RLJ Lodging Trust(US:RLJ)2023-02-28 19:18Financial Data and Key Metrics Changes - In Q4 2022, the company achieved hotel EBITDA of $87.6 million, representing 87% of 2019 levels, with hotel EBITDA margins at 29%, only 229 basis points below the comparable quarter of 2019 [18][20] - For the full year 2022, RevPAR was $129.61, representing 89% of 2019 levels, and hotel EBITDA was $370 million, approximately 83% of 2019 levels [19] - January 2023 RevPAR increased by approximately 44% from 2022, with occupancy nearly at 60% and ADR around $188 [19] Business Line Data and Key Metrics Changes - The company reported that urban hotels achieved 97% of 2019 RevPAR levels, driven by ADR that reached 107% [9] - Weekend ADR for the entire portfolio achieved 116% of 2019 levels, improving 200 basis points from Q3 [10] - Group ADR achieved 105% of 2019 levels for the quarter, with strong production from small groups contributing to the overall group mix [114] Market Data and Key Metrics Changes - Urban leisure trends were robust, with weekend urban RevPAR achieving 111% of 2019 levels, led by ADR that reached 118% [10] - The company noted that corporate travel achieved 70% of 2019 BT revenues in Q4, the highest since the pandemic, with an increase of 300 basis points from the prior quarter [114] - The company expects inbound international travel to improve throughout the year, benefiting urban markets [26] Company Strategy and Development Direction - The company plans to continue capitalizing on urban market recovery, which is expected to outperform the industry by 300 to 400 basis points in 2023 [36] - The company is focused on internal growth through the relaunch of three conversions and building a pipeline of off-market acquisition opportunities [11][13] - The company aims to maintain a strong balance sheet to pursue multiple channels of growth while remaining disciplined in the current uncertain environment [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth profile supported by favorable market conditions and the company's unique growth catalysts [27] - The company anticipates that RevPAR and hotel EBITDA will increase over 2022 throughout the year, achieving performance ahead of the industry [27] - Management acknowledged macroeconomic uncertainty but remains optimistic about the acceleration of business travel and urban leisure demand [14] Other Important Information - The company ended the year with approximately $481 million of unrestricted cash and $600 million of availability on its corporate revolver [32] - The board authorized a 60% increase in the quarterly dividend to $0.08 per share, reflecting a commitment to enhancing shareholder returns [122] Q&A Session All Questions and Answers Question: What are the expectations for urban market performance in 2023? - The company expects urban markets to outperform the industry by 300 to 400 basis points in 2023, with year-over-year growth anticipated each quarter [36] Question: How does the company view its operating model advantages? - The company highlighted its smaller footprints and lean operating model, which allows for lower labor costs compared to full-service hotels [37] Question: What is the outlook for RevPAR and hotel EBITDA in the first quarter? - The company expects comparable RevPAR between $133 and $137 and hotel EBITDA between $85 million and $91 million for Q1 [45] Question: How is the company managing its balance sheet and liquidity? - The company maintains significant flexibility with a liquidity position of $1.1 billion, allowing for opportunistic share repurchases and acquisitions [65] Question: What is the company's strategy regarding conversions and acquisitions? - The company plans to continue pursuing conversions and acquisitions, leveraging its strong balance sheet to access attractive deals as the market reopens [62][65]