RLJ - Earnings call transcript Q1 2019

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Operator

This is the conference operator. Welcome to the RLJ Lodging Trust First Quarter 2019 Earnings Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference over to Nikhil Bhalla, RLJ's Treasurer and Vice President of Finance. ahead. go Please

Nikhil Bhalla

Vice Mahoney, key results. Good Financial XXXX operator. Leslie financial welcome Officer RLJ will and to our Thank Sean quarter morning, will Q&A. our Bardenett, Executive earnings the Trust quarter; discuss Officer Executive first of President and operational be Asset for discuss Management, company's Chief call, for call. Executive our Lodging and Tom the President you, Chief will and highlights Vice On President Hale, available today's

The Forward-looking forward-looking on to the I and filed non-GAAP results materially certain over the review Factors release call last made in it obligation undertakes XX-Q company's results company the this to statements communicated. to call as Leslie. reports from impact Also, in differ numerous with we uncertainties company's the of no and other the are the risks from located to to statements. the lead helpful been may discuss now to subject turn SEC. what company had press reconciliations that may be can may measures, our that GAAP will found actual update night. be

Leslie Hale

and a everyone a first morning, for Good We towards you achieving had start great Nikhil. Thanks, and we're us. priorities. key very joining successful and to active thank quarter off our XXXX

this of growth in First, quarter. EBITDA RevPAR our pleased X.X%, which resulted we expectations our with were our hotel exceeding

allocate capital discount prudently repurchasing to significant to stock continued we a million Second, by $XX.X of NAV. at

finally, the our meaningful enhanced our assets. borrowing of of we which And our and extended nearly non-core costs, our million $XXX Third, sheet. make disposition maturities progress continue to refinanced debt, we opportunistically towards balance reduced

last with and which XXXX in performance beyond. our in and year pleased the made markets capital the bottom especially quarter, line investments outsized with potential top we are growth We further underscores during strong

industry achieved a clip solid team quarter of overall first contributed in headwinds our performance the first We the management the upscale was expanded during our Against achieved top such the quarter quarter. shutdown time, segment cost despite business containment the the while successfully to robust consumer by asset quarter, this at EBITDA in our industry of closely also Components the impacted that the that first same solid spending decelerated. outperformance. and some Additionally implemented the correlate lodging initiatives economy government backdrop, X.X% to quarter. during At growth as the which RevPAR during the economy XX markets. and outperformed we the

which achieved represent of of robust X.X%. EBITDA, growth our top XX% approximately XX our hotels RevPAR Additionally

in Louisville from While a Atlanta. markets, our we in experienced strength results number and Northern concentration market California, benefited of our our primarily

Our X.X%, by outpacing total lifted revenue food by revenue. was RevPAR beverage growth, and strong our grew which

from basis performance basis shutdown XX the approximately of impact overall offset the and XX renovation a point points was by disruption in Our partially government quarter.

top Turning to our markets.

Northern ahead in achieved hotels came of expectations. RevPAR outstanding growth which California of Our our XX.X%, in

hotels. which RevPAR citywides, The first approximately XX% to Francisco-area six our growth record by driven at of combined led corporate quarter strong and demand, leisure robust San with was

with expect in in to and California we year trends positive quarter. citywides throughout ahead, the Looking fourth Northern second strong continue the

that growth RevPAR with market growth Another XX.X%. was outstanding of achieved Louisville

RevPAR which Residence outperformed and hotels, the Inn with XX% Downtown include Marriott Our the approximately growth.

As the expected, from we benefited of ramp-up Louisville. Marriott the

Center renovated planners. recently We is the meeting from significant along this hotel Convention that pleased are with demand attracting newly renovated

last growth our year. our our significant expect we be strength booking Marriott, year. In non-repeat expectations continue despite top-performing of headwinds Louisville of project Austin, of pace RevPAR our the markets the outperformed X.X% the this from to one Given to business

renovation in quarter Despite citywides. March. to markets especially new market our overall a soft combination light comps, to New of activity legislative as supply be of York expect difficult government our and that broader year. out-performance, New performance business. offsetting underperformed York citywides hotels first driven Austin soft Despite The market one weather we Our this and is from are first was disruption base the of softer benefiting a the to was our poor and difficult shutdown, the due backdrop, strong of this by We outperformed RevPAR corporate our flat. in significantly quarter group continue

better calendar and impacted be expect the one continue New by government also market a Southern shutdown. was several We this citywide year. to headwinds York markets California in to L.A. of overall The including our soft

Given of drove advantage during renovate primarily two year, the for the the to RevPAR in soft Southern market are hotels we taking this our quarter. the decline X.X% the citywides which hotels, of lower California compression

renovations the our going performance disruption to we forward lower ongoing, expect be Although, and will improve. we expect

was Moving shutdown headwinds by overall government several rates. market The including to D.C. per lower diem and impacted the

Additionally, at X.X%. the hotels our to our led renovation one RevPAR by decline of

citywide calendar, soft year. remainder we expect soft the Given remain for the of D.C. to the

last during the in and benefited quarter faced the we X.X% Caribbean the South difficult Our by from RevPAR as Florida year demand. displaced we declined comps

these first As RevPAR burn In balance expect declined quarter. the our for improve year. of X% to by the we off, comps Houston, trends during the

the market we and benefited the overall from market. citywides However, overall from headwind as we demand year post-hurricane of a last we relative the had outperformed less to

hotels the overall markets remain expect also soft, the to Chicago during and of citywides. Despite strong For one project due our base from of the being market. we Houston of passengers as the the rest hotels softer our benefited our storms. Many outperformed a market of had winter stressed broader business the year, to fewer

balance us year, which we conditions impact continue through soft market However, expect to year. in Chicago the of the this will

hotels of was over from a led citywides, supply and our was in the than new as weaker markets As the significant tough XX.X% expected, our combination one in faced quarter, These quarter business. by comps weak RevPAR which factors of softer first declining expectations. our non-repeat Denver to

headwinds continue remainder of us to the these expect We for the through year.

X.X%, that by led XX RevPAR Atlanta the by represent our driven approximately RevPAR markets XX% we our the non-top growth pleased was markets performance with with XX.X% of These primarily growth EBITDA. Finally, Bowl. were which of of Super of achieved

Strong Pittsburgh RevPAR portfolio will growth growth year. with of outperformed benefit Charleston these this our XX.X% to we of Additionally, X.X%. performance continue in with in and markets RevPAR

with the of Now our disposition status respect efforts. to

continue remaining to progress FelCor and assets. process advanced solid on have make the sales the We

the the In we've Beach disciplined Myrtle transaction We more asset. process disposition the Similarly, are progress and than an look Knickerbocker. unique is terms made interest continued in term. forward you this that in seller disposition That are experienced have by update providing originally near this York an significant call expected. around of our time the we we we we hotel, being last in and New on said, our recognize taking on this market's this to encouraged since

have multiple. created value We record confident have and an for that executing dispositions of strong at we shareholders a will dispose we asset significant remain attractive that our of track this

is by transaction is the supported which current markets. availability debt accommodating confidence by the capital landscape of Our the and bolstered

including investor the demand, timing these have healthy. sustainable progress that continuing with we are Finally, pursue we we are keenly said That disposition factors to the market. focused long-term legacy investor are generates as volume on of will RLJ hotels opportunistic on growth. as profile. by To owning compliant these not that growth To that a and our several is date, end, long-term portfolio potential disposition appetite sales well assets and for financing influenced our be made

this progress we We will key towards initiative. provide updates additional as make

our we will other within capital the opportunities growth As accretively initiatives at that brand through look to profile. including overall asset opportunities opportunities recycle such portfolio capital and sales, as we enhance value-add deploy ROI the repositioning,

some Suites. portfolio. We upcoming lobby such have identified these project significant underscores such have in the and include Suites, in F&B of the a accomplished across opportunities Mandalay additional keys number adding Emeryville our Beach Curio reconcepting which opportunities embedded a as Embassy Examples we our what value such of our conversion as Embassy portfolio, as areas in to rebranding the at

We returns double-digit projects on these and unlevered opportunities finalize expect in term. to several are near low the targeting

Additionally, effective capital as tool. share repurchase allocation an view we continue to opportunistic

at we $XX.X our over XXX,XXX shares NAV. quarter for significant discount repurchased This to million a

our operational review for the to operating year performance realize assets for million of and vision. we the and flexible last RLJ hotels a high margins capital including call, $XXX million assets; back low-levered a As XX of deploying call energized maintaining priorities which rooms-oriented our long-term which are outlined will are investment significant turn our detailed our well non-core our selling priorities, On points We of accretively. by progress metrics; our to key to our the I we legacy and our and we located XX legacy reach $XXX the quarter, was of four include: achieving with made the have highlights. operating basis look demand. for at towards hotels finally, over realizing financial to FelCor remaining Sean? including the balance Sean aspiration heart And own synergies; first in long-term now more to positioned portfolio, remain that we premium-branded the sheet.

Sean Mahoney

pleased hotels during California, exceeded results We're materially our in Atlanta the performances with and Northern the Leslie. first Bowl by our performance strong from quarter operating driven Thanks, expectations. where in Louisville Super

positive Additionally, our a asset management high-cost flow-through to expenses environment. growth operating in and limit managed realized team successfully

first and RevPAR in March. quarter, January, by increase offset X% of increased our X.X% occupancy. a in the ADR by X.X% decrease February, in driven in For in increase RevPAR partially was a X.X% X.X% X.X%

points quarter from from was points negatively government first As Leslie RevPAR year basis the our shutdown and disruption. mentioned, current basis XX impacted renovation by XX growth

revenues. increase our a in Additionally, by other was driven RevPAR X.X% revenues our and in growth total a revenue X.X% growth and increase beverage exceeding food

segment terms industry segment. In the the in our was segmentation, group to of our our similar trends strongest

in group our markets geographic citywide expected in activity. favorable quarter stronger due was First high-single-digits, revenues to the footprint with grew which

demand from we due down the robust Atlanta corporate, the to as government, special a in was Our post-renovation transient and segment, XXXX total such decline transient significant the experienced Louisville growth to several in and was in due while government the shutdown. outperformance to related quarter the group ramp-up group first markets Northern renovations. largely California, primarily In

we EBITDA to achieved XX.X% our solid the margin of quarter. hotel for As line, it relates bottom

operating team to by led only XX only margin basis Our asset our decline which to management X.X%, aggressively costs, which our points. increasing managed limited expenses

On including and food we increase initiatives our the be and success that the market limited containment expenses, support asset continues cost the tight beverage an the utilities cost including front, and to management IT. of departmental headwind, labor pleased and rooms costs, in were although industry with

hotel During $X.XX. adjusted FFO of of Each of the first we quarter per $XXX.X first our exceeded expectations. metrics million, and $XXX.X generated these EBITDA adjusted corporate million, EBITDA share quarter, of

Board. markets Turning to repurchased $XX.XX shares. the take in the of repurchases capital last capital current allocation, we price share by repurchase share. of to average share currently Year-to-date, million XXX,XXX have advantage under continued a plan capacity the for and $XXX.X our deployed shares we of Since an at $XX.X million recently year, over repurchase we to have have volatility remaining authorized

As share from we sales, our capital to allocation generate asset tool view proceeds capital repurchases as incremental return shareholders. key to will continue we to a

sheet positions the Additionally, is cash unrestricted our over priorities us of well below and $XXX solid quarter X of of which debt EBITDA multiple to ended in balance times. billion with X.X $X.X net target We to times, capital pursue million debt simultaneously. our allocation

our As end the quarter, of fixed debt is or of the of hedged. over XX%

to $XX sheet first remains XXX unencumbered. of EBITDA mortgage for highly refinanced the recent opportunistically our Subsequent re-financings, adjusted new rate balance million represents million XXX the X-year rate approximately mortgage by flexible which entering XX% hotels, mortgage first Our quarter, of new the of of $XXX and and remain into end we X-year floating loan a loan. floating loans $XXX a million

costs we refinancings existing million, These loan. match $X.X provided which to loan an outlook quarter. was by will in new reduce of the Additionally, mortgage million $XX amended the our million the borrowing $XX annual mortgage we last opportunistically included pricing

debt successfully extended our the flexibility. debt average and maturity Additionally, new financial increased our

have until we no significant Finally, XXXX. maturities

to continue expense, transactions will our out lower add interest balance to Looking sheet. ladder and further ahead, our we to explore maturities, our additional flexibility additional

expenditures, capital XXXX track program capital budget. on Turning to and our remains on

quarter which line the was our was basis in expectations. XX points, in RevPAR with Our first approximately disruption

XX by disruption We impact growth expect renovation to points. XXXX XX basis continue to to RevPAR

positive of and terms that at drive the risks factors outlook, in may our the this of macroeconomic RevPAR impact we the overall for remain. Now economy growth should we remainder year. to the believe year, continues That our geopolitical expand, as looked said, industry performance which

to Turning portfolio. our

that first continue We the the some the through remainder during experienced tailwinds we year. expect that the quarter of will of

in performance Tampa; the that pace last operating in at robust a citywide citywides As a strong reminder, and from Northern expect compared XXXX this our strong California we and disruption the Louisville; Marriott to we last of ramp-up group to year several benefit lower renovated in calendar year. market; hotels renovation

and assumes results, our share or first full incremental quarter these but repurchases. dispositions, Our incorporates refinancings no acquisitions, reflects updated year outlook

and XXXX, low renovation EBITDA up hotel year range; XX in growth overall between at and in end XX between and of their RevPAR EBITDA the assist our to between million RevPAR our increase end adjusted EBITDA a basis range share range basis preliminary industry midpoint the incorporates to expect For XX between disruption; consolidated X.X%. prior to end of EBITDA $XXX share, of adjusted our and increase $X which our million modeling prior $X.XX range; flat million, expectations an we to $X.XX EBITDA be points million of full the of to XX.X%, $XXX low FFO to margins low hotel the an range. to hotel range; calculated to Consistent of and increase was quarter respective our to range of and still range. full XX.X% expect behind we the XX.XX% at now of adjusted prior X%, $X year, between end April of range an to of our To the the an per prior points of second the range million, $XXX with $XXX $X.XX seasonality, of XX.XX% million low to to guidance increase growth

evening, information now includes the quarter the the XXXX. call our past was our Please to on We forma which growth over Q&A. expect over the of the Operator? schedule website for second posted will last the operating four for lowest supplemental quarter pro the results refer RevPAR to operator of I quarters. portfolio be back that turn to

Operator

we with time, this Instructions] proceed Please KeyBanc comes At question. conduct Wurschmidt [Operator with a from you. question question-and-answer Our Thank Austin will session. Capital. your first

Austin Wurschmidt

morning, and you thank good everyone. Great,

And been characterize actively the level you today RLJ could on curious of anything marketing interest you Just Leslie, then the million Sean, legacy what million assets. $XXX if $XXX has around to front? that are

Leslie Hale

I expect process full that in good Austin, as before to and in to we've but early that $XXX say $XXX for is we would million obviously, transact assets of portfolios see the both objective year. would discussed -- morning. million And and we're, single that that and related on ultimately, healthy well on the those there's around market transactions we the interest. say assets. what is will that those have buyer interest. volume and And timing early predicated as had as conversations I based been read to would be But conditions healthy

Austin Wurschmidt

report then I to the an like sale that ton to care horizon there's up offer it appreciate that. sounds time to And hotel. not a the of it potential relates just you'd updated as but on Knick, if new curious

Leslie Hale

me Austin, let way. it I appreciate it the answer me question. let answer this But

we that healthy that maximizing said we've deals our our of very And the we the multiple execute each -- we've position on selecting to that FelCor of transacting we importantly healthily a We remaining remind we steps have on to are we X buyer. attractive well And time all a I'll of transacted that balance times. like sit asset us on the both and taken And more on we having executed the of asset time, absolutely sheet times. At at deleveraged thoughtful, the that pushing million how been deal below yielded. we've And multiples path very have you focused led deliberate same assets, the target we're very on below all would. on those but been of $XXX we've recently we value. the on have XX

for focused its sure position the respective we in strength have and of we're that assets the our value here. pleased towards to have how shareholders. of deliberate as we so processes well is we're that how create sale be equally on assets process. a what making moved balance the performed are we very most process transactions remaining given the of these Transactions to sheet very have the And our and at each And have

and you And time. these so look updating believe is we're the say what you at to forward on assets would I going to that we transact appropriate we that to

Austin Wurschmidt

there. Okay. the one the for appreciate then thoughts And just last I me.

lower expect fall of softest being in the the you Or second You below of low at range? we full quarter to possible coming the for Do mentioned range the quarter XQ the April the range? that end within that year. of full and of end kind kind guidance the year still is it come see year that

Leslie Hale

No.

expect within to a range. quarter. We it softest the is come Austin the that perspective will But I cadence quarter from say be second the would

third to slightly fourth quarter the quarter We because comps. and fourth expect relatively be than with of being better easier third similar quarter

Austin Wurschmidt

Thanks the time. for Great.

Operator

Our with with Please Barclays. next question your comes from question. Anthony proceed Powell

Anthony Powell

Hello. me you And soft don't believe could I kind your the is think but Good vision brands rebranding morning. mix? if fit a how Curios the brand does how you as on long-term wrong, question have it initiative. higher gets into any your I brands in general other more of Curio had upscale many Correct portfolio. do? a for your I I'm up

Leslie Hale

Anthony, of correct So you are in the of brands. soft some terms

brand look that a there that would think that around that that specifically. are and part portfolio. respective market brand our the the profile I'll willingness other of going is to what think that have our both we to and asset are more let soft of physical could Curio about be rolling opportunities And condition interested are opportunities physical within possibly portfolio within about that the Tom near-term brands be be of we we add predicated brands there to talk brand the soft But that on think Curio and franchise about that. then the we are do to available fit in. the to to brands agreements are the I few or structure the we when able our so discussions active and we having think assets at relationships, in

Tom Bardenett

brands and now Anthony a million members there's Yes, all wired Marriott the that they to interesting now family, they're powerful about is Hilton. in all Hilton soft XX Curio reservation within with and common is have specifically connected with what's they're the and something system

regards we And because beach very one. so Suites to the there those think are up on trying on where connected there in to the is they're to opportunity be are It's California, that estate renovations what Autograph know and common it's the have all great statements those that Southern opportunities great pipe. is important possessions. as But which brand create attract. well. they're based that they're attractive as the particular members Santa it's for think brands in thing brands on AC we Embassy the way to there about soft value, think as to well The making interesting experiences side we is rare going where well Hilton And Moxy is perfect will about to upside at us we a as versus us of Marriott got really as and to that's those in within we've we're as and real Barbara. participate Hilton to opportunity well those the member group most a And about as of do a

Leslie Hale

we on remix in a for the brand committed looking Embassy to brand. is within Mandalay sits It's unique advantage we as at situation that. the Suites asset to there's opportunities always brand. like our well it assets profile. on And opportunity opportunity of convert while particularly that Anthony is and fits we add it's we to the look remain that We because believe take that what not the don't are Suites I that conversions do because of When to think Embassy would that beach an asset an of the an on

Anthony Powell

Got it.

luxury And high-margin. are in I upscale guessing just Curios if other long-term, brands focused long-term Okay. I'm upper their portfolio and maybe owning maybe they your fair? you're comfortable and or even Is is room rightly the that guess

Leslie Hale

fits of consider heart mean, that located extent is I focus And owning in we it. the high-margin our absolutely rooms-oriented, to assets demand. would again, the Yes, criteria the owning asset

Anthony Powell

impact Got it And couple next percent profile how CapEx it. does terms over of of your years the of revenue? in

Sean Mahoney

particularly look Louisville. last year a within CapEx years, you of handful our when year, couple think last Union I the our made and particularly last over at Square investments included portfolio, significant we with Anthony, significant which of repositionings,

So continuation significant where a not year into expect of that us you this repositionings of conversions a or is these future -- one from just should the year. is what lump into to quantity

fairly think ebb on and to go size and so last a CapEx for materially our that, it And a of but year we based spend years. represent I heavy portfolio wouldn't flow the will would want above

Anthony Powell

Thank you. Okay.

Operator

from with next Wes question Markets. Capital comes RBC question. proceed Our Golladay with Please your

Wes Golladay

to question. that projects last CapEx as A knife? comparable, quick next obviously go year about one a what renovation but under The will follow-up these disruption the be the

Sean Mahoney

it's what Wes, that to talk disruption those the on true markets about early higher to based Obviously, too that in within the Yes, occupancy for in. higher have takes be seasonality, disruption going always place was don't renovation markets. particular portfolio Renovation is XXXX. market

And to think will the in as repositioning the assets disruptive renovations about schedule try course we least period of rebranding possible. so and we

of convert. of well to as time the function to as it's going individual market length just takes So be it the a

Wes Golladay

looking out your you beverage remarks prepared other continue the at definitely strong. then called year? quarter's food And this Will Okay. and revenue the very the throughout results, that in as

Sean Mahoney

our group sequences out for going Yes, be our year. correlated view to that how to the is is F&B

quarter, and had First strength particular to groups. well the as Francisco respect in Louisville as with we San Atlanta

our so F&B And accordingly. moved

in Louisville San should growth buoyed in as as do both of F&B full-year, Bowl-centric the Super total outperformance those story, but was outpace three Atlanta San well that F&B are For and Francisco. we throughout Louisville. a our two that's Francisco RevPAR and in assumptions the more both portfolio of by markets really expect our

Wes Golladay

revenue? other the And

Sean Mahoney

we're initiatives, parking is that. out aggressively revenue was Other things. function working have a a which of rolled the and on we portfolio-wide couple One of

trends continue for the to those year. We expect

but for our on lot and for us resort the working we was year are other the to those we're expect of hard initiatives to should We uplift. that driver I throughout But the year, would a in continue for that facility working assume that that to try moderate. and that for the fees of think a to is trends don't portfolio. get revenue the going quarter other handful The

Wes Golladay

Okay. And last one.

You mentioned do the always balance in to that year? prepared remarks ways the you Is sheet. anything enhance can further look there you this for

Sean Mahoney

We're evaluating a transactions. handful of

I probably to think not lot a done. the with this -- year, until don't We there's respect next have is a maturity XXXX. debt maturity debt

it's significant. looking of a handful to reshuffling something are -- We of debt transactions. deck the But with at respect not as it's to opposed more a chairs the

rate so think interest heavy-lifting for done the savings already an And the been has year. I from

Wes Golladay

Thank you. Okay.

Operator

Our with with Baird. your question W. proceed comes Please from Robert next Michael question. Bellisario

Michael Bellisario

Good everyone. morning

Leslie Hale

morning. Good

Michael Bellisario

to implied stock you're back trading about Going of versus working of one-off portfolio multiple your shares the comes kind us these door cash more eventually versus can upon pricing on, the sales to more non-core thinking assets, hopefully you the that about the appetite completion? and think in help sale buyback how you're when pricing of

Leslie Hale

Sure.

for And assets capital it's my transactions, be the the because than to and at -- all strength These needs I range a this our will any sheet will are look of we receive of are conditions, as and the we're the allocation, our to assets dictate I well in vastly we back it's in not on to clearly in of or capital assets think of and conditions market from how and early would different is whether to at are recently continue appropriate proceeds. will where pricing we as be and the in say proceeds say of we'll these stock. us process. is, the stock that see of So assets. the sort to early characteristics And that appropriate of what either point the these too look We're pricing. the for terms in match-funding in profile ultimately have balance asset the that is What would disciplined time that I sold. leverage-neutral at growth that market the the terms with buying going buyback the evaluate position including we'll we disposition, as book

Michael Bellisario

vein, maybe in maybe Got your any not that sort but of the noticing last high just months, first how are capital? what the it. quarter, asset performance assets to and And over your kind months impacting you saw XX structural changes same in suburban allocate you of nine that's incremental and you maybe then between plan urban six in level, where months,

Tom Bardenett

Yeah. Michael, I performs. instance, with And how And Francisco Francisco San CBD you, CBD talked ran example this compression. during of the Tom. NAREIT citywides to we say relate for really would we an is that San there in out when were about the XX%.

they the in the hotels have near airport We Francisco performed teens. Emeryville in as well San high South as and

other where think start to how you with performance. those compression Atlanta positive well, we portfolio. about did some that's where and our citywides basis suburban about sometimes When that about had citywide the to but obviously not you would I think comparatively we that those overall say footprint our have on Diego the good felt When CBD based markets citywide positive. assets San out within those we from suburban all that the performances performed. citywides, Bowl, were moves an was locations comes get So, that performance, on assets Super the we from had

Sean Mahoney

suburban assets, been bolt-on these our like some Mike, our a suburban Austin where driven of has markets within in have underperformance that some suburban Supply of in of big particularly then Denver driver and to just assets in markets some we And some Tom's comments. has and assets. to of the

last some maybe may our portfolio up in markets. As is our concentrated markets we than and to our CBD-type of call, more suburban for markets naturally to articulated long-term heart-of-demand on line be the more vision

through relative a assets compress think that has -- of are new of demand supply these some how cycle. in what these to past we the I -- be natural markets outsized ability that suburban think compressed we these have to submarkets which had as to reshaping of so, going the have portfolio, And would some fallout impacted sorry it -- in submarkets' is

Michael Bellisario

you. Got Thank That’s it. helpful.

Operator

Our next question. proceed from your Capital. Janney question with Tyler with Please comes Batory

Tyler Batory

Hi. taking Good EBITDA quarter. my in want the margin circle for morning. the Thanks back questions. to I first to

cost bit guys look that when you synergies pace points year-end? of further? measures. basis are a little to have then Can on operational XXXX, containment at some you by XX think you discuss to you I And XX still cited

Tom Bardenett

Yeah. answer Happy that. to

the the on the to at basis to green opportunity buy to was was we on that sure objectives. had basis our points, on In expectations, the on We on the it our area basis obviously obviously, at the margin. in successfully side, also primarily focused particularly with to energy of around been the line. as We the focused alluded XXX flow XX versus X% with side, lot RevPAR the mix and revenues as in management to helps part because and the then to that F&B assists energy we we're efforts in which quarter, and come wages managing drive points. benefits that RevPAR. were lot the and But X.X% regards are as focus XX the the if other was when flow, the also and on path when in We've a that RevPARs growth. in companies on positive. have our done procurement And our contracts webinars, able to improvement be already of making conservation, offering electric. benefits to points sure XX that, They helps a that beverage But had point well food measures we're the about choice in rate growth hit side. you And the flow. making And gas profitability -- to sure average lower at we housekeeping. XXXX. that's specifically to XX profit Utilities, basis we low procurement. programs holding addition of first talked banquets, already Sean the cost talked about heavy-lifting So up can end your of make actually are we're that of on committee, desk, and points the

able making significant reductions IT that, to contracts regards consolidated up, voice, do get those we within and a we to sure were phone found lot And vendors. the that what addition our as we In high-speed of had we in and came contracts. to acquisition,

we have basis good quarter. points about basis XXXX going for first regards of continue So scorecard forward. to was that XX to our results think in we'll XX And part feel points we our to and

Tyler Batory

little a some about of market you're bit in Okay. then, Great, what more talk can on discussion, you that's seeing And follow-up Austin. a helpful. just the

would about that outperformed I that beyond, mentioned talk X.X% your both And that, and year could think in that also if XXXX? you then But expectations. growth you supplies about RevPAR well. how as be you thinking helpful this for things are market

Leslie Hale

was down still largely first Sure. quarter. overcoming Austin off we And I that that, to well the mean But of Austin, beginning was our said had Austin hurricane year, as comps the we're as Citywides, legislation were think we rolls our would by We one at as as of year. better outpace year to expectations in a the because us, we that April. legislative be well. balance some Austin headwinds. fact was that. fall the did that in for able actually driven it year the legislative the going in than the of perform was

it's slightly And Supply about so, similar XXXX, this it's be year. for And in the it down think in Austin balance. up up up a was a in will in Austin -- tapering XXXX… headwind X.X% X.X% is X.X% level I

Tyler Batory

Okay, helpful. that’s

Sean Mahoney

the add on be our this of under the year. CBD one assets renovation Inn will at that, to are kind going is I Residence we thing of Austin then one …And

performance And that one the the Austin to going is was worth it is But baked our so that's our assets. impact of largest that market, of which guidance. noting into

Tyler Batory

Thank Okay. you. I leave I appreciate. it there.

Operator

Our comes Raymond with from Crow with question. next Bill your Please proceed question James.

Bill Crow

to intent of Marriott? the it's of you, that next that Center ask will the curious Louisville And Hey the I guys married for good had are morning. some Thanks. I'm questions there? big just your A a year. lift Convention with comp because, obviously, cause reopening Leslie, you issues couple

Leslie Hale

XXXX. we never why obviously, the right And is we Every to for market the were any at ramping pacing price. sale single with put about is way next to asset asset. And which in married up is that Bill But into capital asset expected for year the the very in feel as And and the Convention well. the asset. believe good do we we're it's willing the Center, XXXX as

every where at for asset that sit But hold. we would today, to so, And we act it's sale is some again think continue an price. I

Bill Crow

select the Marriott results, away the as we've at in the taking brands? Moxys Hilton look results, Hyatt are and brands, the select older and the think world, cetera. you I'm share from some curious, of Mottos the And some service newer seen et the service whether results Okay. weakness just of brands we

Tom Bardenett

still time. it's at brands there's the a point think for on because that, distribution I early Well, not little enough this in just softer

with Starwood that pipe, you the same through benefiting from work think a a that bit. of now integration, there's thing the so I interesting and bit noise Marriott the that kind is other have have little products little of you to because are

opportunistic that, to that trying to through what's select variety that out things on model. the addition of for with -- service the threshold and going of you to There's thresholds. a In have figure is think a redemptions more tiered Marriott about

from typically RevPAR the as have I index Courtyards about Inns, still supplies. high-performing Those those so service select And versus on are what's the going Residence highest your very a think other with soft and brands you performers. all

think loyalty stay as other deliverables. of going to certainly regards soft I is, we models But because that softer the some going close an it's swimming of is brands very it's are the the there impact, select to these going if of to lane there still service out, play brands to be model. So, probably be But within because stated. brands Leslie interested with there's extended brands in where of the so much the to the those some and to compete you heart demand be in are in to to have want what and of

potentially So we're future. pursuing the that in interested in

Sean Mahoney

these thing to we're with initiatives respect to respect assets. our to question Bill, that your luck of own And one take some add trying make to with I'll is

we wants of within are the to assets positioning market, a we're so, guest we our about scope unique trends And the the these type how be and think it when such know experience. renovations that more that

And we the so markets, renovations we're help product our positioning these relative when within are differentiate assets think which geared performance market, on to within to share. trying the will

Bill Crow

question, me you kind renovated of of have portfolio the it's an do using Well, last my I age actually time fully your kind is new leads that birthdate? And last that. of appreciate as which average to been a

Leslie Hale

would to have I assets can put capital Bill, We what recently We the renovated. you put that get on it on in onto recently lot amount relative we we've don't age back of capital a number. of the to in be assets so the the effective

Bill Crow

I’ll right. leave there. All Thank Okay. it you.

Operator

this would Thank you. back to I turn comments. over Hale At the for Leslie to time, like call closing

Leslie Hale

on we an we performance made Well, in joining the the the progress in all look and the for our year to update our start you. Thank pleased thank on operating to our initiatives. call. you providing have terms us term. very today We're near And with forward key of

Operator

This you. does today's conclude teleconference. Thank

time, this great disconnect your may day. lines You and have a at

RLJ Lodging Trust (RLJ) 9 May 192019 Q1 Earnings call transcript