Earnings call transcript Q2 2023

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

Operator

Hello, everyone, and welcome to the Hersha Hospitality Trust Second Quarter 2023 Earnings Conference Call and Webcast. My name is Emily, and I'll be coordinating your call today. [Operator Instructions].

I will now turn the call over to our host, Andrew Tamaccio with Hersha Hospitality Trust. Please go ahead, Andrew.

Andrew Tamaccio

good everyone and us Emily, you, morning joining to today. Thank Second the Conference Hersha to Quarter Hospitality Welcome Trust XXXX Call. yesterday Today's call earnings distributed XXXX second the afternoon. will be release, based which on quarter was

different forward-looking remind I proceeding, today's may results, statements and unknown would actual known to uncertainties detailed from factors positions. performance the statements. any results, Before or be financial cause everyone as and the forward-looking financial These are company's positions performance other the with like release These press conference considerably factors within company's that within call and to risks involve company's or as contain the future that well filings SEC. may

Trust's it's turn Officer. pleasure to Executive now to Neil, the you that, may Mr. my and Hersha President begin. Chief over With Hospitality call Neil Shah,

Neil Shah

and morning, Good us with you being call. thank on today's for

Ashish dive morning I'll in Chief Joining and deep a begin are New our strategic touching capital outlook. covering allocation on Officer; Shah. this this by me Parikh, portfolio's performance York portfolio on and including Jay before our this our quarter, Financial

in core last driven performance late by our accelerating despite in and general economic spoke market outlook volatility, the we When at especially hotels, was urban uncertainty markets. our our positive April,

and and for improve, the consumer we significantly uncertain than and are among previous of more While forecast the picture XX the to in the the seeing macroeconomic by very have at forecasts economists, half back year businesses both continued months. remains any overall time confidence GDP

years. inflation rose in slowest most adjusted inflation the U.S. January, June, more since while pace spending in annual its consumer for fact, than X In at increased

our in retracement is achieved a and level similar of portfolio the growth, domestic we in to experienced This urban the and performance quarter, the compared RevPAR markets has During lodging our XX.X% offset of at as XXXX. helped resorts. growth our some July markets strong growth second urban July recorded industry

compared as resorts, We segment to a view XXXX, outperformance moving the portfolio. urban still believe at the account the our the the back room at pre-COVID this through profitability as we these of to through resorts nearly new with have will XXXX to and flow move progress are recovery travel outperforming a coupled seen into properties significantly our XX% the year stabilizing continued our for of we for resort markets, XXXX. drive and of record-setting as base forward with for growth we Although pullback our the count which XXXX summer, year allow And continue us we stabilization ongoing cash of half in levels.

to With that, portfolio's in I will move the performance quarter. our on discuss

the RevPAR generated ADR the quarter $XXX portfolio occupancy of XXXX. XX% basis $XX.X XX% robust to EBITDA X% quarter over demand of of production, portfolio This for occupancy remained quarter of the resulting XX% second with from growing Urban expansion XXXX. of second XXX an points total equates million, in compared of growth XXXX. to hotel to represented approximately EBITDA comparable nearly the Urban $XXX, XXXX. RevPAR throughout at quarter second Our an

million largest highest strategy Our top in the us EBITDA results, of and $X.X ahead is market. in of high-quality in respectively. million our York East the Midtown producing we were assets second $X.X Manhattan to and located that Union million Inn X Garden Hilton The generating the York in And quarter, XX% XX and properties Overall, generating $X.X New assets Hyatt were in producing extremely or runway of of about a EBITDA, the Square EBITDA. Manhattan. portfolio portfolio was New retain the producer positive delivering remain our for quarter, outsized EBITDA total

York robust and XXXX. the is for our RevPAR recorded and growth second of York travel of the to driven return and search ranked destination in XXXX top to compared demand. a leisure was U.S. New XX.X% XX Strong group quarter boroughs, summer globally. including the Skift, long-term Manhattan to in According the midweek New the top by total York New Meanwhile, summer City portfolio, performance

On room first at of X the revenue to from York XXXX international XX.X% the the ground, quarter grew assets. New top second our

the growth, the despite room and suggesting this However, growth international York portfolio XX% opportunities years. levels, in more below revenue remains New pre-COVID quarters in coming

to when York attendance, line front, metros corporate national the highest only This behind is of with City, it in for it office for Dallas average previously experienced New now in solidly from the QX other the On to employment had United most the the is City the most where York rate third and major partnership comes growth XXXX pandemic. and New growth Tampa QX X% States for trailed XXXX.

demand approximately recorded of Manhattan quarter, greater since Manhattan portfolio topped XX% in occupancy points XXXX. the June, our hotels than more carried Our with July occupancy In into XX%. Strong basis of second occupancy than for the time X,XXX XXXX. first XX%

As we point supply in levels our But to for last we year-over-year in operating resulted growth record York a that the portfolio, had want for pre-COVID I hotel begin reach New cycle, demand in rooms mid-single-digit to owners. very during city. occupancy challenging environment out the

supply with These supply inventory cycle use favorable in operating many much new supply that zoning strict factors result As of the to after short coupled period. time look forward, key term more a alternate very medium from we environment X% a today's forecasted differentiator the dynamics, net for with and prior conversions. regulations the reduction X% to very forecasted to little to of are are

as market's encouraged optimistic the growth in and for remain our the outlook exposure, our positive long-term New on country. the in we York which, city, any is view, and as extremely is the largest date are in the recovery to with market overall

by top Boston strong in RevPAR compared the growth. nearly another was yet had consolidated driven $X.X Boston producer X% quarter generating XX.X% of ADR million EBITDA. growth The portfolio, to Envoy EBITDA XXXX, our with

second XX% XXXX. $XXX of a XX% $XXX, at recorded ADR, quarter resulting occupancy from of of RevPAR the Envoy For the in quarter, the up

nearly the generated the of in rooms EBITDA in disruption from Westin total Philadelphia April. $X.X revenue, despite million completed which quarter The

been which of requiring corporate recovering Labor week related employers Comcast, city's of has occupancy, the in and activity Looking is largest has meaningfully. Day. I've year, days ahead back travel. a and X retail and slower for of Office in tailwinds one the group NBCUniversal, post life all been several to one improved momentum balance has Philadelphia, employees palpable. our the markets, the summer Philadelphia office the is street

the like. business of Westin For is has pace for stronger quarter, The XX% of convention demand. group room for quarter are market. to room fourth a with board entire revenues group demand blocks corporate and including the Philadelphia the XXXX and third ahead the And Philadelphia, looking transient meeting the base, ahead social reemergence impressive wedding

group X-star beneficiaries only continues the increased remain in hotel Philadelphia, As newly be independent demand we corporate demand and that to in market. will our city's confident renovated Forbes Philadelphia return of and Rittenhouse Hotel, the the Westin the

$XXX XX% In over The of the in $X.X from Washington, of generated D.C., Hotel the prior EBITDA Ritz's million in Ritz-Carlton up Meanwhile, $XXX. a Georgetown is nearly in recorded ADR, Gregory St. occupancy EBITDA, $X.X up quarter second million resulting the at year. from of XXXX. RevPAR nearly XX% XX%

August. the with of House the congressional entirety at for calendar and on Looking the vacation Senate

overall first also largest session nights are city. forecast which quarter, to of is and X the in will However, market. of boost in citywides to generate majority host both Washington, the for demand December, in with to and House nearly weeks October, D.C. X the be room the the the Senate the fourth expected for expected November XX,XXX

our $XX continued a travel in have results Despite EBITDA, options pullback approximately in resorts available. markets service XX% difficult experienced a as a that XXXX resort versus stabilization record-setting moving to these into above to up we has July. year, has year Broader that are destinations strong growth for very lodging we and generated performing just under prior well down of but industry a became base to as XXXX to and XXXX. the view million and the seen normalized XX% Despite levels, alternative comparisons We softness forward. compared pre-COVID XXXX, levels XXXX,

million the Hotel, July, strong Marriott with continued has our to to for portfolio X% the compared and Santa stabilize Mystic turned Hotel, $X.X In XX%, X% Waterfront Monica, million, RevPAR XXXX, EBITDA, of XXXX. Annapolis $X.X and and resort in to The quarters $X.X respectively. million Ambrose in increases

handing it to Prior briefly outlook. cover to off strategic our Ashish, I will

resilience our and the of in markets. the portfolio by encouraged urban are strength our We

and outlook positive. business long Our travel on environment recovery international very fundamentals, the the sector's long-term the in current supply including remains lodging of runways recovery in low a and

The debt environment transaction as a somewhat we year remained anticipate and transaction more muted, the active progresses. while markets

As quarter, near the be to last we in are term. unlikely acquisitive noted

corporate our reduce to cash similar We down hand debt, which are of our pay Gregory continue immediately and to more were on mortgage, to likely use rate the St. the floating to facility accretive.

and XX noncore million. of leverage. Since we Last sales currently our or valuation. capital assets public will $XXX for we and has the the continue handful asset of NAV pandemic, market hotels on well to at portfolio via market, reduce a cost our efficient realized above With averaging near most been the refine over year, sold

per of lifestyle Our sales luxury achieved has per with older capital noncore financial we of and key properties $XXX,XXX values Ashish to And needs the into improve detail, urban select allowed the in sheet our our second very a half in us heading assets leverage. the service portfolio Creating year. and position upcoming mid-XXXs. strong as key, the at significantly cover balance rightsize will while in traded are

hard our with portfolio, to efficient gap are we've These on diluting a value, outsized from firm are we assembly or discount that which the importantly, both have has industry-leading manage our and private market our has without sustainability work property our asset focus strategy. to valuations asset shareholders. renovations focused affirm active in we our our that achieved on property done very And our team closing to values operating operation portfolio a sales resulted to The margins. repositioning management, and testament ranges an belief that traded and

flexibility quarter. margin guidance given performance financial open-minded We nimble in in outlook, the updated remain financial and our approach our our will and and our for

Ashish Parikh

call. morning us today's on to Neil, Thanks, and good joining everyone

operating the unique Our forward. to view margins on view growth for experience focused portfolio flexible affords maintaining us a our of to across stabilize year best-in-class industry. pandemic our and our our the margin model the recovers Similar after of changing for base is moving advantage as adapting a as level after multiyear performance, staffing conditions performance guests. Through operating starting pandemic, costs our resort property now market on we controlling our for to we and while overall a XXXX and

result option a hard durable work that, teams, of of we've achieved numerous our guests. by As our

second from recorded and were XX than quarter, of points which margins XX.X%, of comparable second the portfolio margins, points margins our respectively, GOP higher portfolio basis of basis In quarter comparable EBITDA and XX% XX XXXX. our

last quarter, noted restaurant Hilton into As new Hyatt to Inn at Union improved profitability the and and drive Square Garden leases we've entered TriBeCa margins.

of excited up we restaurant impact once are running. will both line product they with We and hotels upgraded growth immediate are an in flow bottom both performance these the along have cash hotels, in as at these for margin leases anticipate and

As and through the both it to stands, progressing in stages final fourth quarter. of operational anticipate permitting the become we're leases

at generating our As quarter, points resort and margins that second XXX XX.X%, EBITDA protocols, were operational were quarter, the comparables, at allowed retrenchment urban second GOP Neil XXXX, XX.X% points, margin was line of with second our difficult from of noted, very margins quarter which drive of a EBITDA of XX% the of limitations the XXXX. year-over-year which significant when strong and last urban margins in XX.X% in portfolio basis in it strong basis our reflected portfolio performance with combination quarter, year's and the along second of from and the and quarter generated XXX but respectively, pricing results our resorts in our up drove resort Despite to GOP us record properties. margins margins

model, robust generate As we of property management to franchise margin. that alignment these we will close confident level are move with our company continue forward, type affiliated operating our

balance our I touch for CapEx want to multiple consisting our property outlook. insurance to and via briefly quarter property insurance hotels and our policy prior We third layered of sheet insurance renewed recently a to on transitioning carriers. wholly-owned

values one and portfolio's basis, from the by insurance as Our for current layered an increase buying pricing more a annual property in year, rate. X% for buyer. and and On in power approach reduces with same-store allows increase insured our price risk increased casualty of of our an associated XX% driven a XX% total insurer

we market, million, had the is internally below overall increase approximately year. compared this significant and While with a in increases this our pleased year-over-year of to portfolio price we is $X forecasted this levels this outcome are for

estimate fourth we quarter $XX to commence the of CapEx. related spend a second roughly Regarding ROI We environment, approximately on and CapEx, million $X in the to monies that dispersed $XX that as we for XXXX. purchases PIP million that million XXXX. remaining in to and spend return in FF&E projects million $XX related quarter, $X deployed Through to in other operating forecasted are CapEx projects the million relates to anticipate we've to of normalized approximately to will be XXXX project-related

noted in As we disruption quarter, Miami Due winter for complete from of will the Haven our project the the project. Winter press to renovation will season, Beach during the Resort. renovation months do release, slower the Hotel major fourth the not for of we in resume anticipate In the be closed during hotel in size currently season. and the fourth our anticipate Sanctuary this We shoulder the is time renovation busier of the quarter. timing

renovations of summer the in a elevate level, time XXXX. the spring resort of product the rooms phase season higher will to and in the Next high repositioning for

renovated. asset on investment positive are generate previously returns similar at each the properties the the return growth confident We fashion in from improvements to we that significant a will and have

Gregory X.X%. Turning to accruing off our floating the million rate We on balance the sheet Hotel. $XX interest during St. quarter. the approximately mortgage of was note The paid outstanding

company paydowns approximately million an $X paid save our these million the principal which On also expense. of interest accruing is term in balance We loan, approximately interest $XX will basis, down the of annualized at X.X%.

to debt the on the strategic a Utilizing on X.Xx of Xx at hand sales debt our operations of basis, aligns leverage. reduce lower with to onset from reducing TTM and continue cash We ended to of one than quarter property nearly pandemic. goals EBITDA at the

interest interest reduced in over have environment witnessed XX debt save second of months. we the past the As expense compared despite rising a rate able our of to that were XXXX, we $X.X quarter to result profile, million the all

of As credit of million an of term an at SOFR. maturity undrawn bears facility option, $XXX of and $XXX loan to which a facility The applicable X.X% over would 'XX. revolving August result extended quarter The the consists nearly and XX-month August end, matures our XXXX credit. facility extension credit million term million line of has interest one adjusted $XXX in in

fixed term hedge an rate the swap X.XX%. $XXX existing of have We to million of approximately loan at a

our our recent debt outstanding through of Following paydown, instruments. or either debt hedged is derivative fixed XX% various

in X.XX% quarter quarter. able capacity. We of borrowings Our weighted life-to-maturity second to $X.X reserves weighted average interest million rate in all a approximately with across we million X years. on $XXX hand were undrawn cash on In to ended quarter addition was with during $XXX million income revolver generate in approximately average the approximately cash interest the our a approximately total,

quarter. So we are for financial the once guidance current again providing

continued through third quarter has in of experienced to second ahead July. urban Looking into in robust the our markets quarter the 'XX, performance

South to are earnings While to the and third quarters. our starting impactful stabilize seasonality, our and less are resort Florida due markets fourth to during in

portfolio month XX.X% XXXX. of X.X%, For of comparable properties RevPAR realized driven urban that the July, by from RevPAR of our July our recorded growth growth

on strong. reduced Neil to return view for in in amplify individual our impacts and the the for how economy remained supply forecasts remaining well short business operating markets, our markets an including the the prospects runway unfold and the footprint of We travel. year, noted, our sector as as trends maintain while or environment ground second optimistic of As term. long-term international but low the as growth half on will in may vary And the this the assets

to cash costs while profile rate leverage floating well minimizing allow flows us where Our managing our substantial further liquidity lower debt on exposure. operational driving within possible focus as portfolio and as our

a We maximizing continue of will liquidity. flexibility profile maintaining to be and leverage mindful low via

will entrepreneurial As our and approach. open-minded always, we remain in

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

Operator

Instructions]. [Operator

question BMO. Klein today Aryeh with first of the from line Our comes

Aryeh Klein

a you're seeing you on of were bit Or You seeing past have noted little you and Are and -- market. trough? you of you seeing there? exactly -- other you noticed the anything color standpoint? booking from might a maybe what that you some kind Can stabilization elaborate mentioned confidence any forward resort have some there seeing in signs the

Neil Shah

of Chesapeake our Resort, Beach Northern on the resorts we're perspective confidence California the portfolio, as and to the the in the to Sure. double based was has that to much in are have by that month is as forward, see California. really Northern California business at year positive And in we into in a close that end now start region. And, getting Aryeh, as already then -- and come trajectory our And there. and single-digit very look portfolio started that our on digits we year gives Florida, pace resort was and is the Northeastern those XX% South seeing to Connecticut which And down declines. Sanctuary markets, we've last California XX% we which year-over-year. books or us Coastal And

continued Florida retracement. but market, reduced as still side South its has that to decline. to we this be It see high-single very continues has on has leisure digits, We a look significantly again, be challenging the quarter, starting been we're it forward, -- were down again, but to demand sticky.

overearning declines is ADR-driven was the it year. prior So ADR-driven and this

drives And our a so great portfolio. it that to extent for

year, our in represents been EBITDA. in our of of than represents it half portfolio which the second the while most EBITDA Florida, half it setup, XX% this the for year, our in has challenging first South then half market the nearly of example, And for of retracement, less the

which your is to But the that results portfolio, it's declines confidence. give us our increased markets in -- and fourth is Aryeh. urban question really drive declining third for the decline our of quarter, point, so just the on resorts, it's also And rate the

Aryeh Klein

looking there those in more the little you RevPAR actually a declined view Manhattan, X very performance as has strong then provide forward? And it. year-over-year color meaningfully. room just Got forward, but Can moving occupancy moving ADR you at how with occupancy on overall, less components up maybe

Ashish Parikh

When Yes, from you I'll in [indiscernible] our about that about RevPAR some July, we up year. they of RevPAR. look up Manhattan, the XXXX, And so were month portfolio, context. X were markets in have the at X% give Manhattan absolutely, we last In Aryeh. XX% just from

rates We XX% higher that even currently at are XX% points are but are July Manhattan about in XXX XXXX, July, than occupancies running basis less than still about XXXX. of for

occupancy So in XX% of March. that to occupancies past really market now in XXs traditionally for run get the for us We're the year. remainder the XX% rate to once just looking low has you at the trying drive

So of the still as flowthroughs occupancy remain room you XX% there's start occupancy growth getting XX%, on very and months. very, plus rate good the in strong

Aryeh Klein

hasn't of that little flowthrough? pushed quite surprised you ADR Are a the been much you same so occupancy bit necessarily level and there

Ashish Parikh

running surprise the did we've percent of think to us quarter. June, been July that occupancy in for I amount last mid-XXs The occupancy the upside.

August. I business that months They're But we as that months. are into think and not properly. get travel strong mindful heavy, also heavy adjusted these our rates we July we're leisure

things and rate a once to December get think then I grow travel when all rate get you the our you of into months, gives group ADR ability us months strong shoppers November, in past lot on like Christmas business and October, September, that August. confidence the -- driving

Operator

Oppenheimer. question comes Batory next Tyler with The from

Tyler Batory

sense this year-over-year could just Can the Obviously, margin in think to the year. sense. of makes expectations which out rest shake But hotel you a rest this half, the where of margin talk get year? first of you down trying about EBITDA for your

Ashish Parikh

down last the Sure. were our basis were we year when you second compared from to Tyler, second at I as quarter, up look EBITDA if about XXX it look XX as 'XX, mentioned, points. quarter basis But at points. margins you

urban year last so compared even in portfolio, margin, quarter to EBITDA portfolio this was nonresort flat. Our

give that properties, our year, back XXX reliance we to resort Florida we remainder points As of full very EBITDA South XX% can on Neil XX%, or half of imply for QX, for take, whole think we roughly for of compared of to X% XXXX get less have which the would upon XXXX. roughly the margin and basis close the in of the is year less growth as our half the the margins the back portfolio year, mentioned,

Tyler Batory

Neil, noncore as it how the Why then, you on have some for assets little sense proceeds And you assets Great. have? Maybe give and well? to you market. of use a Okay details now more selling sale Can be bit that? makes mentioned you potentially on many

Neil Shah

that our as our sales, we've asset of the since capital in have seen hotels, EBITDA significant we particularly upcoming that generate has Tyler, the asset rest unclear been the some return are growth last what markets that and earn looking really to Yes, sell have of noncore generally, might. consider we'll been some XXXX kind recovery whether from requirements we that across of hotels the of at portfolio the we playbook the our

hotel owners student are older we're doing affordable something so And they're or range alternate-use either increasingly, products for other housing, that other create that of or assets differently, a value buyers, by hotels. from housing, conducive repositioning can and finding generally

York we a be with. been hasn't our in City So that been to capital, good some Right and been at could like in that so have a the on New looking sales, Miami smaller hotels time we asset product opportunities actually a have the in some of we there of small felt of transact. where asset upcoming there have couple we've lot market, market high-quality was now, this X

across X spring. seen markets X, the meaningfully improve have We months, last since X, least the or at last debt

by early back of to transactions. couple of fall, hopefully, be early a processes ongoing, And so part on we're report encouraged we'll are These able on. the but

time accretive, you our can view expense. -- expense remarks, reduce where of think mentioned right good where makes have interest use transactions to now debt reduce we and the generally point of load is prepared and we is capital and our significant as immediately your good financial reduces which best certainty a that To done proceeds, that floating and In manage rate our of use in interest of get we we our flexibility, increase still we think uncertainty, you sense. debt,

Operator

question from Jefferies. David comes next Katz The with

David Katz

versus couple the come just on get of really missed But did in York, the to would I'm that's X commentary inbound international and that minutes XX I the minutes. you themes outbound its be late, domestic travel markets hours I a that travel certain that's of you is in of a areas. urban something international up the first on just really whether in differential barometer And curious impact the any so past that demand the New of is evident where between few other or have. in some expect

Neil Shah

expecting travel there's slower because there's which international David, is, people lot improvements, other all line we a around little demand areas been think heart a and in recovery, have even our of visa dollar, guess clearly slow on been strong of pandemic case a to lot There's of to policy the international are inbound clearly are around how has just having of be pushing The concerns international on. the and concerns a restrictive making also that's a people travel that going. I cruise a of place outbound lot were I the travel, pent-up that people Well, but of of recover. are a for that bit

were we quarter-over-quarter York. We David, growth to City in New significant least. the able New quarter that contribution international see can York in nearly first side the at really But XX% international report, sequential this was on

we as to a anecdotally, European right is contributing Britain, of at travelers Italy I have very Asia, walk a European lots streets is up, you now, low as which of Manhattan levels. been countries, countries. lot dig more there. Great still the Just is for and of go France you We've still but you know to all see obviously, the able ways for around up, do, into other

this Ashish, because tailwind, this want of this for to only a lot international? you for We've think at year, been on else add significant looking as XXXX. a really but we do not anything

Ashish Parikh

Yes.

the York, We quarter did uptick see and which definitely New into in is couple leading helping big in a second the our occupancies David. Just performance. travel our in international of quarter things, a third helping

about now, about are XX quarter, -- for second We I think off the right XX% from still XXXX.

is So markets. you Those are particular. ways I'm had go But I travel giving that stats you the travel few impact a long still it's in for resorts, whether just been international on Cape even and markets the to a as because there New there an people that and these urban tailwind the international where in outsized York, about think when has think coastal Hamptons, have haven't able now international the been Cod Northeast, or to Florida international. like or California over they last years are go outbound going

market. So amplified I think resort the in that has some of the retrenchment

start start international, will Asian things domestic think from to we'll doing from and markets getting more more over normalize inbound people leisure, all especially I tend these time, the of Europe.

into tailwinds So international that seeing volatile the some urban such markets. it's back traveler we think time a of are that real just you these of coming

David Katz

second Understood. as And a just question.

I'm for on divestiture market's the just color curious You there. And out movement. more a bit talked potential about processes

been say, -- at that? this I days' about something you was you just landing? months deals have let's a perspectives seeing? guess, As it's by soft Do shift cost of NAREIT alleviated ago, XX Is What a think of, of there discussions underwriting past that bit were that you debt. a couple might toward higher are conviction challenged and with

Neil Shah

days, last that the take to NAREIT, debt I since markets I transactions improve CMBS the seen have think point. take we think since more XX place. We've seen

go consistent. rates pretty base but up, outlook the the hand, other the for has did On remained them

have York, is markets think conviction underwriting, has then And because that around or gotten I been performance pretty property New so strong. so significantly better. at think I debt cities like least performance in little And a bit building just conviction

easier think these was I is see environment better at properties transactions even on smaller quantum of we'll because X the today, lack processes of how it like. or capital it there they first marginally so and assets, market debt equity, which are go. ones require than So And a they the expenditures NAREIT. do feel The a high-quality require less are real but is we

is in As our of in and remarks York. I there's major bid some New increasingly, a cities there very in -- active particularly before, mentioned alternate a use

so that the is something but also hotel the alternate opportunity, believe of available. that's is only And underwrite, use getting and kind to we easier growing bid not

David Katz

Got it.

most with Appreciate it it. questions, As depends.

Operator

question next Chris Bank. Deutsche The with from comes Woronka

Chris Woronka

great, for some X pricing of circle of was I gave was of So a year occ. then is quarter, Everybody May points the maybe potential July, QX and both I But guess year, and want think, not terms and know to pretty disappointed, June back, And as the was area to look year-over-year month last both decent data we relative strongest back. you knew unfolded. lot. pushback I of better, a 'XX. I the July how in April little the promptly

So the where quarter visibility you weakens think that and question just on the a situation have enough you August have is, throughout? do so September don't we

Neil Shah

is is gives I think what more us Yes, a highly -- August month. September confidence Chris, leisure-oriented

for our little some expect the and of in softness. bit through mentioned year. outlook softer. do our the September, and will strong But we Washington We is very so right perspective now And end be September, October, a

And what's confidence. so giving that's us

look of is September like at the remarks, day competing but funeral the you there week any markets, Washington holidays, I at UNGA, October, this than of if setup we New as prepared Last they Jewish issues. queen's better of some think in our we about at and The isn't now, had the the time. of year the of think same year. York, fall, each mentioned the that least last

Fashion around excitement have We Week.

for setup New strength as there's is York. the for And September, think good are well. And I seeing -- some in we Philadelphia so

urban the in we now. environment. feel uncertainty is But pretty put that point, your right the seeing what confident a on there we've out So lot is at feel guidance appropriate moment. we're like market this side, to of for and We the

Ashish Parikh

to I'll that. just Chris, Yes, add

most our of in when urban the past the is comfort performing best upon markets reliance especially us half the and markets, our Just which year, the been probably what August, get you have outlook. gives back

Chris Woronka

really as higher particular guys of positive on follow-up, flipside, means construction. on your and curious the several think rates. notion about, also is just industry is terms potential next just in then longer for interest the do in how for for ask X, What want you years. you a the side And the enough. buyers, Okay. but how more that what this new to perspective Fair and talking is play to you out environment, in impacts of And the guys the going think that you transactional guys

Neil Shah

forward setup, level urban a us, for the this at but whole, moving of decades in supply I have on see the next have back a particularly sector what's start major markets. supply relatively for go fundamental compelling for several a of To see New very really And to attractive City negative or think. to that years, as great side, supply the Yes. anyone is is levels for seen careers. for supply nation is the environment you supply probably flat our most York their the times Really lowest to environment in will

takes to higher adjust. for the the longer, On time market

if through year, stock like to the hardest it. just the year, had market, the last that the probably across in on we've in XXXX, most strong. the is adjust to the gone having to very the interest and And hikes performance starting XXXX is of years markets capital think world impact months, in X continues I of rate you history think a it and be the XX the market, seems

around bit come consensus sectors put spreads more financing. seeing out on the Lodging to a we real of there's in starting attractive soft X and more financing. think a to within commercial all is I little estate are landing,

base see think come in. world to the I We'll continue think spreads high-quality go. But we adjusts rates see X.X% where so at for and we'll borrowing hotels. X% And to between

financing transactions, the now It we conversations up that least very XX% XX seen this been And the to rather we've but when world come the volume than at down from an nearly over is drumbeat. a think to at and drumbeat adjusts further. cost least, has months stabilizing likely I XX% LTV the of on And do is things at XX% think and about higher time. on it's that valuations of maybe go more LTV and go already. the markets impact

Operator

with Hogan from comes Daniel Our next Baird. question

Daniel Hogan

extent of XXXX. disruption those one mentioned into Just question you CapEx the upcoming expectations your XXXX, mentioned You the renovations? projects those on side mitigating things. on of are heading but in What also

Ashish Parikh

That XXXX, a mentioned, in in to Hotel, Daniel, it's the impact that QX, Haven for is closed year significant. back very fairly this is as I small that season projects are it's -- not major which asset. EBITDA little the projects It's asset right X soft there's but up only generates We see third in do Miami. that X be of now. that undertaking: as quarter, Winter a ramping the we going

guidance occupancy don't renovating built QX in November, be in start think QX. falling for really as Resort, that's off The November, for built that we that well Sanctuary and our in and start Beach will will and into So -- again December. the we

that So that doing start out, you impactful. don't asset style, is rest the bungalow the you renovating. once again, you disrupt of that individual all can think rooms, be rooms way it we will don't Because so that start the and of when laid they're

York York don't it. will first quarter QX, in of impact New to next we going do believe larger that the We time X renovated. year, the softest for disruptive we in renovations. far the do will to best these Those be it's that the have either think quarter, New but for be assets are significant and So by be

Daniel Hogan

driving the top know expectations any operators how it. embedded you on give you from side that's their can confidence versus the then are second you much outlook? mentioned what details half Got margin expectations, the but growth? And line hearing is in on I just cost you giving

Ashish Parikh

normalized. of of a X% our fall. say, We're years. I I has in expensive, labor the the few X% range to the, can think rate going we're say, more they hearing the confidence but into I'd of at of instead operators we also about like were more feel get wages We're is extent more from better, It labor. growth the type for the the them on shortages and X% hearing to last which XX%, not

of availability stabilization we've think the year. gone generally, through have labor improved of the the as and costs So I

Operator

the Those we for have all today. questions are

So any I'll for to remarks. turn back the Neil call closing

Neil Shah

to their take a With time no to of just everyone more like moment very earnings thank for on morning questions, calls. this busy we'd

We will you be thank available But for the rest time. of the any questions. your for day if anyone has further

Operator

joining lines. and today. Thank your everyone, disconnect for This concludes our now you you, us may call,

Andrew Tamaccio	Finance Associate
Neil Shah	President, CEO & Director
Ashish Parikh	CFO, EVP & Assistant Secretary
Aryeh Klein	BMO Capital Markets
Tyler Batory	Oppenheimer
David Katz	Jefferies
Chris Woronka	Deutsche Bank
Daniel Hogan	Robert W. Baird & Co.

Hersha Hospitality Trust (HT) 3 Aug 232023 Q2 Earnings call transcript