RLJ - Earnings call transcript Q2 2024

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Operator

Welcome to the RLJ Lodging Trust Second Quarter 2024 Earnings Call. [Operator Instructions] I would now like to turn the call over to Nikhil Bhalla, RLJ's Senior Vice President, Finance and Treasurer.

Nikhil Bhalla

Good morning, and welcome to RLJ Lodging Trust's 2024 Second Quarter Earnings Call. On today's call, Leslie Hale, our President and Chief Executive Officer, will discover key highlights for the quarter. Sean Mahoney, our Executive Vice President and Chief Financial Officer, will discuss the company's financial results. Operating be Chief for our Bardenett, Officer, available will Q&A. Tom

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

now the results over to turn Finally, to schedule please operating supplemental Leslie. pro for information, refer hotel which current forma will the includes our call of I portfolio.

Leslie D. Hale

you morning, backdrop. the joining growth RevPAR achieve performance. despite markets to again and improve and Good We solid see operating once to were the a us thank urban quarter for us second industry's which everyone, enabled encouraged XX choppy during the sequentially top The way, today. led

sale as on proceeds quarterly second progressing while dividend. our active Hotel pleased our well we were conversions were with Teatro of our a of on results. into number asset opportunistic during the share as including Additionally, in fronts, the quarter, Denver, from noncore increasing a XXXX acquiring recycling repurchases Overall, we

events. impact in achieved both quarter, from the growth, and the quarter the we positive June RevPAR growth RevPAR by the RevPAR ADR. weather-related occupancy month holiday Juneteenth and growth while of was May gains X.X% for several with Specifically of which the strongest X.X%, driven despite achieved was

our points, a by This relative performance quarter, basis share strong XXX our underscoring portfolio. market the robust expanded of

once Angeles, driving by held segments segment RevPAR Los continues portfolio from a as Our Diego, in each during their demand, market, York, and in while Austin in again in growth of urban benefited a were our segmentation, quarter, and growing Miami XX% and frequency. travelers balanced ongoing back our benefit expand resilient from respectively. and which Relative to Corporate business Atlanta Boston, New increase corporations growth revenue increase our top-performing and was SMEs, outsized Denver, group San of the such ADR and in generating demand travel from to RevPAR of demand markets robust all the BT with resulted with as continue in renovation to travel X% X%. an by business occupancy from X% midweek growth demand large the expansion

quarter, ADR, X%, segment revenue group by had X.X%. primarily of solid achieving led growth by another Our which grew

and With in quarter, continuing rates were this XXXX booking the booked points of groups several [ portfolio, group quarter. strong which by the Our Kentucky of XX% Derby XX%, many by the our normalization group to our we sensitivity. events of performance attractiveness healthy basis such of activity the current and of across with pace base. in our in quarter. remain our exceed quarter demonstrated Overall, as our to respect the trends in since was as our Louisville bookings driven the The by as allowed pleased our with XXX%, the markets, significant light of space results of ] for Championship revenue group favorable small as XXX XXXth industry to in-house leisure second well meeting increased consumer booking citywide leisure, PGA increased last price quarter year our start across

as with were up nights demand as Charleston Orlando. drive-to healthy California, such coming room from and Southern X%, our markets leisure such New City Our York markets and

pleased on our driven increase in growth robust positioned with underscores leisure included F&B environment, operating our which from expense last to in this portfolio we of strong spend models. pressures revenue we us also a ADR facing venues, to and food The This allowed to attract redesigning reconcepting revenues. headwinds, nearly EBITDA million. believe constructive of helped growth, are the were offerings X.X% our RevPAR X.X%, years, allows the of in initiatives out-of-room our $XXX which non-room we offset several contribution which exceeded us that undertaken our total over demand by remain ideally generate is hotel and demand. growth Although and ROI has growth Overall,

the with aligns X-day-a-week the located Center, demand hotels in submarkets. CBD prime locations in the balance Denver pipeline rooms-oriented Arts just demonstrated XXX-room of transaction. from within strategy which the our location strong recently sits sheet it in in opportunities hotel Denver acquisition to optionality firmly Teatra to external within heart-of-demand our lifestyle hotel, for complex that steps provides acquire The million boutique Denver We acquiring and leveraged $XX.X in dollar capital relates As allocation, off-market second This we a quarter. a Convention of expansion. high-margin multimillion our growth Colorado an Performing completed

expect were within opportunities, XX% included the several our achieve yield over which not benefit ROI to We underwriting. a stabilized from should property of and

which over which first We us in RevPAR advanced of growth embedded the Mandalay Santa and XX% our growth are quarter achieved year. is including also half during Beach the our in our unlock collectively Charleston, meaningful that and conversions during the Monica, second internal allowing to portfolio. growth initiatives, XX%

autograph, recently New schedule on our Orleans look we Hotel Houston, is respectively, conversions already achieving The and in well, and XX% of and by the year. providing delivery in the nearly growth courtyard was hotels the remain year, next RevPAR to an in and Orleans update on ramping forward Wyndham Boston Renaissance Tonnelle conversions on in Our conversion quarter, delivering track completed for year. later a the for and during Pittsburgh to New remain Nashville this and

$X.XX third noncore accretively from increased share, of for covered. a of to the proceeds into well we this recycled quarter, quarter million sale per the we repurchase dividend remaining And $X while Additionally, of finally, shares. our hotel the

Turning to our outlook.

that to outperform of optimistic continue the the signs are markets backdrop driven of will throughout industry. continue current to by urban is RevPAR year, with the Although balance demand, expected this growth largely economic moderation, we showing

is business travel leisure view muted footprint. to the of the continued our as in Our well expectations strong and rooted current That particularly price group demand the we said, new sensitivity dampening our in improvement beginning for supply, persist, as segment to the expect in relative growth year.

benefit year stable. we in we such, urban full continuing backdrop, adjusting as As business the assets our to improvement travel from are this as current outlook. our our which to Relative guidance to remains expect urban well demand, leisure reflect

strong currently ahead tracking markets which from and conversions. our and of the booking is double pace, benefit several continuing strong Our from such XXXX and Chicago should digits second citywides in half as our ramp-up Boston

optimistic we limited demand ongoing term, which, preferences seeing We call now are towards these Sean. segments in given play against period lodging fundamentals, of consumer new experiential the our an to about growth July supply. the of turn performance. time, trajectory I the out will the travel, backdrop over over all should especially of benefit dynamics Longer remain of in from elongated

Sean Mahoney

the the quarter. the acquired was in our which the quarter Indiana, To start, and during include include second Teatro which Residence of hotels the during sold of the and end our we comparable Hotel numbers exclude owned quarter the at in second acquisition Inn Denver, Maryville, XX

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

to were results, pleased line said, expectations solid of we operating strength with in report the urban-centric and Leslie are second which our portfolio. As quarter high-quality our demonstrated

in X.X% Our X.X% in increase X.X% a second occupancy quarter of was a increase quarter growth RevPAR and and the first ADR. from accelerated driven by

Second quarter occupancy was was XX.X%. rate $XXX Average was RevPAR and daily $XXX.XX.

outperformed. midweek As transient we've noted, business and our

quarter in Indianapolis Angeles transient quarter Denver Miami grew XX%, was X%. healthy and basis X.X% by at growth June. growth Diego including growth at the benefited RevPAR to of May urban total during non-room occupancy and X.X% Monthly was growth April, X% at Juneteenth. growth RevPAR X.X% X%. X%; growth constrained of such New our April, as at markets ADR from the which York and growth remained in X.X% at in of Total XX%, and timing of up second was RevPAR in in due primarily of Los outpaced revenue impact X.X% down June, above Second growth business and X.X% revenue and in May points XXXX, XX.X% Boston CBD XX RevPAR quarter San the X.X% Monthly Passover at X.X% XX% midweek by at X%, revenues. XX%; second in in

Looking increase ahead, we forecasted expect in June and to continue the from operating is July, trends between X%. X.X% RevPAR where to

encouraged operating X% the to inflationary environment, benefits the by a We second more underscoring operating Turning operating limited basis. increasing down and our continue to the were as occupied fixed only during the per of our and model. remain cost occupied costs, property trends in in quarter. per of into insurance operating initiatives operating pressures total on our hotel cost room On normalize the increases construct which XX% to variable operating driver X%, basis, grew redefine was cost hotel during a second our costs taxes growth expenses, XXXX the portfolio current expenses, room quarter. such significant controllable most improving Drilling our to above hotel further the

moderate comps. year-over-year growth as half we second the cost the the XXX most XXX the to expect points of difficult by during fixed lap to year We basis

during the cost to the we hotel moderate the forward, of Looking operating expect growth rates year. half second

margins of XXXX hotel achieved million points quarter XX%. $XXX.X margin than cost were our pleased EBITDA comparable portfolio the EBITDA our operating quarter, lower second We only despite the continued which pressures. hotel of performance, and During XXX basis was with of

bottom Turning line. to the

share EBITDA was diluted Our quarter adjusted million second $X.XX. and FFO was adjusted per $XXX

is our our additional with maturities. in managing quarter, our Early cost lower create available capital. actively sheet to revolver. sheet Today, and addressed continue under our million positioned XXXX corporate second balance we our We of further balance $XXX to the well flexibility

weighted We of interest the unencumbered X.X an are hedged. of hotels with average by attractive average approximately weighted and of maturity X.XX% Our debt quarter XX% debt. either and our current second years rate XX XX or is fixed ended

approximately and we to capital and to value embedded of intend projects have portfolio, remaining share $X.X committed in returning demonstrated, ended debt. repurchases As within the selectively to we it our liquidity the our while allocation, dividends. with to unlock consistent liquidity, With acquisitions relates billion of also to to what $XXX through shareholders pursue both capital million quarter with we respect invest

$XXX for share. our at successfully have we million of During under the million X.X an million we disposition $X.XX active share the been second per third recycled average Year-to-date, program. approximately repurchase repurchase price of proceeds and $X towards quarters, shares

Additionally, third our to with our starting Board quarter. to the authorized share $X.XX recently $X.XX increase per a quarterly dividend

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

weighted our our outlook. financing the the color markets cycle, monitoring cost our capital results on debt to during the balance of flexibility. decisions additional making additional our would maturities, the while laddering We portfolio reduce to sheet like lodging to assumptions I drive position will provide identify to average continue underlying improve updated prudent to allocation opportunities of increased and entire now

outlook revised Teatro residence second sale acquisition of [ the in and actual the Marabell incorporates Hotel ] quarter our second the quarter and of results. Our the

to leisure ranges. mentioned, and the weekend normalization ADRs industry-wide continued led Leslie As prior our in guidance us update

For incorporates corporate million adjusted EBITDA comparable between shares comparable between to and to growth and to $X.XX EBITDA diluted per XXXX, X.X%. and million between but RevPAR now date $X.XX, $XXX.X between range additional be and which $XXX.X $XXX.X And million, hotel we million and repurchases. adjusted expect repurchased FFO share X% no $XXX.X

range rate $XXX base RLJ no still expense to the $XX range $XX be to of the debt higher estimate Our and We in our the refinancings. XXXX million, be acquisitions, outlook impact net additional dispositions in million $XXX capital which now on or of rates reflects expect compared variable of to assumptions. million interest will initial million our expenditures will assumes

information, results Finally, prepared to Thank you, which our XXXX and annual the XX refer and comparable this hotel quarterly please for our supplemental concludes includes portfolio. operating remarks.

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

Operator

you. Thank

will question-and-answer be session. a conducting now We

If ask questions would to you [Operator like Instructions]. around

Bellisario First Baird. question, Michael with

Michael Bellisario

in the happen be in on the are on first to that And your to Just then backdrop risks high that at what at end low low focused question end? high that assuming versus would need you're range? second half. versus what macro And the the end? guidance, you're end baking What's the

Leslie D. Hale

Yes.

was of way out the Mike, signs we if the slowing, the Fed thought is about came So the our said more signs that is that range morning. economy We this that it successful, be that is signs on immune be mostly leisure we're driven. The it of obviously seeing on largely and the affecting to impacted. side wouldn't obviously rate travel -- in clearly,

assumed at the original Our economy that slowed end low range the down.

all the to between BT still discount strong. continuing between in as We're continuing and that about it that a ahead to to down seeing ] booking And on that's through largely clearly, If range the ], rate-driven, XX before we and do see and it length rate Today, remain points from leisure of of of our current about low would I and group. Monday our is cut -- previously that that in And the XX we different who's points on booking Our been the is assumes our assumes, forward midpoint baked booking increase about group, the consumer BT us is would to has move our there were what was same that seeing is rate below And obviously, stay. the The BT book-ins of coming that. demonstrates frequency, Wednesday [ some we as GDS at standpoint well thought historically, later, the rate guidance widely between BT think still for group. from is original be our channels group that the terms booking, you discussed. and -- think of perspective, What's assumed obviously BT end as early segmentation, and that's -- of accounts standpoint Tuesday, and BT is else convergence SMEs everybody gap from look If of resorts a range. national the a We're that it grinds guidance. we and by difference that we however as booking, they range XX weekends are that that converge. [ not translating it. as the of still that thing of mean into forward. relative

in house quarter. gap rate our rate this of that new X% view group quarter, grew that X.X% the grew that by is second Our is BT remains. that, by An example

we side, we as at As our our quarter in actualize second quarter I the pace the for look quarter back the isn't that midpoint group saw we our of half. that that current in but the group the strength range assumes outlined, in strong

at so midpoint seeing And we're our that's range. of the what

about would leisure -- bottom and pluses assume degradation some weaker BT And group the it in on and demand if so think originally see you that is minuses I leisure end, that demand doesn't than that the side that thought, that we on mean, actualize.

our convergence it. with group a we group BT current end some based side rightsized on way leisure that top range see urban the On I of we that the overall picture rate would fundamentals range, it and the outperforms that assumes do think has leisure on But that is that is overall. that I our stronger,

Michael Bellisario

group try sensitivity? offset channels there pricing management and you're is to on weaker? some up outlook, And particular in for end that maybe demand your portfolio more weekend leisure then revenue just terms seeing? Any that to reduced of Tom, across your directive broad-based of rate on the then for what leisure and to stronger operators the is or And any to

Thomas Bardenett

you we're look think where So there's would things a leisure well. where and in is the we is thing very that look hotels general is leisure industry -- in cruise we're have other sensitivity, Orlando, you about South West, Florida, the say. seeing if at of Key doing When when the some price I that couple noticing you Fort shifting markets Lauderdale because

XXXX though there. X%, hit cruise. passenger about ], volumes instance, by XXXX, it's to what up we're finding a rate XX is movement harder weekends demand in million surpassing there's And is to on even For so [

demand. get appropriately having able priced sure be to make to You're that that to you're

and were down. were redemptions looking are other we Marriott we and day, example, the Another redemptions at with

make So, little we we're on different that even to point, we're when when think make through weekends. group sure Leslie knowing revenue weekends, they're to and to manage are more regards coming sure it's absolutely a the To a little your shifting booking. how and that changing they're who's bit referred we loading trying in and to bit to coming

making whether referred we're up can that You only The everything in sure up And that or is focus group Leslie groups, groups, demand, more, see that not special to group. though, is do. booking we been but weekend has in on can events corporate the group SMERF it's rates. it's small

XX% rental. still group that's not the but the our only forward. And BT group about So AB, grind corporate, where we're banquets to at continuing and seeing us room well, of is helping that's we're corporate kind as in of

of rates in bit. on bit right not significant a completely answer a to focused from where we're types pockets drive so And but definitely And year-over-year. little profitability. the it's were little profitability hopefully, standpoint, helps it's But more broad-based, that groups a you

Leslie D. Hale

I days. is And you that of ask talked that obviously, X XX% within thing booked X X business Mike, starting between would more about and X, comments, to to to now range. is we've We're see before, the Tom's our as skewed to

of you we be short and So how the to thoughtful has how are it management forward. gives revenue the go a as bookings sense

Operator

Miller Gregory Truist with question, Securities. Next

Gregory Miller

a full outlook. So year this is on related question your

Given the no of at to especially that, June see clear with was of with full conversations in guidance about and And cut, reiterated last year they adjustment terms your start your quarter Nareit. your to guidance I'm mention operators that when this relative leisure curious I softness. degree

Sean Mahoney

Yes.

are initiatives your think with taken I that put a with in softening respect in as point Greg, So well we is to economy. there conjunction place will

on certainly, revenue to make good revenue contract mentioned that up Tom grouping cetera, a side, build et management so sure And base. the we business,

costs total are type on wages which sure our this we are benefits, and monitoring XX% the particularly importantly, make As of aggressive business, in to of costs. that environment within is

revenue new the to outlook. accordingly flexed are costs those that sure making so And

the an help which softening some guidance initiative within And ranges. of mitigate well is economy, the of impact so the to I management think as reflected asset that's

Thomas Bardenett

Nareit, remind we at the May. a you, Greg, were we just best were the when I'll year in month of week after And

weekends of And booking and of month, about would in when to growth ran Friday in where we July Saturday. sensitivity, in at into so encouraged rate is on quarter, when RevPAR and happened really when starting that look to Saturday, look midweek. as what growth to with see a week just where had you pretty talked were and and window, Juneteenth, coming sensitivity most it. off was starting I BT and around shift significant the we Even more a the the we've regards Friday we which at our you're you're obviously, bounce June then more it's say But is

reacting and So our we sure all the booking quickly, good are window revenue companies very aware we're of management our thing strategy. management making that short. are And pretty is is the

can we -- quickly So pivot versus things not to make able some are to happen things being adjusting. having when

Leslie D. Hale

summer I And that Greg, to provided. we as we within with that and thoughtful guidance are last moved the into reflect a visibility the thing would was in that here have and visibility Yes. that greater that way what think add, on we would is the said I that we our call able we

Gregory Miller

for the the just the question, leisure Mike's your Do from of of OTAs for from taken similar I overall? And you demand weekend your and leisure RevPAR. or and channel mix. today additional think perspective increase have softness to In this it's when will given about demand about increasing the share some that And my there's is also OTAs net anticipate been as the this is follow-up, cycles, softness, past share.

Thomas Bardenett

seeing brands, needing to my Greg, say, rely the think total. that would we from all are on you I OTA. weekend earlier certainly and seen, OTAs on need you about the lean you though, the same. are percentage reports in about is filling of Hyatt and definitely the comment seen the What additional is and What these to our on I avenue way redemptions, an our based we've that increase for is have at that going house, but an when percentage bell, if it, and will, remaining Hilton to are we're the because Well, look back not we turn towards Marriott, premium they

pricing properly ourselves, rate best our I because related available that's that we're making many thinking is leisure discounts, is thing of what sure AAA, to say would positioned. we are whether about other when The our AARP, we're is everything

that further about is think of you can rate where give out when get the people that much discount so in. are reasonable to buying paying booking. rate but to you're as not trying off demand further rate, got a So coming vacillate you you a out, in getting but still closer decent people that it too on continues, bar position up That's what as well rate

I marketing that are going consistently it as say the continues. think to I growing, demand digital are we're making OTAs around sure the be enhance we same, so some the I to don't would sure spending see And that but ability make to

Sean Mahoney

the Greg, ADR one that I leisure healthy. by driven is in adjustment side, not leisure And Demand risk seeing Tom's Yes. thing leisure on our and remains we're the comments to add, would the by demand.

channels And to that the have to of customer pricing right, channel, discount your to would the healthy function demand adjustment the leisure just demand, more it. lead so didn't It's is a sensitivity driving because a there. to you is a a from believe significant with you have

Thomas Bardenett

direct the thing And earlier, a to distribution. corporations. that's GDS a made up, Leslie national on comment relationship is last channel

because direct. the That's people list comes ability making putting the against sure channel would property are groups ]. is many grow we to to up thing we're that's that other channel to think opportunity I there's monitoring it And roaming when point we're our related payroll out which market how sure to is and other really also put The then where share our where most [ an in taking is negotiated. that local share. growth basis of Leslie in well that's to local the we're that share business negotiating is the points, were we XXX payroll national finding in amount to seeing local mentioned, is. is there's there market market corporate, We're midweek, growth we're then corporate corporate growing make

Operator

ahead. Next Company. Oppenheimer question, & go Tyler Please with Batory

Tyler Batory

gap a between hasn't business some explain on converged gap, could group. Why like more? a transient there that. that's is that you depth big would I'm helpful. the you that's expected? explain gap? rate But bit more, in Can impacting that Why Leslie, it you little and be assuming there's of more going that such maybe made note the go mix you comment if and

Leslie D. Hale

BT Tyler, business, group our we then normal Leisure sure. that the the and was to rated still back, think ramping was highest group was then was I and has Yes, I as BT strong leisure, historical back. now know. right, relationship think is come new shifted, second

Your months, last customer rated highest is XX just now to coming the back in minus. or XX plus

so role. grinding we between been into slowly a I forward as traditional, things And all would figure of out and leisure, new are BT playing normal it's the say those

think just strong. has so I leisure also been

the shifted has that BT to know get back just is not We're relationship, so historical suggesting should it we to going same the better. that do And dynamic.

close the whether that. general incrementally, on means our it completely so house gap And that or do view better is should

And about so how think it. I that's

Thomas Bardenett

coming that's demand because a a corporate national had last fixed category of have you amount didn't is have your also pay I we've available rate. category. rate we've over pricing. SMEs the about been couple add dynamic to you that attention the And seen the in going growth into best more but discount or thing into would years, to who of accounts that going Remember, back, last The weren't talking

the power demand still the And so that's has was. shifted. where And pricing

you're with rates that getting therefore, had. you're more come companies. And we've So been coming your highest those rate for increases that back, corporate demand the that that now on getting best national rate seeing you're negotiated available has the

Tyler Batory

science it Is mix bit business? communicate of of in your in is travel being -- terms questions sense resorts? leisure? categorize weekend I clarification numbers, coming would leisure? rough to the trying what imperfect Some trends. percentage a particular terms definition of of a of of to know you what's it's as you're get your as the to what trying but really little we to just overall an leisure it Just here, can as And

Leslie D. Hale

that, at mix the transient, XX% was transient think mix of probably was say our XX-XX. leisure. and is group transient. XX% I that transient the today historically, Of would XX% BT We It that

Thomas Bardenett

-- on weekend you And look would And leisure break that rates also at at on booking down would category, that also look much that travel if midweek you can anything be all would then that's I those it's leisure. Tyler. rates when transient the or you pretty say would obviously, in weekends, are weakness. discount be

And I just so mentioning, things where was look leisure. code AAA, can to that AARP, you at we

So it based the for or pleasure. we define what they're saying on are people business there

Leslie D. Hale

Right, at better leisure also look well. are we can indexed as to markets that

So ways to it. there's different lots of cut

Operator

Kesten question Fargo. Next with Dori Wells

Dori Kesten

assets? acquisition markets acquisitions the as would Has point? You've it this over past follow-up, as certain your at more more months. about growing? been talking few are your And there just would been stable that you pipeline Or a you from of describe then think benefit more clustering

Leslie D. Hale

Sure.

conversations. that much to having on would team that talked very on terms What always that transactions We about that is our focused say assets generally take focus and call, underwriting, we're longer situations. always off-market we've of curate. In is our we're I unique pipeline, have on previous as

say And generally that's pipeline, would stable. I of been that's smaller subset a our and overall so

Dori Kesten

U.S., yield Is Teatro. knowledgeable bringing it getting efficiencies? then particularly operator the top-line a into Sage, to for Hotel but the more Or lean well-known you're Denver as driven does in greater in thing? And of XX% about stabilized a

Leslie D. Hale

above. of I think it's all the

baked is all as in capabilities is and and the wins who dominant to manager, addition hotel. the expertise has using bottom. and player obviously in an operating management asset largely the equation, in [ institutional I bringing subject by By has natural side, in matter of particular to it's of looking our how operating driven on this the unique well think opportunities as to side at as quality add both value aggressive whether on for there function Sage, the a well upside all top that the that custody market bringing a ROI, in of on ]

of All those bottom. base, top things and are operational

Dori Kesten

can't guessing white then from the XXX. those changed remember Can And many years, from, remind app XX quarter, I'm wrong. last the this then has you still just in hotels just are you RLJ I within Indiana be original from I back lodging original it's materially that portfolio like has. quite might how sold today? the of over The portfolio us RLJ

Leslie D. Hale

we Yes. reduce we of is don't a assets a heavy with in XXXX, what I noncore but say our out that number just and lifting give assets of lot we're generally of a a But Dori, portfolio. we lot is large, where of XX a assets, of you, assets. portfolio of would so and I sold pretty what I portfolio. say from by did overall have that would happy that to the And have number handful

always going to [indiscernible] have your a You're portfolio. bottom

just execute in we done brick-and-mortar noncore that a [ it fashion. so that But we stick by get transaction, an from that of was in consider of an and This we were I build ] we portfolio. handful really able of that not assets. And This could handful we've that large, a accretive would and our to dealt say, is have asset assets a left so we portfolio unencumbering with and noncore have assets. kind

Operator

Point. question, Floris Next Van Compass Dijkum with

Floris Gerbrand van Dijkum

little bit share Maybe see certainly Leslie, higher by on talk you you some And do if trading dividend. A you between a about today? returned -- of price allocation. the balance share question capital your in repurchases, new a light How is capital obviously, that? where investments could

Leslie D. Hale

a of represents perfect said. consistently really quarter example this we've what think I

than lever one time. us optionality at a pull balance Our to sheet more gives

to us volatility that. window that. gave quarter the the for ability be do You're able this always And to do the looking right to

been that mentioned, a you about those accretively active As we on fronts. took the X, a leverage-neutral obviously were and shares asset bought and couple basis. have we and proceeds back recycled of we talking just on

We look on a climate, our have When are that very to so buyback And of do our buybacks allocation about equal successful, what been between continue that the to in executed on remain as allocation. of obviously, and was and about we conversions well Teatra, the as we we're this recognize increased you per then we pretty We the well-balanced to at portfolio dividend year. and very invest we it it actually dividend but also remain capital is and constructive, a well going disciplined be cadence X as acquisition we in for Teatra. attractive. our paid

Floris Gerbrand van Dijkum

you if you on could maybe to for have in balance Remind again Obviously, of million terms got the us well? I sheet. then potentially of and $XXX you left rest much on pipeline as the of this how what the year conversions cash spend then cash. follow-up still in the plan And and

Thomas Bardenett

year-to-date a talked the more I of year that. half ROIs, $XXX $XXX for inclusive Floris, of than about cetera. CapEx of is We've million that Yes. little million et conversions, mean, spent we the to

of so would spend that us expect you during to capital balance And the this year.

that you we've when we've right have, the to time, sort lever and of term, us think historically done and I talked provides as the right liquidity on we the at the look about long pull that. optionality

on that going I be to a to Obviously, about has within when an on think cognizant past think, our acquisition competitive capital of options, liquidity and position advantage we've elsewhere cost in is I are our of opportunities. talked us an going positioned disciplined comes be today, but we calls, the being enviable buyer we're all-cash it today. to

provide we I liquidity view I'd what it to we view optionality. So have wouldn't what as as to have it us spend,

Operator

Deutsche Instructions] from Chris next question [Operator comes Bank. Woronka Our with

Chris Woronka

is example, the and the Or be want window are transitory? ] trending demand further right range. shrinking you earlier, but look So the further booking -- you like windows that, -- see indicative lower maybe maybe is Leslie, the back, weakness? on that of guess if just up that then can be issue towards mentioned, think [ I do and I booking end you I to XXXX think you not back we going historical the something mentioned follow which to is that first of is

Leslie D. Hale

I at basis, the it was No, historically, days think the and X was now in we're that to pre-COVID on X think a about XX% X. X booked sort in I of XX% to

at Technology normal. Transparency has a has think bit improved. a all. a So of I mine it don't we're improved. kind coal I little as new canary really in the see of

and I revenue able manage the are pretty you consumer be sophisticated and think think to which have that it's just I around behaves. understand behavioral we how to it,

coal just the nimble it. be perspective, our so respond mine. a I to and And we canary have it to in see as don't from

Chris Woronka

you Second lot position now question here? able weakness still hypothetically, RevPAR can are far a hopefully, but pretty that won't, flexibility? in is you flexibility you also, And for just guys efficiently I a as you go gave prepared during look you see you -- brands the of if softens to further were right were, a ask think tell, to if develop, if running would you back things to you're -- you to do lot as are from there you Would to are COVID? do -- they of to you are give

Leslie D. Hale

economic in that some would say revenue we through appreciate I do We to navigate we showing the still Keep to softness. operate a mind a expect that soft continue learned COVID. and zero of is environment in landing. signs backstop Yes. that

that we lots didn't So tricks we have there ago. of the X are years that in today have back necessarily

even to we a environment, was. navigate ability than ever it degree at and if And softens so the today current probably [indiscernible] think is further, higher it our

And being we go brands. so to the think I good environment. this we pretty don't back about And to to feel navigate able have in

Sean Mahoney

to second buckets. with efficiencies, Chris, And X cost why break the we can to the is is do then, respect you quarter year-over-year into Yes. the watermark really -- And it respect with that high believe the reason increases. we think

the is taxes. fixed first and primarily are property The insurance which costs,

November, that fourth successful there which to we November, the Our there will and part an benefit property as in have renewal renewal insurance in would of quarter. to will have a expect renews be of a premiums ease

you quarter, In tax to this we're to addition, property fighting have we but didn't or taxes. be adjustments property would make minimizing quarter for aggressively us expect last sure -- any

we so subsequent And think a that of quarters. becomes headwind less in

remarks, that's expect my fixed to cost said points. that so the XXX basis And increases to I I why wane in XXX prepared

benefits, on The wages wages is opportunities and second there. there's and benefits, our item

this mid-single up employees. higher reflects full-time But quarter contract in the quarter. were digits this they percentage So a a to shift more labor from back

reduction XX% in roughly quarter. have this labor We contract

employee that where what the the labor efficiencies quarter. is, in shown And up opportunity have that up so the side, was an see in that full-time able contract teens to benefit is the doesn't you versus in the and get is employee the But what low increase be we'll in has quarter with which a future quarters.

will of better And year. in relative saw half expenses feel much the to good in so we year-over-year that first have operating the our what comparability we that,

Operator

from question Chris Darling Street. Green Next with

Chris Darling

you proper question you're And good on Francisco East you could any Area? speak what A and probably. between the Valley thanks to ground the across Tom, comments the morning. and Can seeing Silicon maybe to if for Yes San Bay Bay? relative delineate

Thomas Bardenett

I'll with good news. the Sure. start

Let's go Silicon Valley. to

little We back. longer office have a business Chris. Hyatt more We're seen come to stay back got helped. seeing few length a bit The quite definitely a because of out has houses there, project we've

a to seen we've some so Tesla. accounts with XX, seen have for And we got actually and XX year. XX that rooms hadn't from that either last We return had XX days,

we're seeing So a increase. nice

much you a little where Silicon is the back have international there work we capital whole right areas 'XX being come Embassy the that some those you as -- at business from we us, to of versus that's are a And consultants business we're think to the the for And that's When When seeing We more Moscone a was special airport set a But location. year the another bit a we around better as cause a been come is pretty in, because will in we've second is a sailing that some encouraged got growing share be what the in place in go tougher business, South Alto, that all going All-star Waterfront, that well an fourth quarter we're in to game event XXXX bases, at addition seeing CBD, And getting the contract -- 'XX. now. than the like of kind a year talked have to We've area, events we on as The CBD XXXX. Palo summertime. which increase. the California. be the in volume area and Embassy we're you this as will seeing we and knowing of half NBA year quarter between seeing do little game will, other of there's we're closer if citywides, of to the put going as have to everybody this well leaning well. helping airport. gives the that nice you to Northern has as I harder the AI Valley, bit We're been to up spend and get where capital, know of that was than we setup and an close towards and third we're seeing half. University, that be first better seen Stanford thing about our uptick the takes

Chris Darling

another just Leslie. gears. shifting me, one then Maybe quick And for for

thinking this in As expectations last about of various kind you couple the of change you kind conversations slower the seller speak in months backdrop could market individuals transaction to? buyer, have the of with in demand market, any that

Leslie D. Hale

think There's I continues since call. [ a better. supply BOVs bid by the down, the TTMs, on last Chris, really is see and last coming around still not The you that constrained. of our call. hasn't back in a I activity but of year. volume available the half expensive, It's that low be people rates shapes remains given levels much large, pick our how say since up But debt and general changed ask, gap changed focus but would up and But conversations. there marginally that perspective soft No, has fact ] really that around to in

Operator

turn I Thank to over Leslie to the you. closing floor would like for remarks.

Leslie D. Hale

level of have some joining rest Thank travel. great We it you, that includes your everybody, you hope of and us. a for summer,

Operator

teleconference. today's concludes This

You at for may participation. your this lines you disconnect your thank and time,

RLJ Lodging Trust (RLJ) 2 Aug 242024 Q2 Earnings call transcript