SVC - Earnings call transcript Q3 2020 | Service Properties Trust

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Operator

Good morning and welcome to Service Properties Trust Third Quarter 2020 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Kristin Brown, Director of Investor Relations. Please go ahead.

Kristin Brown

morning. Good

management, today’s and Murray, Officer. Todd includes the to the that transcription and results presentation today’s meaning on statements forward-looking Chief expectations Brian Today’s through are Commission, Securities call based point Litigation forward-looking question-and-answer prohibited the of of out November any retransmission to call Act of SVC. on statements of securities Reform a The obligation Officer; and a the written of contains no revision Financial the made other that than Hargreaves, today’s are as by other the laws. of call me prior forward-looking the President; conference recording, John consent Donley, the filings call call conference with within session I XXXX. SEC. Joining with statements is and by analysts. Private followed Chief note Please XXXX today’s Exchange undertakes Securities without revise would like X, and beliefs conference today, or or SVC’s release present company on These to publicly Investment

differ the components to may calculate those these section from Relations including Investor this FFO to FFO contain in may addition, the supplemental available of financial funds as website. well in of non-GAAP income found normalized net AFFO In operations, from and or forward-looking and results measures, materially Reconciliations are projected package call company’s Actual EBITDAre. our EBITDAre adjusted normalized statements. normalized in adjusted as

reliance to Investors data contained John. any I operating be forward-looking the in And is that, will found those the our financial undue turn our XX-Q www.svcreit.com. supplemental, statement. over upon to are factors filed Form website on SEC call Additional that with information not place concerning to cause our and differences with cautioned could later and at today in

John Murray

the of with restaurants other and had dramatically pandemic and The economy United negative and service a related our like Kristin impact hotels, most and COVID-XX businesses morning. good hit you, hard. on theaters States particularly retail Thank lockdown has has centers, fitness and

the April our are impact as improvement the the to backdrop us, We its was seen since this continue across portfolio and albeit we and our acute. solidify at most are take challenging that behind steps when to gradual we of gradual Against a severe effects confident circumstances preserve capital necessary recovery, liquidity. have most

covenants to will last of billion more continued announced waivers As week, credit facility and access obtained $X all revolving through we financial our we XXXX, ensure detail. mid-July which undrawn amounts amended Brian in to discuss

June, reinforce further As debt sales, our capital which dividend, Todd new and a our we XXXX maturities. reminder, our steps moving spending, our capital discuss. planned forward with non-essential deferring largely will and include have in certain of Other quarterly financial addressed debt taken position we raised previously reducing to hotel

beneficial these As management with decision Sonesta. these hotels we the reach made transition or to we Marriott, unable and agreements to were terminate and IHG mutually to branding resolution

Sonesta’s growth focus emerge we from well of recovery from reminder, the upside new and of as the of will benefit We some hotels. from Sonesta be normals the SVC safety, experience. these and sharing XX% As as pandemic a as believe will travel service greater the owns more of on

hotels in pandemic programs. guest to re-branding the greater also the business translate will rewards people managing which we impact lasting technologies create major videoconferencing that travel, think and Sonesta impact have and negative will longer have also these on hotels The with a of brands’ businesses value will We X utilized during these less best future. flexibility from dispositions a highest of of improved year Initially, decision-making management performance and positive a impact to with have portfolio’s review market give or through conditions alternative the on through for enter the allow December this and XX, to use us XXXX these agreements hotel. control in each thorough challenging of we Sonesta uses believe expect

the in favorably XX% the in still second prior comparable for in RevPAR to rate quarter XX.X% the to quarter, year $XX.XX decline hotels results to the $XX.XX $XX.XX seen compared quarter. third was to quarter sequential and the occupancy in quarter. in was moderated the is compared was year-over-year second hotel from with While have our quarter Average declines compared daily second improvement Average $XX.XX second continue compare and encouraging. the

and outperform suburban improvement XX.X% extended XX.X% first Importantly, from for our and XX% by healthcare service service XX markets urban stay hotels extended compared respectively, seen with Results of stay have in to stay extended travel. and occupancies as stay could results service limited in airline hotels locations outweighed hotels, our of hotels to hotels select demand continue temporary XXX hotels. non-urban leisure, also quarter point The roughly responder, favorite hotel’s vary and a special SVC reporting hotels demand with government or that XX with occupancy extended stays. guests portfolio occupancies accommodate full groups, during and full-service of April projects stay business competitively extended group continue our project our the social we priced offerings in most middle since the the premium housing. non-extended percentage workers, crews, have hotels, XX to using reflecting

terms XX performance All our our saw hotels our has greatest last percentage steadily portfolios Sonesta For overall and open hotels, from the occupancy and hotel XXX both October to decline improve. low and Marriott are and declines a to Wyndham RevPAR our Radisson increased in RevPAR Subsequent to X weeks portfolios year’s quarter. from weakest XX.X% percentage our year XX% ended versus performed to continues results. but the nominal the comparable of RevPAR of end, of X nominal quarter April. and Conversely, last best the in

through full-service least We our urban select-service stay in of portfolio XXXX. outperform hotels expect at diverse to continue will our extended suburban hotels

and us helped with us XX% becoming has extended with rooms in approximate for great our to select-service Northern has in positioned burn still cash a options and challenge hotels restricted with markets mitigate stay markets. provide maximum hotels Also access, extended outdoor restaurant especially guests waiting Importantly, of dining rates. well kitchens flexibility and full say

our XX.X% our net portfolio, supply efficient of retail to to about minimum and the lease represents of support has rents, continued returns to an Turning which TravelCenters America, throughout pandemic operate chain.

collections most trucking its it and gasoline, to sales, impacted on negatively repair of diesel of the current truck Although quick-service including navigate to is closure the fuel restaurant than our industry, the TA tenants. pandemic by sale offerings, a decline primary and enabled shown service in full the resiliency TA’s services and have services of government restaurants better us. that this their trended XX.X% closed our to to quarter. level at our retail were lease was from Property reopened. other locations rent coverage October in TA a tenants, to as due obligations of guidelines temporarily rent X net mostly Among have low businesses mandates XX% April, upward have times or in service

team flow who with service hit whose continues We affected deferrals lease to tenants in portfolio. September. more like Requests at retail the work Our of retail of changed. past the net TA theaters, reopening Tenants crisis detail. and net believe worst by movie supported to prospects hardest Todd except will we from our tenants for industries restrictions. began height deferrals management lease retail have in this this have opening our for significantly, discuss steady are the asset certain slowed pandemic requested pay the cash in by

that, net portfolio. capitalized are for With well a in navigate liquidity We further it the to as assets recovery hotel activity. recent and portfolio portfolio well with lease of a diverse our ample detail over Todd turn I well our discuss gradual with as positioned successfully to transaction to will

Todd Hargreaves

John. Thanks,

X.XX the with for portfolio lease versus lease months September ended XXX times annual a X.XX returns, trailing The XXXX our of of million was our weighted coverage total XX, with XX-month The average largest XXX operating of TA minimum and tenant, minimum under Rent due square feet, margins XX we of September gross TravelCenters basis minimum times a lower by to the SEC. in our million, represented the period, trailing leased coverage our As properties, rents including was fuel its rents. America, lease XX% XX, portfolio’s as aggregate distinct all XX% current rents September XX times tenants centers XX for net lower of and prices. X.XX of minimum for $XX.X on retail on years, industries. of year XXX term travel as annual XX, brands pandemic and result XXXX. is of a prior XXXX, of was returns rents $XXX.X net due of owned our XX.X% to obligations Representing lease which service-oriented requiring

net retail the lease of we from returns, $XX.X to rents of we of tenants, tenants. leases challenged represent movie lease other million, rent. our SVC’s rent of XX% net the up entered annual total represent portfolio Today, which with net theaters, second For collected quarter, returns. rents an minimum uncollected XX.X% of and from these XX have XX.X% XX.X% continues third during October in agreements, requiring which deferral quarter. aggregate and with XX.X% be total minimum rents into X.X% industry October tenants, our during We rents of lease Most the collected

October. Repayment over will for are We the rent due these have be a collected deferred to-date. months and commenced of of have and to XX% deferrals rents X in deferred Generally, an million portion a to by X of September for XX-month deferrals September we $XX.X XX far, rent so and aggregate tenants period. in XXXX of rent of the these repaid

renewals space. XX.X% Turning by square average were average feet years feet leasing to that same and concessions lease of square leasing prior and term The commitments for rents below capital for rents XXX,XXX per $X.X or activity we foot. $X.XX aggregate during square were quarter, weighted entered million, the rentable lease an third the rentable XX.X weighted was at

for weighted an square and new and X,XXX rentable per above into feet rents the average XX.X% leasing average approximately lease that concessions entered foot. for years or leases $XX.XX capital also rents weighted We were square space. was prior leases $XXX,XXX term X at aggregate The for were these same commitments of

$X.X totaling an square transaction quarter additional end, ended properties, During during costs. $X.X we net XXXX, price sold quarter properties, aggregate lease X to square X of for the XX,XXX September of we price totaling feet the closing Subsequent million. million, lease excluding XX, for recent XX,XXX aggregate approximately sales activity, net feet sales an sold

Marriott XX into Wyndham $XXX of an XX rooms of X,XXX have aggregate million. hotels, and to We million carrying value net a hotels price with entered with hotels, $XXX including sell agreements sales XX branded branded for

the management from near contract to extended The would in already that Wyndham XX sales December first Relative amended until We amounts. market, they a and to hotels the our acceptable sale will occurred and transitioned buyer convert for hotels and Generally, under branded under turn fourth full X X quarter of transaction multifamily. and result of recently We have come these be remarketed so sold to to be hotels quarter in addition use pricing transitioned properties or their the hotels call management to Sonesta, over I with for terms for that on agreement to Wyndhams outstanding transitioned hotels at of the to able have in now Marriott we as been a and management found will of to from is to manage as Marriott XXXX the of been XX urban have Wyndhams pre-pandemic Wyndham hotel. to debt not full-service demand Sonesta. the repay We brands but hotels XXXX maintained we proceeds the X have groups The targeted values to X levels. discount continue strong to Wyndham remaining expect interested the the sale Brian. sell continuing XXXX. remains XX, X stay as are service completed will were the on contract hotels have operate available investors hotels they of the to the to the to that in with sale, Wyndham originally Sonesta X sale. well of for we

Brian Donley

with recognized year agreements. the results, XXXX third normalized our quarter Starting to lower our $X.XX the decrease decrease Todd. billion Thanks, prior consolidated FFO of due was per primarily compared Marriott returns financial share. to $XX.X $XXX.X under IHG and quarter, in in was The million

agreements $XX the quarter, remaining last the guarantee second of declined third Marriott fully year security IHG discussed Marriott minimum agreement XXXX. utilized quarter the IHG the and security and in quarter prior in deposit million to million million $XX the As of the under returns and we recognized utilized the quarter. respectively and by $X under The deposit compared

declines $XX.X increase positive for was expense to operating decline expense prior quarter the and third the a $XXX.X Lower third at in million XXXX. over quarter quarter in XXXX million a $XX offset portfolios million flat legal by income in and third FF&E $XX RMR the and were due million quarter. the the G&A the XXXX versus offset resulted fees $XX.X in the period. year-over-year of partially XXXX management the in million Third SMTA was respectively, in company $XX the quarter. XXXX and other closed XXXX XX.X% public from roughly Adjusted EBITDAre reserve costs our decline business by end elevated quarter third million a quarter or interest million Wyndham impact transaction Sonesta from under $XX the losses we of were

million XXX comparable decreased by percentage as this by at of FF&E which referred comparable were presenting available quarter, and our the million comparable or basis, second minimum sequential of at $XX.X are compared to XXXX. result we lower XXX Turning of to quarter. quarter in prior profit points for now EBITDA, package hotel paid calculation and profit over second down to information $X.X returns XX.X%, XX.X%, hotel our XXXX. details a operating of and $XXX the our comparable agreements declined a Occupancy of hotels brands. margin hotels points for lower our in rents our that $XX.X increased percentage operations prior prior are compared available hotel over release to Hotel suspended XX.X million is gross fees RevPAR the RevPAR Of decreased our hotel and line, year million our as hotel year cost XX.X% improved approximately hotels, results the system the XX.X XX% which certain contributions, operating to website. the note, $XXX decreased percentage we Below On for GOP flow the supplemental other our and the cash historically earnings pay have our period. EBITDA operating to and $XX quarter losses increased on to million to from of million and year EBITDA hotels the gross reserve

remain have reopened of closed are only pandemic full-service during which hotels shutdown, quarter. Our the XX million non-comparable that all hotels, losses either $XX.X recently or from generated the

hotels generated million XXX losses net $X.X of portfolio the for consolidated Our of quarter.

had Turning XX.X% and to our of as balance gross sheet total primarily liquidity, and our cash, of of quarter was we to end, future improvements million including hotels. assets of for escrowed million $XX $XX.X debt cash

both quarter cover minimum of earlier, Hyatt as available As September guarantee XX we our IHG was under XXXX, we had XX, XXXX. Based of cash during and hotels, of the that agreement hotels X our we quarter XX, credit in fourth projections, exhausted as I on the guarantee and was agreement the for be to Radisson under million available rents $XX.X support The the could September Marriott under agreements, exhausted shortfalls our Radisson exhausted our pay the $X.X for XXXX. guarantee the mentioned XXXX. by third million to project flow be and returns current will balance

operating capital losses. During advanced projected we of cover our third hotel XXXX $XX.X an million working operators to quarter, of certain of to the aggregate

funded are year We or of the for total $XX approximately currently additional quarter a full could projecting the $XXX working XXXX. in advances million be capital an million of fourth

tenants. discussed, for Todd we of certain have rent-to-date million deferred retail As $XX.X

quarter in Sonesta We operating for transition as the and $XXX.X funded currently to Marriott as capital lease lease reserves approximately assessment maintenance capital certain to certain $XX.X third from And our of of $XX of SVC rental an million to the at capital hotels tenants. capital Year-to-date, improvements. branding the for of renovations, and funded improvements we uncollectible of during well quarter, million management cost changes million income. fourth Sonesta. We has primarily an we the maintenance, certain renovations collectibility recognized ongoing all as expect ongoing improvements for hotels. During for XXXX fund primarily in adjustment net revenues to third million recorded of of quarter, $X.X the and

budget not will more clarity on XXXX have our call. for expect expenditures earnings during spending have and we yet We capital quarter completed our we anticipated fourth

XX, we the covenants noted, July in agreement through John revolving in existing the million our credit XXXX. amended As agreement $X governing billion term have and $XXX loan of financial credit the waivers all and facility secured

value our of secure pledged will in revolver. have states subsidiaries million include XXXX. Following of a over hotels amendment, XX under book properties under amounts. closing gross term premium increase centers states with our the the of September and pay value interest the of revolving XX provide XX terms $X.X using liens a in by $XXX on in we to agreement rate book with These key Other include obligations X credit amounts, XX point the in mortgage XX, as gross loan equity we repayment the properties facility in travel in our SVC outstanding first un-drawn that basis billion of a $XXX owned LIBOR million interest XX the on

full covenant reposition to addition forward. going need the we In hotel relief, the we as portfolio also the look flexibility we secured to

of $XX in Other million year. the investments place. in May, remain capital ability We up signed in have of expenditures to up $XXX will we the back as to amendment the as requirement we including per minimum other fund certain well per limitations to million year agreed liquidity to

per million position, portfolio was month. burn at liquidity small relatively in $X QX to the $X hotel our our million from Regarding around cash

of burn accelerate given QX in starting December. seasonality hotel currently to in to some re-branding hotels QX expect substantial and relative number we QX modestly and Although, of the our a for portfolio our cash

lease Our rates, overhead assuming base of collection solid covers triple our service debt corporate costs. net current and assets,

we the XXXX. we through currently are Assuming trends ample continue, we believe liquidity seeing have

is Operator, major options of that concludes continue to assess improve position debt August times. explore all the and extraordinary during we liquidity our maturity next in our to will prepared of Our XXXX and remarks. these

We ready for are to up line questions. open

Operator

Instructions] question B. you. The comes from Riley Please Maher Thank go Bryan [Operator ahead. FBR. first from

Bryan Maher

and morning decisions? you all comes as this the going reverse all, news as call it, it It’s slow that rallying for to And a information. guys from disposition process helpful. have morning is it Good John, thank to thought [indiscernible] first Marriott their recovers? vaccine secondly, this everything to wanting super received and of your as you sector

John Murray

Thanks, Bryan.

So far, received have Marriott from this any calls not and IHG I morning.

good I think for favorable end that can vaccines – space in hotel sooner morning’s should the the to in this everybody the out, people if of it continues boosters a lot the next pan expecting. very is the think is by year, really industry. news it’s the get are than news I which should XXXX, and recovery And if and accelerate of

So, that’s good.

our hit. terms for value were performing of cases of brokers weaker we that pandemic that opinions In in of got and in well has have from hotels lot identified or of matched disposition markets the a a we achieved either with for not before were reasons we activity, variety the sale up the pricing that

we or have not. have a vaccine that the we pricing entered So, feel the of that are the reasonable got there regardless agreements is – we pretty into like under

those we the as continue forward the what to the with do impact transition we So examine once going portfolios and we may transactions. best of Sonesta. highest use some remaining hotel to hotels are It we with

Bryan Maher

it hotels of some color schedule, schedule, going much bigger Is that how to becoming continue there kind take on transition of we we for on on many can you to to a behind to a kind and noticed ahead while, is Sonesta brand? any running a give some process Can going ready transition get background that lot Wyndham getting hotels with us And us is the of Great. give of going? on much, Sonesta. on so manage hotels of you questions what’s

John Murray

Sure.

close. of all, of reflection of be our extension with buyer nothing would Wyndham when First a to do the has the timing It’s really to ready Sonesta.

So, just our hotels management transition didn’t to make from didn’t sense to – it to Sonesta it company. buyers’ Wyndham

So, extend to Wyndham willing was there.

In growth well they and on taking terms their they amount transition of the hard hotels much hotels platform they of way can been the the staffing, of increase larger these then the are with portfolio. a are IHG scale have of working – accommodate their services and have on portfolio creating in significant to they that Sonesta the to Marriott select-service subsequently shared in situation,

that state agreeing already most finance side I close are well on They Chief add side. as think their have the team recently both significantly they enhanced on of to operation Florida. the as They in likely to in a capability hired the very space Operating new management Officer.

going of steps. November lot think positive XX I will they through hotels are a The expected Then Marriott XX with be. December, little that they of XXth year. taking to X. take the would ahead. subsequently and managing on that that about They be behind. basically over to rest are they ready X And X taking portfolio and expect not more December are Toronto, are convert are where there of And and next hotels X Marriott for in transition the San would – the transition be will those. these bit during complexity So, I will IHG in hotels there not do They the say the to they hotels that we Juan then on, on hotel hotels we Sonesta

I ready. So to going think is Sonesta be

Bryan Maher

for that everything. Thanks Great. with luck and good

John Murray

you. Thank

Operator

The Sullivan ahead. next Jim from from Please comes BTIG. question go

Jim Sullivan

updates going Marriott invested that the assets number increases something the And portfolio was and I the $XX wonder this us the beginning get of could million upwards to I if you. into of [indiscernible] to million of think the had the $XXX in of company at upwards committed be update course recall this, the CapEx this for million you flow can any give to there $XXX not in about assumed the the cash the year. invested. And plan? from is of a $XXX Is from brand the us was extent I of to is conversations balance have was in and asset what agreement I that been on ‘XX that with accordingly. thank seem to cost a brand, the and that. year, is Sonesta any the the the of Marriott extent time money, you was know that each the but million Yes, had decisions nothing to most course, made, at changed Marriott to John, there that regarding – the transition but invest do

if assuming what So, flow you a give be CapEx an those of us maybe just a of kind could as Sonesta for update we analysis ‘XX number assets? cash through to in the should management out

John Murray

Yes.

on Brian pandemic So, when well the pandemic Hyatt am of the let not hit, and maintaining when way with we but restricted and we Radisson that we the and were amounts spent number we of tell balance portfolios. the renovations to in CapEx our we just in – planning a our focused the had exact you for have the sheet. a I Marriott And going that to ongoing had are portfolio, IHG moment, liquidity on hit, our but renovations quality

we that remind we year $XXX $XXX many the wasn’t say it And are over to spend will or planning expecting that wasn’t finished three – million to we period. that spend well was to million new that were two too kick would didn’t are roughly, to underway, And continued in you projects on great a million $XXX XXXX, to so off that spend we and extent but projects. I

were it to we not so, all And happen. expecting

planning. have the We on continued

renovation, As the going Sonesta. And a to part well which Regardless is renovation of of design that hotel. really, to done just well Marriott, that the the work the amounts Huawei the on will branding, mentioned, there planned been have design we the was the for work doing design concept. transition it’s for the

FF&E on – Friday to renovation. the ahead past that have gave go the we for I so And think order this

we furniture, it So, normal take half for to – it are better the or rest than but as of a the decide, renovating time that higher extended the second Year just And takes hotels repurposed in we to we this New may time next to between that, use of repositioned for Chinese will portfolio use the and hotel be will year. look multifamily that normal, the of it’s seems be some at some going we markets, in closely and some like point. have stay-hotels the

we won’t are those renovate apartments. to standards going become so hotel they if And

are evaluate XXX% forward The whether renovation as instance percentage a other on same whether we the and been hotel, the conversions, facade if we go need do initially. with we we we remain go tub smaller shower the are going courtyards, to to or for if revisit planned, may forward to those courtyards, had of bathrooms, to

forward varies have that So we move might there’s the we a have we number that as that flexibility not otherwise.

Brian Donley

affected I we each look The think another systems CapEx sort expected hotels been to have we Now signage XXX changing using million of in you $XX opening per December, just Marriott move which in we as is at to to that plus as hotel, $XXX,XXX for of add is XX, costs, of million roughly as is that rebranding the remarks $XX was around I approximately benchmark year-to-date quarter. QX, about numbers said of fourth that, and of the XX these mentioned XX, into hotels roughly Sonesta. the move

how point hotels. So and over, we going look signed John operate at to at the with ‘XX, some what are to as we Marriott. in And projects under when will the agreements move mentioned, move reevaluate, we forward we then we continue that these

Jim Sullivan

of is people – Marriott, is to what of amount of Marriott, them me Sonesta, question services course, fixed, entitled And platform, prominence agreement, that made to hotels, as operating they the for want some in Marriott for, management the to there whether their I to or one agreements reference other perhaps others shared expenses property on with you above and a and significant the under the fact, by refer And the reduction, to material if any provides. driven Sonesta? difference side scope cost, costs services the of reduction, any brand the of give for transition the the the that just in brands, in

John Murray

it hotels bit than Yes, choppy I have to more as, is that, going think little a transitioned. XXX be initially,

hopeful And steady is I will less too shared exact early. so, we’re we today. can’t at you perspective what projections are a that services and platform but it experiencing operating, that we be than state, have once the point. But give an It’s from this operating expense costly

Jim Sullivan

the about on then Hyatt, to they could were confirm the the combined were in Radisson much prepared amount is want comments, have guarantees and in end deposits this, deposits agreements the security if the clear security of for make quarter. that any And what and guarantee discussion and – or was And still I used sure total QX? at of the third is that amounts just other total there you am how deposits you that I between the

Brian Donley

million the total, the roughly XX contracts. so, agreement those QX, guarantee down is $X to million, from two Hyatt is around and Radisson $XX.X

Jim Sullivan

expect third Radisson right? Okay. And I to – quarter quarter be that ‘XX the you on you next had of based think industry said third the in of used trends current year

Brian Donley

That’s correct.

Jim Sullivan

Okay, great. guys. Thanks,

Brian Donley

Thank you.

Operator

Please comes question Dori go ahead. from Fargo. next from Kesten The Wells

Dori Kesten

brand on us Sonesta’s the morning. call their a under guys. ROI Good Marriott Thanks portfolio you as little on you detail assets how two regarding had underwrote Marriott’s, can of bit the just the versus give some the comments families?

John Murray

I key into assets had I portfolio mudslinging, a I portfolio, portfolio. stable and I renovation. but large get think The portfolio is were mean, Yes. that comments the several under Marriott those to saw Sonesta want don’t

so were really weren’t discussed, And really apples-to-apples. calculations that return the

oh, none good of we about Marriott two shareholders in hotels XX% converting them. security that that those pay it’s to Sonesta to recovery, to and and guarantees the we So, the not hotels them for of all, to waterfall in convert the the not will we back think Instead, proactive. the deposits move when Sonesta, be through we or are replenish of won’t flow the us. say, these portfolio hold the If maintained. with do and is flow think interest forward of takes we upside XX-XX well of cash just better to will to to go and it’s then what’s sit as of well them go allow And as diversified would a recovery to think And to shucks, the our go IHG try we take, otherwise first situation Marriott and very share the to instead. control take a and here well, this lot and the hotels take cash in IHG us

be back to linings vaccines as think finance from is for here of so, what’s and SVC’s much result team to going at a there worldwide earnings. accounting we and less in once and and pressure team I the and going are been I is out And that heard on. some think and I that looking trying silver think America have a from keep of videoconferencing better occurred is, in a result that’s to as expenses of normal. to available I And mentioned the that, more how much RMR lot be are I every for and T&E corporate the And get it increasing think to then people dramatically entertainment travel there have savings that finance going probably

after value business recover think is that been that to traveler historically program that we projecting. has they of points don’t less as quickly we post-pandemic value that programs. as going some it’s maybe going historically. think those to we are less have business than important in that So, people programs the And those and been rewards driven And travel has that think the be and

of a gain well-known as that will much we increased and brand. them as much believe become a so re-brandings, they the more competitive be to And position that these Sonesta more will scale result

have until plays know models, various done won’t it projections, so, have And out. really but we done various we we

us see have to but confident will well as do we are to be who we Marriott so. going not for that’s at us IHG, to as pay So and all, decided

Dori Kesten

have out do you few I got of how think Do can all any I per the that Right. Marriott structure? thoughts kind expenses can into that expense of Sonesta you line there make mean, is this top have we structure expense the versus I initial you guess, room? like, Or we But about do Marriott? questions on last assumptions of point Sonesta but can mean versus anything occupied

John Murray

a you to will too of and new give little tell, able next think but number on hotels it’s of are be the because that color that are our adding, early the they a of creating we lot they on that think platform, I to more call. because that I

Dori Kesten

strategy just you about change this walk Okay. thinking you through point equity point? match acquisitions? if you this can are or holding ‘XX/XX how And closely are just a there’s So have with equity what in issuance issuances at about at wondering thinking I historically to decide am you funded

Brian Donley

the And We and Yes, a are thinking Dori today’s still something market with these open. that’s and we the balance going the improve, point. way I to pop mean, to good undervalued, point, going are believe been, runway and all and things managing in at about we liquidity. have levels. still at industry, keep the we at the But equity even will we we and are our we keep this not despite this really keep sheet, evaluating that’s options not sway and shares think us have equities,

Dori Kesten

early or of for I we floating it And in about some think you when there talking number expectations? sales? have the the in one potential Marriott on had their as million, management question, going was last that initial Is portfolios. you number heads separate agreement Okay. what’s keeping new among a our kind around is hotels we are $XXX about the reassess, just too but should last that sales

Todd Hargreaves

it’s Dori, hey, Dori, Todd.

So million $XXX agreement XX hotels on, to $XXX about early to of were that is sell decided about sell million. not but We those. have were we under the since talking

use now. $XXX a million that number is good to think plus for I So

to some next As in hotels Sonesta, markets. Marriott’s identify year to all earlier, the John we IHG’s other be for to going mentioned there’s overlap that going be looking so, and over likely as transition sale is the to we there are or

and And going to markets have IHG a already. have Marriott. some We there be and is Sonesta Sonesta

a year. over next transitioning that the So XXX we out are hotels we of are to the of number likely identify

So there is we likely going always to be some sales coming out in the that next identify. XX months

Dori Kesten

Okay, thank you.

John Murray

Okay.

Operator

Please a have Sullivan Jim BTIG. question from go follow-up We from ahead.

Jim Sullivan

am or of subject performed TravelCenters extent more net just any of of assets? would extent leased here. pretty wonder I what the the tremendous have just of than selling might assets consider that well topic just some selling buyers perhaps TravelCenters part liquidity the Cap best John, what as assets. curious kind prices. amount rates equity of at consider the sources I as of to potential equity. on public other the of market been current raising company strong, obviously, the freestanding on has company private the or portfolio to activity, both in And Obviously,

John Murray

That’s a sort part – good more to short a thinking any of that, the as TravelCenters, are selling sold TravelCenters some the we not a sold well-performing I about currently question, some back restructuring, we is out of answer of the Jim. when of last we of TA year. the – less

to were last only no for asset. contemplating our some not open. all that providing week, transactions are the was the the there a And we of in we ago, interested for the in a the to TravelCenters of was collateral really options our security was are we and interest We that, transaction. and assets TA that credit going currently but such revolving tried facility And banks debt keeping some year deemed be capital. a like actually are raise transaction announced we And

turned So, everybody the head. year, in its on knows a world as has kind of

evaluating in not time working without watching about we but we of TA portfolio the – current any anything and working on or crossing our the markets are are all the and the not sort at are we opportunities off assets So, list, closely sales. thinking

Jim Sullivan

Okay, great. Thanks.

Operator

session. remarks. conference over in concludes our John questions CEO like There are queue. I Murray, closing no to to would turn This more question-and-answer the the back for any

John Murray

today. catching Take care. at much you with of some Virtual look up forward us for to We NAREIT. joining Thank you very maybe

Operator

The conference attending Thank today’s has now for you concluded. presentation.

now disconnect. may You

Service Properties Trust (SVC) 9 Nov 202020 Q3 Earnings call transcript