LUXH - Earnings call 3 2023 | LuxUrban Hotels Inc.

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Operator

Greetings, and welcome to LuxUrban Hotels Third Quarter 2023 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Devin Sullivan, Managing Director of the Equity Group. Please go ahead.

Devin Sullivan

Thank you for joining us for LuxUrban Hotels 2023 Third Quarter Financial Results Conference Call.

will the Ferdinand, Financial company's today and and Officer. for Kothari, Shanoop Co-CEO speakers be Chairman Brian Co-CEO; Our and Chief

amended. call of XXA Securities and statements. the Litigation that Before everyone purely Act as of Statements within like amended I'd forth Reform XXXX Securities meaning may in Securities historical Act set this XXXX Section the Private we of statements the not contain Exchange Section forward-looking the to of as XXE XXXX Act forward-looking of begin, are that are remind of

Forward-looking expectations, statements include, but the are strategies not limited to, hopes, statements intentions future. regarding beliefs, regarding or

In plans addition, words, continues, could, circumstances, projections, or including possible, of or any the any but estimates, underlying similar expects, a statement anticipates, forward projects, other forward-looking believes, should, is forward-looking not that predicts, to absence the forecasts characterizations identify may potential, mean would assumptions not expressions of Generally, events that intends, and statements future statements, these are refer statements. does words might, looking.

for leases the well commercialize in efficiently lease the future. transactions, include ability the statements of and properties will company's guidance, closings financial operational with openings, in & noted closing on to and scheduled at anticipated ability to respect success continue expected additional the as profitably it's pipeline of properties lease may as Wyndham property to collaboration the Resorts, leases with company's statements and Hotels the Forward-looking

XXXX, number actual the will of and based anticipated. risks potential SEC, including to some or assurances set public quarterly there which forward-looking XA caption in the including forward-looking the no materially those in are have filings statements the filings. assumptions expectations XX-K set and reports Risk performance can XX, beliefs for our that or Factors control any expressed these and effects developments forth or by or Form other other to year uncertainties, are of are their statements updates our results from cause subject These implied these Forward-looking subsequent on current may forth with company different XX-Q and been future beyond those a to statements of December in and be the company's of future those concerning under on on Item developments be ended public factors

discussing date Forward-looking forward-looking the presentation in and the or reconciliation be information except undertake made metrics company financial press statements forward-looking contained of GAAP applicable measures we herein the are of a the company's afternoon. which forward-looking be does of measures non-GAAP found and also will financial non-GAAP as Management in and and information release, referenced are statements any laws. are not that with yesterday these to securities most accordance issued comparable this can

Ferdinand. to like now Brian to I'd said, the that please With call go turn Brian, ahead. over

Brian Ferdinand

Thank you, today, everyone. joining Devin. morning, Good and us thank for you

be to pursuing. the that growth, continue trajectory very of and pleased opportunities depth of We breadth the we with execution and the our are of our consistency the

on we and in are locations to and to leveraging across destination first-mover U.S. as lease validated approach successfully a asset-light evolve management our results, properties the We continue hotel turnkey team and our company dislocated focus as sets, by identify properties

expenses million, incurred funding. public charges generated the our are will To Series rental stock late revenue, now which costs in associated expand In via first behind believe and remain income of closed in deploy A of non-dilutive a business commitment to profitability. we will a complicated retired record coming end, result preferred We cleaner, These our $X we XXXX, the future in which our to October of we in that third to with that less generated mask net quarters, and our quarter variety prior now our offering quarter us, to debt net since GAAP we portfolio. long-term EBITDA, quarters. grow P&L inherent had served further our gross true proceeds we

our immediately and the in enhance capital utilized efficient expense The cannot the that on offering our focus quick stakeholders avoid We a fashion. footprint a be of capital the expand can future reflect to raising our non-dilutive to to in want benefit in deploy manner that results our we of raising operations. and

growth. Resorts Wyndham continues business with drive help relationship to Hotels transform & Our our and our

remain onboarded successfully operating are the our and optimistic future. Wyndham We integrating have and hotels platform. the properties very brand process agreement under integration, We XX of family in the about Wyndham initial additional to

and Our backdrop to property the its of and pipeline increasingly lease to rates refinancings. upcoming interest rapidly asset becoming attractive impact an is continues alternative related of for net against rising owners expand opportunities our triple asset-light solution

turn and of With review financials. a Financial over that, to I'll it our Kothari, our Shanoop for Co-CEO Officer, Chief

Shanoop Kothari

Thank you, us Brian, and thank for you today. joining

to results condition Brian excellent the strong. and have put in As we an quarter noted, us third of proud very year finish are our

I press is Our is our growth mind, our with on on selected allow the to key of improved and yesterday the release expected I'll items. us much focus issued XX-Q both amount throughout SEC, filed balance Form contain detail good our operating and sheet With like continuing also that highlights to my would XXXX. goals. realize afternoon a everyone in remarks remind business to and model that our

XXX to driven tripled from improved million XXXX per first the to available XXXX as to was Net nearly available by units Occupancy months $XX.X for well in to or of RevPAR in rent was expense XXXX. same compared of the XX% million in or million million million year's expense to net was in increase rental QX XXX million room from XXXX. last revenue rent of profit to average the in rent of Year-to-date XX% revenue in as rental $X $X.X totaling million and profit from revenue quarter. quarter rental period rose QX or total revenue XX%. third the XXXX. included RevPAR rental last or $X.X XX% revenue XX% year's cash revenue QX Noncash XXXX expenses XXXX net primarily XXX period. $XX.X an rental $X.X X rose net to net Gross as XX, in last compared X,XXX Gross from at other in December same or year. amortization XXX third during $X.X from million third of quarter, $X.X period

to expenses Last or from X.X% rental XXXX. was year's decline million incurred expenses not certain model, apartment charges General gross expense comparable to of the from for apartment rental the in by numbers from administrative net profit from rental net XXXX gross under onetime on from margin based we -- as $X.X are $X.X our which exited business with million rental driven The and of operating accounting primarily loss of XX.X% or operations to million $X.X in related an declined Income $XXX,XXX. exit below revenue. business. improved revenue our

XXXX. before compared adjusted to $X.X Income -- income taxes to QX or to per or income $X.X share the from million. a rose of negative $X.XX of net net $X.X provision income loss a $XXX,XXX improved net from million share. to million per improved cash $X loss $X.X in Adjusted income million Net of $X.XX million

our XXXX quarter $X.X ahead XX-plus the percent $X.X or ended margin margins EBITDA term. XX% results goals the increased up of million of from in respectively, EBITDA our XX%, XXXX. margin in and to or were September percent the in For margins EBITDA slightly term short XX, XX-plus QX million EBITDA XXXX, QX long and

XXXX. Moving XX, $X.X to the cash Restricted balance million December at million. cash cash unchanged sheet. XX, million, $X.X and improvement XXXX, $X.X from a At September equivalents totaled was

gross from October like the of we senior not million. ability Our balance new to sheet The generated in closing offering. Series company's our participated redeemable offering to our at and the stock proceeds $X with offering underwritten market promising preferred end quarter and position public growing A our outlook. non-dilutive, strength that was an of also believe that include add this did to cumulative XX% financial proceeds go management reflects of security this of I'd

quarter quarter and the $XXX,XXX, continue capital was quarter. at $XX.X balance XXXX, declined on debt of at made end from million working our around in XX, net million down $XX payables to the work strides to in the debt with Staying $X.X and the sheet, the at Total and XXXX. December end from million we

a million in $XX.X position capital $X.X million $X.X to December and negative working Our from at million negative XX, June improved a XXXX. XX, from XXXX

we continue improve liquidity have look quarters. previously, flow, to in free As we stated make to cash and efforts and coming these the metrics capital improve to working

all a total properties, X units XXX New of added York we City. in quarter, the During

X, X,XXX includes the portfolio with November at rent. X, units lease, units for of for leased as X,XXX Looking XX September as leased of available And XXXX, for under and yet November properties but we the company these XXXX, properties company XX properties as rent. XX, with units, of rent X,XXX leased our XXXX, available available properties with XX not

Regarding guidance.

rental have to guidance We to new operating addition from realize our net the our of the increased rooms portfolio we relationship. and expected Wyndham for XXXX and synergies and our expect XXXX, revenue EBITDA associated reflecting

XXXX We between XX-plus XXXX both $XXX expect that margins target and all-in $XXX over room achieving while of and gross in be a the for RevPAR percent, quarterly will of per XXXX. year

and to EBITDA We believe we term. will XX% XX% in excluding margins the that in expect G&A, in long XX% would of approximate during term XX% result short noncash items, and that, year, plus the the

units. X,XXX end We year approximately to X,XXX expect the to operating

timing previously pursuing with always, goals we're the we revenue of reaching as Wyndham, guidance higher-quality partnership of our properties our -- larger, than As result impact positively previously. did may a a than

opportunities been larger. cycle is pipeline this to days, or XX close never elongated has XX Although our to

and Regarding the initiatives a quarter. couple of operational over accomplishments

are the mentioned, the Brian Trademark All co-branded by properties Wyndham. with under Collection process Wyndham LuxUrban completed the now brand. As by onboarding we initial

goal Counsel staffing than Holman end executive service promoted operations to to new corporate in team This to to adding on we We and health. reduced the Matt X this over the quarters. York ] general grow and in organizational evolve X Miami without we the areas improve XX% with best as expect a density as continue Second, more oversee unit effective few [ we sacrificing New General month. managers meaningful practices included initiatives our company, of by next have client operations and to senior we as and focus share

run which co-branding X line over formally revenue seasonal on result improve percent we much and will improvement million margin in revenues rate is to business focused we over add second ancillary can believe the revenue new with the X% these to X% opportunities, well pursuing $XXX and revenues. next we believe X the One, quarters, And streams. occupancy in markets, X-plus top higher that

I'll over back now turn to Brian. conversation the

Brian Ferdinand

I'll questions. to joining call open and to now Shanoop, the ask the each you thanks Thanks, for us of operator to today.

Operator

first Our Allen Instructions] today from question [Operator comes Group. Maxim of Klee

Allen Klee

strong Congratulations results. the on

-- anything do and drop down to did once fact is was strong from question And it they've third question it could First Or that some RevPAR. when looks With expands you the second been quarter that Wyndham that's product, it temporary apples-to-apples? it think a them mix you was related? is I up here on is, have little is carry fixed. with properties My -- also that very operational is the so like year-over-year, that you of were to improve rebranded quarter. that

Brian Ferdinand

Allen. Thanks,

I'll So Shanoop turn that to follow-up. then and it additional for take over

So a things. X of really combination

portfolio. is some the within on First seasonality

The sales we dropped and the periods piece made time of the hotels transition entire as is second that where during quarter the of transition. XX we portfolio did distribution and work

of withstand then a quarter. as softening And and questions a performed well, say the terms some of really factors in the that's lot economic and softening online around there in given for thing tick the environment. back there well. pickup is in see business I there. softening overall a a So business could RevPAR was the And little those leverage you RevPAR? still slight one combination And our sales will did a Obviously, seeing bit come the see the through we business of we can of very is degradation

do RevPAR ability performs. of -- And a So for get to higher RevPAR the a including you to of then I really variety create some softer answer think additional create reasons, RevPARs should expansion. softening questions the for Shanoop? in margin business terms that a economy, if still

Shanoop Kothari

Yes.

that quarter bookings So of second year, part right? don't of RevPAR recognize front occurs. made revenue the in Allen, We until drove a the the Brian's stay part response, the the that were of lot early

the of coming that just are COVID, of part pent-up travel nature of and that's the versus some still QX. so So increase out was QX

guests out seeing softening because turn the it's the we're how So And not we about frothy down little York We're booked experienced block and were to the then away the transitioning of in not is some we're market figuring softening Wyndham where experience. a front But really, the in light. operationally, transition full it's personally time based cases, New overbooked. a actually, to end bit, bit the reservations a on over. of at little of occupancy, were

Allen Klee

was you X this of X,XXX the had if questions. to you that year. that under not rooms more X,XXX I sure end that actually have One means of by MLAs know are many guidance framework operational. I'm Is of think operational there to end be us -- can how maybe a a if of I way many don't the year? of provide by the might

Shanoop Kothari

Yes, Brian. ahead, I would go --

Brian Ferdinand

that. Go ahead, Shanoop. take I'll let you

Shanoop Kothari

Okay.

operational the we week mean operating, which next be say, that I in would that will of operating. units X,XXX or MLA X,XXX under The I actively X on bulk maybe an have units So discussing level. shortly, X,XXX-plus are of

that cases, are X,XXX to just what going is But through. be X,XXX operational. based process I would this thought would some the my longer So is on say in cycles, between we're the on

in maybe with middle the balance being MLA. somewhere the So that of under

of So could in easily X,XXX to are maybe XXX the that. a we'll right? in get One single get us XXXX that somewhere number the There's assets range, over enter X,XXX, well that on pipeline higher over between keys us property XXX, can the end.

our when the from So depends comfortable been very as a always it guidance on guidance. we're revenue drop. with just chips we've But perspective,

Allen Klee

to master a -- you're terms And your That's is understand cost to leases timing to roughly I'm the you're cash this great. reimburse question just the your on put just for that how of like in they Were put capital asking you work and upfront with to Can half of projects? that working My future I really it deal Wyndham. has they have able the does the Related of the kind last to so more can units. up understand putting your for up upfront that, then I property that be you? of that? fund -- understand

Brian Ferdinand

Sure.

or So the our provide way money platform. works notes or financing money notes each the for we incentive on is the that they strategy Wyndham -- so that bring enhancement key property to development

the in provide of note, over the they key which life form franchise enhancement amortizes development So the money agreement. of

working to business So us into substantial portfolio, capital can that the for new redeployed capital as it initial et for cetera. at was right, business then the into property capital the gets the which redeployed get acquisitions, level,

that's we So we do put for opening live. get out the capital going reimbursed on and property the then

about So when quarter get this redeploy which then units. capital scale, capital get in purpose into the you're that scale and doing large we was going and larger a the of keys per to of preferred additional then offering cycle X,XXX reimbursed was

Allen Klee

again. That's great. Congrats

Brian Ferdinand

Thanks, Allen.

Operator

JonesTrading. The next of Matthew Erdner is from question

Matthew Erdner

of the guys So role the that, just and guess, you talk properties can has star. I new of And opportunities just And the top played on itself? the have developmental you then how then brought into X right that that about X the of on Wyndham you now? the X pipeline

Brian Ferdinand

Sure.

New binding into have New and high-quality larger cycle, properties, higher the that London keys LOI LOI are properties. our Boston we some X,XXX in Orleans, currently, heavy concentration we're with under MLA York, even quality moving approximately or So X-star scale,

one closely very be So has trademark done joint of through and And with -- for that perspective, been we Wyndham brands their well on of We will process. and a we properties business in branded onboard the underwriting distribution of operationally property through from helpful, platform both in very, variety when work obviously teams. LuxUrban goes sourcing both a the under Wyndham. property, as it's very development very sales that to each through MLA we robust. bring as the

Matthew Erdner

some follow-up, a markets? you insight Is in doing about any and that's helpful. on And of expand that what markets. kind XQ talked you seasonal the could there and increase occupancy you in as the I if to be occupancy going could, give those you're then can to of guess, occupancy Yes, And you then numbers? try

Brian Ferdinand

I'll let Shanoop that. take

Shanoop Kothari

Yes.

perishable so again, the New dynamics robust, the So very a it's inventory. right? combination city occupancy overall we to as continues as approach So stay -- way of well York of

L.A. we New will we, of help floor at markets, opened well there. opened property -- we but a that Orleans traction does very as on market that as understanding within more restaurant the was not other there improving just and believe us getting based The well. is the ground I

at looking Miami continues we to the months in of property to So things to bunch offerings stay of expected I as grab-and-go seasonal, the regard than right? our occupancy. in level, on a say, would we higher quality Initiatives focus wise, slightly enter a terms the colder we're Northeast, our overall into with see there. breakfast, is of pickup improve should properties lower really, coffee, one do

of reviews I think So not on as that's that a function many property.

about People think they out down put of You don't have great when voice, give stays. unhappy. review usually slanted. negatively Typically, reviews. They they're they're a when

to got focus to getting we've improve there high-quality occupancy. in So the on reviews

So a markets factors talking to how where on improve, much certain have harder seasonal, what as now get a occupancy about it's weekly to number up. management there's to where work we're it to team, as of we -- the especially

But management function the is we've collapsed our of underlying business as mean, in ancillary as getting on revenues. I team, the as as occupancy, and the hands some involved more look, of of really just operations, mentioned I which deeper and a the well, sort focusing team a comment,

happen that in to going that the see it these hanging material but say effort So guarantee a to are extremely going quarter, into couple will fruit. definitely next X we're We can next can't things low are we're impact. quarters, it we of that full put

Operator

Investments. Caterpillar from next The is of question Tuttle Kris

Kris Tuttle

for well-earned Shanoop promotion a to Congratulations there.

the just a few questions a at link understand to your got everyone and calls. might sort But RevPAR can safe I've your I in speak wanted for year? want behind point guide, think to I to looking harbor rule to next know the you future when of XXXX assumption what's us I

Shanoop Kothari

Yes.

year, that, economic been haven't of a couple and of followed overdone. impact from which I adjusted factors, So that right? an perspective, being really the I think have companies they So next seen we if has haven't we're overhang, is RevPAR yet. much reported, one based on conservative you other hospitality mean,

overhang it's bright where one there's think uncertainty. economic spots the sort I of of with

on RevPAR is, second properties what we heavily is weighted type The acquired. of

to end, going X on star is higher also be going the X So matter. is markets end, to the star lower be

is the comparison. New Orleans York, equal much than New star lower

don't crystal are putting online think going on X a months. we're have right? sort have March, opportunities what we into which So May, the best to of next X to ball after over coming depends. is strong be June, But the April, that We in online visibility we that,

in world, the back, quite they'll property So come Brian's because refinancing right, not at for example, the then he'll and deadline. they're reject

in potentially They'll try but the they'll come X months. to to a better table or X garner back alternative,

though the star And so passed we even come back X that's may property pipeline. on a may a have into

So there's of a factors. number

been I think always we're conservative. conservative. being We've

revenue that's up guidance that initiatives have will make and achievable, we we here. provide occupancy and RevPAR through sure Obviously, to ancillary but want that. We drive we'll manage

Kris Tuttle

Okay.

into -- a of revenue I follow-up talked color things them for one on I bit involves initiatives little ancillary before a of question -- about Could partnership on think about can a you what that? your types that I about your read more little provide was Can X little just you example. talk you ask that. a and

Shanoop Kothari

Yes.

platform. Sundry large more received service higher-end we're wouldn't at got the which providing early I of more that point, well of bundled late a that's talking of a call digital something sort not check-in, this but offering, is because we've a, bar, resort to, So fee at it properties assistant checkout,

we adds to -- to become So to through get as obviously there's us. continue to we number portfolio, a third-party continue that it experience of guest of approached grow much co-branding candidate sought after the on the more a we things enhance and revenue

have a the on proving the operational the of economics an aspects. associated is the been model, which skepticism really on I start good. out coming So the of very now -- team, business portfolio gates we're there think of really business focused cases, -- good And We've IPO, to some to and them. are so going that that adequate some on executing focusing model, variety in we

Brian Ferdinand

be Hospitality additional our One recently program leave that Pilot rolling more coming item is thought. We'll with we've additional on soon. out. of in an agreement Amazon signed details hotels, One number a that there and will

Kris Tuttle

That's interesting.

a couple Just more.

manageable mean their or processor, and terms to things so -- a is company acquire processor in medium processing? is payment able So model national go the each for something in as you -- My part a individual to and being scale, communications are deal like get with there the that opportunity online, more now question an have payment AT&T services and like properties could of part better that like get for that these are is, more a on you one-offs bring guys of of you to I you as of how or whatever. I ship important contracts communication them the term, a guess? payment near the WiFi

Brian Ferdinand

just you sure the want just I that? make could I fully Kris, -- I to question. understood repeat

Kris Tuttle

I'm Yes. simplify to I'll it. sorry. try

or WiFi that more and basically? gives deal you you As you can the for all negotiate hotel price more payment comprehensive processing performance a scale like communications for a with someone have AT&T get more properties, Shippo better and

Brian Ferdinand

Yes, absolutely.

which across of scale, processing, rates there payment the XX% as there's expansion, in pure transactions of credit there's So the pieces cost XX% card -- right, a Wyndham, we processing. margin leverage is driving inherent right? we're incremental Obviously, which number Lower a down the get supply commissions business, are or a business. potential Its multiple ordering, have soap not large beauty It's with leveraging talks placement product number partnerships, partnerships, things in on ancillary revenue. system large-scale, for then and about we're in And supplies. ancillary working just companies, we're property of companies. addition, working of Shanoop of level which public terms Wyndham on health revenue.

upcharge not ability comes that. product experience, services, details better even the the for then of certain of you and it's get guest there's but generate incremental right? where I place free, scale, you're across to creating Amazon a Again, mentioned on similar to the portfolio. So looking for only product a be revenue to as mattresses, lot will the margin, incremental coming something that they're also a That's Hospitality, pure ability to pillows, lot

Kris Tuttle

can as transition? let's take? that. And percentage. had question the you'll And are that or enjoy in talk and one I'll uptake platform, lower we off, the CTA then a you're bookings last to on the in How rather. we fees the where Wyndham of appreciate see, I have of to What right. the on -- more we about will I should pay guys then is or say you to are get transition yet? -- the All Okay. you are terms which OTA fees, able that do that opportunity platform, long that the is Are in, that? you Where inning I

Brian Ferdinand

now previous Wyndham cumulative of the working them. We're to versus that portfolio the that on -- hotels process are XXX% signings from Currently, prior platform. were with through our

scale are live and currently, Wyndham portfolio that. we on we So requirements OTA rates we're working and technology optimizing as commission Rewards on the under

Operator

next of Research. The from question Kerr is Investment Zacks Tom

Thomas Kerr

I been think questions my covered. have all

and tax. the rates one look how XXXX? That do $X issue? timing taxes. for even a then at quarter fourth million the just Is that into tax one Just And on benefit maybe quick we

Shanoop Kothari

Yes.

related the inspection. further benefit So to upon tax was

where expenses. quarter on at estimate the based think to each year think be. is The you the to is estimate of the You are tax you is think an as what about you going deductibility certain for be as well the going make way year provisions done,

complex. tax you is first we a in preparation year deduct our So were the XXXX we to from the which C-Corp. going year, thought ability a in there little preparation was limitation to determined, was probably of charge XXXX that. to got remember, our I'm the XXXX, return, But The the too of a last large

So the that's, hence, big benefit.

large have entered the benefit we associated that so to rev a into. we agreement share And

deductibility. of we with sort second few rate the XX% very going where federal is would in approach that I think a low year, in So penciled and it benefit onwards tax as And state kind quarter taxes. forward, then all next of quarters, with next we probably of be maybe about

Thomas Kerr

Okay.

be will some beyond? XXXX there tax at So point a and rate in normalized

Shanoop Kothari

Yes.

about Again, deductible think half being but it's then with rev forward. back accounting we or the based last of maybe on nature from the the in low teens the share that you large half so first sort normalize in XXXX being quarter. the of If did normalized, point XXs

Operator

The next question is Gunnar. of from Leo Joseph Carpio

Leo Carpio

Most of answered, have have actually, questions. questions I but been my X follow-up

now the the volume you you're gaining RevPAR of on coming and your property pipeline coming are terms more you in same market. then seasons? the on of recognition comment -- deals vendors Wyndham the help in as that you're they distressed hotel to Can and occupancy having First right the provide in -- properties some on terms or to you improving you increasing volumes how secondly, of the can with more especially relationship. in insights slow And

Brian Ferdinand

Great. Thanks, Leo.

question. the et X,XXX first rewards hotel members worldwide, footprints, XXX So in keys, Wyndham largest million world program the of has XXX,XXX approximately XXX,XXX cetera.

booking rewards footprint, volume very, So both direct through very high Wyndham's large channels. and

point main increased bookings as on distribution portfolio LuxUrban seeing good and for there velocity in across that additional volume should We're in XX drives RevPAR. some of leveraging days. result early in there. maybe traction good the a So We've XX, some been seeing days

of main So that's a distribution. point

Wyndham gives line to to the addition across leverage that, the bottom drive commission OTAs expansion. then margin us to rates And ability in lower

cost doing So it independently. versus our us lowers

Trademark Wyndham well by of LuxUrban is terms by globally enhances points into hospitality recognized leveraging distribution brand, as a years a new value. as Collection sales in and X those Wyndham entrant old, property co-branding, the hospitality, LuxUrban as So a of couple

pipeline both the of in to hotel. just with than comfortable inspections training the attached acquisition, hotel. helps higher and typical level, Wyndham's of brand standard also property more They employee operating terms higher standard ensure name a are It boutique owners obviously property a at

control good employee around So service functions quality interaction, property upkeep. customer level and also

financing So market in seeing in assets, challenging pipeline, very every us. seeing quality we're market terms historically of velocity currently, very just very, of owners we're deals And the robust. the deal come for refinancing of probably It's amount higher very, there. about ever. most in then very, to of and hotels helping higher coming And through the difficult hotel terms

Operator

The Skoan next question is from [ of ]. Matt Encora

Unknown Analyst

to and want up on funding between the I you follow Wyndham. arrangement

reimbursement, amortizes the of Does after to time repaying the reimbursement period? agreement. that mentioned over that provides franchise it actually what that life mean and over you're the that you Wyndham You

Shanoop Kothari

Yes.

we perform asset, is way they're there's of spirit the by -- the agreement, no agreement on but the roughly for it's So asset account the roughly If done we agreements. it, -- repayment. XX-year

amortized from our financials. it's So

it's liability we of amortized about on key course. front the a they over money end. don't XX that a So that's the XX-year of for provision agreement, reduction a to expenses damages months that on receive would the liquidated there's perform If fees

the off it in because it it's not again, the is, spirit sheet. balance And So of brought of liability a the the somewhere it's liability, balance booked really as a of over agreement. the down kind then it put term sheet

Unknown Analyst

on What an they're actually is getting spelled benefits that but I question, to That for all seen that providing to Wyndham haven't me which made statement? LuxUrban? out. next How paid Okay. to assumption, these look brings like it the I've income my going is of

Shanoop Kothari

Yes.

very, So it's in cost be a of a platform. the to going fee if on with combination basis, level of very a of revenues. booking fees off slew included, booked of booked but There's high it's their So fees right? the

off we previously. off than of an a it the the were the call If third-party magnitude books X% X%, is what operating but their platform, incremental better the of, before had books agreement, of by overall we they book negotiated -- a have cost guest that expenses a if off increase. if platform X%, guest what it, it's platform, directly So rates reduction than had we of third-party

So So Wyndham to few meaningful right? $XXX platform, rate million going you're million for in savings beyond $XXX which XX-plus an look, day I and time, as would we'd achieve towards X mean, initially traffic goes bookings business the site, a which dollars. overall greater X And then the about incur over percent is run us, day to off expect of expenses. their we percent, of thinking margin XX, magnitude

Unknown Analyst

Okay.

the actually accretive past. margin some fact that that you're say? be maybe off the expect that this Is paying or despite top, out of kind to put So to profile the royalty you you accurate to the them in fee

Brian Ferdinand

see to inquisitive. We'll not improvement of of all net minimum Yes. X% X% margin

Unknown Analyst

item are then balance What DSOs And you to kind line sheet. receivables growing that? on collection Great. expect of on a Okay. do the your OTA period or be

Brian Ferdinand

Sure.

over So properties Q. the are so receivables had X those York due took over are We that made pretty -- We that consistent last receivables from City turned receivables we of. with New took up over. OTA

increase the of that is the So this Q. bulk

there. of or with of receivables around we static about City this took New $X Q. receivables the stay hotels turnover over over should million we consistent OTA X on a receivables $X quarter. took York really possession for through the million, that as properties, a really programs That onetime So I was were was there the Q. last X onetime particular

Unknown Analyst

Okay.

go large away that So as as not or you be might it continue would entirely? to normally as that grow,

Brian Ferdinand

the Yes. XX% of I say Q would revenue. XX% to

Unknown Analyst

Okay. of me. That's one then kind And last helpful. for

think of X,XXX new by kind put -- those are put mentioned And And big partnership out you kind LOI to X,XXX will Wyndham up you what confident guess to the by what frame in and time like of gives those how out conversions of MLAs the numbers they occur? confidence with I I numbers LOIs? that? properties XX,XXX What some June you've you of under year-end. and over

Brian Ferdinand

lease exceeded both highly process both wouldn't guidance, or and confident assets been leases those lot of unit what PIC on have earnings Wyndham have with of in standards, money, process deep reports count, on those brand put met we out. in signing Yes. underwriting negotiations a conviction key Sure, those terms in Historically, run. on on deep, and/or high deep the of it we have

they're along very the So achievable. process, far and they're in highly

Operator

Adam Partners. is from question Lismore next The of Waldo

Adam Waldo

you're in we right think about recollection One more do around a developing -- balance or the following in freeing OTA And to as should think channel funds, if how And recall, you questioners receivable. all resulting growth the in retained to of funds how there? balance you processor Am funds the 'XX and I early I able press switch if be the that retained in seeing? the retained 'XX in of prior the growth. I obviously payment think, go processor rate so, we at relates late the payment sheet release The on inquiry processor. out put up capital working about my process reinvest forward I

Brian Ferdinand

Yes. Great.

So if so see it's -- you it's increasing. no longer

If So $X.X about did we Q-over-Q, release you see, right? I went down get think it there. million some

Xs. I -- X -- now into the from went and don't it change think I

about which came the a capital working Q, business. million got we deployed that over release Sorry, over $X into into the was of

you or few So of through negligible X processors. those get balance with down as the next think we see that released funds certainly not X It increase come Qs, to and come next a quarters working it the I those down will number. will the over should

Adam Waldo

So does that -- sorry. become I'm

Shanoop Kothari

are percentage but not really last for X.Xx forth. of a peaked of -- so the almost it's as so at releasing quite, about so of capital. a meant gone as revenues, thinking when it's And it's holdbacks it the and they've percentage, right? but that plummeted balance year, considerably, from But a And and started -- end also revenues down protection so

Adam Waldo

to of entirely that. But where becomes seem obviously payment is source follow-up you're now does million absolutely. that was go no suggest that guess that and the the Brian's a comments maybe capital. after platform. processing few And dollars I I next through a Does it almost with down Wyndham to over just few growth going No, quarters.

Brian Ferdinand

historically. payment it's processing. company holding have Because balance on does. processors that there's were the right? more holdbacks no with strength And the holdbacks should go business It's sheet current historic eventually back on It a longer that we're as any working don't we It improved, X, requirement of processing. of given for payment the new the to given payment the

work those of contracts, gets released. we as money So the time over the periods

next working So to and X get quarters. over should X we'll capital the to X it provide

Operator

at closing Brian for to the Ferdinand There turn call back would I are like no to time. additional this questions remarks.

Brian Ferdinand

Great. I appreciate everyone joining, and thank you very much.

Operator

This concludes today's conference.

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

LuxUrban Hotels (LUXH) 9 Nov 232023 Q3 Earnings call transcript