SHO - Earnings call transcript Q1 2019 | Sunstone Hotel Investors, Inc.

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Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Sunstone Hotel Investors First Quarter 2019 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. I would like to remind everyone that this conference is being recorded today, May 7, 2019 at 12:00 PM Eastern Time. the Finance. to turn President Reyes, now Corporate of would presentation Aaron over Vice I ahead. go Please

Aaron Reyes

Thank you, our good available all release Cassidy, and supplemental, yesterday. received should now, and a have you copy were of which first earnings morning, quarter made everyone. By

our If on yet access not do a copy, you can you have them website.

XX-Ks Before call and that XX-Qs, statements to We risks other contains uncertainties, those statements. our evaluating consider I those and are actual like in factors differ to materially remind to the our forward-looking could would begin, from with forward-looking we everyone those this described including SEC, projected. that filings cause you in to subject caution prospectuses, which results

including margins. FFO hotel We call that also note this EBITDA, information, adjusted and adjusted EBITDA may financial non-GAAP adjusted contain

Robert Officer; are John information that accordance call Generally your Accepted information go a on President Officer. we to to the Please After Principles. to over available Arabia, today Officer; Hoffman, will I be Springer, and our Giglia, with supplement the answer Chief Operating providing call and We Investment With like us Executive to remarks, that, Chief With Financial Bryan Accounting are John. would turn prepared Chief in ahead. as questions. Marc Chief Officer;

John Arabia

the our thanks then on transaction market Thanks, first update the quarter our of capacity. joining significant provide Aaron. as the us. as an morning, investment with everybody, an a review for environment. call on operating Good operating and I today and I update will start well current results, will

our relating Afterwards, sheet specifics quarter and will and XXXX significant call highlight the recap our initiatives to updated and the full-year second over reporting. I'll turn Bryan the Before ESG advancements provide our related made we have our Bryan, earnings. guidance to on balance strength I to

activities more operating first operating than quarter, management in various with earnings as were were begin, and results efficiencies. pleased market markets challenges to years stemming various our concentrations, in benefit continue our to growth outsized and from So well-publicized successful previous the we asset produce attractive and revenue completed renovation offset that very by for the initiatives operating our

increased up quarter well prior revenue the to both our RevPARand very portfolio which the industry. stacks over peers year, X.X% First in comparable

wages As topline nearly growth of X% in group and growth a segments both --respectable quarter, revenues. was cost room X% room increase total driven level demand, continued XX% ancillary Comparable the first nights as by expenses, revenues as despite by pressures in and in property in group increased in well portfolio other and as benefits insurance faster than EBITDA costs. increased transient growth rate

by were wages revenues saw we increased down percentage as a points. nearly first While of by group commissions quarter basis XX group X%,

come. quarter, last food and beverage Plaza and high-quality to is that received X% This of was the and the we beverage number same-store more Boston and most night. has hotel and to the of said, pay points $XXX effectively EBITDA spend our working group well this Embarcadero investments that to healthy Orlando of basis. additional our San hindered our our compounded Boston, the put and on This month space room hotel. of things $XXX Because guidance. gains those out-of-room group the continued, annual book food Boston lines, the the per years spaces and have converted for in Long activity group a and and group by in To benefits market to deliver benefited premium Plaza, beverage Francisco. the Chicago group Key of therefore, food highest results declined sell capital a Hyatt XXXX catering more of excess a that in in have and specifically, quarter Plaza and room in and group our market the hotels. group growth Diego experiences. More Renaissance-LAX per renovation been diluted these Wharf, various growth groups. investments, owned of represents expectations basis second XX, several higher result XX attracted coupled driven delivered space hotels outlets rate with hotels beverage have by EBITDA and resulted we lower-than-anticipated Comparable adjusted provided fantastic drove as production corporate in repositioning mix direct The a as at had portfolio exceeded with expenses, Park proactive Wailea, clients has and in year of into at per Additionally, cost exceeded from spend event and sleek our proactively we Baltimore and in audiovisual San great groups allowed facilities the from believe growth. Avenue to San the nights space of food Boston group came in and April, restaurant FFO spend We expect in and events. at future a Park Wailea, Park anticipated well in That and at space share $XX occupied first our creative results. room weakness with And addition was hotel first that routine our room perspective, in hotel first Notably, are of group we end higher-quality helped quarter Along targeted by Francisco, well adjusted meetings meaningful increase market Marriott improvements operating and night X,XXX several our West willing general per index our since high investments empty our recent Portland our audiovisual revenue. healthy

but Not the in only of the XX,XXX hotel. to group new in locations, the are booking our our Orlando our produce we rooms helped in investments have the space in continued highest book assets results. most hotels Additionally, owned meeting strong hotel the right since April April,

property exceeded sold guidance lower-than-anticipated our we $X.XX. which X% adjusted share in figure diluted results per built earnings provided of XXXX and FFO range in result. corporate and to share, the $X.XX, strong to Our off-strategy six of a expenses dilution significant This hotels $X.XX capacity previously represents despite increase FFO operating diluted resulted in have relating adjusted per investment the as

outlook while our unchanged. year for Looking of the various our by fluctuated remains portfolio remainder a amount, forward, the expectations markets have for normal the for

for overall over despite fundamentals forward-looking soft bookings demand transient steady XXXX the that over year steady up quarter is remained remained the stable, appear prior in for is March. year. group Our the X% Similarly, pace generally about industry full and have

beat. our Bryan a year details by As get result, amount first roughly updated outlook we full our have of guidance our the just into of will earnings a in increased the moment. quarter

aggressive in investment the real-estate, at, billion depending current million six asset cycle. resulting So of highlighted in this, On current are below ended call, comfortable levels on Solar's $XXX rates long-term let's talk $X buying length relevant acquisitions the of cash, last investable notable various given Because capacity about sold, our expectations hotel we the over which especially no factors. about in of resulted transacting XXXX with we environment. bit we pricing for a asking cap well

that sellers have on data those it difficult will prices only appears aspirational While with to began appeared done. decline in but get cap to met just not for the pricing points, based rates order will with to even a few push be an year attempting likely justify, pricing asking expectations lower deals with to

that deals trade. some for that -- those in those we we pricing feedback either based various on in unlikely to have are it have materially assets deals appears been hearing, cases For come tied up or and that has been are

investments, leave continue in right to investments be dispose the expectations, to dilutive hopeful do while underwrite we of So earnings short-term. where at level of the what remain not strategy the will and in to reset our expect of find some new light even in methodically same if that that does we we asking appears time, hotels We that of pricing us? handful fit the

made over call minutes take let Bryan, couple and our of to advancements me highlight the quarter. ESG Before turn the a during I efforts, more importantly the to first

you usage doing be doing you be corporate first office, evolving our allowing a communicates our environment on REIT governance. job and proxy the for the which This assets own which us when access the to friendly of here issues. communicating while, amend excuse carbon can the the which being MUTA, of how Environmental in we active; what with who to found energy out comes it report, EMS document, think important me, communicating of is we many of of for will includes opt and came or the what operators Sunstone initiatives it's Sunstone. on environmental environmental stockholders didn't very environmental in however, a at those bylaws our shareholder and employees that how Whether Furthermore, the were has consumption, really and social better were shareholders. with we governance to shareholders. and our work states at properties reduce good G announce investments have our now to continue how to forefront or continuously job known been of For I'm for issuance we done adopting waste. improve performance do social ESG, a of happy ESG, our to to water have our quality the know website, of environmental commitment our the with emissions, social we're we're hotel hotels. we to to doing what we about communities When our we the we report, very commitment it our contribute, our corporate that to work inaugural right it and we

initiatives Wailea, mechanical retrofits at of numerous have XXXX portfolio. monetization exciting planned across equipment installation including and several solar and energy additional We our of the hotels for lighting

and and areas commitment includes investing harassment free ensure social promotion safe our to a promote comfortable back-of-house in environment safe workplace. devices a to more education of hotels at it importantly, policies includes the safety Our

Bryan. look make these which to topics. important time, forms AHLA I'll communicate With enhancements and forward on to we please continued will additional call of go over Over we dialogue further use We are as trafficking. a our that, and progress Five-Star proud the turn improvements, report ahead. shareholders harassment have we to Bryan, onto to the Promise, our all signed human ESG addresses with and

Bryan Giglia

quarter liquidity, and including $XXX credit We of undrawn million you, facility. ended financial morning, Thank million and an cash unrestricted significant $XXX John, total than the everyone. good first more with revolving

preferred We have X.X%. of rate outstanding. years of our weighted approximately in-place debt and debt of consolidated maturity average average term has And interest billion a X.X securities to and weighted $X.X current a

of rate XX% and variable a total of debt XX%, as our at Our stands is debt percentage debt unsecured.

collectively generated XX% unencumbered. EBITDA over that hotels period, of EBITDA XX-month unencumbered our trailing approximately $XXX and We nearly million XX have of a is

Now in turning year our to second in and reconciliation release. full found guidance. our earnings quarter XXXX be and A full can supplemental

expect total the quarter, to portfolio For RevPAR range second growth we from X%. to X%

and EBITDA be to We share diluted adjusted expect between second between $X.XX and to $XX adjusted quarter FFO per million $X.XX. $XX be million and

increased X%. the our portfolio RevPAR For range midpoint it expect of X.X% now to total of we full year, up from and up the growth to

midpoint range adjusted full share $X.XX. range from per the of full $XXX to year EBITDA and guidance increased from also We million, $XXX to to adjusted million XXXX year FFO our $X.XX to our diluted

to includes displacement XXXX investment related in $X.X less approximately to our million a basis, of capital EBITDA year-over-year $X.X EBITDA million we XXXX be than total outlook to we $X.X On million of XXXX. million expect and revenue what $X.X approximately projects. for realized XXXX planned Our to displacement displacement million approximately $X.X

any does the hotel our guidance assume meaningful our Finally, of additional incremental earnings hotel and the that portfolio nor future it cash reflects XX result from existing potential balance. dispositions, does this would reflect deployment not

to turning Now dividends.

taxable for a does per dividend of to throughout pay dividend stock -- Board dividend that per dividend extent distribution of in second our regular with would that Consistent common we practice quarter. the expect common be in regular cash expect a to of a a prior to continue has equal To years, annual share remaining $X.XX pay satisfy generally to quarterly will we the requirements Directors Our declared our not catch-up expect for common early pay XXXX, common XXXX $X.XX our the we to income. share XXXX. quarterly

With board also In our call distributions outstanding ahead. now routine addition preferred dividends, the has quarterly securities. of the to both like Cassidy, approved up to for common to series please I'd questions. the go open our that,

Operator

[Operator Instructions] from Our first Hartwich Advisors. Green question comes Lukas of Street

Lukas Hartwich

Good morning.

John Arabia

Lukas. Good morning,

Lukas Hartwich

bit. a sounds down come It hotel have like values

much how down any they're So you average? curious I'm sense just have if on on

John Arabia

those Yeah, cap sellers a active of I'd on My deals caution that commentary closed. is rates, of have lot not takeaway, and really Lucas. expectations deals

jump hotel very values making So have to the of cautious down. I'd be come that

we aspirational more about aggressive talked the last we to whether seen in starting few mind, only sell in modify buyers and points, and keep what were those is we aggressive is or we expectations have but are thought hotel what process see very a sellers As question the sell truly seen earnings by have asks it have either call, not to those rejecting a data meaning of assets our moving, quarterly aren't to most sellers, lower. at had price we more we prices hotel was or and what or this was just a

get and few despite growth in cycle valuation just to seems being rates alike times, year is. And longer one the You and long I this industry. more anemic pricing know cap as you those a talked about continued expectations, it however more parameters aggressive at somewhat like and have

So that it high buyer a to that's little aggressive so trying aspirational strike a been what very appears -- very in on of we're terms there assets. some that of pricing of say quality that bit has

Lukas Hartwich

And be market? long-term That's Chicago, second a helpful. estate on is rough. that that to continues Is Got question my it. market real pretty

Unidentified Company Representative

push it supply being recently, right to problems would is but been has that seem to and it asset, able -- having wouldn't market does is challenging a -- I be say pricing. the now well, it say absorbing For some right I been it's

shall-- we So

Lukas Hartwich

city? picture And the in you fiscal about given Illinois, that that worry at does difficulties all bigger

Unidentified Company Representative

some It it's be is But a city those we'll fantastic that does of me radar. it some give pause. Having through issues. I our on time to over said think and get able

Lukas Hartwich

Great. That's it from me. Thank you.

Operator

comes Donnelly question Wells next of Jeff Fargo. Our from

Jeff Donnelly

if relevant it, real-estate news I entertainment would going the as know in that light you consider out it? define long-term to entertain but Maybe more there, Chesapeake's portfolio just you don't broadly, John, of -- be

John Arabia

talk prefer Interesting can comment question, do really to transactions, I'd ongoing somebody deal. nor else's about Jeff. nor we to or not And want on I

we at my believe think that to have selling the growth is capital going We have the directly out in is been looked And found, terms assets real And sell relevant portfolios that their just commenting LTRR we long-term general have concentration transaction. -- there where external What we are general where our have I growth. through anything terms this a And order that of those the isn't think in more assets M&A you than in mind, bigger amount lot organic would would is is consider have us us others you down those have to mentioned, transaction better. justify I'm are leave we approach out. that have forced But of have that the talking is Never generalities, in we way assets, transaction I better point, legacy probably found is we though, owned the not the stood M&A, I in significant in recycle likely by in been portfolios we at that have that leave better, most don't down enough long -- that on I to exercise count asset we asset. most likely term. of to certain think when and don't of is being real-estate. a not of we estate path mentioned. speaking general then to see LTRR in what significant

Jeff Donnelly

some on for a expectations in your seller frothy. just are, described horizon. word, maybe in a -- cracks But lack of the And better there's pricing where you market remarks,

You per But big maximizing we're does do guess, there down in some why balloon, to being more I there? and and net I on the you push seller? you not a concern focused to accelerator if seller. harder become a you've that slowdown? very been the already it? Is growth. leaving about net think aggressive NAV guys always are that want the share How is not cause NAV maybe recession or a air even will, you know

John Arabia

We year pretty hotels continue aggressive. more recently would say buying selling hotels. at And hotels. we Last success found been -- sold six than I we've more we've

really bought Robert of I value-add over we bought it correct that estate. wrong, of I'm the bought cycle, me not we in a -- if cycle, and bought $X.X we real $X.X think, billion lot but worth this great and early And then those it we billion, that, to was really but only eventually brought yields New Embarcadero, a significantly that the JW lease, lease bought the going them. would that be Wailea, of be created would in. in Orleans ground better would something good that even be ground subject out And

incredibly but great for thought investments We at ever numbers, us like at billion that somebody all of correct tune driven them has happy and assets. else's appropriate ours. over years, assets XX cycle I What but cycle, time. is, this thought the me I'm most cash have. shareholders. that off bought recently, growth XX, NAV something fit a really we our sure will And past Those little and with we in don't will if left sold of they We we've we more strategy, those my are with have our fit done sold something share per would $X.X to have hotels we in than recently three a somebody out I'm worked think bit

ago, to down two eight was we times, all get And we'd or our and we maybe three was said was we EBITDA, of to preferred leverage that when so X.X terms debt X.X sheet incredibly or good. were times journey, nine if times and started times. high you -- those seven, that us to invested this balance speak, knew For our incredibly when in us years

find We we maybe was nor continue ourselves don't at need we sell would to much but this reasons the got we X.X think flexibility we get financial we here Now, clearly did times. and here, down the foremost fairly assets. strategy. for of And in I more first given anemic We and the our challenges don't believe we've think in disciplined growth. the some been long-term industry,

we tight, the for. And earlier as have people I aspirational been have some that particularly given so asks looking mentioned held of

that growth, out. all that's as So is, I'm NAV you that work here. end our said, of per is day you confident share what matters really as focus as the to know and Jeff the going biggest driving very this But because at well

answered I hopefully, So question. your

Jeff Donnelly

one, to in would maybe does quick you bought thought the nine. how do think changed mid did. that about thinking you're was So it but I And XX you hurricane You six edge at point an this the trajectory the you cap at at it. time how just the one last through on just curious ocean's just of just I'm your went a delay there, hopefully you it stabilize your all that's underwriting? about one, I think original at the versus originally I'm curious ramp minds? eight thought, numbers, recognize trajectory

John Arabia

market was But Yeah. sometimes that to happens fantastic special an what we compression that is had and is a disrupted What asset, as with and significant strategies, really is a use two-fold, one, our to of market. what our because happens bought a back, a climb. the when game in our is business -- drive it's coming to that was two, news in it take market is plan. after stabilizing index compression And one news result the obviously momentum and of good continues Key the five-hurricane the and up West. market we declined, the that's the modify plan just category good of index back and The business asset. coming you And happened trial management to kind step gaining that part trajectory The completely changed is buy weeks hurricane was and revenue a product. the hotel of the to

of to potential longer will the confident be it's take upward asset half for just this gain asset has there. index earnings of So while We feel I the time. a long-term think an to about a some little going just that get as

Operator

comes Our from of question Powell next Barclays. Anthony

Anthony Powell

Hi, good morning.

and on What's of transaction refinancing has how Just in the come going lower sellers this of still attractive back you've willingness review pricing to recently. prices new to to our alternative with environment, transact the selling talked sellers? about

Bryan Giglia

let only me again, everybody And about caution handful one are only of a points. data And question. we're good that talking Yeah, participant. we

We are not the market. entire

John Arabia

out for an got lieu hold because weren't for refinancing assets them yeah, we that asset mean at had So John's is that our sale wanted to looking focus pricing gave and that the made cash data lease right the the understanding of what And getting alluding now. markets I over brings from on the in would an can't competition of day, I just alternative. that points that attractive broadly you, ultimately you tell to assets in where another the the partial What they financing fairly kind sellers time real on hold wait we're in in exactly markets past. very a that the very, recent that's refined last have meantime that through. attractive in kind comment months, was that the there they we a look in if those of XX quality financing really exited that seen reason spend I whatever the

a come markets somewhat when Just factor, the months. pricing aspirational assets and in comments -- the out have past those. echoing to every especially have getting of how be recent definitely appear case you John's been with look financing just don't from last But couple

Anthony Powell

it. Got

tell So sellers willing just later a there? be refinance think may bit given cycle, in early you to to assets the still more the or these we're too actually or sell do

Bryan Giglia

be an get those that of dynamics it. markets shifts changes call course And tell. sale the to to alternative the next because a impact play in see six months, debt and to how proceeds sellers quarter those the in of be interesting It'd the has and cash-out potential been in last it'd the kind a out, two refinance. over or early pricings there of some too how to level interesting Probably probably see obviously,

you I call would ago a or months definitely how interesting tell more. be is was X six It'd and factor, that So months to today. it see that it plus

Anthony Powell

And right. about terms you go expectations markets think going some for this better John, to performances of into which fluctuate markets more mentioned markets that All detail you which think going your worse? the Could are I in the to are you and year. now do do

John Arabia

by Nothing And Anthony, all that nothing worthwhile amount, year. a throughout comment the material happens about. that to probably

New York, for example, little looks a little bit Key worse, Wailea looks looks West a better. little bit a better, bit

San likely well changed was a very I variances the there quarter say is bit very covered first It's all. is overall, at wouldn't there to I the best of and is interesting quarter has be What's think market-to-market. But the much deceleration. a year, well talked small and Francisco about. just the normal really of

Operator

Our of Smedes question Citi. from next Rose comes

Smedes Rose

buyers I market. into what terms wondering just kind what it's maybe in on that wait there one finally to enough like really about any wanted activity of with you're piece? to in ask actual expect pause there the out you Or factor sort and portfolio opportunities sort -- doesn't that with seeing? happens that, the I'm if that sold high-end as portfolio activity recycling see of is it of do much sounds is talked of potential --

John Arabia

it you time for I would specifically. that preparing I those portfolio Smedes, really to anticipate to out, are -- a about. on that you comment that significant you're would anticipate portfolio build speak the To that Unfortunately, come talking can't anything to any speaking Yes. up but capacity, can't extent generally

Smedes Rose

to kind Okay. the it's part Do asset the now of to any properties while, you Kind are you strip. generally a sort in forward? -- I going sort that? that there gap of on like in on stabilized ask of the more -- is you other Wailea, ramp-up wanted of have you where is -- And talked of closing

John Arabia

$XXX is scores the rate thing there. scores I typical TripAdvisor to satisfaction The close team mean the meaningfully. is are the of in The moved we hotel, first phenomenally is love first room Sunstone, not We well. Guest fantastic. average doing is properties to and that have still I profit all, some The but room hotel are fantastic. about quarter. the this only run there think very good, have I

invest right is Our that really long-term continue great and just hotel strategy and for group the honestly honestly believes production our in hotel. working. And to we team it's the that there believe is I associates

is a asset that have mantra manager we everybody the think Marc experience hotel that and It are for level experience asset, that certain that they Hoffman and out it's clean because service And very a hospital Cormac visits here for are enjoys expect them. future a of years. of it's, I So hotel, special that and goodwill we over new building because and like business and

that that's the focus profits So hotel the and pull think that special, were good not are very owning. owner, of I if out we right long-term property, we and those things really another are think we $X million of I that it's for types could something probably $X that million of the or

Smedes Rose

Great.

particularly kind at then you anything resume of that? ascribe least mentioned then since in that like And people maybe seems And on FTR you as data, one, Okay. just patterns but of normal of it one you that have on March, provide industrywide weakness any to? a last based more could commentary number

Unidentified Company Representative

specific. know whether was we fantastic. on it. of our our been finger in couldn't we It's surprise, weak calendar debated elongation of the No, Quite spring kind for not and put calendar, -- that caught said was it's the spring honestly, part to the we've good could that in example spring it April prepared as overall have it anything remarks, of -- just production demand vacation the was or us the by

little seem doesn't and of looking if canary So for always of a it it coalmine that be. it. to bit was We're But didn't a looks a and like know bit a the blip.

Operator

Woronka Our Bank. Deutsche question from of Chris comes next

Chris Woronka

your ones I to the recently morning. new of first Renaissance going for group think ask Does something there want want brand some a announced you're open you hey, I out other to hotel in concern I watching for to all Orlando. boxes? and of group is good where and markets kind have at up one -- is that that ask in Hilton you a

Unidentified Company Representative

existing No, a huge That's group not no, at -- product And all. in No market. all. concern. not

Chris Woronka

guys -- Okay, that down hotels risk you six of even I think assets, to portfolio the EBITDA great. does something, And to non-core are then, you have or now in your does kind the right hotels guys non-core though as thing differently? John, the top systemic any like selling do; that XX% cause your the is look of sold just at

Unidentified Company Representative

value, look assets. valuation really. maybe I rather you at and that a more top a In the -- from diversify a take concentrate really two look you our Not the and six, Those our -- hotels. also probably much, going seven third a take all seven move What particularly look we're great think in. much stuff of great When concentrate at for perspective. at little when we a bit are you assets, needle the seven a top total portfolio value, And take when don't bottom our believe to we don't I'd interim, the six-- hotels. real-estate into

term, people much in really off will all to, and say, campus all and Embarcadero Francisco, and we let's up term, than, I that several much, in thinker, best located cyclical, huge like things think a it's it's will we continue Long the own well, at San sold a disposing is assets like us. quarter-to-quarter everybody is cleaning it down which the Houston. noncore their Wailea Long be end rather have of think you're value think the acres we portfolio. to XX the we I idiosyncrasies in markets or then I'd hotels knows properties I think, be better the from Marriott or not And eventually If one we're just At end talk a think Wharf, assets owning XX day, day, moving let's much long in but while Wailea of -- the of the concentrate when hotels going So win. more. Boston. about say, not that, we in of

Operator

Bank from of comes of question Our Kelley next America. Shaun

Dany Asad

Shaun. for on Dany This is actually

Marriott reported I on able exceeded that parse or much So you quantify if last your platforms assets, and of gains maybe much of from share the to your it expectations. comes week to how of markets? specifically value-add like and and your your even focus Hilton lot your product more big delivering out management think initiatives asset we relative But how are numbers performance Hilton people's is

John Arabia

Yes. with properties our I and they're we've located. doing mostly it's would say been what where

Dany Asad

talked view about rates, then allocation, this back Or think on John, And capital allocation. the that? cap with been maybe to you what's and capital your and at do just your of even point? of have asking opportunistically you what But be use best Okay. views Would maybe would programmatic? on something earlier, prudent what capital your market transaction or obviously you've your turning stock you buy based

John Arabia

changes it over and depends, Completely environment time changes. the as

and which -- good is financial The tune we as our on news good to a depending move long amount maybe news billion, So it's really for strategy. as price the where it of, as changes The the and or have as of hotel morphs somewhere bit. how can expectations enormous can on or changes, is we is is around needle $X deployed, little this answer deploy optionality changes company an this capital the share environment self-evident. that

So place, for very We I authorization in and would a depends. repurchase place been that's say in some have that do time. much share

Operator

question comes Michael last Our Bellisario of Baird. from

Michael Bellisario

the relative to us to Hawaii, first during helpful? in quarter broader John, maybe to the also turning in broader that would you submarkets back and market what kind the good state the us your can outperformance and on take then put versus be your happened context give of help broader

John Arabia

beat in me, Wailea X% by and was second, points ADR, up first quarter, that so. hold XXX by beat beat about the set think one I the excuse or maybe was we that see, by, --we basis Let's about we some on

Marc Hoffman

X,XXX was the Yes. basis set This comp it by very we're as luxury set the is down that and strong. -- RevPAR X.X% Marc. in points, we Hey, actually comp beat about

set. both we Kaanapali and kind Wailea so And comp of all the outperformed comp sets, comp the set

outpaced very at a Maui, comparison year -- John ramping before, occupancy. state, as in beyond. hotel feel good the for this its significantly, report have and and on the we discussed continued significant we of our rate -- rest And we've have the up ramp to again, -- islands has to Our and about held strongest the hotel as the continues

John Arabia

interesting. This Yes. is

an when in perspective to a run used about by set it $XXX bought and we from So quarter ADR $XXX. luxury gap that that hotel first the to the discount have we almost closed

over now ADR property it's that So went XX% XX%. index at to about our from

Marc Hoffman

No, loop I that the just what the saw first on to sense Any an to be state, us continues relative that broadly? quarter, and drove of you market what temporary year kind I to the tell the in put SAP group That's outperformance that kind just Maui, help first broadly into the -- happening of is more was pushes your that in every I in called for guess the mean can there we I you closing of broader of helpful really market. more mean, outside a into broader is quarter [indiscernible] -- then slowdown the the markets. Wailea. know, what may which context few blossom

heard In general, anything meaningful don't some and it people, beyond market the coming general feel it's is know a long-term. I first think what really in from helping. Big coming I the which in Japan of Island. really in all into we now is but slowdown to speak the can't I about quarter. that there was good was Southwest the Hawaii there I from

Michael Bellisario

managing Bryan, cash That's helpful today then for in? balance the explain how you cash investing your can last in and just are one what maybe and you you're

John Arabia

our and facility credit securities in it various short-term lenders. with deposit other have various accounts We government

right so X% think now. around paying we're it's little And liquid I over highly roughly a and

Operator

question Powell next comes Barclays. Anthony Our of from

Anthony Powell

up me one I you're more still like ready renovation. get real hotel to another on Renaissance follow-up and There is that Harborplace, Is term, long estate? know from just Seems renovating hotel year. a cycle this the

John Arabia

Unlikely.

Anthony Powell

Okay.

the comparable is the So behind renovation to be size that, really given just recently? life core a other cycle more process -- thought the needed just renovation to renovations current to some the of

John Arabia

rooms we Yes. looks looks And Lobby been done take approach was It years. hasn't long. to space so We be just past assets here renovate. our the redone. Sunstone couple great, an of was Meeting in to great. for don't at stretch time it time that

coming So pretty out the hotel is going soon. look spectacular to

Operator

in this it we queue. At like back turn questions to no to And John I further time, have would Arabia.

John Arabia

open Thank you that very season, Very much, Sunstone. everybody, our shareholders just that as that much you to and sidebar, for going proxy very all reached that. corporate in appreciate had with governance your out a we've during Also, look much for discussed more to appreciate us forward. dialogue the forward and of interest of

around today are a and great We if follow-up have day. Thanks, any anybody has questions.

Operator

gentlemen. and This ladies teleconference. you, today's Thank concludes

may disconnect. now You

Sunstone Hotel Investors (SHO) 11 May 192019 Q1 Earnings call transcript