Financial Data and Key Metrics Changes - Adjusted EBITDAre for Q3 2025 was $319 million, a decrease of 3.3% year-over-year, while adjusted FFO per share was $0.35, down 2.8% compared to Q3 2024 [4][5] - Year-to-date, Adjusted EBITDAre and adjusted FFO per share were up 2.2% and 60 basis points, respectively, compared to 2024 [4] - Comparable hotel total RevPAR improved by 80 basis points compared to Q3 2024, driven by better-than-expected transient demand and higher rates [5][6] Business Line Data and Key Metrics Changes - Transient revenue grew by 2%, with double-digit growth at resort properties, particularly in Maui, San Francisco, New York, and Miami [6][7] - Group room revenue decreased approximately 5% year-over-year due to renovation disruptions and the Jewish holiday calendar shift, although definite group room nights on the books increased to 4 million for 2025 [7][22] - F&B revenue was flat, with outlet revenue growing 6% but banquet and catering revenue declining due to lower group business volume [18][19] Market Data and Key Metrics Changes - Maui experienced a 20% RevPAR growth driven by increased occupancy and strong out-of-room spending [7] - San Francisco's total group revenue pace for 2026 is up over 20%, indicating a strong recovery [56] - The overall transient revenue for resorts was up approximately 2%, with significant growth in luxury leisure travel [21] Company Strategy and Development Direction - The company is focusing on capital allocation decisions that enhance long-term shareholder value, including transformational renovations and strategic asset sales [10][11] - A second agreement with Marriott for transformational renovations at four properties is expected to enhance long-term performance and market competitiveness [11] - The company aims to leverage its investment-grade balance sheet and diversified portfolio to outperform in the current environment [16][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued recovery of leisure travel and the performance of upper-upscale and luxury hotels [16] - The company raised its full-year 2025 guidance for comparable hotel RevPAR and total RevPAR to approximately 3% and 3.4%, respectively, reflecting strong performance year-to-date [15][24] - Management noted that the bifurcation of consumer spending is likely to benefit the company due to its focus on higher-end properties [16] Other Important Information - The company collected $5 million in business interruption proceeds for Hurricanes Helene and Milton, bringing the total for the year to $24 million [9] - Capital expenditure guidance for 2025 is set at $605 million to $640 million, including significant investments for redevelopment and repositioning projects [13][26] - The company has a strong liquidity position with $2.2 billion in total available liquidity and a leverage ratio of 2.8 times [27] Q&A Session Summary Question: Can we expect more asset trading in the market based on current performance? - Management indicated they will be opportunistic with capital allocation regarding dispositions and acquisitions, highlighting successful asset sales this year [33][34] Question: How are you selecting hotels and markets for investment? - The company screens assets to determine where to invest capital, focusing on transformational renovations that reposition properties for better performance [42][44] Question: What is the outlook for group booking pace in 2026? - Group revenue pace for 2026 is up 13% compared to last year, with strong bookings already in place [48] Question: How is the company managing wage and benefits increases? - Wage rate growth is expected to be around 6% for 2025, with a potential decrease in growth for 2026 [82] Question: What are the expectations for growth potential in 2026 without major storms? - Management expressed optimism about performance in 2026, particularly for properties like The Don CeSar and the Ritz Naples, which are expected to benefit from strong consumer demand [90]

Financial Data and Key Metrics Changes - The company achieved RevPAR growth of 1.6% in Q1 2025, driven by a 2.1% increase in ADR, slightly offset by a 0.5% decline in occupancy [5][17] - First quarter occupancy was 69.1%, average daily rate was $204.31, and RevPAR was $141.23 [17] - Total revenue growth was 1.2%, benefiting from a 3.8% increase in out-of-room spend [18][20] - Adjusted EBITDA for Q1 was $77.6 million, and adjusted FFO per diluted share was $0.31 [20][22] Business Line Data and Key Metrics Changes - Group segment was the best performing, with revenue growth of 10% driven by strong citywide events [8][18] - Urban hotels achieved RevPAR growth of 3.6%, with weekday urban RevPAR growing by 4.9% [7][8] - The leisure segment saw a 2% increase in revenues, with urban leisure outperforming at 3% growth [9] Market Data and Key Metrics Changes - Strong RevPAR growth was noted in urban markets such as San Jose (14.1%), Houston CBD (9.9%), Philadelphia (26.4%), Pittsburgh (12.6%), and Louisville (10.3%) [18] - International demand remains soft, representing less than 3% of revenues, primarily in markets like New York and South Florida [13] Company Strategy and Development Direction - The company is focused on capital recycling and strengthening its balance sheet, including opportunistic asset sales and share repurchases [6][10] - The company is optimistic about the long-term outlook for lodging fundamentals, supported by consumer preferences for experiences and a favorable operating environment for urban markets [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that fundamentals have moderated and uncertainty persists due to macroeconomic risks, leading to an adjustment in full-year guidance [11][12] - The company expects RevPAR growth for 2025 to range between negative 1% and positive 1% [25] - The booking window has shortened, with a noted increase in cancellations primarily in the government segment [47][48] Other Important Information - The company ended Q1 with over $800 million in liquidity and $2.2 billion in debt, maintaining a strong balance sheet [22] - The company has a new $250 million share repurchase program approved by the Board [22] Q&A Session Summary Question: Can you provide insights on April's performance and how it compared to expectations? - Management indicated that April was expected to be slightly positive but came in lower than anticipated due to elongated spring break and softening government demand [30][31] Question: What is the current state of the balance sheet and capital markets? - The bank group market remains strong, with capacity for top-quality sponsors, while high-yield issuance has seen some widening in spreads [34][35] Question: What are the trends in the group segment and future bookings? - The group segment is performing well, with a healthy booking pace for the year, although cancellations were noted primarily in the government sector [78] Question: How is the company addressing the uncertainty in the transaction market? - The company is taking an opportunistic approach to asset sales, with one additional asset currently under consideration [92]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported net income of $15.6 million, adjusted EBITDAre of $72.9 million, and adjusted FFO per share of $0.51, reflecting nearly 12% growth in adjusted EBITDAre and nearly 16% growth in adjusted FFO per share compared to Q1 2024 [5][6][30] - RevPAR grew by 6.3% year-over-year, with same property RevPAR for the 31 hotel portfolio at $188.73, occupancy increasing by 80 basis points, and ADR increasing by 3.6% [5][17] Business Line Data and Key Metrics Changes - The Grand Hyatt Scottsdale's RevPAR grew by approximately 60% in Q1 2025 compared to the same quarter last year, driven by the completion of its transformative renovation [9][22] - One-third of the company's assets achieved double-digit percentage RevPAR growth, while several others experienced high single-digit percentage growth [6][17] Market Data and Key Metrics Changes - Hotels in Washington DC and New Orleans benefited from significant events, such as the presidential inauguration and the Super Bowl, contributing positively to RevPAR [6] - The Houston market experienced softness due to winter storms impacting travel, leading to a 2.1% increase in January RevPAR but a decline in occupancy [18] Company Strategy and Development Direction - The company completed two significant transactions, acquiring land in Santa Clara for $25 million and selling Fairmont Dallas for $111 million, reflecting prudent capital allocation [10][12] - The company plans to reduce capital expenditures for 2025 to between $75 million and $85 million, a reduction of $25 million compared to previous guidance, in response to macroeconomic uncertainties [14][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the portfolio's resilience despite macroeconomic uncertainties, noting that all high-quality branded hotels cater to more resilient customers [15][30] - The company expects RevPAR growth to be driven more by occupancy than rate, with a forecasted full-year RevPAR growth of approximately 4.5% [30][31] Other Important Information - The company increased its quarterly dividend by 17% and repurchased 2.7% of its outstanding shares during Q1 2025 [16][29] - The company has a strong balance sheet with a leverage ratio of 5.4 times trailing twelve months net debt to EBITDA, and current liquidity of approximately $75 million [28][29] Q&A Session Summary Question: Have group booking trends evolved in response to the current uncertainty? - Management noted that group booking activity remains healthy with no uptick in cancellations or attrition, indicating a positive outlook for group business [40][41] Question: Have you seen any meaningful impact from lower international inbound travel? - Management indicated limited impact from lower international visitation, as the portfolio is not heavily dependent on international travel [42][43] Question: Can you provide background on the Santa Clara acquisition? - The acquisition was a unique opportunity from the city of Santa Clara, aimed at eliminating future rent escalation risks and increasing asset value [46][50] Question: What is the plan for deferred CapEx projects? - Management stated that they will continually evaluate deferred projects and may consider executing them in 2026, depending on macroeconomic conditions and tariff impacts [52][70] Question: What are the trends in leisure business? - Management observed varied performance in leisure business across properties, with a slight decline expected in leisure RevPAR for the year [57][62]