CPLG - Earnings call transcript Q3 2020

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Operator

Welcome to the Third Quarter 2020 CorePoint Lodging, Inc. Earnings Conference Call. At this time all participants are in a listen-only mode [Operator Instructions]. I would now like to hand the conference over to your speaker today, Ms. Becky Roseberry. you. Thank ahead. go Please

Becky Roseberry

Swanstrom, afternoon, are conference to we call. Keith us. Howard and remarks Good SVP Song, quarter Investments; on of will Lodging's the XXXX from and Dan CEO; our earnings In our Cline, CFO. and you. Rob CorePoint our CAO, welcome Garfield, third have our also Thank a with moment, line

our materially remarks from like materially only These expectations today. statements today I indicated from implied. those made not we would to actual results remind could that that do statements. statements Actual to start, duty subject forward-looking our undertake differ factors include expressed risk will to the or any as our of are may those forward-looking forward-looking in differ forward-looking to statements. to statements. Before everyone And update cause speak We results today

For GAAP August non-GAAP and release, on In we Corresponding remarks, also a to available on in recent Securities XX-K more is XXXX. Risk report of Commission of the some which company's the corepoint.com. certain the metrics XX-Q measures. financial reconciliation at section the today's on refer of are GAAP measures non-GAAP risks, earnings report Exchange to to refer will quarterly Form annual provided filed these please XX, details supplemented by on with Company's and measures on most Factors as Form our website our

now information Keith. call presentation no the XXXX, to it not be listening and discussed remind those be replay Finally, for the I over With this possible that, longer November this to a will will that will current. is we after turn of you that call X, updated,

Keith Cline

cash to response an like preserving a everyone provide We're also on update platform will an current highlighting our update estate Becky. burn and reducing to of on provide quarter would sheet join system COVID-XX could disposition strategy. operational positive hotel we the expenses Starting improvements efforts, update our you, adjusted pleased brief liquidity operating call. we and Thank report hotel our will to and us. levels. and of Today including I I profile, provide and review afternoon third Good generated our that you continued pleased non-core way Dan results, $XX EBITDAre. operations, liquidity are with balance with level our real Wyndham on details sales. million under welcome then

for XX% destinations, This the two-thirds bookings of third performance relative by and driven the quarter. outperforming that drive-to in the all those travel, fully As primarily leisure including weekdays quarter RevPAR a RevPAR Arizona broader is of third Florida, call, favorably occupancy our quarter of operating a to we which transient were Since in temporarily that outperformance. Index guests. time our hotels results change are with accepting with for outperformance comparable open, noted industry in that second when in improvement currently and outperformed compares significant we've quarter in hotels which and not had recent California. represents marked experienced XX our approximately second weekends Year-over-year we early

to transportation construction, see such businesses and certain project-related to to related leisure, some continue travel In essential in addition corporate of as we businesses. segments recovery

times. is hotels to amenities guests all of is elimination and only pre-pandemic property during at staffing hotel the of containment while serving these essential we until level continue place spending these everyone what what levels, needed, a remind cost place levels. our containment reduced to safely at see all include efforts cost of the the operating to will in efforts All to our stay freezing run non-essential the remain and To challenging in return

breakfast, well a with standards Our as rooms cost van maintenance, lower sold. and as number driven drivers our hours the better associates match such occupancy structure in as to housekeeping reflect by service of guest areas reduction significant labor reductions revised in

are designed approximately XX% the containment $XX, expenditures. adjusted of a our positive level total approximately we us company This cost saw cash quarter. performance burn of breakeven operating for level these of to $XX hotel All cash rate. reduce level efforts million occupancy RevPAR level excluding drove With EBITDAre to property an and the an for capital positive of

was Our for approximately total cash million million the was and quarter. cash $X G&A interest corporate our approximately the quarter for expense $X

in significant our this lows expenditures an revenue scaled April, significantly cautious ahead of highlighted all Additionally, million. months we the have as in line Even to we generally month industry the estimated the global lodging $XX we the our remain back to stats about non-essential the October calls, $XX recovery spend million last from ongoing capital typically Dan annual with few expectations. pandemic. were strongest quarter, in the for fourth uncertainty the with as navigate in of

year those softening this of during hold, look first past, part with But periods. we we these evolve. recognize to operating we quarter noted potential that are prepared remainder in as overall business If historically As conditions we consistent cost the is and year, two historical and fourth initiatives adjust metrics season. non-peak slower have control in to there of trends the ahead our next for our of these a quarter what are the of quarters the

of platform tool be the to systems than way Wyndham, toward deliverable our XXXX. improvements no completed enhanced meeting the under work relates this Wyndham settlement. Wyndham available required with As is implementation settlement end of the the later best to to remaining dynamic continues the it rate-setting under under

our to Now strategy. estate real

and of of experienced sales, quarter half from previous when our in back hit pace on has a our recovery slowdown recovery date. noted a pandemic this the we to first the second asset the in the we continued call, As

on transaction a and Our on having sales buyers. investments recent provide team will new has additional few Dan deals been with activity very active closings, dialog existing prospective signing results moments. in

sales our we realize hotels we months demand multiple for a be But there are significant headwinds revenue. XXXX sold seeing X.X the hotels for we As our La we buyer combined pace ahead. approximately encouraged sales, that results of by attractive could to times with uncertainty the XXXX million to-date our pleased branded price an gross and XX some $XXX Quinta be in of continue at asset of with are macro the in and

we through noted in is As strategy. process continue and we have the non-core past, generate can this value we disposition a believe significant multi-year to this

Dan, our to corporate leadership want also Dan related efforts to hard their all thank during I call call and the I service goals times you extend CorePoint hand a of the thank guests field the their With heartfelt to working Before for I at these associates and all frontline and for unprecedented Swanstrom. want CFO, during over that to to will team I at to cost containment and over cash preservation work dedication Dan? the times. CorePoint. turn to these diligently

Daniel Swanstrom

in Keith, providing a sheet liquidity The I by comparable decline updates point non-core of and today disposition and also a third by start everyone. position, results trends. brief driven third operating in I quarter balance you, approximately good RevPAR ADR strategy. the afternoon of decrease on occupancy. will basis will review XX% Thank a the our provide quarter and XX% decline and X,XXX during recent was

third This room is the to for XXXX. a EBITDAre to sold quarter reduction well in favorably decrease $X the positive contributed in of million significant adjusted from million negative the As generated sequential EBITDAre million $X On as primarily the compares expected, the year-over-year as revenues decline of of in in due to hotels. impact resulting the of to quarter. the basis, demand $X the second the COVID-XX impact adjusted

we current calls, generally room hotels, to on As Hotel believe of predominantly on demand. of recent transient segments, select XX%. during we well have the capture room portfolio is highlighted to of demand that positioned levels occupancy comparable was the quarter the with our continue third our consistent midscale focused service

markets suburban Our the proven industry's for from are drive-to the portfolio footprint portfolio and guest have destination adjacent and recent generators characteristics to interstate we operating demand leisure be hotels. benefiting is These broader near CorePoint to performance. for multiple favorable mostly relative demand other and in

in driven with room $XX. the strength our escrows perspective, $XXX metrics is cash October, liquidity of of operating comparable today million. other the balance From approximately of and demand. travel $XX RevPAR of weekend primarily leisure-oriented preliminary comparable results and XX% by approximately month For of the lender a continued of with September were month These million, were excludes occupancy line which

Our quarter. operational company the current the total for cash liquidity reflects breakeven before the position in that achieved CapEx we third

continue As our priorities to be challenging lodging near-term initiatives. and cost will focused on capital in preservation containment we remain a environment,

end of second Now the down we million of our year, of sheet, $XXX balance have since this to paid total debt outstanding. the over quarter

$XX asset from to debt the our have drawn paid net revolver down through we proceeds have sales of paid CMBS today, continued of million. and As balance to $XXX down use million we our

repay a million of reminder, to per revolver our recent revolver part an this required million As as later month additional in month are amendment, and $X outstanding $XX of balance December. in increments loan our we

current Our average is approximately X.X%. rate weighted interest

on continue non-core located hotels strategy, quality our growth program are top to for is there assets in higher rationale and to compelling focused potential MSAs. Turning disposition portfolio believe we XXX disposition core our a and of to focus XX primarily our our narrowing strategic go-forward that

These $X times, approximately hotel a we on revenue During Subsequent average the times of gross adjusted total at for total the attractive of basis. an $XX,XXX closed for approximately approximately proceeds and closed million. of multiple multiple completed XX about one gross $XX XXXX hotels proceeds X.X were per key on sale hotel transactions the sale XX million. additional we on approximately price third quarter, of valuations, XXXX quarter-end, EBITDAre of of to have

under approximately to buyers an of continues generate be a expected our have hotel disposition gross program hotels also total are proven proceeds The value million. creator. non-core qualified We contract of that with to execution XX $XXX successful additional

will in be of your thoughtful program to We continue value these open patient and meaningful for this With hotels. to we disposition line for will non-core questions. realize execution that, Operator? the our

Operator

line question Bank. [Operator of comes with the Our first Instructions] Woronka Deutsche Chris from

now line is Your open.

Chris Woronka

- afternoon, guys. Good Hey. And

Keith Cline

Hey, Chris.

Chris Woronka

breakeven Congratulations mix you to any know to the do EBITDA there are the of lot is leisure a and coming ask of bookings on getting channel rates, I the and where just an about update say mix back positive maybe on business be to to are But going and the this from Wanted the where the rates room have? is like-for-like cash. of us way on shift. kind give

Keith Cline

travel, two-thirds think of our Well, about I obviously now mean as booking. right that's you about leisure

you basis weekdays. that, relative can that a with weekends So on imagine are outperforming

You booking shorter some of level low become fairly typical combine than pre-pandemic obviously that it even short quite for experienced kind before in group we window GDS the has was a because that a pandemic, right with window of a booking time. business

you direct, property seen by benefit during because think toward adjacent So I in that gains, is really share his that - being about primarily our the the business that demand as we shift given has prepared with there. characterize increase we of seeing of would of an than Dan room And our time, mentioned the in locations interstate mix market comments, markets, transient fair drive-through are out reflective of we're more share properties this driven of our period biggest transient are strengthening kind leisure. seeing, that's primarily

Chris Woronka

the maybe buyers? though appreciate about Okay, bit But hotels? versus dollar comment planning capitalized sales, can just to can - even you the a well keep lower they about then obviously those comment the hotels. buyers they're are are nature And the asset a that. full-service Are little as little on bit of these you

Keith Cline

- look the La we've that in them project, I redevelopment people portfolio, as keeping brand. at over there's as the hotel talked where and transactions, that with years that But many interested have are certainly hotels, this offering vast you Yeah. about Chris, as could a opportunity majority these Obviously of occur. these a there Quinta always are

in And our kind the we've about, hotels maintained real encouraged we our of that this pace that call. there after value within of disposition to certainly to strategy last as continuing properties a talked is talked La see to operate we're these As slowdown Quinta. about than more

buyer typical of of across the people these Now service country. products select owners markets of the hotels the typical are at

franchisee it's industry. know this we So certainly well. a a there franchisee that Wyndham at in in of already a point or that out a It's price buyer many buyer the is cases

Chris Woronka

revolver, then And question, housekeeping in The used I that go December maybe away be Dan. is of pay going a does $X million or December just Very to and Okay. that will the November down that for time? guess, to for continue helpful. a period after

Daniel Swanstrom

$XX earlier were executed million that Yeah, that to in month started our - Chris, million totality. August. we part it's in Those repay just agreed we on our of this revolver increments in per $X as year, amendment revolver

So our and in remaining revolver will the maturity. $XX terms in one to balance one we paydowns That of remaining December. it the down through And November have that's in million. bring required

Chris Woronka

Thanks, Very good. guys. Okay.

Keith Cline

Chris. Thanks,

Operator

As questions further please there are time, at proceed. no this

Keith Cline

Well, to you CorePoint a in thank everybody certainly today and continued want time good I interest thank for for their day. Lodging. your Have

Operator

and call. this conference gentlemen for participating. Ladies concludes Thank today's you

disconnect. may now You

CorePoint Lodging (CPLG) 8 Nov 202020 Q3 Earnings call transcript