RLJ - Earnings call transcript Q3 2019

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Operator

This is the conference operator. Welcome to the RLJ Lodging Trust Third Quarter 2019 Earnings Conference Call. [Operator Instructions].

I would like to turn the conference over to Nikhil Bhalla, RLJ's Vice President of Finance and Treasurer. Please go ahead.

Nikhil Bhalla

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

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

turn now the will I to call Leslie. over

Leslie Hale

you everyone, morning, Good joining for and Nikhil. Thanks, thank us.

quarter, debt line shares despite net was largely selling third build slowing closing meaningful from and portfolio on we to the trends. X with which quarter; the of expectations. September; with choppy during low and hotels; million balance fundamentals, in our final executing sheet the termination additional X.Xx amid Wyndham sale solid includes RevPAR the During XX-asset maintaining the hotel only $XX agreement for in operating that of EBITDA; portfolio achieving we momentum operating repurchasing X levered at a and a previously made This by executing generated results transformation. progress of on on our noncore fronts We the number continued announced

trends spending wars lodging further, constrain the softening consumer third we light the top geopolitical remained quarters, of likely healthy, softened in decelerated which trade events. business quarter, hampered These the overall in indicators uncertainty U.S. associated which third the impacted made XX which We the were the the demand. transient business leisure and continued growth demand are in as although consumer during the investment moderating and with the markets. in progress by transient from the demand. urban And Key especially such pleased with prior resulted quarter, trends in economic to

RevPAR this our X.X%. slightly by backdrop, Against third quarter declined

Our performance Dorian was diminishing as slow-moving traveled Labor around Hurricane weekend, heavily for also constrained several holiday a impacted the expected demand we by positive shift the hurricane September. the in lift Jewish Day from days

our transient in with the most across industry, we of the segment in experienced Additionally, markets. broader the consistent trends corporate a softening

pleased Despite industry urban markets the we these we and XX as the gained headwinds, are that share. outperformed segment as market the also top of well

Our top strong XX% achieved those growth of which from outperformance center. including Louisville convention a a benefited last strong was by renovated we driven year. by capital markets, markets, a significant growth number group invested the Among of where ramp-up newly in our base, Louisville and RevPAR robust our led of Downtown, in-house Marriott

performance quarter. through We fourth to expect strong this continue the

XX%, which our CBD, outperformed overall with achieved significantly the Austin, footprint growth of In hotels improved the our in market. strong

citywide created hotels from and by compression the transient strong Our business benefited demand. healthy

We of remainder the to positive expect these year. continue some of the trends through

demand the CBD. D.C. X.X%, from in events growth in a solid benefiting strong created group hotels achieved RevPAR by Our of of in-house compression number and

this During by market noncore the one our quarter, improved in hotel. selling we additional geographic footprint

quarter to at the moderate growth to fourth renovations hotels. due citywides in expect we and of ahead, our Looking one fewer

of to due our the Denver assets. is another improved growth profile sale noncore where several market

X.X% Our strong growth the quarter, and third during large demand. hotels benefiting achieved RevPAR one citywide from corporate

citywides. to moderate expect due to we quarter, fourth the to performance fewer Looking our

leisure achieved positive strong and in-house demand quarter, weekends. the helped group by during growth in hotels RevPAR California X.X% base Our Southern a also over of the

citywides and softer the renovation, the one fourth of expect hotel in RevPAR Diego San we to quarter. However, under in contract our in light

New by X.X%. declined RevPAR York, our In

of the leisure soft quarter. from demand. a we holidays July falling expecting of With the Jewish and August and a benefited September Jewish in Although were holidays, timing October, to transient weak soft are business due fourth combination

Chicago Our X.X% markets impacted X.X%, citywides by California Northern respectively. and RevPAR this with declining were quarter, fewer by both and

we Northern continued has quarter. expected business experienced softer Although during in fourth we softness, the quarter had the which transient third trends into California, incremental

remain We given the during citywides. soft to expect quarter Chicago fewer fourth

points impacted Hurricane was and basis Dorian our renovation. by approximately Finally, South one from market Florida XXX

and in other impacted new fourth also quarter. Given with Tampa, international such these we the achieved X.X%, number to during Charleston, XX.X% travel New trends growth, Orleans and the as growth achieving are softness Charleston we RevPAR pleased of markets of headwinds, Atlanta. many a contract Dorian New markets that Hurricane XX%, robust supply, and RevPAR these Despite and expect Tampa, respectively. RevPAR solid Orleans of

the portfolio. With our the geographic increased markets overall sale amplifies of in of the assets, growth footprint these further noncore concentration improved long-term our

and deployment. transactions to respect with capital Now

As embedded us expected, additional time. dispositions the of XX-asset of an We've D.C. for our drive which benefit year, this $XX in appreciation achieved over hotel NAV our profile, August almost sold elevating the and been growth we on value portfolio market million. with pleased noncore closed our the and in execution sale unlocking to strategic positioning of meaningful noncore the

portfolio is vision. long-term our current aligned Our largely with

to of investment are for deploy our debt as repurchase and progress significant regard created number an exploring ROI we opportunities from refinancing opportunities, the accretive the have callable which FelCor shares X% by we and reduce bonds, incremental of pull, thoughtfully in capacity. are where brand brands; the savings. tool; such Wyndham continuing interest portfolio, working capacity a which sales our this levers to a highly and expense mid-XXXX of to With significant as substantial we actively investing asset conversion and are by represent by pursuing successful cost interest to see including in strong making opportunity Our

our earnings. benefit capacity our We to investment XXXX expect the deployment of

to take we disciplined thoughtful we As capital, continue approach allocation. will to deploy and capital a highly

remainder for outlook year. the our of the to Turning

in fourth the the expect continue We the that softening industry demand to throughout in quarter. quarter experienced lodging the third the

and in XX shift international markets factors impact to in many the travel be to expect demand We to markets. the by are the corporate These urban and of October. remain top expected constrained to also Jewish disproportionately the holidays amplified weakness

As fourth in to Louisville as it during in California, our markets portfolio, relates strength such offset we industry of recent more expect than group to our Tampa Northern and and the quarter. the in-house trends citywides many

the result, our guidance, As are from our a we XX at midpoint implies the guidance. a end RevPAR top reduction which basis previous points of reducing

transformation we has strengthened which very balance fundamentals, slowing of the improved platform sheet. and portfolio, our are Despite pleased our our successful with

We environment. to value a in are Further, within capacity rooms-oriented, we the growth with despite have high-margin, Therefore, are working a well portfolio. of our positioned we investment macro incremental value that embedded of and unlock portfolio believe shareholder choppy we premium-branded generate substantial hotels can markets.

I will review turn now Sean and for detailed over highlights. to the Sean? a call more operating of financial our

Sean Mahoney

Thanks, Leslie.

following. third discussing please note the quarter Before our results,

Our were year-to-date our and exclude hotels XXX operating include which results the the of portfolio during Inn and third owned Columbia quarter. the Residence and sold quarter as XX-hotel September XX

EBITDA adjusted sold from only and corporate period. during reported results ownership RLJ's hotels Our include operating FFO

way, X.X% flat increase in of in X.X% percentage results by growth by X.X% and September, the of rate, was out offset Monthly with were average daily third by X.X%, a of in in a occupancy. RevPAR contraction decrease point August our July driven items partially housekeeping these quarter X.X% RevPAR With followed RevPAR of X.X and contraction respectively.

share We the market XX their from that upscale, XX during basis gained sets points markets of were the and the quarter. portfolio pleased outperformed top urban and competitive

basis XX quarter in Dorian RevPAR by September. from third Our growth negatively approximately points impacted was Hurricane

Total an other to revenue initiatives. driven revenues, X.X% success parking X.X% change increase and in beverage which during other departmental which in increase RevPAR was and grew a food the quarter, revenue exceeded in and revenues X.X% by the continued the of due

from benefited third a only shifting which positive in room the the was more results revenues, XX% That by our our Tampa. segmentation of in in quarter a into These The segment revenues. revenues. Francisco, by partially week-long single-digit San citywide were than increase group group approximately decline standpoint, group impacted single-digit low quarter. of offset fourth represented driven a which our transient From said, offset by and were was a low by third Louisville outperformance markets quarter

backfilling However, we mitigate soft demand through the trends contract transient partially and group business strategy with to continued our quarter. the during

Turning line. to the bottom

sale hotel was million. negatively of impacted Hurricane and pro Inn EBITDA of that quarter Please pro million $XXX.X Dorian forma result third third EBITDA the quarter hotel Residence Columbia. the note as $X.X a our by Our was forma approximately

XX X.X%, In terms to initiatives limited cost-containment that EBITDA pleased margin increase costs to of quarter were contraction we our which third asset our points. limited our hotel operating the management basis only in margins, operating

cost labor to in full continuing best implement is manage team to employment practices and productivity environment. this Our

$XXX.X per quarter third EBITDA share of into Our translated FFO adjusted results of and $X.XX. operating million

the sale was and and impact weeks quarter adjusted approximately a third Our of XX, these of the earlier of Residence the million. FFO Inn items $X.X reduced EBITDA of The Columbia closed than the total of were which Portfolio sale couple timing expected. by

ended Turning $X.X cash the $XXX debt, balance of fortress debt-to-EBITDA and quarter to with our sheet. approximately of million X.Xx. We unrestricted billion net of

significant maintain flexibility to our balance sheet. on continue We

end XX% XXX hedged or the XX debt of the are approximately and quarter, of of unencumbered, EBITDA. As our XXX% fixed representing is approximately of of hotels our

and explore will ladder out to We maturities continue opportunities expense. further to lower interest

budget. year full remains on capital to and relates it capital As track on our program expenditures,

to to and $XXX of $XX points. million renovations XX expect expect million continue basis XX year XXXX We to full displacement renovation-related in

X let's at program. repurchase $XX of $XXX million remaining the repurchased We have currently approximately of our under have approximately share. to million million recent under average year, price share beginning the activity our capacity we for slightly shares Now above Since $XX program. turn per an repurchase share

expect we returning repurchases through for the of and forward, capital balance shareholders Looking dividends. share continue our XXXX, to to

investment recent capacity. dispositions created Our significant

As as highly capital. will you would we we expect, remain deploy disciplined

to of share alternatives conversion range a have X hotels; highly accretive the Wyndham repurchases; high-impact and opportunities, opportunities. brand We multiple including including ROI pursue,

allocation conditions value evaluate the to capital to capital allocation investment capital allocation XXXX alternatives relative our will include plan, remain finalizing market on of continuously are We a We deployment of changes alternatives. of committed our the capacity. based portion and which

I now to additional underlying color like our provide updated outlook. assumptions the would on

third quarter fourth quarter. have our the Although fundamentals continued trends our recent with was expectations, into line and softening the in

Dorian the actual outlook impact and Hurricane incorporates the Inn of XX. the and quarter Columbia Portfolio the sale timing revised our of sale earlier Our of including Residence of third results, the

we the addition, revised our into following incorporated outlook. In assumptions

at softness expect now the San through year the will Francisco. RevPAR favorable continue and comp demand hotels expect flat We despite citywides fourth due easy in in We quarter. transient strike the trends recent our softer-than-expected Northern California business to prior to

Houston concluded Chicago, by Louisville finally, Louisville by the be to at to continue citywides production guidance group Based we Diego. end in prior strong Washington, of ranges the expect of the not D.C., achievable low impacted of end Marriott. and were outperform, ranges maintaining on of driven and San our will ramp-up the these ranges. high and trends, prior the continuation that We And end while post-renovation we soft these the high reduced

outlook. Our prior reduction updated RevPAR from the basis XX of a midpoint implies point outlook

$XXX and growth $XXX.X up EBITDA per additional $X.XX, between and we hotel For and in EBITDA million to repurchases. but be the EBITDA $X.XX of which range consolidated between XX.X%; no million; now date million; hotel flat shares $XXX million XXXX, incorporates adjusted share between to repurchased to $XXX.X to and to adjusted to margins FFO expect X%; RevPAR and XX.X% range range between range

which refer assumes last results and pro past Our information our XXX-hotel no the additional to forma or revised repurchases. Please for dispositions, the posted website supplemental over portfolio evening outlook refinancings share includes quarters. our we acquisitions, X on

remarks. this And concludes our you. Thank prepared

for We Operator? lines will Q&A. now the open

Operator

Instructions]. [Operator

with comes KeyBanc Our Capital. the first Austin question Wurschmidt line from of

Austin Wurschmidt

finalized, the was is us the With loss flow now wondering the through how to mechanics give sense better the I of going you NOI transaction a behind Wyndham could around the if guarantee P&L.

$XX million conversions it's of X goes gradual if decrease or that Jan underway. a if are the as away curious Just more

Leslie Hale

result such question. similar in that Austin, And structure I in a in able we've contribution Since allow able deal remarks. discussed last to XXXX call, in it, finalize said that the XXXX it's termination don't thanks is been to recognize a are as going for our Austin, that over The kind their received XXXX. payment. Said us prepared to to Wyndham the of Wyndham drop termination involved, technical. for a expect differently, amortizing we the But as mechanics payment guarantee EBITDA -- long be any of of as we'll in the as my the we way we were involvement. in

Austin Wurschmidt

brands like along you hotels Got think and you'd And how respect Appreciate clarification to it. this the Wyndham which point the at there. then to most identifying are first far might reposition what sense? with you make

Leslie Hale

think we've this we really great are on Austin, about here, calls. Yes. super value and many discussed as there's excited opportunity

brands would active with: Hilton, expect the We us and that IHG. major with discussions Hyatt, be are in to you Marriott

down are process had the proposals We've of reviewing We interest. great the in and narrowing brands.

in the commence next to the expect year, brand to renovations us to or hotels to in for X a of selections be the end We year. several by of the year, X be a put position early assets position which on finalize able would next of this

to ability which of Our and on is we have. on really selection, duration comment to be to a the the expect the going size renovation final predicated brand

that next so color we more And to being forward on our on able look to provide call.

Austin Wurschmidt

remarks? ROI prepared opportunities timing or operating of you softer the any rebrandings the in high-impact sort of mentioned about the thinking your the of that just Has environment the changed

Leslie Hale

No.

the projects of we've $XXX sort we classified we about, obviously, as million. have, of identified a energy operating about ROIs $XXX of space from, ROI that of the sort million also and we've as ROIs. conversions, And the you reconfigurations, they projects talked span number think that If to span but

generating And into is there's nonrevenue-generating before. meeting wasn't converting which you risk in that no a revenue and pool, a it so think space, taking a because space reconfiguration, if about space, it any

of So energy an you risk parking, associated adding charging are an from continue now we to And regardless value. will operation cycle. energy costs it. also and going anything about because for have to from in create where perspective that limited weren't with you're and it the before perspective, charging you're incremental Thinking

So an changed our from perspective. capital hasn't deploying no, ROI on it view

Operator

Our next of Michael from with Bellisario question line comes the Baird.

Michael Bellisario

Just on that capital today? projects an buybacks on the relative same give topic allocation, doing can ROI update where us acquisitions see kind the the you'd that of of kind fit of returns about to you you're and that

Leslie Hale

to we our mutually are that have across is said relative really our and and thoughtful, look to that, think options. balanced sheet Having exclusive. look to capacity we optionality, us balance deploy of really Mike, that strength so The various ability don't Yes. the and the at provides we we as returns capital be going

buying while that an number we geographical a on aren't the operating the that's Accretive from and needs And has perspective, it in, for create have like course, recognize metrics within the footprint benefits And value in rooms-oriented, necessarily we what to is so And perspective, be which the fit growth on then, high-margin middle our to terms for on and off of a do it bar the portfolio. in from to our premium-branded accretive got of RevPAR asset overall catalysts in table, the acquisition, it. of terms the to of right? accretive the acquisitions accretive to higher why fronts, on profile, of is invest we're fairway hotels.

relative not on that it's off a so basis recognize we bar And the do the is higher. but table,

been active the market seen for continue be active of will that on NAV also, Obviously, discount volume we've to our avenues the on the obviously, you've to conditions We're going deploying to well. terms buybacks. as dictate the the capital, In and other buybacks.

be that. So on we'll to continue active

continue Additionally, the we're going relative bonds are to look coming sheet opportunities due the balance at to side that next to year. on

optimize to what the have amount I so the as in materialize. balance well we extent sheet they investing across the acquisitions gives us the strength of buybacks, deployment ROIs capacity our opportunity say that the of And of that as spectrum is and to our our would capital

Michael Bellisario

mix the disposition the it. understand activity can obviously, today. real more flip you of exposed of How underlying, how because concentrated that much are helpful. shifted very completed, your to have corporate sales? shifted has maybe But then the side, has guys would the estate on asset help intel group That's mix Got How there Any traveler? us sales? more you And following you the business better asset be business helpful. the

Thomas Bardenett

Sure. Mike, Bardenett. is this Tom

hasn't where really group have side. the we of mix at XX% percentage, amount our business, still to XX% we about that far we same When as attract of about portfolio, the much. of the the as portfolio So look shifted group

our to business hotels, at to as business looking which in business, what if of to to will, which group of doing us to higher-rated had Embassy as have catering ultimately by mix on more bit the try to well try the what's put get though, on more We Suites, well is based gaining a the profitability. group phase as our hotels. of into will when with per more able allowing evolutions change biggest up based be one space happening help opportunity occupied the change side we contract the even our a having we're us And to get transient capital little and that on shift, as some think reimaging these provide you for we're lobby our to more is and mix areas room full-service allocation

So certainly we helped the we much do at RevPAR. mix to what do still when look really become shifted it look hasn't and have on But at overall have we us that to when you segmentation, and what profitable. dispositions

Operator

next Our of the Barclays. Powell question from with comes Anthony line

Anthony Powell

your sales an on provide given you And appetite now? for asset stands what's your the right strong mix in noncore additional sales capacity the update Could where process?

Leslie Hale

not call, with sales, majority we the over we of as portfolio we've Anthony. vision. really that to, own additional with aligned from sell that, going is heavy lifting vast more agreement our it forward mentioned the asset a saw we reshaping It EBITDA had we And that our we our look, unencumbered. opportunistic do asset did was And you Thanks, in business was sales, us opportunistic to On completed and to -- chance rolling us. on a because summer. last basis, it the We're Columbia. a our long-term be management was around the was location the and asset of core terms on perspective, an on

example just being asset So on sales. future opportunistic that's an

Look, RLJ all relates assets. the our we've as of to to targets legacy exceeded it and the have relates it as well on Knick, executed dispositions, our we and FelCor

It asset. significant an capacity of And and Anthony. continues that's irreplaceable year-to-date. X% conviction the going long have which the to in then We This and it location, in sheet, high we remain up us term. quarter. market an well. strong patient. we're it's third iconic. that It's up in a And is in gives It's disciplined, perform X.X% a this we to value have believe balance asset to in be was ability And

And Anthony, so be the we're asset. this relates value as going it patient, get to we ultimately. to believe that And we'll

Anthony Powell

next the And I mentioned Okay. you call. flat for where there? headwinds currently? we And your Can kind just year? Or think of in mean, lot the fundamentals, on international do that a international are on business mix declines continued expect inbound the we that to you we What's in be segment? do

Leslie Hale

think not we about the New out Florida, York and a obviously, answer Anthony, markets going strong. is coming our it's question, which the Obviously, government And the And helpful being part to XX%; biggest be your about these as South overall of continues XX%. first of well. days which portfolio, about So the to of is XX% to international continue our with is X% to dollar to be headwind. rhetoric is

center, softness a Francisco to related imagine seeing lot as in across which as continue of also San that the inbound well. and gets some see some also headwind with markets. we in international We're L.A. associated as it and that to so Houston a medical And well

Anthony Powell

you reduction flat to Francisco, the force What's quarter. driving the that last in expectations be And rather just San that that there? sharp you sales into on it despite expect shifting mentioned one,

Sean Mahoney

particularly similar the in and our Anthony. Northern quarter California. view and on started And fourth it, at a call thought we expectations quarter. think Thanks, would of third But relative year, in we by, the to underperformed the a Northern -- I basis our and the I year California we quarter, Sure. have the our third quarter fourth in timing took to of points throughout because had what adjustment muted great the start it the force. of mean the XXX of the expectations quarter, third for beginning sales

such, that citywide transient known. And think so driving as It's California portfolio. within activities Northern that was is impacting what's not is that traveler the which our incremental business I

drill is of Northern fourth can expect are fourth impacting impacted. demand do to San little Francisco down and we're being we well. still to Silicon are quarter. you some some CBD that. later within quarter out as assets, our performing we If California is Valley within a the the fourth the really the There renovation perform But well, But -- those our is softness well it's in deeper, quarter, seeing them But disruption assets where markets. which which some other it's in going

Operator

from Our line Wes next Capital with Golladay question Markets. RBC comes the of

Wesley Golladay

off the I to take refinance uses just at your to you pay pile? for as plan other year. Obviously, next look look to potentially using initial deployment something highlighted want to FelCor until be cash bonds for that? capital out. Or the just you the find cash Would would you you could

Sean Mahoney

Wes. We're alternatives the right now. evaluating Thanks,

early that with It's refinancing little have an rates firmer markets. under be interest There's realizes XXXX the that deleverage million at where or savings. to more are decision. call our to. we rate it, leaves sheet color of cash would of we're to inside refinancing on a whether as debt We deleverage just that. ability a corporate whether respect there's tea significant of the points And that we'll creation read part bit a basis, we be about to for we're make a going basis of debt when in and want function that on go we -- have from year value sits we'll if current on based on where the confident great we $XX interest balance But like-for-like which on today, there. But that next we annualized XXX call financing the savings

Wesley Golladay

next year? as little out What for a I better can then or And getting markets get supply your worse? outlook maybe stand Okay.

Leslie Hale

Yes.

generally overall are Wes, years. say, between though, we is I similar Lines be would blurring to what So to that generally XXXX. really XXXX expect

just that And be our so Demand just I Austin Louisville Austin, continues And within is to off market, biggest post next the side. supply concentration long up Austin our keep term. expected of expected year. up beginning X%. to continues of a to in markets to Austin our upside. in stand out. And several what as we're we greatest position is in the kind surprise But -- so to I sales. X% Houston, that would is find mind. the year better Denver, would seeing we ways projections you market X% to Austin deceleration that are in and to in be market supply also generally that But so find about CBD believe is demand headwind have on then then say the because in

And so is our supply while much the absolute number position better. is to higher, that relative

we feel And about Austin. good so

Wesley Golladay

it to bit. with sticking a supply pushed seeing a Are any your renovation takes in then assets? the what being you And complete maybe delays out Okay. for

Leslie Hale

We're seeing mean, of I No. delays. I while. cost, a cost higher for sort not labor in been higher think we've obviously, a material

the to the that And and reserves the enough relative done planned products plans to so into cushion enough on and time baked on renovation. with our that's schedule get way we

has that very in-house very also a have on team well, both experienced conversions. normal and renovations We executed

full execution. team, thing the an and is makes unique able have I that have history a we design do that We extensive about us And in-house to think it. being

Operator

of the from question Woronka Deutsche comes Our Chris line Bank. with next

Chris Woronka

know but a from that? Do your of great Ancillary next tailwind years? upside of been a the fees for can hard have think for to tail I you getting couple all definitely is there level to and model those you've you the a it's guess continue peers. I been little bit, many of

Thomas Bardenett

some far, on it. we've on are we've been pleased been returning great very So those And so revenues. capital we're with, a many against investment of very putting ancillary focused based

the So we a from are going about think me but continue let to for us. handle you little positive Sean I'll bit modeling, to let that be tell that, examples a

X.X%. the food X, had on growth. and quarter Certainly, up In beverage, we've we're

regards We Embassy more we've we earlier, of Suites. spending and catering revenues our in to Miami, banquet When a for in continue Boston, that the a able think on the as to the lobby our making how on Charleston, food other we money in deliverable space, better benefits Louisville mix ballroom has to renovations, returned renovations which about side. as benefit and our well talked Square the group we're beverage Union about for really see us been beverage-centric

brand pick continue opportunity. the beverage we So depending opportunities, and will to we as see that with then potentially conversions, do upon Wyndham even within have an more And reconfigurations portfolio. food what we to some space

arms no initiatives, Again, year, Leslie know in referred prior the parking come continue we at need even when locations. so opportunity that On little Lyft, we be I Uber see to to to knowing having parking. it earlier. bit Lyft, spending have And going people we're up to be a to still there's where with people where markets to drive in urban many to an we're the location we labor of capital make and sure in that have

an to think day. we of -- end then is that, at miscellaneous, to cancellation will from it's bankable the the that room configurations, opportunity up-selling drive standpoint, really attrition, on on whether a which the lastly, RevPAR fees, miscellaneous And more still based continue revenue

Sean Mahoney

a there, lot parking we so pull there. confident we're to I'll comments. runway we Chris, a portfolio the then, of specifically parking, through going and we to to our revenues think of we drive One, with left are portfolio. -- have that ROI the continue to initiatives bolt throughout continue couple have And initiatives. the within on And And we a to parking be is subset Tom's of several years of

of we exposed thing other of resort maybe less The are for that to I'll sort peers our relative of risk fee, is some other that the to portfolio note facility our is of risk peers. for just it ancillary an industry be part nature of which because than a is revenue would not of our the just big our maybe our some portfolio

think part our you would when revenues lift like and key it about not for when getting, of I sort so lot folks that's a the story are -- some others. of of those other And be

gives the growth. that sustainability revenue more of that so And other confidence us in

Chris Woronka

Okay. or of money those color. get going Great. still to And downside would that are XXXX? ongoing, negotiations the Appreciate you some or all through least with form renovations year then next protection as the understanding you're key expect at into brands

Leslie Hale

would keep form mind, horse-traded, negotiations. in support and sort then be So some And reviewing would expect would brands. from the but be other to that active money opportunities part our of may get to some But proposals I we're of right say key absolutely you, we in discussions now. expect a of

Chris Woronka

Okay. Great. definition, the lot the bottom by years. asset XX%. of kind And progress sale of front always have last a a guess, of you obviously, couple I on

So appetite private really continue pruning your to kind what's pricing and on strong? the as cycle the moves portfolio of market remains

Leslie Hale

terms before, active not you management marketing mentioned reality to I portfolio be assets. the selling we're time. have any but assets, assets, actively XXX-plus be it in with we all of As the opportunistic is will But of

be opportunity we're we prune coming be whether presents But we'll at the years to determining not and something. incremental portfolio just the need right trade so to looking We're assets. now, some our going to And itself opportunistic active. if over or not

Sean Mahoney

portfolio on to year, dispositions to was done long the add be we're where to we that this the lifting just intended on term. We've where get portfolio And our Chris, really to with and today. want comments, sits it heavy the Leslie's happy

important long Leslie's within think portfolio that so what heavy with And we're be in to the term remarks, group. the aligns lifting. in generally the the prepared statement shouldn't lost our vision we through want us. That's And

Operator

Capital Neil question from with of Securities. Malkin the One comes line next Our

Neil Malkin

Tom, such you your future that can adding for big that, part those the as are may just a and what lot brand. biggest that and space of space. question or a be of configuration the it open the Embassy Suites current you. the Can middle talk is rooms, they whatever opportunity? of about -- reconfigurations, And your a portfolio is plans, given for revenues, maximizing the maybe such obviously, the serve just hollow of you hotel,

Thomas Bardenett

Yes.

atrium with think and ponds, you be. build koi if met the about, conversations that Hilton had the landscape, happening about but tremendous opportunity the talked existed people water to We've what useful and Neil, enjoy much a not you an about And that thanks, initial space we numerous a So the what for consumer in elevations of to want space question. not really take to as was but amount for standpoint. pretty as space from what's utilize have features, picture today

spend kind of to is space reception there breakfast what or the elevation where for the to be and -- actually or actually space whether time the we changed one bring opportunity then evening can people the want done it's into comp to be and to utilize people the beverage then have be and out So public-private the so throughout, space we've more created lobby able elevation, really our restaurant transactional.

time to we've concepts and Tavern food some the beverage with on that the better be and actually create to a purchase we're spend So and and side alcohol, had called groups environment able attracting. camaraderie & some provided much Taste Tap

addition In actually you that elevation, when meeting that, add space. you change to

could has your ballroom and you group with space. an breakout X,XXX XXX feet, only, past, using in that square instance, probably for keys you by -- So your or service the if Embassy maintain

the so with for that then can in as use serving groups lunches, and atrium, ballroom space. atrium your additional now meeting book Now two receptions and additional using you're space you the open-area that space actually

proof So that's we think positive.

a -- standpoint. is, to And think is group taking which which to be few a had X occupancy part additional square pool, rooms ROI, And from X,XXX are fill floors. by the able room in special a corporate another we us us can produce BT, going to that and create feet allowing Buckhead, some a locations which ability we midweek, that that back for that of positive real catering keys, from we do in an other proof drive configurations, Buckhead to positive thing immediate actually to the an better at be productivity in we've have done ROI is getting that's and

Embassy So consumer a value Suites midweek, will higher we're and able rate. a in things create doing that's average some of to the drive quite to be attract our that, that different honestly, the

Sean Mahoney

system, is system. their relative focus respect to able item Sean. listen, Hilton. and being for the this Neil, -- Yes. part a is big to of large this It's a Embassy a to of Suites With we're owner

they've within a Suites space reconcepting we what incremental But lot drive to have public think end mentioned job part spent that critical in we our Tom all Hilton the we brand great has years that about with to and et believers in cetera, for the that XX about, the time think repositioned a of potential within the one in as Hilton So are discussion us, how going group of a is the next allow and we will done an of are portfolio, business, it's within Embassy be Hilton. upside brand.

So those when as assets, continue remix within core with fits invest and the back a next, portfolio see -- think portfolio, our where as about upside we capital our X within we holding RLJ. it's X to to you in over And Embassy step those we a those hotels. lot Suites of it, years for call

Neil Malkin

appreciate maybe you. Leslie, and of the you since or demand? maybe, know Can And guest that. July, trends a of breakdown Kind the just transient I leisure give business I for hearing point lead demand that slowed. incremental or anecdotes, be of either or inflection to would things positive? color Any there's you're that you great. coming, believe has That would negative an

Leslie Hale

seeing that what your for points what asking? the that Neil, that question. there you're of would we're you suggest in the is asking So data don't just side? I Is understand leisure are Are softness sort that

Neil Malkin

weakness Well, believe out come but we we're the will inverse, of weakness, a and lead terms you lull to quite back of yes, I'm And talked okay, either fourth you the been quarter, saying, in about I then obviously worse like But seen I'm of been sort mean, have since maybe leisure maybe saying those. yes, of haven't you business, bottomed anything just that, on or that we'll has into bit? the or and incremental through we've which kind documented. the getting actually

Leslie Hale

look, Yes. well. And see saw trend decelerate transient, on some did that there on it weekday, the impact And of a quarter side consumer occupancy an on business there We is the deceleration, we I on here we drops side, standpoint points that in healthy, a X.X down the backdrop Obviously, side. is traveler. economic on associated a we topic. is the points we that of which quarter-over-quarter. theme spend general, saw decelerating spending say, saw as When versus in having leisure the then is weakness the perspective. the at a consumer remains look basis that suggest GDP number from the would And impacting a we is with while there's well-discussed as from right, weekend consumer business data the believe that, in would cracks leisure fronts.

basis further and demand when we going have to that's the obviously, us and Go replay our the look of look is that. you performance it's so and And ahead. markets guidance that most at -- there. even and why, persist, degradation brought clearly there, down you and points down our we being trend peers think year-to-date of -- at and down to reflect in XX the top the markets look you where urban XX and drill most where We

Neil Malkin

either next changing like corporates like anything Okay. your indicate weaker anything or like that? anything year from you But lead is there things negotiated to you're a like rates business that incremental or maybe -- like would for about that, contracts cancellations, -- or major are

Thomas Bardenett

just the Actually, opposite. Yes.

you the a have were when folks quarter corporate area, and AT&Ts On the the IBMs, on discount special volume based in up negotiate X. that production, with we the instance, for actually

in proof it's have to what positive continuing that regards So we're to expecting. a was demand that

results. well we've low would of regards the quoting what what our we're able a set high-demand negotiating looking fixed with XXXX what for bar as up dynamic next how you're what to regards QX for days. hearing year's seen -- single in we're from that trying I would is think based companies be is And similar flows trends on to pricing based of digits happen versus you advantage in lot really into take early pricing, management to to to as indications on

people sometimes is a The South in think we when X happens other I Day thing our in portfolio, the which -- in but side, X had mandatory had weekend. Charleston a and over that on evacuation forget, and then -- leisure hurricane Florida Labor hotels specifically

to travel unfortunately, was related to lot XX that of people that, to where go what around. QX hurricane stalled were see days a to So leisure waiting of a and

is thinking So we're leisure still positive.

Suites portfolio Our on proposition that leisure. has Embassy really value

color. on to that's in side little a just more blip think a in short-term the we you regards what occurred So to bit QX, give leisure

Operator

gentlemen, Ms. any and the comments. closing to conference I would the Hale now Ladies Q&A back this turn session. concludes for to like

Leslie Hale

report guys seeing for and within want quarter portfolio. We of the you guys. week We progress. you, thank continuing next to to our we us able are we activity all to today, and that joining have all be you around look to pleased Thank our discussion NAREIT many another of forward at

Operator

Thank and teleconference. concludes today's this Ladies you. gentlemen,

Thank time. your You at your lines you this disconnect may for participation.

RLJ Lodging Trust (RLJ) 8 Nov 192019 Q3 Earnings call transcript