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] - 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] Business Line Data and Key Metrics Changes - Comparable hotel EBITDA margin for Q3 declined by 50 basis points year-over-year to 23.9%, primarily due to increased expenses in wages and benefits [5][23] - Transient revenue grew by 2%, with double-digit growth at resort properties, particularly in Maui, San Francisco, New York, and Miami [5][20] - F&B revenue was flat, with outlet revenue growth offset by declines in banquet and catering revenue [18] Market Data and Key Metrics Changes - Maui experienced a 20% RevPAR growth driven by increased occupancy and strong out-of-room spending [6] - Business transient revenue was down 2% in Q3, primarily due to a reduction in government room nights [21] - Total group revenue pace for 2026 is up 13% for Maui, indicating continued recovery momentum [6][41] 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 [30][32] - A second agreement with Marriott for transformational renovations at four properties is expected to enhance long-term performance [11] - The company anticipates continued outperformance in upper-upscale and luxury hotels due to its diversified portfolio and ongoing reinvestment [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of leisure travel and the affluent consumer's prioritization of premium experiences [47] - 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 [16][24] - Management noted that the bifurcation of the consumer market is likely to benefit the company due to its higher-end properties [17] Other Important Information - The company collected $5 million in business interruption proceeds for Hurricanes Helene and Milton, totaling $24 million for the year [9] - Capital expenditure guidance for 2025 is set at $605-$640 million, including significant investments for redevelopment and repositioning projects [13] - The company has a strong balance sheet with $2.2 billion in total available liquidity and a leverage ratio of 2.8 times [26] Q&A Session Summary Question: Can we expect more asset trading in the market based on current observations? - Management indicated they will be opportunistic with capital allocation regarding dispositions and acquisitions, highlighting successful asset sales this year [30] 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 provide clear returns [35] Question: What is the outlook for group bookings in 2026? - Group revenue pace for 2026 is up 5%, with strong performance expected in key markets like San Francisco and Washington, D.C. [46] Question: What is driving the growth in out-of-room spending? - Increased spending on amenities such as spa and golf, along with successful repositioning of outlets, is driving growth in out-of-room spending [50] Question: What are the expectations for wage and benefits increases in 2026? - Wage rate growth is expected to be lower in 2026, with New York being the only major market with upcoming labor contract negotiations [57]