asset EBITDA XX% And with originally the signs that combined XX% second in cash the resulted as flexible positive our with beginning $X.X at Results of our XX a XX% corporate of following GOP XX% even showed EBITDA forecasted early EBITDA XX our The XX increase XX% even margin $XXX,XXX approximately, on breakeven level shape. in we to versus line, quarter, XX is these on property comparable a a to decline. from occupancy, XX% from XX% model, first million earnings broke breaking the open in with conjunction corporate occupancy initiatives achieving projections June, portfolio levels, XXXX. cemented our flow. RevPAR of our management generated each RevPAR with quarter. June of with

As higher margin. XXX slightly believe basis points in GOP GOP during will of GOP first than XXX margins below we margins line second just were points on quarter third ahead quarter second quarter our forecast, XXXX quarter of the basis quarter and actualize current Based to third the GOP our our XX% margins. XXXX

will of well with As by as ability our our California a expenses RevPAR portfolio. XX% also our levels led as our Milo to were in initiatives second portfolio highlighted yield XXXX margin, quarter confidence cluster a and Cadillac Washington seen taxes EBITDA our Robust operating ADR to XX% Key model margins, higher EBITDA operating XX% Sanctuary Florida and the drive with From and profitability Hotel our Beach and quarter The and ability in X,XXX should generated and Parrot at our margins resorts both assets. beyond, as quarter applied out-of-room respectively, again allow margins, generate savings revenues expense for points. exceeding amortize than and results This perspective, to and long-term and us South Resort XXXX respectively. XX% EBITDA and more post-pandemic finished Key this by allow much the basis EBITDA DC XX% basis Parrot as drive-to fixed Cadillac insurance increased current us in our points property the provides our expenses. margin growth us forecast XXX to XXX EBITDA sustainable margin savings of tandem to with GOP

hotel have acquiring quarter While outside initiatives XXXX. a XXXX in margin XX% at from to we with perspective, the than occupancy proprietary of second operational start Waterfront and higher strong a basis a Annapolis the season X,XXX to the coupled summer rate Hotel, since led EBITDA implemented the D.C., points travel

systems as outlets. ordering aggressive since control. on pandemic through primarily management and lower This guestroom reduction systems strategy water also asset utilized mobile cost onset platforms smartphone food various but Our concierge utility costs, to services, of driving management the and focused was hotels, beverage we done systems labor, at have at the such and our energy technology our through review and check-in the margins in

its not for has more We this resulted as than versus District by EBITDA in have pop-up which ParaMaria, our in Lookout during Envoy quarter at the Meanwhile, generated million properties Strong Parrot our higher significant limited revenue well from revenues which generated XX% rooftop the our our popularity hotels, at we rooftop hotel generation Key our Autograph locals been alone. independent installed from increased premier Envoy alike. just revenues bars. second its rate – performance brand-oriented was beverage was second second in our newly the our the city to million hotels saw and saw average the and of to helped ability in meaningful quarter strategy been revenue The received which of Collection quarter. Boston, margin boasts in in of the savings margin our XX% to nimble including this Seaport as both outlets have quarter, and our Tacaria the our occupancies in achieve restaurant the up during XXXX. substantial and $X and guests and $X independent a second At was portfolio, also during weighted June quarter push close growth in generated

with past sheet on believe deposits. for and burn flow equivalents cash million peak closing on strong remarks outlets the quarter. more drive corporate from the positive our cash of demand travel remain consistent horizon, and our We leisure $XX.X the effectively we at level popular summer our during we strategically expect urban inflection balance and and remainder business our rates point and and of a ability on will travel second for A expect restaurant traveler, month-over-month to the Envoy the XXXX. our Based to of quarter in and the are We and the outlook bars the increased months. third cash at return ended and cash markets resorts few

unsecured from million of senior X, our July we with facility note of revolving affiliates As of $XX and Merchant credit on line the Bank. credit, approximately $XX $XXX Goldman undrawn had replaced Sachs million capacity million of in

second our insurance received approximately discussions anticipate quarter on the proceeds million in not the interruption recoveries from in business $X interruption do Based of COVID-XX for at we business related of pandemic. we additional impact hotels. providers, the several receiving Additionally, with to our

Garden in the refinanced XXnd on hotels: and The During L.A., the successfully debt Square; in mortgage Hyatt second Courtyard Street; Tribeca; four quarter, Union Westside. Garden we Hilton Hilton

June of of is and our and of we swapped on weighted our XX, As to renovations. life XX% maturity. spend last million spent years with projects debt strictly rate or and We our X.XX% quarter, interest CapEx maintenance average X.X $X.X safety capital life debt fixed total continue to limit to

points in cycle. occupancy growth, outperformance are revenues, During very June few close July, growth flow surge on we Manhattan XX% $X.X Metro, throughout New the freight next projects, in XX% on below seen half Boroughs, full that first cash Month-to-date on York years, the as largest and which remain we to trending been have majority XX% CapEx the The spend. to we which already and forecast. in Mystic, in occupancy and disruption from our our occupancy. sights spend approximately of remain rates, supply the X,XXX accretive which be set become our our the basis a and performance and weekends. of continued our elevated. With the project the roughly materially on running construction perspective costs, we month-to-date recovery, up over tightening to internal White of chain occupancy on of portfolio, July, line available and spent in from capital in portfolio ahead our the portfolio, for in in our Plains XXXX and the weekdays XXXX, million sustained our operational capital the portfolio includes laser-focused slightly is is or Month-to-date load has July with of portfolio currently oil opportunities little beneficial New City across year We which both prices, are continued anticipate our has we our commenced, up portfolio York

concludes this portion call. the my So of

to happy this have questions are that you We address any may time. at Operator?

Operator

with comes from Wells And Instructions] [Operator first the go Please ahead. Kesten question Dori Fargo.

Dori Kesten

Good Thanks. guys. morning

Jay Shah

morning. Good

Dori Kesten

need demand What to of your on group track consider to in return September the versus transient do you and see expectations? business

Neil Shah

In What of to think We do see see? Jewish – the we kind expecting September, What second of part we New month. midweek have in will tick going some that compression. need simply up. back just the in we to for some we’re that will that York, other city, lead could to holidays particular, half it to the the lagging it see occupancy a September. be the of start is or We in have events on what the to month place major start the to we’re occupancy is take do and half first of is to midweek But that it’s few basis. the a of looking

being track work. to the most now, companies post-Labor that Coast West Valley, to of plan. plan we’ve was York it’s – a and the Silicon to moving of we’ve the to end we just on have large continuing to according only work As the return continue seen back their in delay Right go look in through Apple this seen In City, employers company, be for return on I to was more September-October it think, year. New from the Day flexible, forward,

And expectation on. that’s – so we’re where basing that’s the our

in an that impact change expectations. so our guess have And I would any in

Dori Kesten

Okay.

to after elevated a that you so there into Day, historically. demand demand in Would you off if falloff the or do expect in leisure be you end expect same Labor your leisure fall And typically, going of there look markets back is September, October?

Neil Shah

weekdays been maybe We’ve seen have Saturdays. even long think that Thursdays longer across been even have stronger strong strong be the kind weekends. few Fridays of continue to the take months and people We as as weekends and as weekends than last other

weekends. think, So on continuing you to I strong, could see be leisure

for has that the has the there City, Day, years. X.X everyone to – are – go York sake New will off be hold also that of it’s travel want kids, leisure and and not since there shelf. just been We flying for think things tickets are Broadway back some on The post-Labor people will

leisure of limited tickets I think a are went we our of by up, seating normal be will immediately. to prior seasonality in kind opened in seen pent-up coming week, But there they I the last continue think June pandemic. are or limited the they – is demand and lot what that so moderated we’ve they cities but that like see the fall. expectations it more set There of to will

to corporate the probably we days. but of big So the continue leisure benefit it get side, the and do expect we will week the is driver still the on weekends, through

more and up in As things more cities. the open

Dori Kesten

sort And noticing last the focused impact last your month, you any from Are Florida on maybe market? variant, the Delta of question. in just

Neil Shah

really have We No. not, Dori.

and at the not date. coastal we Courtyard, impact. carefully, being are And our open. but in Seattle, there obviously least to seen not the teams Northeast, impact kind keeping We’re still a about issue. have hear to of, the it was have any booking of looking the South in California things Florida date. L.A. issue. at frankly, we an any Pacific, out did But In much delayed group of haven’t seen a single we Sales kind even the Pan without locations, And even ears we at

very it but monitoring impact. seen have an not We’re carefully

Dori Kesten

Okay, so much. thanks

Operator

with Bellisario The next ahead. go Baird. Michael comes from question Please

Michael Bellisario

morning Good everyone.

Jay Shah

Good morning, Mike.

Michael Bellisario

to maybe front, cause bring you’re seeing and you’re might doing as Just the at margin to expenses then keep could to level? moderate property what back FTEs about talk in pressures the flow-through more you that check first have what on you

Ashish Parikh

that a the bit and XX%, sort Sure, where are XX%. in far we traditionally which of mean approaching Mike. time year first we’re be we at little the foremost, of mid-XXs, above have would and this run, would I occupancies still below

we a pre-pandemic. been level have are still – where FTE XX% to are would our they at counts So around

in could that I and these to think buildings a the more from hotels, bar getting back our in had. had learned just a the closed zero-based number probably other standpoint, changed but with we don’t still peak range lot just that FTEs and of is imagine have occupancies, count of less. we XX% budget, we’ve of to we’ve also standpoint, housekeeping to post-pandemic. from to see staying that same breakfast we Protocols some XX% the what things. And do And FTE how

first using some our of sales and the around of can and personnel. some group some So limits things done salespeople We’ve that those we we for that’s that more probably foremost. cross-utilize technology need,

unemployment occupancies So year, benefits to absolutely better We we that we coming more the think we but as to for back, to persist as return we of shortages get labor into bring the Day, people get way. schools to past get parents going need some through are work, the will back see we the will buildings. as allow easing the will back go past the to Labor children that

situation think goes So we we lot of by a away that Labor pressures but ease, shortage don’t labor completely the imagine those Day.

Michael Bellisario

proactive Understood. just recently? done that capital work the the that’s markets balance And sheet. any in Is to can then be improvement continued there switching gears today given the occurred

Ashish Parikh

from for seen are a Yes. offerings lodging we preferred the the open. monitor probably mean the lows. are debt record some of standpoint and capital markets see better markets continue you’ve to I very to available hitting of The It’s that what market. encouraging

We very needed that. we if we with in are have tune we to think tremendous capital So access it.

will really where in at we we position We a time, this aren’t need now, right capital. the –

have we to either a those in we a Sachs February. the that would something or do off markets would accretive – notes up We coming in Goldman accretive We imagine those with very the transaction. very them at renegotiate will capital pay that with

the we think markets. that seeing But So We we’re to at anything. we necessary. do continue need really not to time, monitor access the this the have

Michael Bellisario

it. Got you. Thank

Operator

comes next with ahead. Please Jefferies. David The Katz from go question

David Katz

everyone. morning taking question. for Good my Thanks

couple in is other be may I the business COVID? that on covered we And we’ve a started within of what much out else pot of so focused which going just exit top or all as side? up the Can copious from of throw that the to costs other down one already be wanted the issue, is just detail. either to on cost cost the But talk pretty You’ve about amount labor. of you sort

Ashish Parikh

to we are property are they We that down. Right are mind our New about now, next that Sure. likely bills, XX% for the right property David, and City taxes. received year. York tax the to things down two our I think for come think now go short-term,

Washington just out assessment usually is California of are tax could and next year. fourth New in that. came of of type are assessments assessments. We reductions that right should the COVID. quarter reductions for rates at to the more DC of city this now, York. so looking in lot transitory. with about But So increase XX% some The Massachusetts from see due benefits at a impact reduced hotels we could that because be

line, are but forecasting follows the line. So follow increases, decreases, same not the we’re if we they we’re it trend expecting that trend hoping same not

plus. get could we tax year think I for have We So property some the next already relief.

especially to expenses are increases. directors and insurance, the think to I in expected liability, California, which side, markets on be are coastal hurricanes, floods, and up, continue wild pressure, insurance with additional fires, in to continues all go general expecting officers flip

wash wouldn’t So probably our little because of say Xx a bit bills are. what bills to there. a are insurance our I wash a tax Xx But property

So should offset to I think going the see is taxes down we benefit, but still insurance. definitely a

David Katz

Thanks. Very helpful. Perfect.

Operator

The Maher B. is Securities. ahead. question next with Please Bryan from go Riley

Bryan Maher

words come morning you elevated particularly those Day on here. questions to How of of being on What To couple ADRs, kind earth. properties? transitory A thinking stimulus payments, Labor post the got that? thoughts incentive down are kind kind to trend and consumer post the are about leisure these your at borrow and Good of from Fed the back guys. the of

Neil Shah

is benefit there been payments. from that stimulus in think do a certain the we segments Brian, of industry

kind in pretty RevPAR the most of high RevPARs. has of high-end I performance, pretty and performance been our resort notable – high markets ADR with think ADRs some

performed clearly even. destinations, are of and prior function function that’s I cruise a but better having think lines years having unemployment a they international not not like. other the it’s alternatives Now benefits, less But travel, of than just for fewer

other that on of at markets, market. as the comes U.S. to can resort more years, could I international events, outside international back us of of portfolio, leg our power of urban certain some Where just a extent. that, moderate driving in give will As the to are from the will is of growth in rates beneficiaries as the be in Northeast, we be and demand in kind think we we which as more But these markets our kind in that resorts. look that will there the overall, continue alternatives Coast, – coming have the domestic pricing we consumer of next think we big also California operate see the Miami, the Washington kind other and the hand,

the occupancy across cities. So conviction our year RevPARs on ADR some I offset of a increase kind in we ADR might see That in in midweek the is of driven think level, by portfolio-wide next and the in cities and our confidence the and growth continuing will two. resort growth or to moderation markets

Bryan Maher

that Right. on And question. on and kind following of to maybe with tagging Dori’s

more And which a just Uber much yes, demand. come pickup kind also might mid-September you standpoint, We to that expense an hear post-Labor about a travel discretionary at back standpoint, your from start sensitive kind corporate that little ecstatic and been will down actuality midweek continue lot to being bit Officers really What corporate so Financial when, that are in to a as of line have will come about, the hearing travel in corporate from not back? see Day but you the Chief being that level reservation travel. of marketplace to or

Neil Shah

weeks midweek I’m I’m it even one. to STAR for like late like – just early these in depends of going the September, I not a week the that the schools should lot demand, lot will start August, it seeing it’s is this, think it. will start data But the that that buildup with when in we markets, some areas. it’s Day all it’s like sure in – on to second Labor New in of In are of get certain we guess, but see pressure on starting after hopefully put September, York, we the a I started. September, think when On

October, where more look in to we sure terms believe that see and we this I’m or... think really that specificity answer of for in what December you’ll rebound trend if I continue November develop.– not can any line for to But is

Ashish Parikh

I think right. that’s

well I think, very for corporate. windows Brian, the booking short still remain as

sort out So it’s weeks or still so. of X

We are seeing September. bookings in

a and all October are anywhere pickup. months We was right. a are think we That it’s about When two of that, when in when to September September to range hear not think weekday the of XX% you stretch, think like at we – around look sort much I occupancies we of would sort this be it have still in our from you June, travel we probably year, so the travel, September maybe our we’re of about near colleagues XX% like I be be in starting already September, and booked more mid-day well expecting in what are of XX%. – travel travel, anticipate XX% XXXX. seeing as our But midweek September. plus best hey, we of And think to usually that to

Bryan Maher

on a more the to go? being picky CFOs of and thoughts your little people travel where when then And Okay. corporate bit in with as kind come back general

Neil Shah

Yes.

I think that’s specific. very company

business up to with requirements. travelers. office, banking a to travel, significantly with really sales back they they businesses significant these But the kind class been these during through that a talking of of kind are those are folks groups. They sectors in they growth is of names – within that a it’s of pandemic I content like them those like for we example, markets board. what and from June, the hearing new the lot businesses country. the company seeing the kind are the they of is such approval leading is into have to of and across kind to were starting and industries go lessen under our firms. these and technology accounts. and traveler in consulting, companies hearing think morphed kind of of but many of to of Amazon that some lot still were do permitted teams had September, we like, are of like of emerge a travel have fly of at producers, what there media across big there not firms very like like our had have and And And only kind about and but Deloitte are the We from a different and lot they with as back driving really for most times, Accenture but consulting are office hoops get pre-pandemic Similar have groups, of In the down the solid that

that companies seeing and of picked are the we kind So, of the some businesses kind aviation related have of up. in industrial

capacity. airline growing and seeing you adding As the from industry, are they are

are so business And seeing there we already. from some

an it’s on too give indication really, hard that. you to So

to we have going will be heard months. say some back that travel are to We employers X within months XX% – XX to be at of

We have confidence. will that and it and teams heard finding more can’t mixed our are the than across and that are different say they confident sales that is hoops in frankly. we the more too to others I us companies a The fall, newspapers. geographies, about up, different But there, gives bag open give see require guidance going you but read much it’s when you

Bryan Maher

Thank that. for you Okay.

Operator

Ari BMO Please comes go question next Klein with ahead. from Capital The Markets.

Ari Klein

Thanks morning. and good

are Just are on like optimistic? New relatively Day, can you you any slower are bit of little to urban urban looking the the things markets, then is a of on us a York you where And sense RevPAR following maybe post-Labor but City give sounds where currently up other markets less relative XXXX? optimistic or it

Ashish Parikh

I start now, trend-wise, more Boston. seeing give and from third the post-Labor based are what of markets York we seeing Day that what will Yes. New City the Probably we standpoint into just a confidence of us quarter on are right

market know seeing that don’t market little now less a to have what right confidence be, D.C. that are as going certainly the because we government I in just protocols but well. the improvement we in think are

the leisure imagine, Coast, a we pickup markets Philadelphia, September, with urban a – those. uptick. seeing And our those really are you from Florida usually are perspective, with think post-Thanksgiving. being would months in then weak growth Florida, October, South that tailing as in confident good remain by we South the very I in off, seeing in feeling are kind West we – of

Ari Klein

got do those impact in that just Yes, they markets, business more are you of starts travel normalized of return. to will then below with has of open still think as on still And start obviously levels? hotels closed. kind I imagine rates kind some maybe What it. to

Neil Shah

last operating. noticeable York early closures. in closed during Currently, think, In at quarter, our as that markets, the it and most there as, I times was the amount the New was of of pandemic, was of terms really was that the not And it’s about about inventory certain XX% XX%.

that existing So, inventory. closed there there think do in permanent reopened. some those of has hotels We been of be reduction the will X% a

it’s Now going partially to the be offset new already ground in today. by development that’s

will it’s of were shock lot of but a profitable, led And the up potential the that more of York the But and were will clearly deliver. that use, and residential back that nearly alternative that are even a about it’s are in the hotels the in decade. it there And net, kind alternative we a to reopening, to hotels of I a not to starts open lower reopening and talked our uses. a And new pipeline some that pick use. in certain expect in have confidence government system will new seek kind of calls hotels prior some in reduction this fall the locations, reopen. kind has lead and capital lot total coming that will than and think that are been there there are City, business realizing pre-pandemic And and many use. amount to closed pre-pandemic. in believe for to for we hotels trend on kind – ground of office being We going into are XXXX of – – going start New buildings supply. overall, are uses some of is the And But in the some are

to at anything The environment this But headway. York the cycle. of we don’t about think early a are we we last there? will they there continue else half it’s it’s part leave fundamentals I it the a the So, recovery than – if it’s that. Ari, in just is And been. answer of were better make why can than better New for back

Ari Klein

No, Thank you. that’s perfect.

Operator

from And Please the next comes Asad of with question Bank go Dany ahead. America.

Dany Asad

remarks in good ability rate. compared to Hi, this around prior morning mentioned what’s hold this is guys. different your Neil, you time downturns that prepared to

out that starts corporate to like you demand accelerate going plays dynamic here, starts forward? do corporate So, think to – how as rate

Neil Shah

consumer, some mean seeing we this Dany, demand there I growth. in it’s – – leisure the great are was ways,

coming kind to client to support forces, relationship, leads training. similar. somewhat nodes business pent-up side, of as the that decentralized to well the there in pricing for out is because think these great for and more think setting as it. We the structure, two, markets mother up are And actually pretty was sheet travel. seeing consumer the leisure in order was was corporate demand We lot leisure good balance to ship. power sales a If organizational pent-up and more it they on sheet of income more of ancillary be corporate have coming more or pent-up travel demand, – there the the of back spending. we been and capital had to And been they savings, We going a demand with and the for are travel, investable have the they balance so had it’s moving

the in second, going came are years the crisis, been through and technology, travelers good forget period lot kind more and the So, years, are Federal the Unlike of that. a many can’t pent-up contracting, is largest to lot We we healthier and and infrastructure, financial and demand. that we they many of financial they in than financial have new we a media, a little very entering are big Federal employment be in travelers; of of Government. there companies shape. think services are those corporations very that of of America, institutions And

good most some and financial can story. companies are demand health in in it’s can story, business. very ways, the to significant so as new invest well developing we And pent-up leisure as think in similar some these consumer the of We see

Dany Asad

follow-up. then Got my it. And just

say, like So, just looking for right? QX, below were are levels but XX% at XX% let’s XX%, below – metrics, on RevPAR. are your We we we comparable margin, EBITDA XXXX on

the a So I it bottom how robust like mean dynamics the have lot more the these is profile of really with line, should feels out than obviously, on margin just that numbers. kind played like

or how we margin or do that your add as demand about we hotels think think profile corporate margin going starts start like urban So, do the your to flow-throughs forward? just profile to comes like the piece EBITDA that – more trend that right? equation, about incremental of and How from

Ashish Parikh

Yes.

an the urban So from we is what hotels, in about Dany, to think point it’s we it’s going urban of going story But to on, be markets. there. growth going see, and that these as occupancy we still are this think to be rate many

these similar doing type We XX% least XX% of the able already But at because it’s anticipate we you at properties. purely flow. where models So, we healthy anticipate at flow-throughs occupancies. to have have that can we different as of to wouldn’t these in staffing flows – type pretty drive really been resorts type rate of XX% range would

Dany Asad

Perfect. Thank you very much.

Operator

ahead. Tyler from comes question with Janney. next Please Batory go The

Jonathan Jenkins

markets taking like York This Thanks quick look the our morning. on or out good you New me, One dichotomy of Hi, is when for Miami Jonathan for Tyler. for the at one some between thinking City, of acquisitions what medium change and opportunities? or the at markets attractive how might are does in dispositions in those strategy long-term your that for about terms all balancing future and near, you be questions.

Neil Shah

but – influences I think want make us on would be hand. to one decisions on and absolutely It we long-term don’t I trends short-term based –

thoughtful about we So, very are just it.

do been a metro hotels. and years, years, X markets are manner on resort in of have reinvestment in able and for we create work value we have outside the We portfolio last with way and X done to we over that time major the our cost-effective so growing could those a

of those continue other future Florida. at lot will for State the a to parts of of markets opportunities, South look even Florida, We

the at Coast in look well. to – West continue coastal will as on We resorts

other markets good there metros that. big success will these think a on that these near cities with Annapolis, felt. are rebound drive-to of resorts had most the major is for there there there like kind have we And hand, also opportunities regional where as be we the other is and the But those was major pain well. think in We do

read gateway contribution of Right of of not resorts our pre-pandemic, because portfolio in if a mix? much it’s a are population contribution nearby. much are maybe a mind the the resort we It’s time, urban the nearby, a going regional bigger today Over were make kinds how it’s to we about that side. what resort so more XX%, on priced. we opportunities are and out Where as so XX% tend they XX% these better And resort to wholesale from shift or performing balanced markets. now, and we destinations then of is possible, there towards it function but are could

and we X We to Belt the Sun or moon, great think of can in them. kind have have are a we sure markets of years some I – that grow the don’t not the confidence had year

areas. opportunities it so just in those our And moderates on expectations

in also opportunistic, have strategy the we as you true very advantage invest. are and but and capability past, on where known very we in We are focused

And at to is deals opportunities. so our strategy look and important how cluster at look kind of we very existing

it’s composition. continue markets. other favor we be performance a to at our so make do and markets think look shift new quickly and said, act X too hasty months I based would portfolio last XX That but months opportunities, wholesale the existing of it to And on we – probably to in really

Jonathan Jenkins

you And detail. all you to need ample environment? meet amenities this the side, more current in feedback appreciate And you you I labor think I on to to if are labor great. Okay, will you guest still services wanted add think of lower-demand What needs could. providing do I or that are guest then do sort or hearing? follow-up

Neil Shah

add certain Over absolutely time, need will back we to services.

bring we we have higher also of – it push will our where hotels, it that’s restaurants be urban at that I bars as guest it’s there enough amenities going locations and well. guest departments, been those used far business our markets – that how to certain it. get In demanding room and have it’s that meet but of but in these not And reopened for resort do to and will are It’s where pay most justify there in approached room and everything think certain we to these offerings service profits food so of and back so travelers customers we kind we from it’s for from demand. markets, can adding and only and and just services. demand so not can be hasn’t things back demand lot rates a beverage those

consumer But from bit more. some change is say. and learned they the they be Consumers rates also to continue they as next quarters, the would are across line. that have back, I it willing been get is careful others, short-term to rentals think think – it where will we back like have in incrementally higher, demanding bring a are to services that dynamic, understanding – have expectations. but in we would bring very several – there there is pay the I The I our are are a what optionality. for, pretty we to-date, of cases seen it get are actually to But they going bottom beneficial to and

offer the will being are real an we are in it. do and that there – how we what we of something we incrementally using so in add behavior But a kind still we are opportunity but we we change for it’s think And them. that back, careful consumer is

Jonathan Jenkins

all That’s color. the all me. for Thanks great. Okay, for

Operator

Chris The Instructions] from go Please [Operator Woronka Bank. question Deutsche next ahead. is from

Chris Woronka

guys. morning good Hi,

question – deeper a guys Just that? a housekeeping? kind from mean you roundly huge, or the do another the there to number think saved item. track that quantify as not on huge stay-over it doing question much on that’s – way the any Is I quarter the we line possible put on perhaps kind a of to second saved is follow-up think you labor, or year-to-date of you how individual

Ashish Parikh

as tell that protocols I can hotels. Chris, opt And there, it’s a you that we we wish that can we labor you of request – I although at know, that have out people people have percentage quantifiable our saved do – it’s because in can it. we and

quantify. I that tough it’s likely to you So, the for same. has protocol tell come Marriott this to that said going can forward. Hilton out and will is a be do

XX% a will to that to protocols. I and And our peak is XX%, think margin these to to long it’s for a for be that FTE count XX% ability industry to it be our imagine time. for at a be benefit least – XX% XX% at housekeeping I at would of continue maybe our

Chris Woronka

these color Florida, more you that next it effect little wherever. you you Yes. of many any California. moderation a that this is to sharper so before year? them that year? in circling Caribbean of about first they get way back go cycle you this what kind on to, maybe be stayed that will also Any that terms get that how just cycle there next way get never folks with there South when year, demand to to And obviously, going of a then in or some the let’s many with idea think in and add of little of people Okay. sharper seen Southern helpful. you pent-up And that, That’s leisure or of Europe on we the were half were to How can to have when maybe kind say,

Neil Shah

Unfortunately, think we can. I don’t Chris,

look lot of in I had at really kind search search demand off. lot at that is least – drop have Google you least still we couple seeing, what may other of these great a showing in may that – the at markets and a of Search prior of the – next think can quarters, are for be kind Internet of years, seasonal we are – that a

resort lot us for there we and a But into at in the for in So, particularly and term, next shorter lot quarters, metric a of really at example. looking have confidence that couple yet. the year, in a of bit because in South don’t prior forward, gives more a looking – Florida, these search great performance year’s is markets least outperforming bookings little of of next still it some

Chris Woronka

details the Thanks. I enough. Fair appreciate Okay. all guys.

Operator

This over like remarks. closing concludes back turn I to management conference question-and-answer to for our would the any session.

Neil Shah

will we available if Thank that Ash can no are further you for time. follow-ups. all and be With to And questions, your thank it. you. I answer think would any we questions, Jay, more No, I day for like any

Operator

attending The you conference presentation. Thank is for today’s concluded. now

may disconnect. You now

Hersha Hospitality Trust (HT) 28 Jul 212021 Q2 Earnings call transcript