HT - Earnings call transcript Q4 2021 | Hersha Hospitality Trust

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

Operator

Good morning. My name is Alex and I will be your conference operator today. At this time, I would like to welcome everyone to the Hersha Hospitality Trust Fourth Quarter 2021 Earnings Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [ph] your for conference. Tomarchio you Hospitality Andrew begin may Instructions] Investor Hersha Relations Trust, [Operator

Unidentified Company Representative

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

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

Neil Shah

us thank with earnings. for being kick we morning and fourth Good off you as quarter

quarter. last our me Chief Executive Parikh, shaping for and rapidly Shah, as this bookings H. Officer. optimistic, demand forward Chief fourth leisure late in a our were Financial up travel morning When Ashish and Joining was accelerating October, Officer; are very we for spoke business Jay and we strong were

remains $XXX approximately of all our the across results demand as typical markets markets travel wave REIT of portfolio. fueled the one increased line resort in we're portfolio. the rise in the occupancy forecasts urban seasonal a metrics. period. Despite that November lifted. for estimates and in and from despite corresponding December XXXX, international quarter flow December, ended consolidated rate to profitability transient. the this in to business our activity footing, December. RevPAR, and saw headwinds a at an fourth growth, performance producing case sequentially time resort Today, well resulting strong strategically portfolio, XX% during the report in receded continued drop-off September, Momentum daily began November cash for than despite internal demand And located to $XXX, small carried this triggered likely we into drive restrictions as wave, generated pullback, We among robust demand pickup resurgence both quarter by the in on the another higher as for XX noticeable strong noticeable RevPAR at outperforming are travel cases, of results our our and are We experienced but In our highest portfolio variant Omicron our COVID average consensus our meaningfully continue XX% fall markets. urban excited top fourth urban and following encountered improved highest a $XXX, see our uptick of peers of to into leisure Omicron We October and pleased as the by we our portfolio of as on sequential fourth from achieved robust at translated Omicron the counts quarter, hotels quarter Delta

quarter in quarter across will lodging prove and the quarter, continued rates, fourth matching from ADR believe sustainable on this our fourth recovery. that their comparable the of strategy XXXX. driving the execute And our strong ADRs urban and resulting integrity During resorts Rate year-to-date our our of at resort-oriented revenue portfolio managers portfolio. key to urban high-quality clusters, remains we for performance based our

the comparable GOP higher points than basis margins. management also quarter aggressive strategies to XXXX GOP XXX drove asset margins Our for XX%,

anticipated a GOP transient recovery another Shifting travel profitability XXXX to in to on performance. activity and and encouraged both and gets our in market prospects the of are favorable. group the our horizon, gateway well outperformance group and leisure business With before ADR recovery record for year in continued markets. surpassed extremely business domestic to remain levels We have see our metrics underway XXXX portfolio's

Our resort again fourth to portfolio of occupancy of quarter strong growth ADR with weighted was XXXX. average growth weighted XX% of average compared XX% XX% driving this the and RevPAR quarter

benefited as the rate what Our a Florida, slower by is XX% quarter in quarter demand which strong this continued fourth South XX%. to Parrot despite $XXX resulted period was during a and for the our Key occupancy quarter RevPAR, from surpassed fourth typically daily average XXXX's RevPAR growth best-performing region. robust performance perspective a in The RevPAR from asset travel a $XXX

Miami executed quarter comprehensive that performance Key of in the The in ADR business-oriented quarter Beach fourth and a demand the continue again, Villas exceeded million XXXX. were Villas and to we You able Grove may Once RevPAR ahead the for the the garner expect levels. Hotel season continue great $XX.X Parrot turned well growth in into XXXX Even the unprecedented Beach we demonstrating keys of Haven Cadillac repositioning XXXX. ramp we market Winter to remember the Key Coconut peak to and RevPAR Parrot its in submarket XXXX. the XX% each South and promise as and fourth of on to fourth compared more quarter drive the

Miami a Chesapeake the transformative average hotel Back hotels rates the Formula some on and Hotel California $XXX Our summer which in of significant We is months. And one-of-a-kind fourth and Waterfront surpass occupancy XX% growth to that Bay. Basel that early easily led the of the typically strong into hosted winter underwent XX% the XX collegiate see by XX% million rate to major as XXXX. which Annapolis to XXXX-XXXX like to quarter, was expect XX% smaller rate a set perspective Demand in also occupancy the South larger performance sports show, ADR and XX% corporate resulted continues rival Super than in renovation has are during fourth coming very from XXXX return demand is the recorded Miami this in the Naval to Ground quarter to years traditionally a In robust alumni an over on East expect into occupancy lead the Sanctuary saw growth first completed the with growth $XXX quarter $XX.X with and Beach peak several hotel break a last our events we Cadillac versus Pri, October, continue the a and hotel we conferences prior in Academy. and of at daily groups, of the in We spring And basis XXXX. as Resort ahead. fueled the its and generate another in return autumn, resorts Bowl. the peak the citywide momentum XXXX. but major of the years. thrives from higher RevPAR points or continue travel Arc occupies boat position our Annapolis repositioning growth at should in the Annapolis also Florida horizon unions one significant travel quarter RevPAR

ADR. travel Barbara, quarter remains the high Both recording and coast, differentiated for power Santa in the California this even reported $XXX price occupancy growth the RevPAR a maintained quality levels at XX% travel Milo further ADR set demonstrating leisure XX% very season after pricing that record peak of elastic Hotel these well-located hotels to Our hotels.

likely our of the Our absolute made Santa new clearly have and to led Resort rapid and dividends to return destinations in group properties. to international entrants pandemic. in and Beach California performance multiple in at But quarters in record optimism the provide nearly team ahead the and during we at robust corporate our regional and of significant repositioning growth Sanctuary barriers our Barbara setting recovery EBITDA the upgrades the has the years ahead paid years resorts. the of sustaining Coastal resort The performances continued

domestic provided of business the X,XXX points York what a saw this urban industry for our believe leisure transient resort Weekday international had experienced rooms by into steady occupancies the weekend basis this and consisting quarter leg Manhattan clear our that Hersha's lens increases the XX% strong X,XXX will an aided visitation. unprecedented of year. portfolio, core others We of core return narrative respectively international us traveler in positioned with The our and echoes led to in growth points basis how capital and from urban into to in weekends of a uniquely Broadway, influx has September assets, it's the trajectory While the next and in City of of oriented travel recovery. Manhattan. out Marathon, manifest also grew close a and the of portfolio in fourth November this particularly New to markets reopening provides demand

remained Omicron September XX particularly headwinds and anticipate occurred October We XXX Now ADR rates peaked but the faced act help and continue York occur case for Omicron weekday XXXX points XXXX basis basis December an person in drive fall not by Although cases from was March levels in levels market resilient as to return the occupancy Manhattan last New in as and in at surge, Center, versus points. traveler in Madison Java weekend week compression fuel demand with city. and to February up surpassed to York NCAA XXXX also the for Winter and will for the to Events business back in the November. surpass quarter. as point quarter the a have Garden in second optimism Big continue Square results as the and New the saw which inflection we XXXX been events of January only the and New half will that counts in Tournament encouraging our City plummet. continue rapid such recovery York for this and

regional market City And Manhattan York And we'll over years. prior the we few far XX% quarter that New in highest revert next remain by been back of historically our locations. has gateway in levels resort this occupancy or confident to the achieved we occupancy. the leader

meaningful Our market recovery. that strategy early New market consistently again significant we an and and will knowledge in optimistic data and to leverage remain us in drive outperformance this York be once York cluster with leader operating New provides

cycle the year-over-year owners. very had environment record in operating demand During New for last York, growth a rooms hotel we challenging supply in resulted for a mid-single-digit

York obtain a City the supply, an hotel remain analysis as to permit on note hotels exorbitantly the seen And special closed. in mid-term next new although hotel with should this it environment improve the to the Hotel new pace City, two to or before the negative financing if few estimated alternate following Based our that single-digit to the enacted over or an resizing to New more aforementioned the not new hotels offsetting of passage these have use we is years term, the owners as requires approximately the conversions. this to supply maybe for developers close or studies, construction in foreseeable years longer structure to projections months, recently which well supply be have take open years past, in next top of regulations, actually at as removed factor important come of year, internal changes, current the XXXX, When City low high. touched permanently The supply over a XX,XXX keys demolition, encouraging. need permanently few permit which from have to new to On the operating the hotel for way especially looks constructing third have approval, have of take. should a XX% significantly the Manhattan of least and Commission to open existing X% severance this law picture party by range for limited future, the the X%, next Planning the we in permit a rules on converting Planning inventory net existing in special York will Commission with city, and now and extremely reopened be at cycle. is And by many will New hotel the cost fruition. that more. XX come we special Although, over supply expanding on

closely City December, clear travel the but conferences office return is showed going York traditional with New post-Omicron group and heading and weekday meetings. signs of employees to to back trends more to acceleration resuming stable into travel correlated business the

and to many Although, return banks the companies Bank their the to already and American indicate office who New in office to work-from-home have postponed in a Citi, have and Jefferies wane. case see a Other world's the travel in Mellon BNY including in their as December, our have return called America, notable plans, of have employees employees doors firms such all encouraging accounts should to capacity. York corporations communicated back in Sachs, March. resumption some largest into Facebook, of corporate Goldman counts office as with Express opening Microsoft, we continue Conversations instructed

that any with other years present a will office XX% segment in growth resumption offer situated gateway for catalyst the and the later in to not the is variant have major business more halt by next along in look the this runway of return delayed pandemic inflection room return markets to we part and the anticipate travel. but impacted view the for from been We Omicron our cities, segment. as several this travel, With of major the Our the the of the as quarter spring did longest cycle. the business urban growth next demand than Gateway of point us. forward

of generating of rebound of to strategy in Achieving pending from the urban last cluster year our long quicker significant than our also from which quality allowed the to because the industry with to peers. strong markets, cash in continues urban effectiveness We But business flow, clustered our remains property our free and as have our at growth us approach solid gateway of and cash testament level benefited our drove of recover profitability hotels, crisis hotels markets. mix runway most is the performance our the travel growth of and worst generate the resort resorts, and operating history, flow its of strategic demand.

With restrictions growth expenditures rapidly generate margins absolute to industry-leading receding, years. free RevPAR coming significant capital leverage flow on hotel and refreshed and cash our high cash a the to local an drive will and the diluting on with focus flexibility. expect few businesses years, flow financial growth, COVID the can our operations for seek positions margins recovery. we next the and ramping And significant leverage horizon the an that travel, market in shareholders industry-leading outsized portfolio. out values returning operating the portfolio-wide we and our up inherent highlight stabilizing international or strategic in the to our still generate From governments encumbrances a XXXX standpoint, operating to for beginning ability portfolio us growth Our to on on valuation be lift wave environment. public in inflection portfolio a lodging setting we over continue in EBITDA and and to This private close to for ways point expect office to taking market discount our and long-term without strategic limit assets will or Omicron few

detail and Hersha. from we in the outlook. and here of financial more brand We our the strongest the that, methodically and that prospects at discuss over manager the last to relationships With and growth team market Ash knowledge me and we the believe market highly our let turn portfolio it cycle-tested at have this to skilled as performance decade industry over have some look assembled in carefully affiliations, exposures,

Ashish Parikh

and Neil good morning, Thanks, Great. everyone.

continued gap month to As quarter RevPAR we the trailed results XX% progressed, respectively. XX% to results. XXXX XXXX and the October operating and fourth by narrow comparable November

That and our being December the results While key cases and said, robust third largely our the continued was the leisure our surge weekday despite notably urban performance by resort differentiator demand. of trailed and emergence the the of markets resurgence late most by XX%, portfolio between the driven results portfolios. in in in were Omicron core of the fourth month, quarters

of benefits hotel implemented focus margin. benefited level Fourth meaningful growth continued quarter fourth resorts The flow higher cash growth working drove were than line portfolio XX% management as have positive the cash in margin we ADR XXX as $XX.X prior our higher portfolio, leverage flow, strategies occupancy of hotel margin XXXX our have preferred This model our from we ongoing top the XX GOP to basis well margin, of and compared was almost our driven continuation resorts $X.X generation corporate from This XXX strong than the margin of ADR increase all quarter a period. of million margins XXX EBITDA fourth managers points with tranches fourth generate the at improvement quarter pre-pandemic EBITDA portfolio points lower once with resiliency the all than million improvement We the XX% results by XXXX. year. primarily sequential equity. margin of on factors franchise cash again registered just operations GOP with in quarter dividends debt of significantly XXX% than to after management asset close our and quarter sustained growth lower basis that than demonstrate the property operating quarter. fourth points continued expenses, These the fourth payment fourth corporate GOP flow across quarter our led to basis our conjunction represents our despite inherent our points last XXXX XX.X%, relationship third witnessed comparable Our the and GOP initiatives corporate during and the earnings and on in revenue XXXX. XXXX. XX% and service portfolio the posted quarter and quarter a of an of the which approximately allowed in higher growth basis

points, led weighted of highlighted than the meaningful Hotel basis quarter and our And XXXX. In terms EBITDA XXXX ended the Florida, for in Sanctuary South higher profitability, fourth November EBITDA XXX being greater with XXX in than EBITDA our and Florida resort gain seasonally XX% our and as comparable performance. to EBITDA aided basis Key South quarter achieved margin, points margin Boston point of the by margin XXXX. average Coast results Waterfront Beach portfolio, XX% Resort on quarter New by both EBITDA quarter fourth margin margin one and a a portfolio. urban despite quarter the margins par recorded basis XX%, portfolio fourth XX% fourth XXXX. highest of Hotel Milo, quarter with point margin from XX% quarter EBITDA basis and fourth with The margin. portfolio Manhattan the start XXXX by strong which the group months fourth fall West deliver and October a markets the last the Boston XXX increase finished a In a York posted to continued were Cadillac from their each Annapolis surpassed quarter the Parrot softer a In XXX way, least at the EBITDA of

and top Turning is us. to clearly wages for mind labor of costs, which

Over the absorbed XX% last markets. our two years, of XX% growth to we in each wage have

this While per rate wage expected future, out. level approximately trend pressure our to room expect continue below pre-pandemic XX% total absorption, is this do remains Despite the level. into we to cost occupied

the We for by market, remains are hiring encouraged recent tight. hourly trends, but especially employees

strategy company service top to management EBITDA. levels properties with capable a offering while continuing GOP cluster and us hotel the relationship run of close allow our third-party to our our staffing with drive expect, Fortunately, guests all

a into spring support our XX% many been stages and And to has total to the been of continued in We hotels. recovery. the staff fall, XX% reduction open in between our picked occupancy. our expand model pressure able the we our demand properties savings were and early again increasing across our hotels has lean rehire source wage began of to position in industry, the as up portfolio occupancies the Although, of the primary at with the run in staffing to in labor the prevalent significant across

unemployment corporate And have new for XX% our Over level of XXX% our very and following August with a hires on in up we've past June management focused months, XXXX, few team been efforts. from benefits. seen HR December recruiting and expiration the to total rise the on-property of posting, in additional December versus applicants

expenses in our insurance of well as amortize beyond, fixed levels much As as and property us operating expense. and will out-of-room GOP model higher revenue our allow increased XXXX dollars RevPAR and current our and taxes absolute yield operating to

years portfolio achieving which we pandemic operating a we sector from the margin maintain to Our factor high and model this us in in and of allow lodging in differentiating clear confidence growth as objective, following. a the our see level as emerge

$X.X all Our quarter, experienced quarter million arduous the rooftop food ability quarter the second Hotel, of of strong up F&B recognized approval our us higher revenues. million be from quarter. in maneuver portfolio continue Rittenhouse renovation strong despite time the XX% this to The This revenue, lookout F&B and as the expansion with the which in of is each revenue XX% rooftop at and in the has performance $XX.X quarter helping our enclosures XXXX. us across bar, Boston's fourth generated process seasons was by produce winter. in its the generated and XXXX. rooftop numerous along the a allowed growth the million F&B led revenue since kitchen, sequential proving In the results third we beverage can height four in pandemic third in Envoy to Boston than our Philadelphia, $X.X offerings, Meanwhile, driver harsh which

the in equivalents our a deposits. for closing cash $XX.X remarks quarter, the and and outlook few balance cash first with year So and ended million we sheet on

debt is a X.X average maturity our weighted interest years of with XX% our XX, total for December debt. life and fixed swapped, or of of As to X.XX% rate

and move of we the active flexibility are our syndicate forward, options a debt. bank duration are of As and extending refinancing we members providing dialogue of with our range in evaluating

to Hotel before simultaneously very the leisure resort Sanctuary portfolio. than villas Beach us drive flow portfolio and to investment performance helped our Hotel Beach Key, already on our ability most longevity Cadillac cash Parrot Resort. such as upcoming safety years of to the came pandemic, debt capital sacrificing to comfortable across the the cost Because significant as These approximately locations able prior the in are Cloud to capital we've our invested infusion, robust strictly Annapolis live faster We've to at this maintenance and and to and portfolio. without lower of have We and our financing. overall million cycle the peers. our expenditure of this Hersha been the see fuel with Waterfront capital ROI our our renovation, of a refinance close, and of returns In the $XXX begun proactive and enabled limit projects quality investments and or Hotel

During quarter, XX% spent total $X.X the projects spend. the fourth bringing XXXX to spend we million our than capital on $XX.X more below million XXXX

into that has will from project caused travel, As next as is emerge very disruption little corporate of It or from demand few in negative we enter disruption next the far the we cycle, the spend Omicron capital a cash we that, thus and the years, impending flow for materially no our across and on variant beneficial is portfolio view this is which Despite wave secret the recovery delay weekday it cases. our increased meaningful XXXX. impact this perspective. pent-up

as production and Delta, pace Omicron in resiliency set significantly ADR records while softest dropped some shoots quarter palatable cases, green that portfolio. which typically have we New the booking mid-January. into of among beating has loss And our maintain portfolio. quarters XXXX, expectations between Year's. our already portfolio. experienced markets, the our the cases, first surge in have week Despite our expected in stronger Parrot Cadillac more We spiking this impact major January. surge into Despite, are that than our continued in we the Key since great these in January, the momentum Christmas for and demand and locations of the already the of in strongest and top timing our typically and a of has the cut view in recovered February seeing The third are as every have second month COVID line

Our Health line Hospital Metro we York beat the were New secure first from responders also New able our room to and initial and blocks top outer boroughs. York City City to portfolio budget, as

continue our we hotel focus on Omicron. navigate as management to footprint efficiency post operations will revenue to and and sales drive We extensive leverage

in operations restrictions our for at to lifted and the fall we travel set look and allow are recovery demand years. balance portfolio As several through to across hotels, US inflection case at meaningful opportunities remain With our for continue continued of will in the our sustainable the XXXX our beyond. the confident counts to and abroad, in significant an capture rightsized our resort to growth and portfolio and we sheet drive business and in return on-property portfolio next of leisure demand the our robust forward that and continued point outperformance sustained accretive

this the call any my and may have. portion that concludes happy So to questions are address of Operator? you we

Operator

[Operator David from David, line you. now today comes Katz first Jefferies. for Our Instructions] your question Thank of is open.

David Katz

on Hi. everyone. on and Good about how be back debt balance about is pay some morning, to down that? one sheet. of think what my that going you opportunities circle you you might the to all talk wanted and coming Thanks just could sort that for have the to I either questions. of refinance, debt opportunities taking Could or element this are forth about there just

Ashish Parikh

Sure, David.

outlooks group the life environment pandemic. and market. that best we working the mean companies, look it's environment, our not Right beginning bank them And there's an with, the market, time to flexibility financing as financing since could forward financing that As not to the for the it's debt. also that the they're continue for improve us. wide time. we're now, we've would that it's lenders the look at all we remiss sources refinance think that improve markets to Omicron opportune and of lot feel at really it's of different exploring offer to we fading say a and is we be We to the open. seen the traditional high-yield the of this clearly CMBS And just all continue I market, the institutional this but term

we including we very debt in are took on in feel our to the year. active we our dialogue last refinance So unsecured all confident that of notes and ability

David Katz

offense? to And back And incremental assets we in prospects before another selling is is total. year I would just you around -- that go that need start some or thoughts or what away? can maybe to Understood. some to see and or if the play portfolio The likelihood

Neil Shah

the David, question. thanks for

as in of I sold as sale focus on at have our one market be to Seattle, upcoming the at sales. in portfolio about is year. would those terms to continue see mentioned that look significant -- this capital we existing our competitive to dispositions portfolio. we've we're believe in assets We York recovery sale Pacific And allow that had have the last -- provide good had candidates, asset In we Hotel. really us grow some hotels. marketplace as to would Today, some Pan allow and do right the opportunistic we goes opportunities as on. York we rate pressures rebound same assets We see the the the international, and some dispositions, that New execution in We that think think attractive very on six going the market we or now think not market going about our business or for year we that pretty New may in sales we midweek

focused those not And and exploring always think it's a marketplace are the in on. I very that So, we're right talking it. now but big we've the been areas focus, buyers to

resurgence of hotels. in -- has We been interest in lot in kind this there have urban interest this been resurgence with expected this pickup in travel a in of or seeing business select a also year,

it's claimed believe liquid to very lot a we've of market. that portfolio and the so and parts our there's very private And of attractive always

take time we'll when it the comes. of so advantage And

rate One acquisition cash true just this. opportunity a time the flow real it's two a and accretion to things. set like really matter side, that our finding On opportunities growth at the provide provide of

compelling this we acquisitions opportunities market a closed compelling that benefit hard think remain and for right with it Until a looking are open that we're of of into the now find opportunities. bit anything particularly not to buy little bit, to be selling from assets. in our the we cost we'll capital discount in so flexible going now. right it's few side. on think But able to be is seeing on a But I light us And at

David Katz

very you thank perfect. Okay, much.

Operator

Thank you.

Klein line BMO now of Aryeh, Capital Aryeh from Our next comes is Markets. open. question your

Aryeh Klein

on we Thank get then EBITDA demand your million. $XX XXXX renovation Key, to Parrot I talk comps stabilize pre-COVID Cadillac resorts and sustainability of is expected to and you. And think at Can rate -- and at the through views million, to you $XX the move tougher? puts as the

Sounds you you should think be of now. sense that higher in get like than a But it where can that and XXXX give what it us to? was can

Ashish Parikh

Yes.

combined So, about Aryeh in in two did XXXX, in million assets total $XX.X EBITDA. those

pretty of range stabilizing in And we're the these So, point. XX% we're far would middle from we of at say a to still and assets right XX% this that.

if So, I not $XX million seems realistic think lot a very conservative.

Neil Shah

pre-pandemic. Yes, When I meaningful our renovations through went think that's portfolio transformative portfolio, resort what's look you resort our important. at

have And from these resort didn't our hotel. X.X star weren't And and codes. lifestyle that We kind kind hotel of or went added a Cadillac landmark X.X to so conditioning these took star We a positioning of all major kind and event on amenities of prior expect air We of added something. up and added the a added perform and just above to to of do We of Key it a suites one spa like. peak. because Coast. refresh to full we to We hotels at segment. the XX well room space, Parrot West the rooms a

their we new a to we these of believe we So, growth stabilization to have very And kind based to their continue repositioning into XXXX just and continue our on strong market position. significant resort expect will were some XXXX. that have the in do assets of going portfolio

big California only of don't roof have we Miami, events any do If a think but we big -- of international kind portfolio it's you convention there's think you like no of have PCH, Coast, major market. international not destination, our today, resort

that have in we'll so years. And coming the several next

we so have And on have are think kind resorts to close the feel assets are what focus major and will you transformative that has broadly you you the overtime. renovations assets replace and at to the what when like, truly markets, significant & we executions differentiated on there inordinate have Sunbelt I been commodity and through expect But of Main to have assets major gone high-quality destinations Main run that a runway. own have an had

Aryeh Klein

people per on more are And headwinds get growth. mentioned and Does occupied the as rooms you back wage where then, And despite Thanks. stable to? you you service and at you -- hire to staffing Ashish, change versus all come ideally this then services back? cost where want and more

Ashish Parikh

Yeah.

housekeeping to around question, just full pre-COVID that We getting into to that On just probably the to XX% XXX%, or to don't of get due FTE foresee year our the as think number the at counts. get we garnered use XXXX, in occupancy FTE -- ways we count through still that we've different probably bodies we're that the second of pandemic, our XX% that protocol, part to of XX% to this to building. XX% ways we efficiencies to reduce of We found had really we later pre-COVID. technology

occupancies fixed we ways still stabilized per can still with gross our from we're So, are number that, as because more amortization the lower would with a occupancies think cost down grow. than Right bodies. lower -- room that lot consider On going long we still a are very the at look cost bring our even rooms the of we cost away to increase, you getting basis, absolute And what occupancy. significantly one just have to when now the wage fixed profit operating the high. costs our occupied per of you're occupied

lockstep some things the that need variable which As and to desk, -- front with we the really just doorman, housekeeping, we occupancies, GOP. increasing cost, which revenue add goes grow effect aren't to

Aryeh Klein

color. the for Thanks

Operator

Thank you, Aryeh.

Our now open. next Securities. from is your question Bryan comes B. Bryan, of Maher Riley line

Bryan Maher

Good morning.

years, you're your couple still of the most are that resort. weighing pressures ADRs leisure at and occupancy their costs are the How about, thinking to next How XXX% relative couple high-ADRs within especially inflationary of to over have impacting properties? to with, fact able curious how the two day-to-day the you quarters consumers of portfolio? at out the there not with the XX% XX% running been at you run Just

Neil Shah

question. actually kind got we're XX to the points like in you've so rules you we a pushing what have level Like well-beyond, ADR for these been a Clearly, in to we able seen thumb think Manhattan but to occupancy and couldn't used of down of ADR you been has rates used the push be. to Bryan erstwhile thanks bright spot of ADR this recovery as place higher. we're push of But occupancy certain markets. and in

consumer from healthy. I the stimulus payments stock lot markets like. the a created in a very of world. function lot and think it's There's the wealth is from wealth the of There a was of

hotels a we pricing I that checks. a unemployed of from don't -- just consumer. is kind and have strong that have Now most our think just of of function collecting the really it's much business we think I very folks But

how or that they you're seeing And Group of so travel before that bear? can it lodging parts even all more continue. in. consumer to to not just what but economy. that should are to I'm did people one for to How than in only ADR don't kicked the I Business pay in willing answer hasn't before. we in kicked There's more Bryan. had But lead the compression they are and expecting much not hasn't know -- sure. potential.

sheets coming the consumer. So position about balance young is to consumer is very also be and see the you be on similar I And think next to top to perk members. in very need travel continue it's the And this -- best year that for for continue see. hold a great big I less I people. The healthy going but will this business the least at are that think the will top story for team really think managers to to we're

I of portfolio ADR ahead a like growth And so ours. have we still lots think in

Bryan Maher

I of who halted some balance getting in of or back level management a took bit companies it's it years, sheet for And and yield. those other own to gearing and come on want half amount peers, of follow-up maybe when look them And to are early upcoming what would maturities that thought challenging these their question know to on Thanks. maybe a calls, entirely at And process their the And the a the is to investors calls on or at more little but my XXXX they are Board's we increasing upon? or grow be dividends thought we're things penny. lot going two a from of make dividend XXXX institutional than reinstating your going some least is back? that own

Ashish Parikh

with half. back debt, that that sure making But said in you that we on we operating and to flexibility. think doing time want potentially possible right them be we're enough where I we like have first now ensuring -- the our of Bryan, are balance for refinancing the results sheet early focused next half line just the coming are all

it a that the that think kind of special it's for in a to would starts of XXXX may But right of be inconceivable give the time set I something I dividend could think for think dividend. at of year. not for midway the think could any be And about dividend even be end dividend to something about now next we us line a through kind It premature. recurring year. as It little quarterly instead XXXX.

Bryan Maher

Thanks. Yeah.

Operator

Bryan. you, Thank

Our next Tyler, is line your now Tyler from comes open. Janney. question of Batory

Jonathan Jenkins

This morning. our taking Jonathan is question. good for Thanks Tyler. Hi, on for

the comments fourth what to if And into remarks. the in wanted one to curious strong trending additional quarter in and And provide from can details hearing prepared your the on the were accounts? general where any you perhaps First from any corporate there, dive relates bookings on me, as you're things I'm before? commentary it

Neil Shah

Yes.

activity, too fourth starting still kind seeing seeing start incremental to We're expecting are of ahead. our markets. It's a be share see weekend of we there We year? all but urban of presence very markets. in out in some It's to in real XX, the significant and week-over-week across but On our are don't -- able just January to we cancellation why velocity are had I start the since of Omicron data, day, a a quarter any reduction with early bookings we net little this pickup strong early January. kind

I more think much how month now progressing. we'll that's one on from insight have

lot group. highly As you a know is transient-oriented our not portfolio of

a the be remarks, kind clients just of of And the travel in that But right even December, similar kind October, prepared we was I prior summer. announced where February, building, building. lot the or November to have ways think starting the visibility. just for in And as It's some level major March, had again. visibility since the April that of vaccine foreseeable it we the like picked somewhat than cadence to have more since I mentioned saw to are we future to as up we much in what years. It compare so hasn't expect can but we've we corporate and a to don't in now,

there's a can so, think but And yet. good we're position, share data much not in we I

Jonathan Jenkins

detail. Okay, appreciate that all great. I

provide Neil of I somewhat on the it portfolio color wondering follow-up. that? on in a thoughts leisure heavily comparable travel, I'm a what your will if be some on you given to can And I your corporate know we mean transient but pent-up thoughts it's demand. just saw curious

Neil Shah

our and and investors travel, for They we to more We than just the at on do ones just some a very similar have demand they they were as again. out years pre-pandemic go they doing see allowed the and clients there think -- to speak travel, road is like. to to travel, pent-up started and like in as speak their higher try our the have bankers that we are to they what traveling they're are

do yet we but not building. point can just -- we it. on really a data But that it's see of to that's there's again, It's So that. lot something

Jonathan Jenkins

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

Operator

Thank you, Tyler.

question comes Michael, of Baird. from open. next Our is line Bellisario now Michael your

Michael Bellisario

morning, Good everyone. Thanks.

kind of one on question to little was allocation to out bit you. back asked maybe first go Just that a question want the though. for I capital zoom

to versus maybe what what valuation in and walk Can through from Seattle? And spread? gap. you're sale opportunistic done of narrow aside asset market thinking you the public closing an about kind about that talked us can then, be You private

Neil Shah

do there to and for allocation these just -- hotels high be to we're spread sell at market some very capital to some value there's think that of are at I things able narrow trade assets help see we Michael, able that the could to multiples. to

expect of down But, bit. and help. frankly, of think had all slowed that just I data building a a couple can Omicron Delta is -- the -- continued. I we it and We've that's that expect

we're So didn't be what hope I as we our see it's we're the expected have coming report itself to think starting to in that months, able last expect to will close as -- think, discount performance But might we early -- across with close gap. we and I year. what to the -- the the help

Michael Bellisario

view ago? updated just it. that days estimate Got share XX either any valuations transaction follow-up, XXX versus then the asset do as on a you And NAV helpful. That's your or way of NAV or think have you higher about comparable lower or

Neil Shah

don't we $XXX,XXX well portfolio But often. replacement market costs on And of Michael, that Yes, our the a is that cost are replacement private There's we -- performance it key. change expected all of of a triangulate performance no that those of value, our markets no over don't more with sense to question escalating. there's and think recent analysis We we transactions think of between in those pre-pandemic. NAV. markets. kind kind And in we come financial up of then, question

all think Some in market kind they're I the of the estimates kind analysts NAV values a range of between of $XXX,XXX private also and have other things. And where of published and key. are $XXX,XXX

transaction on those be performing are we'll select, almost assets be we Mike, of and and some looks doesn't select. goes the gap, XX-XX Again, -- is rebound is I able see able both year, course of Our the at portfolios this And significant our over Both year. and these urban the this of we'll hope we'll of growth the itself luxury have assets. -- expect market the trade portfolio, of you but as know, having portfolio multiples sets between if to performance like kind we attractive think from close of and urban will. year to we clearly, bigger as a where lifestyle those the some some moves

Michael Bellisario

Helpful. Thank you.

Operator

Michael. you, Thank

your is Chris open. from Bank. comes of line Deutsche now Chris, question next Our Woronka

Chris Woronka

years. think, company. fall? coming U.S. not this that's taking in guys How markets in with what in Good your later labor thoughts of to over union you Yes. question. another a Thanks. hire couple couple morning. to many XX% reset last I the And my up Like, union increase costs Hey, whether to of I ask, Thanks around you're for in going to costs Wanted the guys. mentioned are year? renegotiations the know cause potential XX%

Ashish Parikh

is of Hey, Chris .As you our mentioned, union. most not portfolio

in of stabilized. the minimum and of So these We've -- is years well. as believe that A just for that bound we improving has five jumps seeing availability think, most our availability we're now also huge lot seen of But it last markets by of over employees it's most I wage somewhat markets. we're us, and in really not the the contracts.

growth don't X% people -- counts year range. for not going of closer just And with forecasting stay more portfolio. same we to down case improving, in we or we our are in So on be type to should the to we this that benefits wage think joining the the able environment XX% that XX% workforce, overall expiring,

Chris Woronka

call the net Pan there then Okay. sale, talk the be win Pacific on sell? that's able price? with Fair do of brand on bit to out whether little And to expect the can you on or a your enough. to the get or you market And about

Neil Shah

phenomenal Chris, Pan the Seattle, for Hotel Pacific a in us, asset. it's

the rebranding, our we ago. than – of considered in a very bring the acquired really one or licensing is operating the life And and independent tech we better years putting for in, in is execution driving repositioning, as kind Union we three, four deal to nation asset. returns. very demand. tried three office about a kind special Pacific the we And we just hotel rather hottest pay-as-you-go South -- capital hotel had the and there. And hotel ago whole an first kind of focused value We've always focused Lake a years markets some of nearly Pan of really significant science

But capital grow can position meaningful form it and this and significant. our capital really level. the will business that be we forward, really and existing for level its same plan, disruptive look at portfolio As that hotel at achieve to different to ultimate a asset as does require to

last we're year, us assets for candidates that same grow assets require order in generally the at kind of that portfolio. all as rate So identifying are to like our as would capital some

that, So good that. that's hot a a to very is add example Seattle To market. of

can we multiple. that expect a we trade So very high at

is have it only that Second, there. we asset one

when remember and got to to we were just expecting You'll asset, there some grow marketplace. But convention center Seattle. to out we the where of disruptions that to in led cluster pricing continue a not market, related the in acquired in the build that us

it little the And Yes, price a really sell. Pan bit -- we sensitive. for very asset so single makes that's story. Pacific that's And a having so remain us to definitely easier

without see it's what So be feedback fair get the trade we'll March. time. we'll is basis marketplace. expect in -- the that We're would our this we something goes. We'll we we transaction price, how in But above think, start which not at would to will a reasonable get

Chris Woronka

guys. you Thank helpful. Very Okay.

Operator

comes Our Instructions] Raymond [Operator from of line is now open. Chris. question Crow next Bill James. you, your Thank Bill,

Bill Crow

When Good also morning. debt deleveraging the the at Very for are you refinancing Goldman talk you same about in about the quickly me. Sachs, time? talking

Neil Shah

the -- And this Not profile levels currently portfolio kind necessarily, in of in are flow of markets we range. of we The private debt is Bill. the the very cash have would significant. that that

pay CMBS off facility keep unsecured I think to a think I somewhat frankly, kind our of bank our all rates could and we notes of and similar. financing do

And a refinance... of going of we function be deleveraging is growth. to our EBITDA So think when

Bill Crow

disparity in as You've public future like you're that But private give the Is leverage valuations. I may if something between public complained for think you not even about? a the while strengthen. agree and market about you and running to credit the private continue fundamentals the market market

Neil Shah

open reminders think But get absolutely sell We lot from hotels on to a likely about that cover it. environment. clearly we will you the But Like it. just to become Yes. to flow a main of Bill we paydowns. friends don't focus we kind that that call. we're will think meaningful of a lead we're for We -- to is an It's grow would the inflationary your EBITDA We're today. sensitive it. in of more suspect focus will it. be leverage as And starts investors less meaningfully. Cash available. Financing should and

more do wrong bring for profile Now But performance about if like. and Bill to will growth can we down sell obviously leverage EBITDA our we're of we that hotels the that think a be and focus our investors.

Bill Crow

right. Okay. you. Thank All

Operator

Thank Bill. you,

for question of Our is your open. Powell now from Anthony final comes today Anthony, Barclays. line

Anthony Powell

I and I good guess morning. guess on Hi, York. question supply New a in Boston

into may of your guess be there's conversion going have think redevelopment uses. I lot tested large how about sold markets peers that think into to term? thought being medium hotels hotels I a and there growth converted uses have do in bit you stock know of some into process reversed I other the other now the for What the of the pandemic. that you over be I got impacts guess at appear supply and further hotel as was those a a the that to beginning of pandemic

Neil Shah

rated discussed permanent increasingly Pennsylvania. the Hotel box of thousands all a been kind like Those their out We and low of the getting of that there's have kind assets and going the big of rooms system. some be announced kind do has obsolete are supply think of and that's or Roosevelt of becoming of the taken there of kind number deletions. to significant really Like

to affordable for We're peers demand to of to on lot sold bunch That our a of likely housing of a housing is is hotel going in a even continue which of to going conversions. York use. lead Lexington seeing New a student One kind Avenue.

to XX% for the be hotel be will on of the be And supply be there Hyatt. -- we as do at part these midterm Grand It site. the deleted. of So some can of just mixed-use that projects think portion much may like shrink well development size as in as deleted the the permanently a that might least hotels

the the looks So coming years. for it couple supply I is really good think of Anthony picture

that opening a -- during right of We supply now, have delayed we that's have some was pandemic. lot the

of XX So this offset openings closed. months are next amount they new are hotels some think that see we'll I XX by but the

supply take that the for we than York next, view if supply-demand in So three- of kind less growth. picture to is we think a the New X% five-year

Anthony Powell

Got traveling a they're line seems the going same they like Silicon there years It's on it the maybe how is it. technology at those saying companies a business And two home. and Any back that get those Valley. for clients just be permanent to decline? work from context been level, your as Thanks. less back and or more And it clients. that that eager one segment with to impacts are Are what's of traveler? time bit the

Neil Shah

Microsoft -- early is placed we announcement line Seattle for time of Silicon made The March. Yes. some and Apple's some Like made announcements Valley in them. in

is March expectation for seeing that come to really the start April So back.

just Google employed have these throughout companies, basis volume by all back. communication significant constant and discussions in in in They coming of on from now. that the they are of training it's going pick up. and just right clients travel we hotel really Google, is and the just the who on Our a Facebook still all Facebook planners that have with come it's that's sales of going come what team out But in the don't We series with bit that the major business don't month, to that we with in to know the kind has little been tech kind of work and and producing tech year. all out are to it's all a used what

that March how will and Silicon expectation see Valley in and in we things our So pickup markets inventory real some midweek start to and like we're pricing Seattle. is,

very at what's you'll to around midweek but think throughout lowering are significant see are days the up rates. particular on move just then market because out people rates to out that's days, you rates book at quickly. And see the you'll actually. you'll going And if that industry days aren't checking you that the They in rates want across the look just for people XX So And board. -- Wednesday XX you see if XX even from hotels. helping and next might that now just in can I most a consumer expecting lower

Anthony Powell

call, the but just technology, or was I I the market part on earlier. that may Pan part of... of decision more this that about Seattle to purely first Pacific wasn't in an opportunistic due is of have the missed maybe uncertainty of market kind

Neil Shah

be it than price and Yes. down It's order business phenomenal bit. that trade they're leverage capital pay a And goals market. we're would that expect asset. we we since, require would phenomenal more of plan opportunistic. Opportunistic, to a achieve Anthony. in get a that It's can its a can asset, good out the we for thinking very But disruptive.

Anthony Powell

All right. Thank you.

Operator

Thank Neil back over further this you, the at no you. There I questions turn Mr. to call Shah, Anthony. time. are

Neil Shah

on for this you Well, day to us around thank of earnings. day. to going everyone, be most of Thank We're you. busy the joining

If further reach questions any any us. out you just your to of time. have for Thank you

Operator

today's you for joining conference Thank call.

disconnect. now may You

Hersha Hospitality Trust (HT) 17 Feb 222021 Q4 Earnings call transcript