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APLE Apple Hospitality REIT

Participants
Kelly Clarke Vice President of Investor Relations
Justin Knight Chief Executive Officer
Elizabeth Perkins Senior Vice President and Chief Financial Officer
Neil Malkin Capital One Securities, Inc.
Alexander Kubicek Robert W. Baird & Co. Inc.
Austin Wurschmidt KeyBanc Capital Markets Inc.
Jonathan Jenkins Janney Montgomery Scott LLC
Anthony Powell Barclays Bank PLC
Bryan Maher B. Riley Securities, Inc.
Dori Kesten Wells Fargo Securities, LLC
Floris van Dijkum Compass Point Research & Trading, LLC
Call transcript
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Operator

Greetings, ladies and gentlemen, and welcome to Apple Hospitality's First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. of President Vice Clarke, Investor Relations. Kelly you. Thank

may You begin.

Kelly Clarke

call welcome you, afternoon. earnings Hospitality Apple XXXX good earnings XXXX. call first Form on We distributed and morning. you and Today's May REIT of which this release Xth to be quarter the based the Thank on day will XX-Q, first were and quarter XXXX yesterday filed

financial COVID-XX. as described the future performance by federal review call involve the actual carefully such the our and the any XX-K Form filings December Hospitality's results, as risk by year of factors and to no SEC. and and the achievements statements. As implied forward-looking or different by law. in to the including Hospitality contain business undertakes today's for and cause ended thereto other XX, Participants forward-looking in report on as Company's measures XXXX, statements notes annual achievements Apple should forward-looking or Apple financial or impact defined Hospitality unknown statement will from materially securities with except of Apple a operating makes statements of express or response risks and speaks Company other and These obligation statements update publicly today, performance forward-looking regarding to that reminder, as statements statements, may only results, revise factors, as Any required well laws, and results taken future the condition which be known from being

We as release in FFO performance, GAAP SEC. discussed will and those review EBITDAre, certain EBITDAre, hotel filings the measures during encourage EBITDA, and included adjusted measures reconciliations to be of with to addition, of EBITDA, FFO earnings as participants measures non-GAAP yesterday's other In this call. such modified adjusted

an the Financial Knight, of overview additional information copy provide or our Officer, and Chief earnings This Chief Justin Executive of our the results XXXX. first for morning, Company, Liz the visit Perkins, will please release quarter applehospitalityriet.com. of a our Officer; about For

At Following the call it overview, we my is will over Q&A. to the open pleasure call Justin. to this time, for the turn

Justin Knight

and Good today. you for us morning, thank joining

quarter, for from first margin now not the exceeding improved without most our weathered worst averages to expenditures. and focus during broad-based. keep to level through and sheet strongest internal drive with flexibility positive the transactions. leisure continued of February results we Last We to full-year. early challenging minimizing increasing demand Occupancy remainder we and and improve capital industry we efficient for our returned estimate year. occupancy positive of in in April XX% existing together are increased Demand RevPAR March. Occupancy within approximately we since positive operating and we are long-term signs our industry. end with and produced positioned be higher of able occupancy expectations. the transient, the year the on with have RevPAR well steadily and in continued trends all the the over portfolio portfolio $XX for positive to positioned our company we efficiencies organically the including beginning our cash cash was capital February and and full the to quarter. resulting of value dilutive rates teams, on swiftly quarter, the from cash for pandemic the on March burn, the market management for the We and corporate modified operational During asset operations broad our XX% low With XX% to since been as corporate month balance summer hotels profitability, even to of January of open the after the continue lower is we externally market. and have in produce It from diversification accretive operations to hotels with level we funds during we strength, note were we flow has that level April of expenses, results focus our our operational operations, flow of to achieved the in ADR to business Uniquely reason grow our improvement these remain of rate. as our of periods optimistic by leverage, was year to and significantly and capacity pandemic, to hope record improvement adjusted and strong able the preserved incredibly is demand hotels of onsite occupancy. what include all Working Having reduced open important the raises. hotel capture costs

to portfolio. hotels of continued of half even better efficient performance chain business markets overall and effective to portfolio Marriott, to a practices rooms-focused diversified our with implement we we utilized has are positioned perform data, than outperformance. rooms-focused our the as extensive and Our Hyatt-branded ownership by we and unparalleled STR, of managers, detailed the different without well Scale across confident access as industry, meaningfully we hotels the benchmarking in return work reported increase the expected as the managers across Hilton and performed back information our upscale, are analysis scales, of business most With to well demand year, benefit travel. for full from

the service staffing pandemic, our As reduce We aspect hotel compared meaningfully we and efficiencies evaluated total established quarter We XX% we by occupancy closely to providers. contracts efficiencies reduced efforts incremental business of costs as our XXXX. expenses grew quickly period with operating to and focus our on in of renegotiating standardized lower we what and by the in for same matters national first vendors most every to challenges models with the find maintained guests. operating to the and hotels as occupancy face

at and from adjusted start million, of been million, XX% comparable during adjusted the funds of April year, of hotel profitable the quarter. hotels pandemic. last EBITDA every of margin hotel $XX hotel $XX EBITDA million result, since we level EBITDAre of the month modified a Apart we the from As $X of achieved adjusted have operation

a optimizing throughout industry-leading have of track margins We to order cycles. deliver economic operations record in

As that to the the resulting continue, we as build for a portion will emerged work operational we pandemic during the our back ensure hotels. higher savings of margins we operating from occupancy we achieved rate current and at cost our portfolio environment, efficiencies have and in

the continued traded of of conservative, be terms exit have peers to extend March, We and the in have covenant first we seen that entered believed and have low, to of Transaction facilities seller. and the the the our we amendment, sheet. and deal balance waiver with producing income maintained provide estate to unsecured outperformance potential period, a merits leverage assets, credit relatively our volume recent buyer as owning additional we waiver the our flow Based period underwriting ability the a result, flexibility but real been believe in the among always remains acquisitive. increase in hotel flexible an In a amendments our enhanced publicly be to period. are waiver we to into on exit low as covenant and have both positioned space actively

and acquire the and total during our to pursuing in North for the onset maximize move that be our pandemic, active continue the grow $XX corporate recovery, year, total combined the accretive to in despite our first performance, value Memphis, which three pandemic, the for Kansas quarter we G&A and we $XXX of in approximately a million. shareholders our hotels will for $XX Hilton volume transactions since Since acquired and million opportunities We further Park, Inn of to combined lower Charlotte, we us Overland of and the expect long-term to positive five in sold enabled Garden through global for enhance hotels, SpringHill Relatively existing and including after we market, a Wisconsin, level As and Madison, service obligations transaction Suites strong cash Suites which beginning intend have debt a of portfolio. million. Downtown Carolina, the Homewood increase. Tennessee, property flow generated including the level debt hotels

a entered with age the years, With portfolio. current pandemic five we average of effective well-maintained young the

invested $X investing million in of an in XXXX. $XX capital million expenditures, quarter, the to we anticipate and million approximately we $XX additional the capital remainder During improvements during

to prudently spend our well operate maintained, that systems have in and environment, to efficiently. ensure competitive capital all we reduced markets, continue we continue assets our current remain in their the While that are that they

of we guests increasing are numbers welcome back, ready. hotels As our

the Last taking light management challenges guests. we have we far additional to dedicated grateful at our teams, our evolving unprecedented hotels were year incredibly Looking as work over in at with back to for adapt and are been challenging incredibly have how caring of exceptional the hotels on and our and amazing last associates serving in for who circumstances environment operating associates our the many with year, we responsibilities. faced come,

plan announce week, XXXX Next to awards. recipients of the we our Apple

the hotels, awards, overall also nominated to forward their look technology, forward the we contributions to advocacy, him Howard with member, moment our public associates Board in well-being wealth our and want contributions Howard For our five of satisfaction safety, on the guests. years. and policy their peers look coming of newest by his I Woolley. at and a recognizing we experience these companies and individuals focus take to we brings management over welcome for a to and to outstanding

to a in We strategy, unique compelling hotel volatility producing ability and and cycles. through mitigate economic have its while developed investment investor refined returns risk

hotels and our is in maintain best consistently with with leverage. strategy reinvest relevant low select-service best industry, Our to flexible competitive they ensure hotels affiliated management brand. in geographically the straightforward work in of and diversified remain the a with portfolio a We structure teams capital the

take and work and to well results for performance but on the financial of to we It's on during our additional opportunity recover. for recognize intently the testament now over our the not of turn outperformance results travel are times our only want company. We are to remain markets. efforts Apple and our my to these strength is a underlying drive who team. I call strategy, to to will to as across also our Our of detail unprecedented team focused our have continues members positioned Liz, provide this tirelessly outstanding to our long-term confident continued pleasure the who maximizing perseverance value to shareholders

Elizabeth Perkins

Justin. you, Thank

first pleased the our portfolio We are extremely of during performance with the quarter.

quickly outperformance and the our portfolios market diversification and the largely more our last quarter. we than suburban anticipated, the call, by and that was rollout improvement business March. strong With consistent XX% through in during to a XX% in COVID result first demand move in accelerated typical and leisure December in that highlighted November continued improving fueled in we to an pullback resulting As we increase concentration improved occupancy in as of our versus spring, especially with national December seasonality occupancy we XX% averages as entered vaccines, in sequential transient expected, On anticipated quarter. from

XX%, all versus quarter team achieved in pandemic. March. in the had period share market revenue us In XXXX grow moving April, to ADR results $XXX of October sequential we've improving was rate, the revenue worked last By XX% occupancy, grow, year, over strong in company during to produced in-house only produce fourth in the outperformance, a April, With occupancy reaching which furthered $XX in the Our with support improvement internal onsite typically month is February, XX% the of strongest to and where our to month we sales enabling teams our down expectation. that to XXXX. to which from approximately occupancy of our compared since closely same continued been occupancy management as onset exceeded January seasonally and quarter, surpassed down

moved We ADR into to levels and we to the began encouraged shrink that May. gap are April as XXXX through

on similar weekend ADR occupancy XX% in Weekday While ADR we from increase occupancy XX% and increased weekend moved as the to $XX and of March, indicative both XX% weekend the at April, while XX% $XXX we and $XX XX%. March, of in increased improvement to weekends. leisure during the growth. occupancies, weekday weekday midweek continued while to ran while January weekend were able weekends, occupancy from from meaningful occupancy facilitated from more period. the moved to we Similarly, weekend demand. quarter midweek In exceed in occupancy in occupancies strength stronger saw to saw January XX% $XXX meaningful to trends our $XXX ADR Weekday in same at portfolio over on $XXX relative

more occupancies our produce drive to on in we hotels meaningful rates. As portfolio we effectively business above piloted our in can calls, XX%, consistently manage the past at is increases of more to as or able mix

for San our XX%, Jose, in Paso, in Fort Not beginning Bernardino, entertainment, ran Saturday's the hotels ran a these Strong performance wide in $XXX number a last in rate number project to markets and was Beach, Angeles in hotels, generators, occupancy military April, hotels other we markets corporate during leisure, Texas, East Standout. consistently quarter. of located by strong many country medical, surprisingly, where relocations, Jacksonville our the we variety the full excess Looking Florida the of Los San small [indiscernible] the above grew the performance month demand including month quarter accounts. and in and and from business, a California, driven with of insurance, of with parts and of government, XX at $XXX of Texas, El at of our warmer Lauderdale, Tampa Burbank, performing top were XX% the week. Palm occupancies of of

to suburban quarter the urban Our hotels hotels occupancy as continue to of with XX%. outperform compared in XX%

growing overall suburbs. provides to our our the exposure during to located generators. Detroit, still markets for located in results to in Minneapolis, outperformance also large Northeast to are produced with markets We and fewer with dependence Chicago portfolio St. as relative business corporate less provide on markets markets into exposure as These restrictions the vaccinations diversification, in and expect greater overall of in widespread and saw and the the improve we our Increased did continued a from demand. move quarter growth we more of experiencing large conventions, returning quarters near-term, as demand of myriad corporations hotels continued business. The see number on attribute weaker of is performance and should where greater to occupancies and regular travel a generally transient our work portfolio opportunity will and the international weaker to our Paul, strong more group Northwest from travel and restrictions markets, Orleans Denver office in future see hotels broad we occupancies which half in convention. imposed lower COVID-related and New In we hotels historic our performance back improvement from of the relaxing year.

in portfolio, our anticipate in and optimally positioned robust the demand growing to of throughout operating becomes outperform recovery as results we markets. Given number a more makeup are of the continued improvement

XXXX We've Our million, approximately hotel for profitability down branded from XXX $XX and was teams’ relentless to cycles. hotel an comparable MFFO representing efforts quarter. to approximately approximately XXX of economic multiple but million control EBITDA costs points basis basis quarter $X the first fourth of $X.XX the increase XXXX, hotels points the an of over XXXX. share per or of adjusted only number experienced quarter of unparalleled maximize of comparable adjusted resulted in and owning select-service margin first quarter EBITDA first XX%,

managers environment. to and maximize year. profitability developed results operating level the fine has in our and this business we Over positioned make produce level of tuned to and a necessary third-party spring property partnership the with as our adjustments enabled strategy any in best-in-class saw to us deteriorate last property occupancies us have time, We to at

job exceptional competitive pandemic third-party done the four operation. quarters, Looking more the past meaningfully our asset teams despite entering managing an and have management savings cost producing business, efficient back management over our with

XXXX, first ratio expenses property resulting to to of basis of level to is and seasonally team X.X. January occupancy to the even of $XX, down of in XX-month half first in total relative on from revenue was hourly With by total utilization XXXX. lower our over Cost expense increases brand of in decline RevPAR XXXX under to quarter quarter relaxed February. the with enabled occupancy particularly reduce and standards XX% occupied relative reduction This XX% with room impressive XX% decline hotel were combined total per able that given the reduction in and payroll expense Our us period of and down rate we decline. over achieve a revenue the XX% members managers

costs We occupancy pandemic, over the to a models hotel property level both of back for we coming the to to XX% months our our brand expect labor increase and continue these and savings standards that modify down ensure management beyond. of portion operating have were XXXX considerable to recovery expenses with somewhat time long-term rethink brands spent and XXXX. build through and and the Total increased staff to the total staffing remain we XX% appropriately. as quarter Since onset the to companies

we strength of capital the encumbering an as operational disciplined current raising to of facilities through value With assets $XXX equity quarter. the current and disclosed million sheet, covenants our exit flexibility of to during successfully additional and Enhancing previously our financial our track extension we transition and terms for to amended outperformance, capital of million use record ability agreement, allocation key to $XXX equity to objectives sale achieved covenant Under enhance a issuances our our as the our shareholders. waiver the for balance portfolio period in to to acquisition. further for credit waiver less from our proceeds restrictive our from continue without preserve flexibility periods up to secured period up the we efforts are our enhance

our accretive remaining incredibly and the their the exiting have We longstanding support period. covenant are relationships our to in grateful we flexibility lenders waiver near-term feel our business on pursue manage opportunities focused are continued for and with and

our approximately in XXXX total of had a $XXX hand XXXX. million only the leverage, quarter million X.X%, by of on the our $XXX capacity XX value cash ourselves with $X debt first the At average facility for take in of mortgage with of credit navigate $X.X and billion weighted current only equity XX, the XXXX, approximately our strategically of As maturities flow of the hotels outstanding much under we positive and million of outstanding XX% environment, total are rate million million of and of we on unsecured of secured continue March consisting XXXX, to advantage had liquidity, borrowing to ability opportunity. With quarter, we credit our debt available of and position unused confident in of billion end total approximately $XX $XXX for preserve interest cash facilities. $X revolving to

Our enabled talented effectively challenging team our and environment investment strategy the most industry. to have in us ever weather experienced

open we corporate proceed service, cash we capacity to shareholders. we value to As to the excess are ability recovery, through outperformance. producing balance costs expenditures us our for and in and positioned With scaled can acquisition, and capital continued drive now enable are confident to question. the our ample debt with call pursue of We for sheet operations long-term

Operator

you. Thank of from Please Our with proceed [Operator the Neil Capital Instructions] comes question line your Securities. with first question. Malkin One

Neil Malkin

morning, Good everyone.

Justin Knight

morning. Good

Neil Malkin

true Congrats. Must feel cash positive. flow great. Congrats on

Justin Knight

you. Thank

Neil Malkin

going scale being are on for on really ability EBITDAs cycle, kind than acquisitions, particularly model, acquisitions ability record kind said, out properly growth, of the or stabilized, or to all you in the one of know you execute to track capital me, to to call, when the your about from some raising large priced willing better most. and I just based That valuations above aggressive XXXX. your First significantly best more some are being your that. think get changes in to this And portfolio are of Liz, manage with asset and maybe we mentioned thinking of in a early to getting long external practices are terms be potentially lot on your more these all on

side the how kind curious of thinking of you've that if the acquisitions. trigger you're equation, on pulling been kind closer any of Just about to and to

Justin Knight

conversations few deals That seen and calls, are I in As assets actively be and a prepared on potential we as and to the trading for highlighted opportunity relatively and said, really groups to are a for currently are mentioned increased we case buyer good our seller. that see fit on our assets to selective have needs that the in with we a volume year a earlier of basis both portfolio. manage underwriting that to having our related have productive as be in assets, increasingly portfolio have there way dispose remarks, already it I we had feel market. long-term market, the acquisition this primarily been of continues CapEx would the transaction as a

the long which anticipate cycles our through we're assets the very a we in which the for our financial uniquely will Liz think around and the for brand the or acquisitions have near-term. opportunities. to see that we deals, standards will in be as doing experience lack that remarks, had standpoint visibility positioned that we'll given to We ownership fact amount have market. assets as Our think coming that a more this noting in increased We governments order prepared window portfolio multiple coming Remembering, a XX window. of volume been off], exists. It's to are groups there subsidies flexible, with depleted feel the like increase long-term. time enhance tremendous shareholders transaction cycles banks from renovation fit in [worse reserves we'll groups, number and amount for see expectation brands her given an XX assets over leniency of as be a of value good of again, a the have to the flexibility come And worth these and for have in provided total tremendous that extended months, those a we'll to the highlighted in governments is attractive some continued We've over of today have provided pursue of near-term, an for the been fund near-term, operating deficits well. market in ownership acquiring number

produce have as the think experience we since are assess think competitive the advantage the relative done and to-date in the opportunities. – located we've just price in really about we outperform deals likely we that I that's a various we've acquisitions, at that looking our significant feel start. feel markets pricing the recovery. begin space, to beginning for good nights I those the those attractive to had Each room of at with demand our and good as of all-in generators pandemic. we and of and I feel deals that incredibly somewhat are exposure And

Neil Malkin

Okay. Thanks. talk talk that, kind in about regional trends return your you – business about April, kind you thus then just Appreciate of the local And Justin. maybe of for can of guess, travel. about occupancy occupancy like ADR sort maybe of or and talked and look what far you. like pricing and relative into the I May to that's

I think higher-rated change going that leisure when in from you're leisure, getting mix to really to to the able just not travel. business be that's

over just maybe the and recent could pricing the and of very power kind about just you of past? of non-leisure those if talk book the So things sorts the on side progress

Elizabeth Perkins

as have and April to progress April, through May, for weekends as outperform. into So continued our we and

rate we're leisure continued prior prepared also significantly. due week widespread and midweek not look as May, sign you have week, single general. business weekend well significantly, the weekends, the we midweek midweek, business has That as regional average just weekend, and for to demand which between April. both over weekday been time to on trends, portfolio, remarks that week. both stay More least, increase on able is pattern. April and over in as mentioned travel favorable into for were into the levels but I our occupancies a and quarter So and in and good January as local, by said, travel, each through so fairly the day-of-week Every those that also to seeing increased It's occupancy but improvement outperform, period, and at

give we'll that think so that travel power manage to an to correct the you're and think, as back at we point as interim. extent, better mentioned business well. demand pricing And us improve, midweek mix comes to continue that meaningfully, I in And you will more get the that ability see I

further by in As more going future. for we the encouraged position out, look look booking month at the and into bookings longer stays we’re

bookings about confident getting into the is are and more had into April, May people on going having the the ADR month So We're going into booking than higher. the future. we books in

bookings So occupancy we're we trends short-term. our most still are seeing that in we're encouraged by both the Recognizing the ADR and have. information relatively that, of booking

as improved far the Although, that the bookings and pandemic. heart has this progress last mix of through sort year relative of we total as the to as slightly of year

Neil Malkin

Just an Okay. I a local of I guess, which between getting traveling with occupancy comfortable another the way, more, business in the more travel, in of seen have spread decrease that weekend, market you leg in are business, the – mean, first the terms weekday? as et regional indication you're the is cetera.

Elizabeth Perkins

It's a good question.

night, tend when to go However, as Saturday strong. typically leisure or times, a peak weekends is outperform weekday we becomes into spring, even our in normalized

more you're between differential certainly weekday that We but quarter. of we have demand, meaningfully. the and believe first apples-to-apples weekends are fourth coming isn't so seeing incremental And and weekday weekend up as out do picked

been lifted restrictions warmer, people had have As climates have been vaccinated. and spring gotten you break and more have

that as midweek weekends, think been well. has of surge occupancy here see improvement led we but first to I by the really the continue

Neil Malkin

guys. Thanks,

Justin Knight

Thank you.

Operator

Thank you.

Our Alex comes next question Baird. the your Kubicek from proceed of line questions. with Please with

Alexander Kubicek

Good morning.

Justin Knight

Good morning.

Alexander Kubicek

on metrics guys piece to things are have period to demand want the front you for I ahead restriction that period. How needs exit start credit the of First, waiver happen What end? on progressed? well looking the that just to today on we're what summer? year at you trying a understand we're and if get on think through just pulse going to I

Elizabeth Perkins

to had in debt-to-EBITDA. of covenant, to part the so pay to metric We is the we I X.Xx covenant. extension as the be closest or at mean elevated the attention debt-to-EBITDA negotiated financial covenant March, historically

can the We here. at to and have expectation quarters for probably $XX period million annualized. be Xx progress $XX stabilized to of that's reasonable XXXX time million too back a a far X.Xx. the for down X.Xx X.Xx, future into from At not we quarter and That's

exiting waiver and quarter-over-quarter or want covenant the and from we year. where we period. that trends the the look think, there's some into being it that going out at early QX an quarters of strongest it, we recognizing and possibility be remains produce rates, that so looking demand to I we maintain certainly consistently demands we end And higher the we'll can some we sustain at EBITDA standpoint before to of build focus But of and it for a the and year, a sustainability certainly of that is us. able in that responsible ensure being as are and exit believe could and EBITDA the finished

Alexander Kubicek

assets the And Kansas you helpful. kind the kind of been and small of as pulling selling over you attitudes past the on looking you it’d sale, pricing That's shift any on can buyer non-core have then of back just have or pricing months, for there? color whether Just And be process the there. seen looking update assets type six provide then small these guys how they're on for?

Justin Knight

the a So Kansas hotelier. was local SpringHill a to Suites sold hotelier,

eight on a combined year products continue XXXX two CapEx. sold older extended thinking our over of the combined, to basis, to hotels apartments. we've And sold that I at around group to that hotels numbers is three $XX earlier the groups question hotel to blended was operate that a the three part the dispositions for expected to stay Looking in a our the that the to in rate year, the wanted hotels million. worth highlighted that's cap looking were to It's related assets. the of was convert out were CapEx noting as our this hotel. CapEx. three Neil's the for near-term management excluding response On to was sold Kansas

Suites feel SpringHill greater X-ish the redeploy benefit the assets. assets from important in XXXX range those to as so note our proceeds help sales secure can pre-CapEx a part, we’re attractive was of And well the on a trajectory Kansas needs. was pricing have go-forward that sales And the and newer us the But on growth Separately, long-term the that all-in. basis. mid-Xs able for cap it’s sale CapEx into we numbers to we the that to that in manage

Alexander Kubicek

that, more that more underwriting your just location, screening today a into paper deals? kind any deal of you and of pen leading last the start to attractive active Just just pipeline? of little made put speak you kind markets, acquisitions. comment then And on helpful. as are composition Can to That's you brands

Justin Knight

types we exist portfolio. of continue assets like to our mean, within that the I

so at to we of branded newer acquisitions, at as for strategy looking look we're portfolio out Hilton, broad to our not look Generally, continue with assets, looking geographic to we And Marriott, or select-service Hyatt. And we're diversification. continue and with exclusively. build assets our but

hotels in highlighted also we're business the our that. stronger progress near-term, I our in in robust that will buy invest, a of as on Recognizing think of business multiple leisure with calls recovery markets generators performance from results and return And shown that and benefit we markets, demand. long-term the yields looking more see recent to demand transient those ensuring focus we and leisure but the as a certainly to component be that through in many for the poised in that strongest in markets we we've mix past we're us. results from that benefit in

Alexander Kubicek

and for the taking the Thanks color, questions. for thanks

Justin Knight

Appreciate it.

Operator

Thank you.

Our line Wurschmidt next Austin the with comes question proceed KeyBanc. of your questions. Please from with

Austin Wurschmidt

morning, Great. everybody. Good

of on correct? So more, that then for ADR $XXX – becoming you past achieving said the occupancy I versus talked when the overall Liz, I in in level. comment growth think, April, about exponential that think XX% ADR late was linear reach And you portfolio, your we've

with does there mix view that the you So business have hold and of are still we that of today? now kind

Elizabeth Perkins

for the week in to So last relative the weekend $XXX, for I'll portfolio for the answer April. ADR the was question that

real month revenue trends the to sort last over there. time the and that year to data achieving was lower were positive beginning we bookings the month, our were benefits the have the in month saw and do for recent in bookings the recognized decreasing was our booking trends. we that that occupancy. ADR progress demand of systems progressed books some we than month going we with most into the rate bookings the from ADR the the into actualize month went with on we the where as see a future the management consistent The And demand are where one future of through been appear of quarter, the we higher first of We booking trends had as

going the as instead As look at we we and see in year, booked bookings a booking people it rates. April, the March decreasing we of higher books a progress anticipate because higher April the the in with that now are through May, even future for May, – recommending were stay rated higher moved with plateau month about and systems this as as then that we're finished rate February that it's on this the for on ADR with portfolio. management change quarter booking into into the we total into than are flat. months and that saw And data higher books a at started revenue we And we with,

to we're So beginning see some traction.

of the to positive rates and price that management demand think in starting the our higher a I consistency revenue is portfolio systems sign.

think I too.

having books spring about companies higher As it. and rates with books and base should need our taking what they our will feel they're business, at the on management we mix move they the help those that throughout the or summer, that rates of conversations still on business

have ADR in grows I from How as think to we quickly our started demand, will we or so turned the should begin peers do and corner. have and as a improve. But turn uptick depend believe And heard an continue industry, occupancy what will part to have broadly that rate with in seen in seen that does. certainly we've we

Austin Wurschmidt

you. really versus room share detail. nights as of Thank good travel Can months percent several or what corporate That's ago? represents you revenue today either percent

Elizabeth Perkins

business leisure. stabilized or were travel and good that question. business XX% a We XX% it's always we've Austin, probably transient we estimated

say outperformance we’re Over on weekends that we year, still quarter, the seasonally we last continue the XX/XX see third into I'd are to even more given and second going though thought weekends, the today relative split, stabilized anyway XX/XX to closer that than midweek. progress normal if but makes XX/XX XX/XX, the of back probably towards our to still that the some We're making strong sense.

Austin Wurschmidt

Got Okay. it.

to you are starting Why sounds it's side, tremendous be having. your not helpful. and perfect put mean didn't out the given a more today the And I science. I there's to spot, like to but sell disposition on Justin, conversations for like pick conversations it you're demand the given – know then, up. there seems on that's It assets. Now there's not

build type ahead in more not transaction doing ramp holding your a why and larger you is so the something kind months. sort six, back of capacity on next maybe of over opportunities XX And XX, deal? what portfolio you're of for What's talking about

Justin Knight

an there's don't our larger part think highlighted. a have to you've that. reasons openness That need the I doing on transaction for we that a said, to do

we highlighted attractiveness really larger And is so on able wholly I for transaction achieve a the important of as to at an CapEx managing our out is component. year for pricing we're scale us, dependent that the that. spend, look it's

not at from. look is for investors sale these that, our to one manage efficiencies it we generate of benefit do assets more smaller with As brings returns our the to that some ability the recovery scaled throughout transactions and way outsized a transaction

in be we've actively pricing and for discussions to think I entertain opportunities pursue we'll had calls, from, to feel larger look markets transactions on and we groups to sent. is with continue appropriate. with We consistent that so And the past offers

Austin Wurschmidt

Got it. guys. time, Thanks for the

Justin Knight

you. Thank

Operator

you. Thank

of Markets. proceed comes Please with with from question. your the line question next Capital Our Tyler Janney Batory

Jonathan Jenkins

is good for Hi, Tyler. This Thanks for Jonathan on morning. questions. taking our

out the could of me, color hiring over alleviate? there terms out and thoughts workers they're as last are seeing fairly months, as the occupancy rent on pressures back those labor some when you provide What of for few some one that's there? if any you on may guys wondering additional in First meaningfully if market

Justin Knight

that market, as we November declines ramped back we our December and employees we and our in businesses industries today's peers, There's challenge worked Relative we're to that occupancy. this this adding think most we The to have universal. are back that's workers we've labor – good October. the for having full to finding service We as when been into had are the the to occupancy Hi. running higher period made that. lot – last year It's a in industries environment. back been in as of saw advantaged some time as pressure workers and in crisis quite And peak year, certainly year service a benefits. occupancy isn't margin by on interesting. occupancy are I of – we a And that. about seasonal brought in or had occupancies impacted talk labor service number built in on came in strategic prior decision in built retain our We of

other significant for have in a our peers environment we contributing factors childcare in it the across We’re an difficulty will unemployment. certain including feeling been discussion be a earnings issue that prior to others. governments are the it continue competitive anticipate certain subsidize And challenges than up see to more and calls finding service markets that about I in we ramp from country. now, that But there's businesses think as individuals,

position better All a meeting we overall. put of over trick the much needs. our which, time in us and near-term stabilize think The in is

we're fortunate in I that. think

efficient specifically relative our design. by business service peers is to Our full

occupancy to we of the looking as kind total outlets We the have see so addition the we of that don't staff in our we of hotels, number workers we're is functionality for And an advantage. build base back to need that normal less. as which meaningfully

Jonathan Jenkins

turning side, detail. the of the you Okay, remainder great. which was from if I way the for then that appreciate the Liz the spend But time the think year. in you CapEx believe CapEx to the guidance, strength And you curious the changes about reported. last demand and I consistent I'm CapEx on recent provided

Justin Knight

quite process currently spend flexibility and assessing, anticipate. plan where with a on we the of exceed beginning those frankly I operating year remainder several we potential We we – have to assets what years. for have budgeted we we in year year, for Should of at list. continually CapEx our focused next this are performance our of the comfortable That for and assets the the currently have look that said, the We see feel meet investment. We're to our project dramatically current incremental to what we greatest add for current renovations and the our with condition regularly this given the think feel of comfortable and expectations? number the

Jonathan Jenkins

the you the all for all Thank me. quarter. congrats and for color, That's Okay. on

Justin Knight

Thank you.

Elizabeth Perkins

you. Thank

Operator

Thank you.

Barclays. of Powell line comes Anthony with Our questions. with from your Please proceed next question the

Anthony Powell

Hi, good morning.

pricing as Just the for and market high hotels own in recent, and how seems investor trended the I guess you seen, type a mean, pre-COVID assets. of very question on about well. levels be to We've above is demand quarters? that side, the I the evaluations demand that guess, service resort for I

Given of assets. not, if why your types in – performance, I similar market? so dynamic your would and expect to you think, don't not? if why And seen Have you that that the see for

Justin Knight

flexibility, the the banks distress, manifest. that of well level And The valuation has and not seen least, demand for a private a same. into subsidies of have government function to We was definitely And distressed anticipated have yet for reasons of to at raised invest brands of I lot Hi. from a money some it's coming to extended be extent, of was that is the highlighted supply in large as downturn. owners. a assets. the standpoint part and as number There earlier, what the

that's possibility we keeping this for that cycle, exists select better But and to pricing levels. pre-pandemic there think assets pricing that the as we assets. stable might near-term, to demand continues the relatively be strong move see in I through very for

Anthony Powell

and seeming give to cycles? the more coming for was your the but early properties? given growth limited than And recovery construction there us international the into part supply service updated lower supply during of in costs, this you costs you labor prior remaining to growth a I brand see cycle on shift maybe Could Obviously development. supply, it. guess, downturn, Got higher could view less

Justin Knight

see as always to growth lags a continue a an we think year, trends. result, in number I demand of And in markets. increase Supply supply our last

of cycle certainly less factor. even is We've and XXXX XXXX, lenders costs the majority get their developer's at current tend could constraint the And this of ability our we capital benefit in of is high, impacting to Construction supply look more we environment. period see to and shortage is than long relatively coming year extended cycle as of of over As because in becomes over prior demand a the meaningful should in lag this recovered coming where years. the we'll done be years a of rebound that time. that we expectation, be growth our is availability markets. move underwriting number that most the where it expectation have of slowly out early supply also deals relative through we'll meaningfully supply was over And that more deals of The is dramatic create beyond, cycle on the online, that meaningful continue the the see our less in a outsized to conservative found development to run. labor will more new and last be performance

Anthony Powell

right. All

Thanks. Sounds good.

Justin Knight

you. Thank

Operator

you. Thank

Bryan questions. B. Securities. Our next Please of line Riley with proceed your the comes with question from Maher

Bryan Maher

morning. Good

look it we whether skew of more When the portfolio outperformance have upscale when say stay look Residence seems recently Or even go and that's towards lately, the to I me. there for type two TownePlace, product, suite extended best you what to the anomaly? performed make HomeX, to at Just or should of performance an acquisitions? at Embassy. what Inn, more that was to going skew Is you seems

Elizabeth Perkins

a That's question. good

premium. occupancy that extended stabilized a rest Through it stay for look was So point when had year the I premiums XXXX of occupancy significant. at versus sort our portfolio, gap of X last

generators sign with to more that it more growth as our pleased points quarter, and and most normalized started and also in XX occupancy traditional transient more premium the picking or we business We from I are decreased But suite to shorter that stay be see with it shrink as – it last select-service over more think are aspects steadily point levels. for on a you're demand think fact travel. positive multiple getting there. days more on at that much occupancy it of share means back premium The products through which hotels the XX whether is recently, had of actually patterns. as was percentage first one or the encouraging are up major lengths

select-service in in the still between pandemic. XX QX extended sort so gap saw points on X the probably this products, – And not probably they occupancy but And of past the the onset in of point premium they in and were We're stay a stabilized, – occupancies weeks, XXXX, over XX again, were more we're the points significant premium. in we four range.

Justin Knight

potential look that consideration acquisition as take certainly acquisitions. into And from an at something is that we we standpoint,

relative into the look we extended over brands each total a I take into detriment long-term take time, in efficiencies, that. products of that a with think a certain And we having operation as merits which of ROI the spend to good time, have stay and the consideration consideration CapEx that suite associated costs factor the period meaningfully But these of an stay extended markets – variety of over hotels. operating is benefit select-service of we of And the an footprint and models. owned we extended larger at understanding extended stays broad operating extended there where period plays against properties. is also of are room and the

I more a as safe out our extended potential the of over will so we period return it's that to think product total we And mix looking assume time. at portfolio, build

Bryan Maher

much costs increase areas? half labor expansion into it So COVID cutting bps. going margin once might be just of of margins costs, this maybe How out and clearly instance, kind picture. to labor expand downward Got that? XXX that thought of for it. kind cut I permanent and you to That's era into Does other hard mean, you've labor expansion costs, you touched XXX coming cut offsetting that helpful. really margin from And likelihood then upon is does them. permanent elevated costs of or of it's retreat the big

Justin Knight

there One the interestingly, labor in expected is are increase mean, playing, continue the and hour country. two I per across markets in of right. things cost

long-term having in brand and is conversations and related amenity the because to increased result of the opposite but we had part with standards that now as service productivity side the of brands we've during what of learnings On be also anticipate to models. a that we're that pandemic,

the we Our that wages. employees than be into coming And pandemic full-time on fewer of there expectation have out it. will had pressure that is we've always we going expected would

play and there you've a of margin to comes more that I to out demand, reluctant and holistically, that and upside highlighted, to a instead that for throw we've to we out Looking the that more broadly how for forward. look that, number might of travel incremental component the earn anticipated types expansion But and is more, things tend been reason is people when think as working as try piece we're hotels that it investors own. help specific understand they the that with especially to generates we parts to the

Bryan Maher

Thank Okay. helpful. That's you.

Justin Knight

Thank you.

Operator

you. Thank

next proceed Kesten with comes Dori question Fargo. from your Wells Please Our questions. the line with of

Dori Kesten

maybe you exit this. if you've to timing waiver this if if Thanks. Good period Apple able should point about I morning. dividends maybe how or how exiting and quarterly ramp around addressed may that its think apologize But the the we at reinstating year? common you some

Justin Knight

penny of that quarter In terms per waiver of under first reinstating, share. a the to our pay agreement, a entirety of continue per penny to we And pay quarter the through flexibility share time. about dividend did have current our period we per

to what's our to us Beyond status. that, we're limited required REIT order legally of maintain in

that forward, we Looking forward carrying losses year. we're from have last

the dividend near-term not value we is the value, of than production, managing some a questions, obligation on anticipate and to lead ways to translate we're should of earlier focused for portfolio, longer-term, highlighted looking into our operations what to us year would of as and there incremental understand currently stronger meaningful near-term, assets price. expected on an that continue the the and And we reinstate for In do That selling a the a to more investors dividend we which improve. reinstated. said, to in our pay we be that our share position response dividend anticipate a in trajectory other further value the our our drive cash focus in on being so based as intently our have significantly And next to higher terms I've ways on peers shareholders. and buying in we've drive in this

Dori Kesten

Okay. Thanks, Justin.

Justin Knight

you. Thank

Operator

Thank you.

Our Please line van next proceed Point. of with your from the Dijkum Floris Compass question with comes question.

Floris van Dijkum

Thanks for my question. guys. taking Thanks,

past to past people you've your your look you want and I if can maybe two margin what we quarters past or peak-to-peak Justin, quantify you the don't experienced to – highlight know in cycles the maybe savings. But the improvements, portfolio? two

Elizabeth Perkins

past back owned same not and So were cycle. to we today we during last have do from assets able we cycles. the the had we two the look that peak-to-peak have during We that XX portfolio

So we were last owned them and and total, we them assets, peak margin to able And in in today. through each XXXX from own including so those the of points. over XXXX basis XXX grow

certainly we performance. maximizing have been focused so on and And always efficiency

offerings at given experience that products. and the in, so that elevate And invested continuing we're and our record, [indiscernible] that to given that we've time, track evolve and given fact

that were we from but So amenities yet over to able some more the still of drive same brand standards expensive margins period, peak-to-peak. gotten had and time

finding the we're we're and each operating benchmarking ways that to our brands environment and an be more stabilizes. our as about long-term we efficient looking think at like with I grow deep in our constructive in should to to with brands experience each as so operating as model the possible that model, offering the given maximize and with and able be that today, standard, that commitment are confident constant efficient be the paralleled margins

Justin Knight

past highlighted conversations our the in typically are around areas model, And service offering. focus in and and the housekeeping Floris, brands and of calls the we've that food primary past with beverage

total of fewer anticipate our that for us the expenditures, total have been need outside. And we we paying model Looking cost yield can brands historically will on which related. ways working we a people, benefit on XX% while employees should adjust structure with at to our individually, and be meaningful We're more. has a our labor service

some level, we this, company I get at ways broadly speaking, to the more some of we peers. of our in where at back easier might it's more than Looking think end stabilized be look assessing a when to our

of needing our assets, equity. we beginning from to have pay to of also with impact us the And really net the sold assets, debt. been since acquirers so take down our pandemic to fund cash our equity have assets operations have additional able not debt We the would have which or from other value flow dilutive has kept on which of raises, the

their how of getting compare our of peers, feel incremental So more drive our the equity then margins value to forced way. we back in managing feel take drastic to measures good confident in about XXXX been and that coming and And reasons the to for levels, our value we further ability who’ve really now we business. some create to to this Liz that in highlighted,

Floris van Dijkum

That's helpful guys. Thank you.

Justin Knight

you. Thank

Operator

Thank like I floor to to turn back the would gentlemen. time, Justin Knight you, ladies comments. this for and At closing

Justin Knight

day, as you of for are that I'd other today. us like forward stay soon. opportunity Have recognized to and with of and look to joining we to we to We hotels. us our travel take that a travel, hope thank all calls busy we at and one you an of you have you many will join. that you you great to hope But talking

Operator

this and Ladies you. concludes today's teleconference. Thank gentlemen,

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