INN - Earnings call transcript Q2 2022 | Summit Hotel Properties, Inc.

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Operator

Thank you for standing by, and welcome to Summit Hotel Properties Second Quarter Fiscal Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the call over to Mr. Adam Wudel, Senior Vice President, Finance, Capital Markets and Treasurer. ahead. go Please

Adam Wudel

today of Trey subject and statements Summit Latif, Jon are I as joined Financial considered am and Thank many Properties good described filings. and risks uncertainties, President federal by that Officer, Chief and Hotel and are Vice laws. in unknown, SEC by as securities forward-looking Officer, Please and comments our today Statements to note Executive you, President defined morning. Conkling. both Chief known Stanner; our Executive

Forward-looking we today, them that duty we make statements only today update as August undertake are of later. to and effective X, XXXX, no

You can www.shpreit.com. Summit Jon Hotel financial filings non-GAAP measures earnings find referenced Chief Stanner. Properties on President Please release, welcome and on SEC Executive at and which this Officer, contain website to of copies reconciliations call, our our

Jon Stanner

for Adam, us joining today you for call. thank Thanks, second conference XXXX and earnings all quarter our

results metrics growth recoveries our nearly transient assets. pandemic portfolio quarter with urban accelerating group era in second continued new shift mid-week travel increasingly supplemented our high-quality in leisure as demand by in driven and highs marked and Our operating in business relevant into every strength

in has of a the quarter the any wage of pandemic. labor levels, by increased lean XXXX last results, from XX% RevPAR as by recapture XX.X% comparable approximately this significant recapture forma a second being achieved XX% recapture quarter driven ADR. from the of a In XXXX the offset onset XX% tight rate, in benefits of improvement market. recapture staffing of June's in since increase we Second pro in the and occupancy quarter XX of year, EBITDA with XX% results hotels RevPAR a month model pressures by the XXXX a was driven portfolio highlighted XX% increase helped first and our quarter XX% second highest of Hotel portfolio the reached

and throughout power all rates our from segment levels continue business in meaningful every our We the exceed pricing of negotiated increased quarter average in portfolio benefit to now first XXXX as the segment. but over

than For ADR the quarter, second X% portfolio quarter XXXX. the was of comparable higher

in resort up more XX%, increased Weekday XX% quarter from mid-week June in quarter, first respectively, over last exceeded XX% improving of pro for with XXXX and the in XX%. continue excess our small nearly era period and of to While town X%, levels, reflecting achieve XX% urban well a same RevPAR posting group rates XXXX was corporate rates portfolio locations by forma and from high than the demand. year. Weekday the XX% occupancy pandemic rapidly

quarter. modestly RevPAR And within in through first Our Wednesday The mix, levels. to our rates in now notable the was group pre-pandemic XXXX. continue seeing to June, all group And levels. room as the contribution exceed below XXXX during improvements quarter. of X% compared of weekend every XX% Monday were meaningfully encouragingly, rates. in weekend And essentially major in total segment greatest exceed the weekday and recapture to above are nights recapture rates quarter were XX% recovery XX% flat increased portfolio night rates the rates second reached particularly segment's Weekday

in XXXX. nearly margin basis in a last over strongest RevPAR a in new down in recapture was seasonal margins new was of RevPAR the line X% achieving profit our is historical in month quarter. were operating be points expansion the compared XX%, just our also to represented forma rates, seasonal the of tends our XXX under is that absolute a onset XXXX average pandemic, month since to which portfolio, than Pro our June, and Preliminary year. reached of expected July higher As June which pace from pace of ago. is patterns, highs recapture July which achieved June of for August comparable second gross month with nominal decline expected, a current to modestly result RevPAR in with rate RevPAR, peak reflected consistent but June slightly what weaker

expect So once recapture rates again, to steady we XXXX fairly hold month-over-month.

one in are forma us weekends. very in XXXX that is with in achieve recapture August, But September pacing second properties, for significant line recapture be recovery to quarter our our the October has we in we to trends still NewcrestImage expect in rates our in with the our of in July encouraged portfolio, months August highest RevPAR portfolio. both the our in of pro pace healthy month-over-month our ahead strongest However, we are by supported is third by pace, very ahead our our are line is booking within the positions further June. weekdays XX% quarter. acquired in portfolio for and window, and Combined seeing increases been September and the and and October, of experienced potentially portfolio optimism above with particularly our to which for the fall pace portfolio in or urban generally early September XX% recently comparable which historically which expectations

to common a period. balance front. quarter, two we quarterly the share uninterrupt, have We've closed common can $X.XX IPO, to remained reinstate had if XX-year venture transaction to Directors during roughly previously dividends, of Our demand to trailing that results million, and North strong three XX% a according expectations. We've Yesterday, annualized if May, so the pandemic, active the strong from which but in we've and the our closed sale we The to a $X.XX the per March share XX. of on Hotel, annualized on with announced reduction it CAGR equates size a Garden our yield. of the of current Prior grew gain of Board in a be record and $XX X% we our dividend, joint San on over Francisco XX-month dividend positioned made continued X% net progress dividend we the X% of common second sale transactions. operating full meaningfully time previously over the owned than increased track In reflects XXX-guestroom paying dividend a price which been less NOI our cap for dividend. basis Airport on a an the years Hilton prudent of in as our sustainable baseline to we realized from continues of ownership. a in fundamental GIC, recovery million $XX.X time Inn per that over sheet experience also the be rate And approximately quarterly declared enhancing business us on

scheduled the valuation to the later $XX As to constructed we us a XXX-guestroom also this that interest closed despite hotel opening, key. its features in the at which Rosa slower renovation hotels a generating in of Miami's since newly named of AC reminder, incredibly The Brickell quickly in $XXX sale since December successfully of million in XXXX hotel average, revenue per $XXX,XXX our XX% one month each Sky In on $X bars, million June, acquire as equity or Miami's opening. recently Element Downtown in being year-to-date RevPAR summer $XXX,XXX a begin approximately The nearly of have dual-branded allowed the on ramped has season purchase to forgo year. Miami. a best generated option was neighborhood rooftop

For option first year EBITDA of X%, generate that the our operations. months full anticipate XXXX, effectively and hotel their will a between yield hotels XX we combined X% on price in

underwriting to believe the begin in the and despite asset perform of belt are sun hotels the the finish several acquired recently year forecasted as benefits implemented and Orleans as to half years. is next on this We very continue over Canopy to strategies continue remain delayed XX for realize expect to concentration the particularly bullish we second assets EBITDA portfolio of opening outperform to trending markets the management of Our above revenue well outlook high-growth NewcrestImage XX% early poised recently the longer-term XXXX as of New as the Downtown. nearly to

are as to Combined, the continue Our June be since expect XX year, XX above acquired approximately the other the last to our of dual-brand X%. Tucson, yield Steamboat, residents levels. XX% underwritten Miami expectations Suites for hotel pacing than and we exceed in Brickell vastly EBITDA hotels collectively XXXX recent the AC EBITDA Element our acquisitions XXXX Embassy more blended

will a As implying acquired years, of the half over turn hotels is Conkling. there in I have many we reminder, upside past the assets. nearly call to CFO, Trey the that, opened With four considerable of these still our within

Trey Conkling

quarter-over-quarter onset the second improvement. a XX-hotel the of This occupancy pandemic respectively. RevPAR of Thanks, which XX%, the the RevPAR continuing a second and we urban perspective, portfolio highest On segment $XX nominal RevPAR highest trend quarterly quarter XX% sequential a by produced and forma of in era across both quarter-over-quarter since a approximately far, RevPAR generating our driven strength $XXX, Sequential urban the RevPAR quarter, or quarter good portfolio ADR, and our RevPAR pro by urban everyone. pandemic. surpassed portfolio experienced XXXX was growth XX%. by for of increased in and our continued Jon, growth first basis, urban Summit's From morning,

markets second Chicago. travel weekday Tampa, approximately recapture and For Charlotte, by approximately comparable weekday results. June such each to double Austin, notably, RevPAR Most XXXX high. improving XXXX's RevPAR urban increased June sequentially an surpassed were Strengthening our culminated and quarter group to that posting as Nashville, urban urban Downtown era Orleans, This quarter New with month generated hotels instrumental XX% corporate $XXX, data, ADR nearly portfolio in and a pandemic weekday fundamentals new the XXXX with levels throughout in a resulting of Boston X%. XXXX as urban of

was our increase hotels of portfolio our to by quarter was Second XXXX. quarter hotels Strength in and suburban the with resort $XXX, accelerate XXXX hotels as our non-urban resort a XXXX to to Tucson of and for Despite and in increase markets, relative and locations, our such among first Lauderdale, XXXX. heavily XX% strength Phoenix, driven RevPAR rate XX% results an second non-urban while this over Fort seasonally entered to relation slower continued properties seasonality, comparable in periods. airport quarter

new the stays declined and relatively With bookings norms. XX% for $XXX. pre-pandemic increased the of first quarter total QX Most demonstrated than suburban Furthermore, low more XXX% XX quarter our XX%, XX% exceptional bookings same-day in while week the XXX% second strength, hotels from bookings era by Booking per and during XX% quarter town with with in to in the Furthermore, the ADR in recapture by quarter versus small line expand. XX% continued quarter. airport to increasing first bookings, out nearly the to by notably, days a declined this the in pandemic over windows RevPAR week of of the year.

the transient profit compared continued points Historically, and group out. during is a XX% travelers window days market to per Same-store In XX dynamics. strong in for bookings increased second of margin the by XXXX costs operating first quarter. to XXXX, current last in XXX quarter million driven a as quarter points improving backdrop. resulting in quarter second came of increase hotel year share a to second second which the FFO business first and a XX% pandemic $X.XX Adjusted the second basis second book amid quarter was of the the approximately FFO Garden quarter the Pro the margin, XXXX, $XX.X corporate XXXX hotel which second a in from higher as increased quarter. in $XX.X we bookings the reservation from below resulted era EBITDA XX% or which per basis, approximately of second San the quarter corporate XX%, on When contribution continue quarter occupied labor channels tax and quarter adjusted quarter accelerate. which a to adjusting addition, perspective, by compared Included EBITDA during quarter more first XXXX. the for second the sale from stays forma operating than mix or stays coming of same-store million Adjusted million XX% Inn normal from bookings than income million for despite expensive $XX.X XX million from $XX.X second FFO in expense demand the approximately for to Francisco. the double systems. quarter $X.XX EBITDA the of typically the highest tax was XX% our gain margin XXX see $XX.X From approximately less than the gross in than bookings was an quarter Hilton flow-through million, the was quarter hotel to the sale, room $XX.X comprise strong EBITDA gain the declined and remained increase second second declined higher of of from XX% related basis from adjusted of ago. an XXXX the central quarter quarterly from On more of our was our at fundamental XX the points basis the in share, for to second year. of million OTA to second direct a the $XX.X of quarter, total channel the over

year, income $X.X approximately of million. full estimate expense For tax we the

During million. in year-to-date bringing consolidated our portfolio, million the to approximately a $XX second basis, on quarter, invested $XX approximately we our total

the renovation to Corridor, to Suites consolidated Place million pro expect to typical on Energy driven spend was on SpringHill year-to-date maintenance capital renovations spend, transformative Nashville purchasing XXXX. primarily to for addition Studios basis expenditures million Houston million near-term $XX quarter MetroCenter or rata total and we $XX at Second a capital projects. Hilton for Inn $XX Universal Orlando spend and a our million $XX in by Including Hyatt Garden basis and

sheet. to turning Finally, balance the

more Our $XXX remains million. than robust overall liquidity at position

debt through continue of risk swaps. interest rate From balance interest to of XXXX average an options. is maintain perspective, to interest rata rate XX% our management sheet pro rate repay considering of including our pro extension nearly consideration debt and after available outstanding ample We current liquidity maturing all X.X% positioned, well an fixed rata when

from $XXX will covenants January to pending extends the the and million $XXX XXXX, the will expire. of In that we to -- loans will less the exited $XXX loans. X.XX%. amendments in related primary The and we These our credit $XXX Pricing flexibility. senior agreements portfolio swaps maturity term additional existing interest four into facility of two waivers and approximately This swap facility notional and years. term fixed senior rate They of swaps XXXX agreements rates quarter our after on for maturity senior be million years million X.X% revolving new and term second revolver the loan carry revolving remains the maintaining for both allow financial credit overall the to credit over XXXX. include enhance facility of date in and month in rate swap two the loan million to swaps, amended options. $XXX of debt. million corporate recently million to in the interest credit January extension new on certain our result available facility effective entered for swap two one swaps for extend XXXX credit will million the us to and transactions extend address $XXX facility. unchanged March average totaling the $XXX to million rate addition, fix duration XXXX of mature The January XXXX SOFR than $XXX company the In The fixed XX% April

has evening, dispositions, and in allocation press G&A, both including a basis. dividends. dividends regarding and Additionally, capital company certain acquisitions, release provided pro interest on expenditures, and preferred on XXXX our Included capital rata flexibility we complete cash expense, items, guidance capital non-operational expenditures potential last the consolidated corporate future retained

expense, your interest of Series With excluding be million; $XX.X will cash open million; preferred to $XX distributions the pro be financing capital that, We Series call and $XX.X to we Series be to corporate preferred and deferred million; be costs, dividends to $XX to questions. rata be Z expenditures the million. consolidated to $X.X expect million; of the F G&A midpoint amortization E

Operator

from first Neil Our Capital comes with One. question of Thank you. [Operator the Malkin line Instructions]

Neil Malkin

guys. morning, Good

Jon Stanner

Good morning, Neil.

Neil Malkin

dividend of everything. Congrats on and the out getting waivers and

shoulders. So that's -- after weight

First one is of on just the ADRs traveler. business

and pickup hotels mentioned being environments cadence. midweek, of in You urban indicative that corporate accelerating travel

below So business in achieve understand ADR typical typical that just back, ADRs a actually overall, dynamics think But it's premium you leisure are the terms can comes lot a a of that think business we for what get peers, how would paying work in versus so flipped. those talk the I important your luxury portfolio, would business what would corporate people or ADR leisure I guest? about can or of are. the it's as

just lift quantify how the into So of about you ADR talk would terms as portfolio we and that help through help and can of the rest that year in ‘XX? go the

Jon Stanner

Yeah. Sure. Thanks, Good morning. Neil.

I think you've highlighted it correctly.

channel and business back. see that at XXXX some was I channel to business were this come rates do see, to in we perspective But do upside markets. a percentage room in two, we've you certainly run we're than negotiated certainly I look That think our if pre-pandemic, than rates mix would particularly leisure they our as start negotiated that I as of have than is BT flipped -- particularly than some of BT rates where rate higher a the normalized going we that a one, still our starts in night as And it through remixing and an started be the of our of as quarter, see to at lower channel. overall amount start has come still demand historically much of alluded our we running enormous in basis. It's portfolio, today. -- that, higher broadly a of month to, our lower lot as think the back. from positive saw June to than is to think the still of business only think pre-pandemic. just you urban you in we retail you come there segment We on better are again, back; back we

Neil Malkin

having multiple. other of on lagging kind stock, a me and Okay. disparate sort an the bigger the of of kind been Thanks. underperformer, picture And for then is group one the

you wondering was or hoping get stock you maybe that could would -- the give moving bridge think discount if on kind that and just could that growth external direction right couple engine. so the points a turn can you of or really catalysts So you the I would help in

a just there's could yes, about, that'd So talk you great. of that things couple be

Jon Stanner

able Sure. Look, been of been think Neil, quality balance we've It's well. the since has the the for of pandemic. don't as the to portfolio, of stock I the most transactions disappointing. really, through the the onset I is think nature the the quality been year I'm peers of been complete has the it the and, of stock traded the reflects sure platform, way our today that the of frustrating.

Some of the it, -- performance, nature portfolio suburban the we of we're that's This less is I think, operating to service attributable a is a select but the recovered sooner, just exposure. have portfolio.

less -- markets. in which have concentration town have just a higher small we which exposure, was And faster. urban We recovered

be to this in on really proud we and an less to in pandemic. really of fewer continue ‘XX. think that in high-quality leisure-oriented of have we're I'm the see business reflected specifically a think that midweek talked mix, we've is well on do think we We urban that don't portfolio, assets, growth. us What as next markets. we're on which stock in we start and created And where see in index remarks again, particular, and where seeing about which activity that onset really do And urban-focused growth again, created a year-over-year pure-play we year-to-date. focus to very transaction really, prepared since been the positioned, relative the been of better more as really, our kind We has better outperformers value is growth will the have I positions that the and price. of growth leg completed I has we've lot well the

We're And Francisco in particularly markets, the money year million has balance realized. of will we we're right $X on X business; of, of billion $XX belt underwriting two, probably -- X%. We the lot flow be this or acquisitions, run. growth next in we our have reinstated the lot over we If to trade that the last and done and you strong forward. getting everything cash we again, And sales think, I'm think the years We're the of the the organized, the the year profile in reflects of realized of price, resources A -- in that business since this we the clusters home which into we get assets. whether going remarks, ahead lot the six from of X% day our in be been dividend, acquired to the done upside of a and The place. back prepared conviction half coming that these of and have some underwriting mentioned was of -- a into of the of XX% we've our months, think seasons proud already in option been it's stronger sun the San one, we've ahead one the we a portfolio. portfolio yet a as trade, been done, in our given and million on $XX that think has in that our NCI The upside profile the yielding sheet. cash our home pandemic. of look that is I the work I those assets our lifting at run. worth Brickell of we've confidence trade that acquired heavy beginning most think it's that about

basis. is we well So And go-forward do and positioned I show earnings thoughtful think execute I that's our think and share up business plan, ultimately, going the to in operating to on continue to will a price realized over time. transactions continue on the in be really if

Neil Malkin

Thanks Jon. you, Yeah. everyone. That was great. Thank

Jon Stanner

Neil. Thanks,

Operator

from Bank. next Woronka our with of line Chris question Deutsche And you. the Thank comes

Chris Woronka

too suburban town morning, segments you're for Question other resort is, from and to for seeing color Hey. -- markets. and small you markets or going of guys. different all same In are of a urban as you on Appreciate do nice rebound, think urban? traveler more this the the perhaps words, markets of transfer the this do kind a to place business in winning, a Good in just instead think pleasure. markets just resort strength is still

Jon Stanner

I think But that, bit look, still -- I little there's a leisure's think really think strong. of I Chris.

don't still pack. again, -- markets They're still resorts. leisure-oriented resort furthest the markets. a of pure of leading ton XXXX. Our have we They're a do We the have of ahead number

We in couple were have slightly way some to a still of XXXX. what actually reflective Travelers markets down I year-over-year June of of is you've seen. but that that And up think preferences. have other

or the performance leisure Austin, market like both in But markets over month XX% over markets markets, for were for market saw That's quarter markets. even Charlotte, New summer, June. reallocated X% go think up if you performance June. ‘XX of through the almost the more for We Tampa. saw to is over this Chicago in in in up June, that I in over you strength look BT-oriented we some like the attraction, the X% would is And up XXXX travel I that and more leisure the Charlotte. call the urban get great greatest were in was markets X% June X% portfolio, urban loop driven and of really a at in least what in Orleans, Miami, BT-driven. more by at even levels. have quarter up another and our We markets like Pittsburgh

some pure-play to shift by no destination of I that BT. driven being There's more leisure resort seen this urban out question we've more some markets, of is urban though. So think just

Chris Woronka

is pressure markets some a it their yesterday, maybe surprising or to more think then was heard get that any new a there seeing that was And starting conversions in they're Are Marriott conversion a these serve hear. from timely schedule, Thanks,Jon. brands, which Marriott done guys little I you concern select Okay. of any we bit of you select see -- little serve from on units become to product? side that interesting, the new Marriott into to any your that get as tougher on

Jon Stanner

challenging. Look, not new think hard incredibly lot know other a Chris. silver pandemic I to development of some -- the And the mean remains and that exists to today particularly, just to conversion really of brands is depends on going I and You the macroeconomic I environment broader think pencil are of linings of the math the I new that the focus development. activity. it's clearly think uncertainty need one

think we're extended -- historical norm to going growth. where of in period very time we below there's be an for supply So low

So I push certainly going their generally, But be a the that, understand us very that's think going I forward. is for to dynamic side. supply favorable on

Chris Woronka

Okay. Very it. Thanks, Appreciate Jon good.

Jon Stanner

Thanks, Chris.

Operator

comes you. the KeyBanc Wurschmidt Markets. from line And Austin question next our with Thank of Capital

Austin Wurschmid

pace versus share. that midweek Hey, good September specifically if of morning, occupancy curious to sort everybody. you October. of of between trends just that And ADR. pace Jon, urban breakdown you detail sort I'm mentioned and business then of piece the also, And for the able you're gains any for have or if you have any

Jon Stanner

specifics. pace can I both with gains occupancy. We are rate in is would up and Yeah. What the say follow that

significant get into Dallas, markets, you're there. season the in particular, Texas. seeing urban getting the urban better in in attributable say much belt it's of I of we're portfolio, here particularly we're get some would peak pretty in of Newcrest citywide out summer and We fall. into more good largely pace most to convention these the slow traction We the activities get summer into where sun the hot markets. been for we as and the portfolio, growth So are in much the gains portfolio, the seeing

skewed of that is I and So again, Newcrest in definitely pace these our some say markets, would higher particularly portfolio. in the

Austin Wurschmidt

investments could years, marry investment Certainly stabilized of over those that hotel kind with a all time legacy the sort the underwriting. up curious EBITDA And out? won't recent just I'm but Where to trending shake you frame, few And the range you assets. in you are and new you ahead if of think then hold the you then mind. taking on a do have stabilized yield curious of you've That's roll helpful. discussed completed if activities last

Jon Stanner

been has roughly Yeah. in XXXX. a What acquisition we said publicly X% about portfolio yield EBITDA the

We about are underwriting. our We're ahead ahead. XX% of

all expectation that these stabilize X%. Our would north of was

expectations. probably we're of frankly, think, I ahead

I realized. we've in is is to upside, the be to point think of particularly reinforce the that still the continued Newcrest a portfolio, lot

think lot those and number been I take A XXXX of those really to for now season. a like XXXX lot the think RFP and tactics asset to many new. properties on them going that implementing Again, to traditional through brand go-forward lot a management it's that A of where them were have feel we never of revenue of basis. stabilize. are are the drive just value a of we a going

of portfolio Silverstar, the you those way, you of I do underwriting. at are ahead look of But the upside of at and markets, the acquisitions of to but some at in next are urban get into lot So some Steamboat initial and -- particularly particularly as come year, the far beginning ahead we they're these when non-Newcrest you of back way and Tucson acquisitions, our in portfolio, look look a think in next year. half this

Austin Wurschmidt

thoughts. the for Thanks

Jon Stanner

Thanks, Austin.

Operator

Michael with Baird. from next you. our the of comes Thank Bellisario And line question

Michael Bellisario

everyone. Good Thanks. morning,

Jon Stanner

morning. Good

Michael Bellisario

behind XXXX, but the up of guys And in to months the a will start Can bottom deeper your then numbers? line -- follow-up I that there. see the just XXXX that to mentioned you and all on And know the and little the when heavy might we to the Jon, when of lifting just line kind show up? all you done start on pick portfolio kind during dig lifting have first in top start like of six ownership? a maybe Newcrest scenes you in heavy

Jon Stanner

Yeah.

get when The something spent highlighted you've lot It's the closed think deal. through lift internally. a of we to real closed. a heavy started working time a deal we work I

proud the many incredibly team, very We'll some alluded and our getting a in in particularly has team markets first of resources these the on for that on Dallas last -- again, the getting place. as RFP those now Francisco sales of and -- in clusters lot And just assets. today. right we're season through go of the question, -- we're I in to so our has in like done, the the I'm been focused, We're season work very, and And Oklahoma organized San slow City. markets

at highest given and just select I you when their And up of assets had stabilize. service think generally, these to the the quality chance markets. haven't quality are these a in they look ramp assets,

I the think bullish in very fall. on particularly so the in market, And dynamics the we're starting

fall. some think benefits to this to XXXX be at always see like some quarters event. But fully to felt was I portfolio thought ahead do portfolio. for us in a in really we'll we'd take of think time, it's but stabilization get going I in the the stabilized we've So where start XXXX that or we this of We're

Michael Bellisario

buyers then just gears switching Could just prospective to maybe days have And finish paying in then financing today. And seller seen last the you transaction helpful. the the across That's deals you any what buyer-seller about on expectations? XX in changes it. get if terms front. to you've talk over line providing Got or of in the interest

Jon Stanner

We haven't Mike. seen a lot of trades,

very That's clearly whether fears from particularly still been all kind particularly data trends, they or markets to are are in and rate that conducive recession perspective, think that convention on trends, trends, been that outlook all an tighter of looming that the public higher hard were. call positive. that of the hasn't The transactions. point there's some Operating the you The being they group is XX the about in over -- better. environment we've the in, by XX what was we and in we markets. And interest environment. overhang, are outlook talked than a to performance days, an that, clearly are I last last credit offset it's can pace that

generally, of perspective, asset And not evaluate. capital we just that the it we facilitates deals. it. any at at at It's of the were sense, deep year. method We've it's trade for the something still think still execution. economics preferred range, beginning I a past. make end would look assets. of buyer our the lower value XX% marginally that decline lower, again, for we certainly lower, have is probably done X% if probably high-quality think, trended seller we in how I pool financing given much these From it is pretty But types and a the the not lower but in think so of to there's prices of meaningfully own, probably type assets than lower, the particularly I And chasing

Michael Bellisario

Thank it. Got Helpful you.

Jon Stanner

Thanks, Mike.

Operator

Thank you. with James. line next comes Bill question Crow our And of from Raymond the

Bill Crow

the your comments appreciate on Trey, guys. morning, Good margins. Hey.

between rate stabilized trying and I in the think and seeing with recovery. the we're all occupancy sort lag of seeing to in grapple we're what margins we're kind of what recovery and an FTE

at FTE you XXXX for per room occupied are on if where So XQ an basis XQ versus XXXX look basis? available or a you room per

Trey Conkling

morning. are A up relative in XXXX, you perspective. How we're QX about the Bill. of X.X% that say of you? would to probably mix occupied a per look cost by room, is from relative driven QX that labor. I to if on Hey, Good lot XXXX

today stand about at FTEs FTEs. Our XX

occupied part pre-pandemic, to higher We to as the think kind remember, we like what's what than was less that productive delta XX. be a going an little contract of don't increase but move would And you than something of we're impacting XX. terms per of is room be. we get forward in probably in here, frankly, needs it that to cost back certainly is which, to XX If labor, that it bit

that close perspective. And so gap of kind bringing an FTEs margin be contract to what remainder additional back navigate is as I we the and of labor there think from labor, market the evolution of will continues offsetting a which this

Bill Crow

So do you think margin...

Jon Stanner

about a I we and thing number. talked were about the basis I XXX Sorry. they say basis on that. margins feel lot add being pre-pandemic. good XXX think that points one jump we've I still will higher just than in points still think revenue -- same to mix in stabilized

FTE shifted I term. still skewed we've basis driven more still than count. points has we're up for running occupancy. to that, is basis more And to mix which points in the alluded, XXX The still and where of that's Trey your a made be higher that of XXX been pre-pandemic slightly less I labor is productive. of from some XX% narrative has we're just it think as confident think by our reliance rate -- perspective expensive longer I is on But of going contract margin expansion about

Bill Crow

can expect normalize? next growth we but grow as staffing and continue slows even levels see should to we labor year margins [indiscernible], to rise next RevPAR kind So if of margins

Jon Stanner

Yes.

skew long towards your I growth. think rate as mix so continued RevPAR to has

Bill Crow

Yeah.

Okay.

brings dislocation and Just any sheet... this time have your opportunities that you balance

Jon Stanner

Yeah.

that think your I long mix so RevPAR has as rate growth. continued to skew towards

Bill Crow

Yeah.

Okay.

of sheet whether Just number wondering from it now, have exploit be balance opportunities what whether or any leveraged any inquiries any this received might one, but you dislocation, kind in growth are on sort brings acquisition of seeing three of areas: your any And a I'm thoughts right side. you in trouble opportunities. who position owners you're to be may not these the time your on

just exit. areas. out are I'm and is you them resuming lending then for an side, be the and there looking Second good broken before obviously of got recovery And seems to in a that there's seemed developers got like which talked, but all, maybe asset for that whether Brickell haven't in deals, I mezz on thoughts there's about you've which wondering you're down process. to -- those And the some too just to up, good think, pretty come any development seeing to it broadly what debt-laden

Jon Stanner

Yeah.

lot We haven't seen yet, Bill. a

your credit development environment open XX they where I'll I than In were owners. ago. but markets or in in interest terms bucket, and fairly broken tighter XX the what dislocated third would of, we're levered are higher days first are early certainly your environment, still and an of say, say kind deals rate

we So get really And that's a basis. do in I compelling we'd -- seen can will the distressed or a more to be see like opportunistic opportunities them mezz if you're come. probably we going love there, to always would program. around potentially a lending in haven't finding yet, think aren't think but I to again, We they broken deal way that

highlighted You deal proud something the of that incredibly in we in we're Brickell. did that

into it where then asset X% of our COVID We you can on that we're think the the value an earn. yield well highlights earn through I in stepped money and the money all well, to and on. program X% X%

we've time that for And isn't to as And never this to lender. do term. we'd at assets -- those. the is development So to of designed that kind -- more of to never to love we be -- longer wanted we just now. difficult were looked this right we as pencil merely It we mezz always obviously something a program want to do get own this a

going think for time. I assets just of see period And so the less you're type of to that own, we again, supply a

we're But lower generally. be being, do some there'll I just do. think the be environment time what selective very We'll supply a continue think So in to we opportunities. I in for growth

Bill Crow

the morning. this for Thanks timing

Jon Stanner

Bill. Thanks,

Operator

next One. our Neil question line And of Capital you. the Malkin Thank with from comes

Neil Malkin

Hey. Thanks, guy.

Just a quick follow-up.

demand, inflation. prices, So typically stock that leisure of not inflation confluence seeing, everywhere, sentiment, are terms factors, I have everything, In just highs gas you little or from think like the at different bit empirically travel? seen, with prices XX-plus food, demand high now people just reference market but but of it's with don't properties I affect know in you year environment that a guys gas with

drive lower to any know, compared impact, resorts, of the, any high-end wondering, don't potentially those orientation call pushback slowing demand things? traveler I you to like, or to seeing arm or budget just a coming trends issues the not leisure booking are terms on maybe, of of because So in in rate some of any fruition it, of of the change or the some given sort

Jon Stanner

of there's haven't, trajectory really a We health. about I consumer broadly know out of there Neil. lot concern the

vast still majority is admittedly hasn't the in shown But Inflation growing. for you at the of think people today, of since still have growing faster. you are I any have it sit of track start they signs travel. wages and where the healthy, leisure at pandemic, if look the disposable the savings look market, income, we really people, jobs, much have labor is consumer whether of up how any

data in happening rapidly. the more simple no in it back But near real are points is at anything certainly the term. yet. monitoring more BT, seeing seen haven't least we it any the answer softness that I to by that There we is strength if there there, it's we're we're closely. be Again, to in than which very So going signs offset think come think that

Neil Malkin

Okay. Thank you.

Operator

I questions. am no further Thank showing you.

any I'll remarks. that, with closing back Jon President and over call CEO, So hand to for the Stanner,

Jon Stanner

thank catching forward for look We to you of leisure travel. today. with Well, you joining all up

So have a nice day.

Operator

for conference Thank now today's call. may you gentlemen, this participating and Ladies you and concludes disconnect.

Summit Hotel Properties (INN) 4 Aug 222022 Q2 Earnings call transcript