Earnings call transcript Q2 2023

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Operator

Welcome to the RLJ Lodging Trust's Second Quarter 2023 Earnings Call.

As a reminder, all participants are in a listen-only mode and the conference is being recorded. [Operator Instructions]. I would now like to turn the call over to Nikhil Bhalla, RLJ's Senior Vice President, Finance and Treasurer. Please go ahead.

Nikhil Bhalla

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

results Forward-looking may had company's reports the numerous to actual XX-Q of statements. and statements differ call impact been that found uncertainties materially company's no SEC. forward-looking to on to subject this what obligation communicated. filed The results that Factors may the made from be update the can are risks lead the company undertakes with the company in other and

to discuss as press certain our non-GAAP we the release. helpful Also, reconciliations located GAAP may in it be measures, to review

schedule refer forma includes which of information last which our our pro portfolio. please to to current supplemental was website posted Finally, hotel night, for operating results the

the turn Leslie. call to now will I over

Leslie Hale

Overall, joining morning, Good in our Nikhil. Thanks, results, expectations. which second line today. and pleased were with you for with our quarter us we thank are

growth concentration urban RevPAR exceed the the Our our second straight allowed for industry quarter. market to

outperform. disproportionately trends The urban fundamentals, strengthened constructive With health for lodging overall we driving enabling unfold the continued which and to favorable group transient, industry portfolio. with are demand markets continue business remain on our is which of benefiting to the continuing grow, to the from them in recovery and

levels RevPAR well growth conversions, ramping execution of XXXX achieving and the our year-over-year solid including XXXX on underwriting. another ahead are addition In objectives, of exceeding are which our we key to above industry, delivered our quarter three

Houston, accretively increasing our this year. conversions enhancing shareholder shares repurchasing in new by for our conversion a in time announcing Executing return second New dividend and total Orleans quarterly the our and on Nashville,

on to performance balance within of optionality provides portfolio us our and second simultaneously. opportunities growth strong that Our capital demonstrates sheet embedded allocation as multiple our our well the execute advantages concentration the urban as the quarter

year, With ADR. industry us RevPAR our XXX demand point points. operating last basis nearly to second the exceeding enabled respect over pricing in a X.X% in drive our by basis quarter XXX power continued growth increase to performance, and increased by Year-over-year

XX% levels, despite RevPAR impact writer's high. strike of We solid Our poor California XXXX a these representing of achieved and new the and was weather in results Florida. the

our markets growth X.X% by urban urban being for levels RevPAR over first over XXXX time, quarter. markets, demand. an rising achieved points representing the are our by and Our the strong driven to be basis healthy grew urban last and continues which improvement international group, first of leisure led in year from XXX

XXXX We exceeded RevPAR basis markets. were XXX over ADR see balanced X%. points with last Notably, XX% levels of increasing key or more by our to by growth our in most urban occupancy and that by increasing was ADR our year pleased urban

this by also room XXXX a areas quarter from in second increase of our to achieved levels. revenue initiatives These year quarter our in to as revenue successful our of X% such efforts out parking F&B and and benefited resulted XX% revenues initiatives in spending last outlets. led ahead total robust The and through non-rooms grow enhancement increase the

a Business momentum insurance, led the bolstered as health and in transient transient In such throughout carried industries consultants. aerospace, range by SMEs business second the was continued positive the broad segmentation, and automotive, forward terms of quarter. by be of of to demand care ramp

the BT first levels, quarter. Our represented point XX% which XXX-basis XXXX improvement of revenues from achieved a

improvement business by business year. evenly Further in and May On positive last transient our over momentum of see to which evidence growth. XX% X% room corporate of encouraged by transient revenues was and weekday between in our basis, June ADR were RevPAR, achieved over which XX%, demand increased occupancy year-over-year a was the nights XXXX. booked split increased total our We in

segment Group and to social the group of robust events, such Kentucky, a allowed and Group meetings Louisville, self-contained for strong our Miami X which our Derby the volume corporate increasing as in exceed expectations from performance Our and Formula for demand in benefited citywide events quarter.

revenues XX% Group was last over year, a by Our which increased XX% ADR. primarily increase in by driven

current Group our from by for third momentum the a group quarter, tracking levels, quarter, which Group revenues by exceeding achieved is improvement demand forward at first ADR XXX% XXXX XXX% is point in XXXX The of XXX-basis XXXX XX%. the evidenced with our of levels. pace

was a Our normalization resorts urban which partially strength leisure last The in of offset by increase Leisure over by expected urban X% was Urban continued in weekend leisure the strength our RevPAR demand. enabled the by demand, moderation our to segment driven saw year. that in

and the growth quarter. by during RevPAR work return relative being of a events robust leisure flexibility urban which to led such improvement Swift XXXX This leisure the first Healthy quarter. basis XXX a third a sustained our the in hybrid on entertainment by sequential achieve weakened our the the of and demand markets both and to our about as urban Tour, are driven Taylor point bolstered concerts markets benefited trends

year improvement These XX% levels, achieving XXX first which nearly trends from a line, bottom point portfolio the with basis quarter. flowed than to EBITDA of that our X% last represented was and higher our XXXX

allowing benefit on XX.X%, basis of from XXX fewer with markets than to was which to are We as labor normalizing. us last EBITDA our inflationary costs. lean operating continues FTEs, margins lower points operating only broader model, offset achieved year profitability pressures Our

growth with initiatives that Moving to associated on significant continue allocation, we capital progress our to make embedded portfolio. opportunities within multiple are

hotel for be as its Hilton's to and we hotel's poised was with location joining to conversion Collection. leveraging The from ideal the already Nashville Tapestry Hilton's announced fully close Collection, to hotel potential third significant Broadway by the our ecosystem. our part redevelopment, will Tapestry able benefit of unlock XXXX This immediately quarter, now,

the hotel. position year further hotel complete will to increased a boutique a as We share to capture next market comprehensive lifestyle renovation

ADR Houston two renovations our transformational respective in capture hotels in their previously end conversions and Additionally, and XXXX these Their Orleans. position be New locations. we incremental will will by year completed to announced advanced

from benefiting the also RevPAR over conversions XX% Beach, nearly our which Monica Santa in Charleston, last is and Mandalay on year growth are of that generated We average. ramp

was above In these EBITDA quarter. the XXXX in the at XX% hotels second aggregate,

We expect our continue to robust our further performance appreciation. NAV advance generate operating conversions which returns, will to and double-digit

we capital demonstrated Additionally, multiple that sheet once balance affords pulling again, the levers our strong optionality allocation simultaneously. by

of basis. a million quarter, at we attractive $XX This leverage repurchased levels shares on neutral

profile for this time the sheet, flow Our quarterly strong dividend also raise year. balance our gave the second free to cash confidence us

represents the from Our quarter. last third increase quarter a dividend of $X.XX share XX% per

macroeconomic Relative that optimistic RevPAR can extremely year trends strong industry forward, leisure driven in is to this As our portfolio while remains, remainder given this uncertainty new demand urban tougher by comps. environment. should continue remain growth we the are we well positioned despite backdrop, to the look through leisure of the positive achieve that

transient to for trends Business group the should year. forward. trends continue see should the positive carry remainder of Robust

is strong the half citywide our confidence by year second the in calendars our of for Our bolstered of top many markets.

our the have of pace demand with should tailwind. seeing point year benefit since the group basis robust to booking in outsized an activity our we continuing Additionally, international incremental year, completed recently beginning for provide should a increase quarter. and XXXX, XXX conversions urban of XX% the the reaching ramp the inbound of markets Improving are

multiyear importance We us increased demonstrated light continue industry new this half horizon in term, as outperform lodging believe the during from that all fundamentals are a on with bullish on first we should that travel to year. the enable of the supply. trends placing to of unit these Longer the of for are we outlook consumers combined

Given growth, uniquely to markets, given this new our our which our outsized ability EBITDA additional room these significant capture especially dynamics for growth. will concentration in to beneficial which portfolio, have drive run normal, is for positioned be urban

demand Our day free our opportunities benefits high the live of including cash next our is external with play portfolio growth our and seven completed of recent from new to strong of execution pipeline and upside provides growth. and profile a week flow future acquisitions, completion internal opportunities optionality The our that and the work incremental free the from balance and conversion drive incremental environment. aligned internal and quality sheet diversified our conversions a

with positioning now relative multiple turn and call of channels I to We will over growth. are strong Sean. the our encouraged

Sean Mahoney

quarter. start, Leslie. To include our second Thanks, comparable numbers the owned hotels our throughout XX

EBITDA We were our corporate period. expectations. adjusted strong quarter acquired and results Our FFO were pleased include ownership with and results, from operating sold reported report which all consistent during RLJ's operating second to hotels

XXXX, ADR a and Second increase which increase X.X% grew in result above in occupancy. X.X% quarter a was of the RevPAR X.X% primarily

markets, Sequential XXXX urban $XXX, improvement quarter $XXX, was RevPAR were York XXX%. where X.X% urban XXX%, XXXX levels. and exceeded Louisville XXXX and XXXX achieving primarily such Pittsburgh which market at was XX% occupancy XXX%, our at by at and our of exceeded was by at XXXX. Average of Tampa as our RevPAR quarter which was San Washington of in at of second Diego Second XXX%, driven New at at Indianapolis XXX%, XX.X%, XX% daily D.C. results was XXX% in levels XXX%, rate portfolio most XXX%

X.X% XX% and XXXX May April, and of achieved June, X% exceeded quarter June April, for and XX%, and May levels grew in XX% respectively. XXXX RevPAR X.X% the in each in Monthly month and during of

EBITDA of of hotel our XX.X%. achieve and Our trends hotel operating margins second led quarter portfolio to $XXX.X EBITDA million

comparable the the of which the pandemic lower of our were same We hotel in Our and for operating phase particularly quarter light points second basis with the difficult of pleased rapid still only ramping. XXX the margin combination in were lower period revenue were XXXX comp quarter of than a XXXX, the quarter performance in from than of costs, margins where early points levels only very XXX of second benefited quarter recovery of XXXX. margins with the basis operating

$XXX.X Turning our our $X.XX, of FFO share ranges. was adjusted to which within million were was adjusted EBITDA both the and second bottom guidance line, per quarter

construct hotel initiatives model. remained redefine the of cost demand portfolio second While costs benefits quarter, underscoring during continued to of the our our strong realization operating operating the to and normalize

above Total benefiting factors are our the growth third-party operating many expected which were in in these to rate core significant XXXX is with second aggregate CPI positive and below successful only operating costs. results, quarter XX%. are contributor of meaningfully costs which continue many hotel the influence There of X% our in of of levels, both operating property the approximately XXXX taxes, restructuring agreements being reductions that most

wages of slightly most cost total still cost XX% operating significant at and were Second approximately our below levels. XXXX quarter benefits,

quarter, During in our the the environment. with XX% of our second post-COVID the hotels demonstrating fewer pre-COVID, flexibility approximately FTEs than operating labor continued model

better need the environment current remains for portfolio labor for positioned due FTEs. to Our the fewer

operations, footprints, lean length F&B operating smaller stay. of and limited model, Given longer our

capital, of of We to create extending sheet flexibility XXXX. our remain $XXX to balance active cost million and in further our including managing additional lower debt

As maturing refinance revolver previously loans. we the our a during quarter, million recast to new $XXX $XXX million term loan second XXXX announced corporate into entered and to term

of Our revolver years new XXXX has for extension term corporate year. options four and a additional an to includes

three of extension new years initial The term and options has to $XXX an two term years million loan includes of XXXX.

included our strong favorable lender covenant The terms of grid these other execution to The flexibility. a key of transaction relationship retaining and modifications and profile. pre-COVID to transactions is credit increase pricing the testament

far So manage swaps. $XXX rate risk have interest into proactively new rate continuing our volatility taken advantage we XXXX, rate interest million by in of to entering of interest

well Today, corporate with an our is undrawn revolver. balance sheet positioned

debt. approximately average our by Our is X.X of XX current years. unencumbered maturity hotels XX weighted are

and average or interest weighted of fixed rate debt attractive X.XX%, Our an is is hedged. XX% either

$XXX said, we committed to a of of on share Turning returning capital the With we billion of liquidity, our of revolver, unrestricted through cash, respect approximately $XXX availability dividends. capital shareholders Leslie quarter debt. both to to million $X.X million and remain allocation, as repurchases with and to ended combination corporate

share provides Board a take capital which year second with to tool us market million the one During a quarter, new volatility. approved advantage $XXX of our program, repurchase

under an During and share. we the average active price $XX.X X.X at approximately per program of quarter, $XX.XX for repurchased were million second our shares million

including price of In have repurchased total, $XX.X third at per for share, an million $X.X during quarter. million far $XX.XX the we million average X.X repurchased so during approximately shares XXXX,

which Turning quarterly authorized to dividend summer. $X.XX quarter, to dividend recently the dividends, third of our a XX% third per increase Board share since increase starting our the represents with last

dividend and our supported flow. Our by cash well remains free covered

opportunities making decisions continue allocation the financing to drive weighted of overall cycle, while to our additional the to of average to cost our during debt balance results prudent the market We laddering lodging reduce and monitoring maturities, flexibility. our increase entire portfolio sheet identify our position will improve capital

a anticipate we view, guidance Turning current our and providing and to our third environment. quarter of the on macroeconomic continuation outlook, operating are based current

$XXX, million RevPAR quarter, between FFO and between hotel $X.XX. third $XXX EBITDA $X.XX the comparable between million million, $XX corporate For we $XX and EBITDA adjusted share per and $XXX and adjusted million, and $XX comparable diluted expect between

dispositions, operating hotel results Our includes portfolio. outlook share supplemental refer comparable assumes no and XXXX refinancings, to repurchases. XXXX and additional annual acquisitions, the information, Please for or quarterly our XX which

Finally, of expenditures $XXX RLJ we in capital continue to million be during range will estimate to million $XXX the XXXX.

you, remarks. Thank prepared our this concludes and

open line will Q&A. the for We operator? now

Operator

you. Thank

question-and-answer We will now moment, session. for we questions. please, be conducting Instructions]. pull a [Operator while One

Our from proceed Please first Baird. your Michael question comes Bellisario with question. with

Michael Bellisario

morning, Good Thank everyone. you.

Leslie Hale

Mike. morning, Good

Michael Bellisario

First question you. for

growth your quarter. so Just guidance, the can the about you far the side, transient on slower in what XQ, in year-over-year saw throughout assuming RevPAR then pickup you're talk in especially the quarter? materialize of you the seeing second maybe that some context third And also

Leslie Hale

but on of look at we're BT. that BT continuing to we was on think When gradual, up XX% were pickup it's consistent. of overall transient look When Mike, RevPAR been sort our I nights recognize at about at good levels. momentum. side, the our improve, and Yes, I it's as May trends, it June, is the room year-over-year. XXXX We and think seeing we midweek X% our

And play so itself we're out. seeing the momentum

and we between remarks, XXX XX% up of are are quarter-over-quarter. in XX% up sorry, overall nights prepared our Year-over-year, our room I'm that revenues are I think, -- and split was BT rate. at XXXX as at basis revenues And levels year-over-year. our points revenues talked about

we're encouraged really pickup BT. by so that seen in we've that And

what for be we're quarter, And third to so as concern no with SMEs continuing us holidays the to there's we and continue broad-based, that that give suggests there. that lead, forward into or can't trend production the seeing look It encouraged national we we're accounts anything to are that make continue. by but seeing us, continues

two on that down. really leisure urban the a recognize it's say, look affected resorts also at tale remains we obviously side, cities. I when being would I and overall, normalizing, leisure demand leisure, strong. are transient urban when patterns of the leisure, about think We travel that's But

was X%. Our weekend RevPAR in urban up

it's about our and about we that's about as talked we improvement, XXXX in basis XXX As quarter-over-quarter. remarks, XXX% a levels, point and

social Weekend venues that ramping. think about we saw urban see year really driven what's events. seeing market, in This When happening we being the we're still Urban we last the by year are

So producing play for but generally are that's attracting just live and venues it's the cons, beyond that us, commercial environment. work

both think as I data drill So from a seeing, transient points, Leisure down for we perspective, we're the produce continue and Urban business to on us.

Michael Bellisario

Thanks more Thank during that flexibility operating fly you. going sort me. remind did quarter? you to changes the demand the forward? on Maybe make just help you understand you And different then changes us just on Maybe or to us could for Or what for that. guys the environments you the make one adjust second of have? what side, can

Leslie Hale

you. were for about margins. about frame that levels, mind obviously and at running our XX% year Keep in of about FTEs just we're our We good XXXX would last today. I at Yes, XX% feel very

commentary. trends small sort obviously through given an operating that's our our about. So model some Sean move things of pivot given as a let It of as give impact. our of having the us model, quarter does sort I'll footprint, stay, allow we overall, to But FTE Tom that unfold. that length of a talked

Michael Bellisario

around that based model morning. feel which we will FTE, and Yes, of operations that because, maintain going us count about to on the is be that I referred have and to XX% Leslie be food an and know, sales to finding was FTE the that you as helps the market up compared deliverables. Mike. occupancy pay attract rates talent. to the able synergies marketing Good We department, we're in good staffing that and hours sustainable where are is on wages to labor to XXXX based rises, we know would say on levels beverage,

I and our rates turnover. to retention own is finding are feeling is that And we reduced We're increasing. about seeing the good. then lastly, opportunity, Applicant say opportunity hire good would flow employees

So healthier Occupancies employees are we're we into it's environment because and a the summertime, as are hours. good busy. go obviously getting

about basis, good we overall environment feel to an on the the So workforce?

Leslie Hale

one wage allows And things quickly is the I hourly say to split employees Mike versus is that would pivot employees. of what between us our salary

And to so do when can model be to a hourly, have able And you higher I pivot think our you us percentage of forces quickly. that. that

Michael Bellisario

you. Thank Helpful.

Operator

Wells with comes Please question next Kesten proceed Dori with from your Our Fargo. question.

Dori Kesten

to us prior where today would Good Thanks. and your was then those comp to you hotels, you and stabilize? spread morning. to the expect renovated rate can On where set conversion remind converted you and the are what

Sean Mahoney

conversion so speaking, to sets those relative was hotels dollar to talked at And post about combination through when room since outer share XX% our and comp portfolio rate seen both conversions. at is ADR conversions relative were are share. a is is also of share $XX also Dori, a outperforming incremental from that somewhere reopening been of where post ran, ability $XX in to we What Yes, of those it. those the which appreciation. our primarily big the driving their is and against gaining which we've that hotels driver spend of running the But that in pre-conversion, 'XX roughly -- generally we're XXX% has gain amount that

Tom Bardenett

and sets we in sets I converting would be rate to the and actually have some thing us an product to that for higher Dori environment comp we're call we competitors of And you're different weren't that comp the capital to compete the that look the more is, independent putting where add other fantastic is compete curio was what change in we much able when to allows launching market to market And of at where a aspirational we're knew now a level. we the we too would at our now able the there with. or the

we current underwriting that where So at the end the kind about versus of looked we changes think And where way think going really the of we're set kind comp to up. going. we're

Dori Kesten

you your be year? And if acquisition talk or pipeline a seller net expect buyer current you'd can net this and about to

Leslie Hale

our has Yes, I Dori since call. much say changed really would not last

that are I to in solid experiencing things in take well advising be interest continues that rates general as to hold. debt to as clients Clearly market factor just market to their think the environment. sellers are the potential brokers rising transaction not key this are constrained. a markets actually we fundamentals many or encouraging The

And so there's on been really that limited transactions side.

backdrop Given the programmatic but will be be to strength our given need opportunistic, positioned. is sheet where our balance and we don't portfolio that

whether And getting is at market is say has would looking we've I the that. buyer. that to seller, too that I'd up, constrained. the way anything. cash But climate. to going that decide conversations would when reason now we're all have because say it's thing started I why from the do What generally One does is benefit right And I are though, early calls we're just to more or conversations, that those is market, an transaction say general changed translate to we're open buyer know, into but going more current the we're that

Dori Kesten

Okay. you. Thank

Operator

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

Bill Crow

of in whether to the environment NYC me City this of the let to the point and about different down the thinking is York not path, ask Sean. a go New enough and you bit start want morning, good Leslie but follow-up Hey, little a sale NYC? good and I to at question

Leslie Hale

pool I today, urban But we the sit where question, it the would NYC portfolio markets, lifestyle key really general, that improve. well the and I Bill, within market our want in an limited think we positioned see the capital way that the constrains to but F&B so its fits given portfolio. its in it's we interesting think we buying think today our count,

portfolio asset market for constrained sits I location and still iconic in of Having today. quality its looking it an that general the think said our is at transaction selling us that, where given to

Bill Crow

different normalization, bit that some right, but whether geographic trying come this you're do out up, wanted go on seeing sound seeing leisure may it be portfolio to your time, little might figure than said And footprint. and more you All already to I you're peers wondering same the is down your it's it's path so at know I that than or optimistic other a you that proposition I'm offer what the people. exactly value leisure.

the don't Maybe consumer, quantify the know whether quarter trading you, think it up, you changes was stays, much down it's changes can helped seeing? to read on we're demand but can here shorter for trying are the to domestically. I if the Taylor what your Any window Swift how second you in that a get trade longer, see? I you booking all and that consumer benefits,

Leslie Hale

that of for I a it's thanks Bill, really think of things. sort Yes, couple question.

mentioned think before, and I first urban venues are your foremost, I as still ramping.

You and for got themes it Many the a years. happen seeing to we're that they of for concerts about think right second. two didn't now,

out. And benefit kind And that's rolling of that. of we're seeing so the

hotels these are that Our the near able nights, anywhere experience environment, pivots off business types and and that weekend into that been a about. that to turning typically leisure pivot play. great of given located we've the Thursdays of for check-in We have are we hotels are that talking are a that see our into from work really venues

the we think so here of urban are playing out think our that And that and think to it's that. stay. we we're own assets benefiting that that portfolio. in types think to the that's We trend market, we from And capture I a within able that's

on grow We sort why X%. in increased urban call of by of our leisure And that. I that's terms it's RevPAR still how room out that we performing. think there's saw And to

primary but seen on was any that haven't side. of X%, weakness softness the Our increasing rate driver by just the we

Sean Mahoney

couple short-term One, still about about of I the booking segmentation. when window, you to look think regards the it's booking window, add Bill, a know categories transient, in Leslie's comments, because window. you a at When asked would booking we I you different And think to about.

they when now to think to back prior can and choice, has XX% instance, zero longer. has optionality versus nights the Fr take XX% So if XXXX. about at seven consumer in you arrival, it's

they're on booking time but I to let's other still the side, the about in it's thing the it's booking short-term, the more say a starting out. they further starting have Group taking attitude. window, last So to go where pace, when little would see think still we're that their because minute And is elongate books, bit getting on we

the window we're gives small full Bill. But out about, that 'XX talking are pricing a something of too, portfolio at because more really and have then when short-term further and consumer versus putting us look credence our value, groups for bookings at I booking the the our in crossover encouraged larger was still our landing suites And the that's is power. you little a we bit hotels, goals think now booking what about which booking XX% into And XXXX 'XX. short term, on ahead we when the and we're date. some service way and Even it

When about ourselves in we how you value think regards it comes buy attractive a the very and to is that differentiate to consumer. when

where have and that a the weekends a and transient Hotel you really sports business week relationship the see much have as during almost hotels a weekend more act weekday Suite you two different at can on a You family and teams you hotel.

critical to our ourselves. is for seven-day portfolio demand Leslie talked differentiate that So harder that about location

Bill Crow

the color, it. for Thanks appreciate

Operator

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

Anthony Powell

leisure more one Maybe morning. question. Good Hi.

where you like I'm maintain in rate to occupancy. And took ADR big but markets West Key opposite, a was occupancy. where reports but Miami, at seems Looking and it there other like seeing tried saw some drop they maintained down the

the Are think So actually finding price customer I'm the sensitivity do curious, you here? you leisure some in is? strategy what better

Sean Mahoney

had you you're the quarter area When if in a so drafted we Yes, always Key purchases. always bit referring two kind that location of value go to we've point, to of little the of off back more and Southernmost is West, the West have Anthony great Key desirable.

resorts we the that. really to further ahead, when draft were able And off moving were of

when Southernmost our kind well a Inn suites that DoubleTree Key goes two On you and as were mile occupancy at onto the we point of much as kind way and back you four buy look Keyes by before on West right when rate the go we the able left then a the we're because to as go Fairfield value down, lose maintain mile to not water. of you have a because

one and took So And up. of because of quite amount still a we diem strategy that that we was there. government take volume a significant went there's per bit business of

it mentioned, didn't So second you the direction. And strategy a question that to stay in your good was you I market hear that mentioned.

Anthony Powell

Miami.

Sean Mahoney

Miami, yes.

shoulder under good So, that. Hilton first that's beach on We'll of And there. result, quarter Cabana, our we went knife obviously then down renovation. primarily in months about that's were and but of the under there, feel hotel a We fourth little a at significant the we down bit Miami, of had a quarter one our the our hotels. be back

we in based So the fourth on in we'll second result out see had ahead. quarter. quarter Go a rooms better some

Leslie Hale

comments What of onto is rise didn't true of that This are Tom's We but going say, markets. I sort leisure Anthony. to markets high. saw resort booking is lift, sort as we our was a

And very so the price attractive. still point is

had Our resorts to peers. of down were more let many down Sean a function more X%. I'll And much in. It's on who are increase to that that. sustainable hop many relative basis substantial our a we than our of peers compare a of

Sean Mahoney

resorts how think have I demand that, right right is look on our performed, last year at when Leslie, you Yes, echo and on top of I top XXXX. of

degradation not of relative the have our outperforming others, when our that to leaving resorts business seen other some because it seen are we rate through has So ADR have performing end others juxtaposition that jurisdictions. high you for how the been rate

whereas was of butter being basis. and bread to quarter, international big one forward on go be last couple that not outbound a the current in International, likely bread sort over the our going and of butter the our of and drivers years isn't

some of value of you're more our think So resort elsewhere. highs stable resorts I the lows a and proposition sort maybe seeing that present than

Leslie Hale

this sort day in be of what's settle Anthony, new combining our goes to goes and of then markets been the capture capture a think We're we to question in of week speaking normal. seven positioned urban and kind being demand to where resorts can really built with capture overall. what leisure able portfolio out the This to to bills. And markets type that at terms of rates we of we've your have kind in the happening to of

new So forward. we capture our normal really go think we as that built the portfolio to is

Anthony Powell

And maybe Silicon markets? that one market the you of expectations year. Francisco. down are other Thanks. one balance of for in guess, peers seeing took for in the Valley What San on, those their I Yes, the

Sean Mahoney

so Francisco, Yes, interesting year the set end we stated was better up versus standpoint CBD back half, Citywide Moscone earlier the of from year, the a XXXX. as about based what's on towards and in San the

So compress others it by might a When happening bit year because have Valley, about situation to and adjusted and we're last much had little probably spread had a you market their it so forecast. encouraged that's unique starts that because Silicon of project CBD what's in out. talk why business

are rates improving weekend talked to offices to say about past of had you We're We're regards we come Clara, Valley. counts The the a to would occupancy in just coming Taylor in middle, that the Santa are back. this that in back. see the just middle But Swift. concert we I are at Silicon starting

bit starting BT. a we're little So see to more

comp, as better are back versus half, first half than we the we the 'XX have about we're XXXX. tougher and a obviously So feeling

Leslie Hale

CBD. footprint the the we is would of Anthony, obviously diversified in just sort what bolt-on Northern is generally have and outpacing And I California that non-CBD a

particular what case, business. Tom mentioned, issues you year-over-year just relative as I there saw project comp were to think some this in is

in that's a think I nutshell.

Anthony Powell

versus CBD, half the I guess comment back like on that there been you're peer be commentary the than Is from it issue? but specific a that I sounds other that. fair? was seeing some going market that property have of expected, of guess may worse issue not kind the a And was to

Sean Mahoney

when think third is is we meaningfully as you XXX Citywide larger to a maybe, dealing and the look as that room specific XXX are the the that on at in year-over-year have both issues We're not that they're hotels hotels quarter, types Marriott, in Citywide CBD, with. big Courtyard. fourth reliant the the Anthony, room of other the much Yes, one I up other closer have 'XX the and

I size, so and footprint, more our us than core our the our others. And from you're year who of maybe, around the hearing half sort think gives of back customer confidence

Anthony Powell

right, you. All thank

Operator

question. comes from Our Truist. Gregory next proceed with Please with question your Miller

Gregory Miller

is service thanks. scores. Hi, standards morning. and My guest Good first question about satisfaction

hotel in of curious how type light staffing manifested is select service Now fully full-service that months. scores the all experience satisfaction operating I'm guest hotels and between XXXX? implemented in place, of better been in recent in a have since your changes service industry scoring have hotels from more Is hotel that one

Sean Mahoney

door. about ability get have it morning, to Good and difference more know satisfaction. to the to can made regards we great we of so question the because think happening able satisfaction, you back be customers that drive then And that in Greg. think And certain of them deliverable, the guest ground. we're what's seeing employee consistency to to we When want hard about we on in really it's have to first, a has it's because important work come after and hours, a

a resources and in certainty the have environment good people tools and they allows and that of So making we've asset. we want have lot spent their morale and to build the type of sure them giving hours, at time

up scores are the seeing expectations and thing for. housekeeping on hours have where going The consistent because and looking customers and what in is more on of those service coming are we're same cleaning. what operations both and getting they're are And full-service they're the select

percentage. we've tidy that point and more still come I a still a the if where to Hilton the having and regards to think room will, And all Marriott where I moved at in is going we're think service, clean, have doing that. a smaller you into regular rate but take towards we're

what contributing in both I select. the all full service service increase would on that's scores suggest But to guest and

Gregory Miller

time. Thanks. the appreciate I

Sean Mahoney

For my follow-up.

Gregory Miller

missed this I remarks. in the wanted ask different Florida from I Apologies to prepared context. if a about

I'm have state in Florida centers, the to if canceling have curious few bookings? groups demand future news close several group been convention you've A reports or Florida any them and You seen actions. state impact events and due to to of negative legislation government are of there hotels. material

Sean Mahoney

our us doesn't year. comment, going there's and But It because center. so an think at the we compression to Yes, the in would pretty really that blocks the think this one have haven't point on seen Embassy Orlando, Citywide time Greg when got we your this area we have because too to the not compared that many about footprint, Suites. a to make IDrive, we nice participate happen in its in convention of Orlando calendar be has anything location

to at of in events Fort phase Miami years. encouraged cruises actually that When what's with are on further their center. is going going down and expanding pretty Lauderdale. be booking as you future you're back in as South, We're coming there the go convention well looking Lauderdale with

So just the opposite.

been have And Miami cause compression. We not that's storyline. conventions a anything negative seen really that produce doesn't

airport beach. We those the And have our in has and the been a one at occupancy hotel good pretty locations. at

you're I the to haven't in legislation really for seen and what around regards So looking cancellation? commentary

Leslie Hale

Yes, seeing at third we're for our is levels and I there. and pace quarter. the degradation What fire. Greg, second pace for you look We're what overall our if revenues not that for across in, would other were of XXXX We group you, on group is at would year on the XXX% portfolio, of just XXX%. tell quarter we're the of add seeing the I thing any our

booked We've months Our full-year what are year in for year we only is for We're year. the year into at are of booked XX% in already seven all year quarter. last the in year. XX% the the the the

where that For we the is quarter to pickup XX% pace continue. expect

this lot group, And which corporate XX% spot. driven the about that represents is a what sweet our small is And in small group of being by of group. seeing we're is right our

which that group to, being Tom a being impacted not is self-contained referring have lot by impacted, what not is we addition, In which of is citywide.

Any events is that's being not there, sort of happening along those lines. impacted. It citywide benefits it's but when

trends have our been overall just group extraordinarily strong. So

Tom Bardenett

to largest the And projected they of and group then be of for quarters. our the roughly in And strongest And quarter, fourth year. above those are XX is XX% Yes. hotel Greg we're Florida. Tampa, both in third our quarters

our So to group largest our the Tampa strongest is the and most of hotel, as hotel convention which our performing proximate one center, one is that assets so.

Gregory Miller

Thanks. Great. the That's all encouraging news detail. appreciate very and

Operator

Bank. Our next question Chris proceed your question. with Deutsche from comes with Please Woronka

Chris Woronka

morning the I go it's in up. question I hotels, Hey, a but brought back in Was Silicon six select to down, primarily of know was occupancy the I big it's service, think step portfolio. Valley that to mean some lowest good QX, everyone. Anthony occupancy hoping XX% the pretty

positive pretty You guys on market. sound that

but ran give the think quarter? have hotels us, different view. up mean, way splits, second you are don't in things market those the do at you can think a still that I you us don't lightning And give I to think? others tell the where profitable if in I you thought EBITDA any they improve

Leslie Hale

we of California, base, the from is lagging that the standpoint Yes, are capital it would but tech happening sits and what's balanced AI I flows in Northern California overall, within that. being and and long-term, optimistic a very What's it we capital. from think where say as what sits perspective strong we're happening. sober economic on being a it where optimistic, that I overall capital a Northern are tech near-term? venture

in I And better of to we just about are in how the market. what Having particular sure perform that make said non-CBD than performing. terms will that's I you're And the CBD. that, it's you have again, balanced we believe happening that to you think think be what's want hearing. that patient that understand But

an and our business impact we we've project positive year-over-year on and a by Northern California basis. EBITDA is on know seen we portfolio. think had And generating large a significant are what on basis I year-over-year that that had

Chris Woronka

specific. And

I think is only numbers, XX%. still was talked a look but the quarter that Valley, at which down, of because year-to-date for versus in business down when difficult you at us you Tom X% second comp what the look Silicon about. it's it's project When

of you're I comps, of looking challenging quarters because business? more of project at the So think that one because the

Tom Bardenett

fourth Super just when quarter, We you do Clara. Santa have the Bowl Chris, were the in And in get awarded you the XXXX. games football into

return and market So retention see are I market, think about and a and about has we back people still as on of got campus back that people employee when continue to work. starting where spent it has potential a money offices we're to starting a lagging vacancies come some are to as this to lot but think thinking office to come

Chris Woronka

of appreciate done enough. brandings. conversions is, Okay, I color. Follow-up all you lot guys a fair the of question have

want brands? in pretty as there kind out lesser experience. of the companies, smaller further, good a probably say Are there where the certainly from to handful, are are at are Nashville, some When but you of I maybe brand lot dozen still things of soft we of or one closer things would Obviously today, and the hotels your You're major other beyond have little nice at portfolio good pretty announced a in that urban of or a some to of you those radar? but a markets. on look Wyndhams it, you go affiliated resort look but I their brand brands, brand with up

Tom Bardenett

longer question, that is to it our I a of three has can other years of think we've great Chris, portfolio of roughly component our big expire some Yes, a call over articulated lever What that pull. franchise XX% optionality the five because story. agreements or that's we range next

to the we think sure the way on are we've brand value basis. right put we've the that think we've date I we've we that's we. examples ones maximize executed the making conversions announced I about asset this that. year date the done going ones of to and on think a right and risk done The the to the conversions way adjusted on way are And

is announced we couple a we've what years. future, several for by the the per in that it, conversions next But and we have publicly, of stand year

which those opportunity right. bill brand that switch go the discussing, but asset. probably to or family fit brand family either have on the you're for of even Some that or a is further today, right thing go particular the within independent, what's Based the up in

a roll themselves. point, our is or is out. around think cadence think per mean that the two And present the long-term platform your and we has our for ability it's fact we've creation. be the But agreements by we the also options cetera. I what what right big that What value. that year, us influenced by appreciate the And worked, per part that two is et when expire of the how are, of But part year done that to our to complement value we should franchise levers

Chris Woronka

helpful. Very Thanks. Okay.

Operator

from question. comes your question Tyler next Batory Our Company. Please & with with Oppenheimer proceed

Tyler Batory

Good morning. couple you. me. questions for A Thank

capital the think a of have team, record. management Look, good on I guys track First, you as a allocation really things. side

in been of balanced of thought a into terms been your execution I Have all mean, maybe on perhaps or lot at as levers, pulling different about leaning pretty consistent and thought you've You've changing areas? very more commentary well. you that?

fronts? bit into and in preference multiple on maybe execute the a may of using more It's nice to the balanced leverage liquidity or remain of see lean one the the not neutral of you're is or sure kind repurchase, on but balance have kind a capacity thinking little to perhaps just you to and areas, that you if these still about different basis, sheet

Leslie Hale

to your the our we time. make we're to sheet right continue Yes. more the than And do as generally provides Tyler, optionality of us our you for to be demonstrate comments. that all, to at I executing say actions that the would windows. within that balance and we're thanks going articulated, same first continue sure one thoughtful

I our but well. guidepost, buybacks, a it a I us use to is leverage as guidepost. a it's think And not so served continue It's with we'll and hard think neutral line,

with to to you our that and programmatically opportunity if one looked time, our Nashville the opposed of point obviously fought in announcement thoughtful we we've invest been at has on today most as buy dividend our end, as to we've to not increase us well continued but served backdrop, of and internally at continued it's only kind as where fundamentals We've execute afford at and to that transition balanced to economic I well. want We well. forward the as the be be and discipline buybacks we as and also recognize attractive, continue thoughtful look as that think we but

Tyler Batory

discussion. leisure little resort level, in is mix this And for corporate? stable you the topic that more leisure markets with mean or QX? then high to bit of can ADR I expecting then And in just be a your accelerate further you of Okay. versus follow-up on remind percentage QX? transient What's perhaps what us are guide your

Tom Bardenett

as we is Tyler, Monica, Mandalay the in as the the quarter, comping for activity first resorts year. the of our quarter, mix Yes, The as will ramp of we XX% start, roughly ramp. Santa is than resort the well little for we're associated they with a periods. would do to where of a off because of year -- our And both or half third in And the back resorts of the those XX% heaviest last are expect our occurred a renovation of second ramp to assets in portfolio. our subset actually better couple

expect And momentum both of are they our to those for the assets, continue drivers resort. of we and meaningful so

believe macro we think net-net that So resort I trends impacting on industry, to the that allow line think the but conversions will outperform for on to quarter-over-quarter in we our resorts, a be expect we us basis, the side.

Tyler Batory

mean you Okay, the at your would when guess transient, portfolio you leisure entire what is look percentage transient, I of corporate? versus

Leslie Hale

BT split and leisure thought, that XX:XX our leisure. and of but booked. about today, historically, transient, in of that's were terms that of Yes, we And XX% is kind what's right sort to I bar, mean separate, historically, because Tyler, of now. XX% it's being group. that was XX% XX:XX hard And your think probably We XX%

Tyler Batory

Great. Okay.

Tom Bardenett

think the mix breakdown you the side. it, back mix, the group And about on on we're

just talked we earlier. As

happening, encourage I think pricing about power at of bar highest is the what's think is When mix. we that's remaining our level thing the and important.

when As we book, And has retail about of the kind at XXXX. how we people look been think winner.

Leslie Hale

now. becoming we mix Yes, affecting right that's also think and nights look that Thursday also check about XX:XX when nights, of in I

Tyler Batory

right, all All you. great. Thank me. detail. the appreciate for that's Okay, I

Operator

your Compass next with from question Point. Floris Dijkum comes Van Our Please question. proceed with

Floris Van Dijkum

see what you of year? little the are and -- a think questions you right of give you're can the thorough, that to the for Leslie, outlook if overview bit facing rest have that biggest this I'm curious your been say risks pretty just so now must I maybe, what to

Leslie Hale

BT, has picture all wrong to say clearly, risk. for if holiday overhang looks backdrop Floris, happening of been I in have is would and we today nothing that in BT But but way, as the But of that to erodes were pushed economic out, I if urban segments what's if the the ramp, going that in good recession about across. way. would mean, some leisure's, feel doesn't and sort that that's affect obvious implications continue but good standing an Leisure, well. that be would soften, to

continue doesn't to too look South would International in emerge and something has if that Florida. markets to particular be New like been emerging, but it York at

I it's that to the for looking on think So implication There's it event has backdrop really continue we're economic demand and particular the at today. to risk ramp. no

that leisure I see And those think we we're trends from that to is that move the normalizing, recognize feel fundamentals seeing should us we overall, continuing demand stop trends see stable. today, nothing that forward. overall, but there's

Floris Van Dijkum

That's Thanks, it. Leslie.

Operator

back There are I questions floor at the for this over further turn to now no to like Leslie closing Hale would comments. time.

Leslie Hale

in to travels our for to conferences and in many Have contributes And progress. execution. positioned keeping summer, Thank guys our everybody. everybody the the that us travel September. good solid on you ongoing industry. we'll And We apprised of forward a with look see you we portfolio their our you And for hope summer. is and joining today. performance enjoys pleased We're well

Operator

This concludes today's teleconference.

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

RLJ Lodging Trust (RLJ) 4 Aug 232023 Q2 Earnings call transcript