CPLG - Earnings call transcript Q1 2021

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Operator

Good day, everyone. This is the CorePoint Lodging First Quarter Earnings Conference Call. I would now like to turn the conference over to Becky Roseberry.

Becky Roseberry

Good afternoon and welcome to CorePoint Lodging's first quarter 2021 earnings conference call. In a moment, we will have remarks from Keith Cline, our CEO and Dan Swanstrom, our CFO.

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

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

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

Keith A. Cline

Good first to and everyone call. quarter Becky. welcome you, Thank afternoon our

to can and join are there We you pleased for also, thank I their clearly technical us call issues today. this started want some everyone was as patience in getting

with we industry to corporate US creating has is have with for the periods under dispositions cost of am the team containment sold while portfolio still or With our two the pay well details balance pleased demand proceeds the our very the the to of environment for accelerating on are quickly lodging hotels contract, that into also select the generating our environment either and November for the debt Dan a later. XX% continue our demand sales need as preservation, through challenging cash non-core responding pleased more performance service strengthened those pandemic a shareholders. last global management and we the get over from While and global attractive done we're in third-party months. focus of vigilant economies, I seasonally of value as nearly work as multiples low down and will create February. to and the CorePoint of

to Turning operations.

and million to Our market. demand broader continued includes We low portfolio property select able quarter, seasonally January which achieve has outperform to $X of lodging hotels for service the were February. level EBITDAre the the in periods of

market including states. Belt gains. California weekends and dramatically with We drive-to in outperforming in continued outperformance Leisure represents to our bookings destination two-thirds is currently travel RevPAR results of those some improvement our strong operating over Index and still weekdays. other Florida, most experience have This markets are relative in occurring Sun

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

and XX% of with As occupancy that of our we fourth RevPAR our RevPAR. are have season. calls, the and Through of strongest quarters comparable and $XX March previous first $XX historically comparable part of for XX% we achieved comparable comparable our noted slower being month first quarter, end, have at on non-peak occupancy

even to stronger of momentum We April see into continue with positive comparable $XX. RevPAR

property mix and demand leisure With rate season to is capture drive our the closely rate level strengthening opportunity. growth. in working EBITDA strengthening Given at onset delivered the the opportunistically spring our and with property we management in have of consistently the traveler, March our team break weekend relative asset of demand, travel manager

on of vaccine to of continued default attractions adjusting rollout levels, cost travel, needs. demand as meet enabling costs returns trend to tight until pre-pandemic the of will control optimistic are to easing while be and initiatives our and posture property we rein level well closer opening While current restrictions the COVID about customer the the this maintain as a

the trend RevPAR our the Given the XXX non-core of This higher sequential XXXX. want our of March or percentage RevPAR April, than hotels, and XX% basis the to first top points which we're success values assets, in gains of margins non-core portfolio index outperform the continues non-core over disposing compared portfolio. positive portfolio. performance mostly than portfolio roughly gap as level and non-core to EBITDAre produced I our core with decline continued continues core approximately in the highlight narrow located to stronger higher the portfolio the in XX having MSAs portfolio X,XXX in $X year-over-year quarter first With quarter, our and of RevPAR hotel are for to the

With in Belt higher Coast our markets, growth we to portfolio believe growth continue potential the the concentration Sun that and and assets. higher West represents quality core

sector full lodging continue the we general. our will to recovery realistic a Lastly, to and expect think time business it's see to take in in some it

We given and measures additional are impact I'll turn that, to With though, the of locations. exposure interstate our geographically stimulus Swanstrom. suburban, positioning adjacent to deployment, portfolio, the our Dan diverse for our over the vaccine strong optimistic future and of continuing the Dan? CFO, drive-to call destination

Daniel E. Swanstrom

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

of total year-over-year well rate resulting as demand of room due As impact and expected, the impact COVID-XX in primarily sold hotels. the the from in as to reduction revenues is the decrease

adjusted compares $X $X For $X the a adjusted generated quarter EBITDAre hotel million XXXX. fourth million in of EBITDAre positive achieved level negative million sequential and we to quarter, of of On the EBITDAre $X favorably of basis, the the adjusted million.

operating recent the trends. encouraged most by As Keith mentioned, we are

since monthly month occupancy For $XX of pointing of RevPAR of ADR comparable metrics with XX%, of the operating comparable pandemic, are the global preliminary XXXX, the of $XX. the comparable April start to and results, best

well predominantly current levels on midscale the positioned room hotels, segments the is focused Our demand. portfolio capture select of of transient to service

portfolio is are and differentiators multiple for drive-to Our in and adjacent we the CorePoint mostly These demand characteristics for demand markets from generators destination guest hotels. benefiting to and positive intrastate footprint suburban other leisure be continue portfolio. near

repaid have our inception approximately non-core XXXX to Now total we beginning an Year-to-date, of balance and the disposition total our resulting of approximately since program. sheet. in $XXX in total million million of since approximately debt repaid debt the $XXX of million repaid debt $XX

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

interest Our current The next CMBS approximately rate maturity June for weighted X.X%. our date loan is average is XXXX. in

perspective, $XXX a discussed is each that on to maturity pleased provided excludes XXXX. of facility our However, maturity to one the to lender June execute the which for million, bank the loan extend next extended approximately we today with a we terms approximately amendment May our the option one escrows through year exercise call, year We revolver and liquidity we have recently were From group our $XX extend successive as balance million. other cash to four June last notice for to CMBS revolver, to our date options of respect through XXXX. borrower XXXX. lender to our With

reflects performance positive favorably of liquidity $XXX cash current time our compares March. million and momentum to in Our recent balance the the in call of approximately the at operational last

earlier, Keith by are are initiatives. noted current we encouraged we and as focus a the trends, While containment on cost capital preservation maintaining

disposition non-core strategy. our to Turning

first adjusted XXXX attractive the total additional on have proceeds times in for slightly million the sale at now midpoint higher Subsequent range. During of gross valuations. six strategy million. quarter, gross Since multiple hotels approximately million. hotels of valuations times, and XX total valuation the approximately sale the disposition an transactions of we achieved on X.X is completed of of attractive non-core proceeds than multiple XXX for gross the key. EBITDAre expectations we times, to of approximately nine highly were XX,XXX average approximately XXXX multiple hotels XXXX of of of closed per proceeds our and of revenue approximately our $XX inception million revenue closed have $XX These $XXX end, we average $XX hotel about X.X at quarter of for sale completed which We approximately

we levels We to date hotels approximately XXX also those expected revenue proceeds XX valuation an and these to your are This progress questions. strategy buyers for non-core. at XXX under multiples. look we hotels and date a additional have our have under year. with the that proven we reporting contract value about achieved gross of to to average open the total sold as contract, will similar for Between we hotels on the With generally to creator line CorePoint XX the hotels million addressed strategy XXXX on is that, based $XXX forward this during Operator? qualified continued XX% identified generate of

Operator

Thank you.

from Our first Woronka. question of line Chris comes the

Chris Woronka

guys. afternoon good Hey,

Keith A. Cline

Hey Chris.

Chris Woronka

even direction Question know on and a it's of the - but bit I can booking was was you? always are visibility how little short, in on question Hey, right. of first inherently matter, kind for windows business your

of saw first So booked the windows present whether you're as quarter booking lengthening the you I'm any or to short in kind in that stuff of curious whether admittedly day? seeing

Keith A. Cline

booking window be very continues a That's The Yes, Chris. narrow. great to question.

very as we calls, through you three pursue making pandemic, further to window it compared the move weekends. let's results to today, results two approach the we've narrowed in around call continue a over on the As window, previous and travel choice people past, to to the especially discussed booking leisure historical stay as booking narrow years

Chris Woronka

give how Is sense little helpful. any is triangulate of and for or weekday a between very or that? leisure now rates you there thanks, way right of to in or of rates? more kind commercial weekend a kind Okay, us historically bit maybe weekend there can much delta And

Keith A. Cline

on remarks, as the fact mapped that have out think a our mentioned been growth compression the providing, and some of around you And on to of to than leisure in season, either of albeit in weekends, really weekends, the bookings etc. to beginning of certainly weekends, rates destination spring but does the be relative slightly break weekends. opportunity the consistent out there fairly travel I is seem prepared I demand. front leisure given it as push we rate rate, about drive Well, more really basis, my that's don't reflective two-thirds are the traveler daily able have since of today long markets, really events, me, and

Chris Woronka

but you Okay. calls - also what about kind And for you're of Yes, minute workers, a then labor. rate? color There questions So hourly of a there maybe for lot the in be and has expectations seeing would of a sure. hotel any on been hourly of lot talk headlines can all Understood. about availability on impact of terms great.

Keith A. Cline

the Chris. of example, hospitality the capacity third-party has not additional them on a incent what industry discussion, a or in jump in, obviously similar kind to around and industry either done We of dialog once into the an as Obviously, shortage the our hotels. we're for of programs combination incentives rooms, with every shortage stay. across been they're lot labor Obviously, into has a housekeeping create industry to stay-over to the incentives cleaning doing, has for people issue. right, the in lot both with labor to of increased. that came manager Yes, on pandemic and are labor There the industry to and calls things day we

this deploy into of the we're certainly But we the one on rest of now top summer assured, So active to today we'd as building. programs shortage months. like labor in is in the topics discussions go

Chris Woronka

guys. great. Okay, thanks good, Very

Keith A. Cline

Thanks, Chris.

Operator

from comes question the Omer next The Sander. of line

Omer Sander

taking Becky, Keith, Hey, of appreciate on the I color April appreciate trends. more the recent I the Dan, you some question.

on the and now, there from that a you that a the discussed six if And do compare back which quarters, XXXX but that see to possibility does think months months I nice occupancy, step-up how is occupancy You we guess, you from do path you're XX% levels to recent front? XXXX? a is here the sit

Keith A. Cline

we're line, to tends about if the laid think the that the that what charts in what 'XX. still and document XXXX are way right. see in that in you'll in is XXXX, 'XX Feb, 'XX, Well, our obviously, March layout some XX% and April crossed out XX% see in show the once compares that you is you'll Q the be And Jan, that question And and for to XXXX. there April there occupancy and lagging has so,

results, out rest We as prepared and encouraged, is will how to think project in go that's are mentioned I versus are months. as summer trend crossing story months really this gap play don't peak of the season far honestly by and I certainly been of right the now I 'XX we last strong summer. the go XXXX encouraged see the we out and of the too amount want this closed comments, couple the in the but around through

Omer Sander

one of incremental That's seller the core an of non-core then not there core if And you've is that of XXX, in helpful. flip possibility do, Appreciate you're obviously on XX% at this how a of were And question buyer markets? had guys kind you and where way assets I I is impressive a compare versus values point I'm on the guess and the that assets? to become going the that in not switch you're markets that But say front. towards asset you it. but the sales some progress guess with markets, what trying asset do that's to

Keith A. Cline

the managed. we're down little around bit the get institutionally many to markets from non-core portfolio portfolio. reality did I structure, mean, assets talked in in toward the provide in the generally are differently, performing, these of that owner-operator the they're core multiple prepared to, cases, as the We a does revenue been how at core that the our is Yes, way assets underwrite a we've given portfolio has the is going so and look color obviously, buyers the working given in in cost fact they remarks different about, a valued assets these are core little being XXX but additional switching our a managed on

look really one rates you their EBITDA to all. cap fit mean and doesn't of core valued the size those certainly to on how would similar value portfolios at based hotels competitors' As I XXX, are many going in you the be and multiples certainly our

value, previous know out it to get last to building the blocks I on investor over details of in sort kick Now, the in kind of the laid what we've was the Dan tried deck of of to to getting terms - decks, some provide some I'll maybe investor evaluation. layout in

Daniel E. Swanstrom

Omer. Yes,

core mentioned, $XXX that mentioned the revenue performer million has significantly non-core of XXXX Keith we've EBITDA. in as we've non-core with significantly the a and, that disposition when non-core you respect portfolio, in value at selling XXXX strategy, margins If we EBITDA March Phase for of kind the back think we total related portfolio announced X Florida, in arbitrage EBITDA our Texas. recall, Investor the versus of hotel the of excess states some as which are provided several I to details been California times million about margins XX% Those portfolio, been and what again in about we hotels. in and corporate XX% in multiple And multiples XXX past represents our total of stronger was which to provided revenue $XXX was Presentation, core that it produced which selling and about of XXXX, And the portfolio. those produced

Omer Sander

Thanks.

Operator

There are will this to I now questions the conference over Keith further time. Cline. back no turn at

Keith A. Cline

once for interest Thank Have today time you. great day. Thank for all a your again, thank in CorePoint continued you the Lodging. you and

Becky Roseberry	Senior Vice President, Finance & Investor Relations
Keith A. Cline	President & Chief Executive Officer
Daniel E. Swanstrom	Executive Vice President & Chief Financial Officer
Chris Woronka	Deutsche Bank
Omer Sander	JPMorgan

CorePoint Lodging (CPLG) 9 May 212021 Q1 Earnings call transcript