RLJ Lodging Trust(US:RLJ)2021-11-05 20:33Financial Data and Key Metrics Changes - The company reported a third quarter portfolio occupancy of 63.8%, a 310 basis point increase from the second quarter, achieving 79% of 2019 levels [9][28] - Average Daily Rate (ADR) reached $160, representing nearly 90% of 2019 levels, with over 25% of the portfolio exceeding 2019 ADR [10][29] - Adjusted EBITDA for the third quarter was $60.1 million, an increase of approximately 38% from the second quarter [33] Business Line Data and Key Metrics Changes - Leisure demand drove weekend occupancy to 76.8%, a 280 basis point increase over the prior quarter, with weekend ADR improving by nearly 12% [11] - Business transient revenues improved by 44% since the last quarter, with weekday occupancy growing to 58.5% [12] - Group revenues increased by 54% since the second quarter, with room nights improving by 34% [13] Market Data and Key Metrics Changes - The company achieved a market share gain of 340 basis points in the third quarter, indicating competitive strength [14] - Urban hotels achieved 76% of 2019 occupancy, resulting in a 400 basis point improvement over the second quarter [12] - The company noted strong performance in urban markets, with ADR growth of nearly 70% since the beginning of the year [97] Company Strategy and Development Direction - The company is focused on recycling capital from noncore asset sales into high-quality acquisitions, with plans to accretively recycle over $200 million into three acquisitions [15][19] - The company aims to unlock $23 million to $28 million in incremental EBITDA from internal growth catalysts [20][25] - The strategy includes maintaining a lean operating model and enhancing the balance sheet to support growth initiatives [21][40] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of lodging fundamentals, despite challenges from the Delta variant [6] - The company anticipates continued improvement in leisure and group bookings, with expectations for a meaningful step forward in 2022 [22][24] - Concerns around inflation were acknowledged, but management remains positive about the overall economic backdrop [22] Other Important Information - The company raised $1 billion through high-yield bond offerings to enhance liquidity and reduce the cost of capital [36] - The company ended the quarter with approximately $625 million of unrestricted cash and no debt maturities until 2023 [38] - The company is on track to generate positive operating cash flow for the full year 2021 [39] Q&A Session Summary Question: What are the conditions to closing and getting that deal done? - The deal is subject to normal customary closing conditions, with a sizable deposit from the buyer [44] Question: Can you provide details on customer mix across the portfolio in October? - Leisure demand remained strong, with improvements in group and business transient segments noted [46] Question: Can you compare October ADR and RevPAR versus 2019? - October ADR was down about 14% and occupancy was down roughly 25% compared to 2019 [51] Question: What is the company's exposure to international demand? - Historically, international demand was sub 3% across the portfolio, higher in specific markets like San Francisco and New York [68] Question: How close is the company to normalized staffing levels? - Overall staffing is at about 55% of 2019 levels, with leisure-focused hotels at approximately 75% [89] Question: What are the expectations for holiday bookings in cold weather markets? - There is a surge in bookings for Thanksgiving and December holidays, with strong demand noted in urban markets [92][96]