Some hotel rooms to reopen at former Radisson as apartment conversion begins

Keeping the hotel rooms is a 'trial balloon' for development team......»»

Category: topSource: bizjournalsJan 25th, 2023

China-Controlled Condo Conversion At NYC"s Waldorf Astoria Faces Mounting Problems

China-Controlled Condo Conversion At NYC's Waldorf Astoria Faces Mounting Problems The Waldorf Astoria is one of the most historic hotels in the US. It's history includes a stretch of ownership by President Donald Trump (long before the start of his political career) and more recently, it became emblematic of the impact of foreign money on American real estate when Chinese insurer Anbang bought the property in one of the most richly valued American commercial real-estate deals in recent memory (the company bought the property for nearly $2 billion back in 2015). Now, WSJ reports that the Chinese developer's attempts to turn the property around by converting it into luxury condos has hit a wall, the latest indication that the problems facing Chinese developers aren't limited solely to the domestic market. Just last week, the American CEO/frontman for the project abruptly quit, leaving the conversion - which is already two years behind schedule - to flounder. According to the report, the Chinese company that's now in control of the Waldorf (having taken over after Anbang's founder was imprisoned for nearly two decades in China a few years ago during an anti-corruption crackdown/political purge) is aiming to finish the conversion before the end of next year, although they acknowledged that work may continue into 2024. Costs now are expected to run to more than $2 billion, company insiders told WSJ. That means the total acquisition and conversion costs could potentially exceed $4 billion if cost overruns rear their ugly head.   But even if they don't, the conversion of the Waldorf is already expected to be one of the largest, most intricate and most expensive condo conversions and hotel rebuilds ever undertaken. On top of the run-of-the-mill issues pertaining to the supply-chain crunch, high materials costs and general permitting insanity, the conversion of the Waldorf has faced other issues unique to it: demolishing rooms in the century-old hotel has been a difficult process, and the fact that it's a designated landmark has led to other complications. As if all these issues weren't enough, the Chinese state-controlled company running the conversion opened a sales office to market the converted condos just before the pandemic hit and sent the real-estate market in NYC into a tailspin (although real-estate prices have rebounded substantially since). One luxury real-estate agent told WSJ that no sales have been reported for any of the properties soon-to-be-completed units. On the hotel side, when the property does reopen, it will feature 375 guest rooms and 375 residences. Prices are expected to start at $1.8 million for a studio apartment, before soaring to tens of millions of dollars for a penthouse. Residents will have separate entrances and amenities from hotel guests, including a 25-meter Starlight Pool overlooking Park Avenue. While a new sales incentive for brokers allowing them to collect their commission once a contract is sign has led to a frenzy of traffic, Donna Olshan, a luxury real-estate agent whose firm publishes a weekly report on the state of the luxury real-estate market in NYC, said the uncertainty in the global economy was likely giving many buyers second thoughts. "Now we don’t just have Covid, which people have gotten used to, we have war. Inflation. Rising interest rates. And China is all upside down," Olshan said. "When you put that cocktail together, that can be daunting for a developer." Tyler Durden Tue, 05/03/2022 - 21:05.....»»

Category: blogSource: zerohedgeMay 3rd, 2022

Golden Entertainment, Inc. (NASDAQ:GDEN) Q4 2023 Earnings Call Transcript

Golden Entertainment, Inc. (NASDAQ:GDEN) Q4 2023 Earnings Call Transcript February 29, 2024 Golden Entertainment, Inc. misses on earnings expectations. Reported EPS is $0.18 EPS, expectations were $0.25. Golden Entertainment, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good afternoon, […] Golden Entertainment, Inc. (NASDAQ:GDEN) Q4 2023 Earnings Call Transcript February 29, 2024 Golden Entertainment, Inc. misses on earnings expectations. Reported EPS is $0.18 EPS, expectations were $0.25. Golden Entertainment, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good afternoon, ladies and gentlemen. Thank you for standing by, and welcome to the Golden Entertainment, Inc. 2023 Fourth Quarter Results Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please note that today’s call is being recorded today, February 29, 2024. I would now like to turn the call over to Mr. Joe Jaffoni, Investor Relations. Please go ahead, sir. Joe Jaffoni: Thank you very much, operator, and good afternoon, everyone. On the call today is Blake Sartini, the company’s Founder, Chairman and Chief Executive Officer; and Charles Protell, the company’s President and Chief Financial Officer. On today’s call, we will make forward-looking statements under the Safe Harbor provision of the federal securities laws. Actual results may differ materially from those contemplated in these statements. Additional information concerning factors that could cause actual results to materially differ from these forward-looking statements is contained in today’s press release and our filings with the SEC. Except as required by law, we undertake no obligation to update these statements as a result of new information or otherwise. During today’s call, we will also discuss non-GAAP financial measures in talking about our performance. You can find the reconciliation of GAAP financial measures in our press release, which is available on our website. We’ll start the call with Charles reviewing details of the quarter and a business update. Following that, Blake and Charles will take your questions. With that, it’s my pleasure to turn the call over to Charles Protell. Charles, please go ahead. Charles Protell: Thanks, Joe. The fourth quarter concluded a transformative year for Golden Entertainment. During the year, we streamlined the portfolio by divesting noncore businesses at attractive multiples, reduce leverage to favorably refinance our credit facilities and return capital to shareholders through a special dividend and opportunistic share repurchases. To begin 2024, we completed the sale of our Nevada distributed business in January and established a quarterly dividend to initiate regular returns of capital to shareholders. In the fourth quarter, our operations generated revenue of $231 million and EBITDA of $48.8 million, bringing our total annual revenue to $1.1 billion and annual EBITDA to $222.5 million. Our fourth quarter excludes the operations of the Rocky Gap Casino Resort and the Montana distributed operations that we sold in the third quarter, which created the majority of our reported declines in consolidated revenue and EBITDA. Adjusting for these sales, revenue was down 1.6% and EBITDA was down 11% in the fourth quarter, with margins impacted by increases in labor and other costs over last year. Moving to the results of our continuing operations. For the quarter, revenue at our Nevada Casino Resorts was up slightly to last year, while EBITDA declined 8.8%. Unfortunately, we did not see any benefit from the Formula 1’s initial race in Las Vegas with distressed November EBITDA down about $800,000 year-over-year. Despite the disappointing F1 experience for us, STRAT occupancy in Q4 was 79%, up 2% over last year, with the weekends full and the midweek occupancy improving, but still lower compared to 2019. We are still missing 125,000 room nights at the STRAT when compared to 2019, which we see gradually returning as we complete renovations and add amenities to the property. In October, we completed the renovation of STRAT’s original 118-room tower, the last of our major upgrades to the property, bringing our total renovated rooms to 1,300. Recently, we saw tremendous pickup during Super Bowl, resulting in approximately $1 million in incremental room revenues over that weekend. After a few weeks of construction delays, Atomic Golf should be open in March, and we are excited to welcome this new amenity to the STRAT. In Laughlin, fourth quarter revenue was up slightly despite having one less major concert. While EBITDA declined 9%, primarily due to higher labor costs. In December, Laughlin revenue and EBITDA showed positive growth over the prior year, and we continue to see signs of margin stabilization to start 2024. Entertainment is a big driver of performance for our Laughlin properties, and we are working to optimize our offerings to create more cost-effective traffic drivers to our venues over the coming year. In addition, our new bingo room, which caters to local residents, has been successful in growing midweek revenue at our Edgewater property. Q4 revenue was down 4%, and EBITDA was down 10% for Nevada Locals Casinos. The majority of the EBITDA decline was at our Arizona Charlie’s Boulder property, where we experienced reduced room nights due to the loss of a meaningful group contract relative to last year. This led to lower margins in the fourth quarter compared to last year. However, sequentially, over third quarter, the operating margin of our local casinos has improved. For Nevada Taverns, fourth quarter revenue was up 3% compared to last year and EBITDA was up 4% as we acquired four new taverns under a new brand and same-store performance remained stable. As of year-end, we had 69 tavern locations in Nevada with 66 of them in Las Vegas. We believe it could create a portfolio of 90 to 100 taverns without meaningful increases in corporate overhead and have targeted three to four additional locations to be added in 2024. The tavern model continues to generate attractive returns with the last eight taverns we have built or bought creating an average ROI of over 25%. In January of this year, we completed the sale of our Nevada Distributed Gaming business for approximately $240 million, including purchase cash. In Q4, our total distributed operations are down meaningfully, given that our divested Montana distributed gaming operations are included in last year’s results. Between the sale of our Nevada distributed operations this January and the third quarter sales of our Rocky Gap property and Montana distributed operations, we received total proceeds of over $600 million, generating over $500 million of liquidity after taxes and transaction expenses. These proceeds have significantly improved our leverage profile and enhanced our strategic flexibility. We reduced our debt by over $60 million in Q4, bringing our total debt repayments to nearly $240 million for the year. Our outstanding debt at year-end consisted primarily of $398 million floating rate term loan and a $276 million of fixed rate bonds. We will repay the outstanding bonds in April, leaving us with a simplified capital structure less than 2x net leverage and full availability under our $240 million revolver. Given our low leverage and liquidity profile, we are establishing a quarterly cash dividend of $0.25 per share, the first of which is payable on April 4. In addition, we have over $90 million remaining under our stock repurchase authorization that we will use opportunistically to further return capital to shareholders. Divesting our noncore businesses has concentrated our portfolio to wholly owned casinos and branded taverns in Southern Nevada, where we see some of the most favorable macro trends in the country. Going forward, our primary organic opportunities will come from improved performance at the STRAT and increased Tavern footprint and the entire portfolio benefiting from the continued strength of Nevada’s economy. That concludes our prepared remarks. Blake and I are now available for questions. See also 15 States That Don’t Tax Retirement Pension Payouts and 20 Best Cities to Retire on a Budget of $1800 a Month. Q&A Session Follow Golden Entertainment Inc. (NASDAQ:GDEN) Follow Golden Entertainment Inc. (NASDAQ:GDEN) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: [Operator Instructions] Today’s first question comes from Carlo Santarelli with Deutsche Bank. Please proceed. Carlo Santarelli: Hey, Blake. Hey, Charles. So guys, you obviously have endured some of the labor costs through the back half of this year. As you look out to next year and all things considered speaking towards, specifically Nevada Casino, STRAT, et cetera, with the room refurbishments with Atomic Golf coming on in March, with kind of lapping some of the labor expenses, is there a scenario where margins could be flattish with some of the revenue uplifts coupled with some of the presumably at least lapping of expenses? Hello. Operator: This is the operator. Can you speak the … Charles Protell: [indiscernible] the question, Carlo? Carlo Santarelli: Oh, sorry. Yes, everything went blank there. So I wasn’t sure. Operator: You are live. Charles Protell: Yes, so Carlo, Can you hear us? Carlo Santarelli: I do, yes. Blake Sartini: Okay. Sorry. So if I — your question — the answer is yes. We would anticipate the margin trend to be flat throughout the balance of ’24. As you did reference, we did incur the renewal of the union contract at the STRAT towards the end of this year, which provides some unique challenges to that property. But I think generally speaking, your comment is accurate. We would expect flat margin trends going forward. Carlo Santarelli: Great. Thank you for that, Blake. And then if I could, obviously, putting in the dividend, a nice touch. Just in terms of your thought process around uses of the incremental capital with the leverage where it is, was there anything else that you guys perhaps considered? Or do you feel like you’re sacrificing any flexibility with the dividend policy? Charles Protell: No. When we committed to the dividend, we did so with the expectation we could do the dividend as well as with our significant capacity remaining buyback stock. And ultimately, as we’ve repositioned the company with this deleveraging, we’ve repositioned for additional significant optionality. So from our perspective, we did this with a very cognizant opinion that we could do both and then the company is positioned with optionality for whatever may potentially come about in terms of M&A or other. Carlo Santarelli: Got it. Thank you. Thank you very much. Operator: Today’s next question comes from Jordan Bender with Citizens JMP. Please proceed. Jordan Bender: Great. Good afternoon. Thanks for taking my question. In the slide deck, it says you guys are comfortable bringing the leverage up to 3 or you want to be under 3. Can you just maybe update us on the parameters around what you would look like — or sorry, what you look for on the M&A front? Is it more single assets or would you go a small portfolio of assets? Thank you. Charles Protell: Yes. Hey, Jordan, it’s Charles. So yes, that’s obviously our target is to remain under 3. I don’t think we’re going to take our leverage up just for the sake of taking our leverage up. We have to have, obviously, capital opportunities that earn in our mind a return that’s better than those alternatives of returning capital to shareholders. So — but in that context, we do look at M&A, we have looked at M&A, I think we are not — for us, looking at something that’s $50 million EBITDA north probably makes the most sense. We are not going to spend a lot of time with things that are smaller just given the integration time and management effort and also in terms of moving the needle for the makeup of the company at this point. So our focus is going to be fairly narrow from an M&A lens. We will want to find opportunities that are either single assets or portfolios that are in the West, where the properties owned underlying real estate. So I think that, that in general is where it is. But again, I think as Blake was saying, our view is we’ve set up the portfolio now with these divestitures that we could be focused on returning capital to shareholders while we continue to invest in our assets and have positioned ourselves, I think, well, to look at potential M&A opportunities that are accretive to us and fit within those parameters. Jordan Bender: Great. And then just on the back of the merger announced this morning from two of the suppliers, historically speaking, has there been any positive or negative impacts to your slot floor or you’ve been your purchasing budgets when M&A occurs in that space? Blake Sartini: No. No, I think that’s, from our standpoint, standalone on their end and no effect on our end. Jordan Bender: Understood. Thank you. Operator: Today’s next question comes from Chad Beynon with Macquarie. Please proceed. Chad Beynon: Good afternoon, Blake and Charles. Thanks for taking my question. Congrats on simplifying the story and everything here. I wanted to start with the STRAT midweek opportunities. I feel like that’s something we’ve been talking about for a couple of years. In the prepared remarks, you mentioned that again. For ’24, what’s the convention calendar look like? Do you think that just overall visitation to the strip, which remains strong, we’ll finally see kind of an inflection point for that midweek, which obviously leads to margin improvement. So any visibility into ’24 midweek? Thanks. Blake Sartini: Yes, Chad, I think you’re right. We have been talking about that. And we are beginning to see some green shoots in the fourth quarter of that midweek trend. Obviously, as I’ve talked about before, given 65% of our room occupancy comes from the OTA sites. We are dependent a lot on those citywides for some of that midweek. The calendar looks pretty robust for citywides. But as you know, some of these larger hotel casinos have added or increased size of their casino of their own convention areas, particularly some of the new properties that have just come on that may put some pressure on the citywides. But as — I would bring into this conversation, last year, we had significant disruption in the spring and fall from construction of the rooms. So I think we’ve said in the past that aggregated to around $5 million we felt in hotel revenue. That disruption has gone. And we have this $75 million Atomic. These are things we can control is what I’m getting at. There’s Atomic Range Golf facility coming on which we believe will greatly enhance our ability to generate additional midweek traffic with that wholly owned facility outside of what these citywides are looking like. But we remain bullish on our prospects for midweek. Weekends were full primarily. Our rate is getting better. And we believe this midweek begins to fill in, both through our own efforts, Atomic and other as well as the robust citywide calendar. Charles Protell: And Chad, I would just add to that, we have seen improvement. If you look over the course of all of 2023, our midweek occupancy was around 66% in our Q4 midweek occupancy, even despite F1 was at 72%. So we are seeing that improvement. That being said, in ’19, our midweek occupancy was around 85%. And so that 125,000 missing room nights for the STRAT relative to ’19, that’s worth about $40 million in revenue to the property at just current spend levels that we are seeing. And so that’s about $20 million in EBITDA. So that’s where we really see the opportunity of the property. That’s the reason we’re making the investments we are and forming the partnerships we are with folks like Atomic and others. So we are excited now that we’ve got the bulk of construction behind us, Atomic opening to really see what the property does as we go through this year. Chad Beynon: Thank you. And then with respect to eventually getting to a goal of 90 to 100 Taverns, we’ve heard of increased competition in the market. Charles, you talked about the returns. So it certainly sounds like a business. If you know how to do it well, it sounds like a good business to be in. But the new opportunities, the three to four in ’24 and then beyond that, are these conversions from other operators that just don’t have kind of the best practices that you have? Are you getting into new housing markets that are expanding in the Valley? Maybe just a little bit more color around the competition and kind of where these new opportunities can come from? Thanks. Blake Sartini: Yes, Chad. We — as we divested of, call it, the third-party route side of the business, we were continuing to focus on our wholly owned Tavern business. And by virtue of that simplification, if you will, we are, I would say, pretty humbly at the top of the pyramid in terms of new sites that are coming about and what we would call AAA locations, we tend to get the first phone call on those sites because of our size, scale, scope and our success in operating taverns. So we are very dialed into new Tavern sites around the Valley. These would be greenfield sites that we’re very good at building or very good at building boxes that have solid returns, as Charles mentioned. We do see opportunity at times for acquisitions, which this year we have — I think we have four coming on, [indiscernible] in the north that were prior owners that we felt locations met our criteria and that their demographic met our criteria. There are going to continue to be those opportunities, but we are focused on mostly new sites at this point going forward, and we believe that the landscape can provide the amount of sites over the years that will get us to that 90 to 100 number. Chad Beynon: Thank you, both. Appreciate it. Charles Protell: Thanks, Chad. Operator: Our next question is from John DeCree with CBRE Securities. Please proceed. John DeCree: Good afternoon, Blake. Good afternoon, Charles. I wanted to revisit your comments about F1. I think it’s fairly common. We’ve heard from a number of your peers, not on center strip, we are positioned to the ultra high-end. Curious your thoughts as to that event for next year and going forward, if there are some opportunities that you think could either change for the city overall or that you might be able to do differently to maybe maximize the contribution to the STRAT for next year and future periods? Charles Protell: Yes. I think it’s a good question. We’ve had some discussions with other operators. We think there’s, quite frankly, a lot of things that they could do to broaden the appeal in the audience for F1, not only to our customers but to local here in Las Vegas. So things like selling individual day tickets instead of a package, potentially making the start times a little bit earlier allowing for dedicated casino areas, so it’s easier access for our guests. So those are just a few things that we shared with the folks at F1, and we’ve talked about with other operators. But I think there is a general acknowledgment that the event needs to appeal to more than just high-end properties at the center strip that are connected to the event to make it a real success for all of Las Vegas. Blake Sartini: Yes, there is an organized non mid-strip co-op that is working together, if you will, significant — there are significant numbers of people involved and operators involved working with F1 to do just what Charles said, trying to activate more of the city during the event. Even though we didn’t participate in what we expected to be the upside, I personally think it was a great event for the city, a worldwide event for the city, the way it was packaged on TV, particularly internationally. So I think taking one for the team last year was probably something that knowing what we know now, we would do again. But going forward, we want to work with them to be more involved in the activities around that week or 10 days. It’s not just the weekend. It’s a week or 10 days. And this co-op of these non mid-strip operators, I think, is going to be successful in gaining some traction, certainly better than last year. John DeCree: Great. That’s good to hear. I think we’ve heard similar, Blake. I appreciate your thoughts on that as well. And then maybe as a follow-up question, bigger picture at the STRAT. So quite a bit of reinvestment, lately, you’ve mentioned construction disruption last year. What’s left in the near-term to do at the STRAT. And then perhaps I ask that in a bigger context of some of the land that you have around, obviously, Atomic Golf is activating some of that. But I think you’ve got quite a bit more that you could maybe utilize or monetize. You’ve talked in the past about maybe third-party partners. Curious if you’ve had any updated thoughts or further conversations on those opportunities since the last we kind of talked about it. Blake Sartini: Yes, we have. There’s no major disruptive additional capital programs planned to the STRAT at this point. As Charles mentioned, we have 1,300 of our 2,400 room inventory pretty much brand new. The other 900 or 1,100, let’s call it, rooms are within 7 to 9 years and in pretty good shape. So the hotel itself is situated pretty well. We are and we have embarked on a [indiscernible] upgrade, which is, we think will be meaningful this year, which we anticipate being done here by mid-March. And the — there are other projects, small bar design projects and things like that designed to capture more of that traffic coming through the casino. So in terms of disruption, I think we are pretty much done with that certainly this year. On the adjacent property, we own approximately 6 acres across the street that we’ve had significant conversations with many different types of uses that ultimately, we want to land on something that clearly brings more inertia to the STRAT in terms of whether it’s a non-gaming hotel. We have apartment condo type discussions and frankly, some out-of-the-box entertainment type discussion. So we are very active in trying to activate that property in and around the STRAT. And in addition, by the way, we have property around our other facilities that we are having the same conversation about how we can energize our other properties with adjacent property that we currently own. John DeCree: Fantastic. That sounds great, Blake. Thank you very much. Operator: And the next question comes from David Katz with Jefferies. Please proceed. David Katz: Hi. Afternoon. Thanks for taking my question. I wanted to go back to the M&A landscape and ask it a bit of a different way, which is the last time we talked about this 90 days ago, is just given how quickly the landscape has improved in a lot of areas for consumers, capital markets, et cetera. Is the market different today than it was 90 days ago and how so? Charles Protell: I think improving is definitely the word to be using, and I think you’ll see it continue to improve as the financing market gets better. So I think that’s all predicated, obviously, on interest rates. And so as we see the spend rate coming in people’s anticipation of that. And plus, I think once folks settle into somewhat of the new margin environment, it’s easier to predict cash flows of the businesses that we all have and where the consumer demand is. And so as long as that is stable and rates starting to come down, I think ultimately, you’ll see more consolidation, not only in our industry but others. David Katz: Got it. So if I can follow-up a bit more specifically, are there more deals? Is the bid-ask different, narrower or the same? In what way would we note improvement? Charles Protell: So I think it’s certainly narrowing. But again, it’s about the expectations. So we’ve had situations in the past where people are trying to market assets off of 2021 numbers and people are buying assets up of 2025 numbers. So that bid-ask is now narrowed in terms of the discussion. But so I think again, it comes down to where are the financing markets, and I think those ultimately only get better. I think the REITs play a large part also in M&A. And so the extent that they’re cost of capital improves as rates come down, I think that they will play a big part in advancing consolidation in the sector. And I’d anticipate that to happen over the course of this year. David Katz: Perfect. Thank you very much. Operator: At this time, we are showing no further questioners in the queue, and this does conclude both our question-and-answer session as well as our conference. Thank you for attending today’s presentation, and you may now disconnect. Follow Golden Entertainment Inc. (NASDAQ:GDEN) Follow Golden Entertainment Inc. (NASDAQ:GDEN) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»

Category: topSource: insidermonkeyMar 2nd, 2024

Marriott (MAR) Plans Expansion of Apartments by Marriott Bonvoy

Marriott (MAR) plans on expanding its Apartments by Marriott Bonvoy brand's global presence, starting with locations in the United States, Italy and the Kingdom of Saudi Arabia. Marriott International, Inc. MAR opened doors of its debut brand, Apartments by Marriott Bonvoy, in December 2023, with the intention of expanding its product portfolio with premium and luxury apartment-style accommodations. The positive approach toward its first property launch, Casa Costera, Isla Verde Beach, in San Juan, Puerto Rico encouraged the announcement of the upcoming property openings under this brand.Marriott is all set to bring Apartments by Marriott Bonvoy in the United States, Italy and the Kingdom of Saudi Arabia, signing development agreements for the respective new openings.The properties under this brand offer homely experience to its guests, housing amenities comprising private bedrooms, a separate living room, full kitchen, and in-unit washer and dryer. From an owner’s point of view, these properties offer residential and hotel developers a distinctive opportunity to transform an existing building, pursue a new build or integrate as part of such a multi-use property. Furthermore, every project will be leveraging Marriott’s brand image and offer benefits under the loyalty program, Marriott Bonvoy.Apartments by Marriott Bonvoy is subject to further expansion opportunities, with the company expecting to expand the global presence through 2024 and beyond.Details on the Upcoming OpeningsIn the US, Mariott signed development agreements in Detroit, MI, and St. Louis, MO. The Detroit location’s development agreement is inked with Roxbury Group. The construction will be made by converting The Plaza Apartments in Midtown Detroit. This property is expected to open in the third quarter of 2024. The St. Louis location’s development agreement is anticipated to be made with Midas Hospitality.In Italy, the company signed development agreements in Courmayeur, Aosta Valley, with Castello Sgr for the opening of Le Géant, an Apartments by Marriott Bonvoy property.In Saudi Arabia, MAR inked a development agreement with NEOM for the brand’s debut in Sindalah, an island located on the northwest coast of the country among the Red Sea. This marks the fourth collaboration between Marriott and NEOM for the construction of property on the island. The opening is expected in 2024.Expansion Initiatives Bode WellMarriott is consistently trying to expand its presence worldwide and capitalize on the demand for hotels in international markets. The company plans to significantly expand its global portfolio of luxury and lifestyle brands. By leveraging the demand patterns, it consistently focuses on expanding its footprint, primarily in Asia, Latin America, the Middle East and Africa.Marriott, which shares space with Hyatt Hotels Corporation H, Choice Hotels International, Inc. CHH and Hilton Worldwide Holdings Inc. HLT, has been benefiting from the expansion of global footprint across diversified brand portfolios. Despite volatile economic environment, the company’s global development pipeline comprised almost 3,400 hotels and approximately 573,000 rooms at the end of 2023, showcasing a remarkable 15% uptick compared with the prior year.A Brief Review of the Above-Mentioned StocksHyatt: The company is benefiting from solid leisure-transient demand, recovery in business travel demand, increased system-wide group travel and favorable pricing. H’s focus on enriching its portfolio through strategic initiatives allows it to deliver unique experiences to its guests, expand its global presence and strengthen the role of the Hyatt loyalty program. Furthermore, its emphasis on asset-light deals to broaden presence in key markets and service platforms bodes well.Choice Hotels: The company’s uptrend is attributable to synergies through the Radisson Hotels Americas integration and momentum in the conversion projects pipeline. The focus on continual expansion strategies through acquisitions and franchise agreements bodes well. CHH focuses on expansion strategies, enhancement of the mid-scale brand, and transformation and advancement of the Comfort brands to drive growth. Furthermore, its recent announcement on restyling and enhancing the on-property experiences in five out of the eight brands across its upscale and upper upscale portfolio is encouraging.Hilton: The boost in the company’s performance is primarily driven by an upward trend in travel and tourism. Owing to strong leisure demand and recovery in international inbound travel, the company is witnessing substantial RevPAR gains in Europe, the Middle East and Africa region and expects the momentum to persist for some time. Moreover, HLT focus on unit expansion, hotel conversions, strategic partnerships and loyalty programs bode well. The company expects positive development trends to continue on the back of new development and conversion opportunities. Zacks Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time. This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.Free: See Our Top Stock and 4 Runners Up >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Marriott International, Inc. (MAR): Free Stock Analysis Report Hyatt Hotels Corporation (H): Free Stock Analysis Report Choice Hotels International, Inc. (CHH): Free Stock Analysis Report Hilton Worldwide Holdings Inc. (HLT): Free Stock Analysis ReportTo read this article on click here.Zacks Investment Research.....»»

Category: topSource: zacksJan 28th, 2024

Hyatt Hotels Corporation (NYSE:H) Q2 2023 Earnings Call Transcript

Hyatt Hotels Corporation (NYSE:H) Q2 2023 Earnings Call Transcript August 3, 2023 Hyatt Hotels Corporation misses on earnings expectations. Reported EPS is $0.82 EPS, expectations were $0.83. Operator: Good morning, and welcome to the Hyatt Second Quarter 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers […] Hyatt Hotels Corporation (NYSE:H) Q2 2023 Earnings Call Transcript August 3, 2023 Hyatt Hotels Corporation misses on earnings expectations. Reported EPS is $0.82 EPS, expectations were $0.83. Operator: Good morning, and welcome to the Hyatt Second Quarter 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers presentation, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to Joan Bottarini, Chief Financial Officer. Thank you. Please go ahead. Joan Bottarini: Thank you, and good morning. Welcome to Hyatt’s Second Quarter 2023 Earnings Call. Before we begin, I’d like to take the opportunity to welcome Adam Rohman who is now leading our Investor Relations and Global Financial Planning and Analysis teams. Adam has been with Hyatt for 19 years and has deep knowledge of the company most recently overseeing Hyatt’s global asset management team. I’d also like to recognize Noah Hoppe who over the past three years has been instrumental leading Hyatt’s Investor Relations and global FP&A teams. I’m excited to share that Noah has transitioned to a new role joining our transactions team and supporting our growth strategy. With that I’ll turn the call over to Adam. Adam Rohman: Thank you for the warm welcome Joan. Joining me on today’s call are Mark Hoplamazian, Hyatt’s President and Chief Executive Officer; and Joan Bottarini, Hyatt’s Chief Financial Officer. Before we get started, I would like to remind everyone that our comments today will include forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties as described in our annual report on Form 10-K quarterly reports on Form 10-Q and other SEC filings. These risks could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued today along with the comments on this call are made only as of today and will not be updated as actual events unfold. In addition, you can find a reconciliation of non-GAAP financial measures referred to in today’s remarks on our website at under the Financial Reporting section of our Investor Relations link and in this morning’s earnings release. An archive of this call will be available on our website for 90 days. With that I’ll turn it over to Mark. Mark Hoplamazian: Thanks, Adam and it’s great to have you in your new role. Adam Rohman: Thank you. Mark Hoplamazian: Good morning, everyone. For the fifth consecutive quarter, we posted record results demonstrating our unique positioning and continued momentum. In the second quarter, adjusted EBITDA plus net deferrals and net finance contracts was up 7% compared to the second quarter of 2022 and up 48% compared to the second quarter of 2019. This is an especially notable achievement when you consider that we’ve sold $2.3 billion in real estate net of acquisitions since the beginning of 2019. Our ongoing transformation has significant momentum and the second quarter results continue to reinforce our confidence in executing the strategy we outlined at our Investor Day in May. During our Investor Day we highlighted Hyatt’s transformation positioning the company as the preferred brand for high-end guests in each segment that we serve, while creating significant value for shareholders. Since the beginning of 2017, we’ve driven shareholder value by realizing proceeds of $3.8 billion from the sale of owned hotel real estate, net of acquisitions at a multiple greater than 16 times, acquired $3.7 billion of asset-light and fee-based platforms at a multiple of approximately 8x and returned over $2 billion to shareholders through common stock repurchases and dividends. We’ve experienced meaningful growth doubling our luxury rooms, tripling our resort rooms and quadrupling our lifestyle rooms. As a result, today we are more fee-based and asset-light with a much higher conversion of reported earnings to cash flow. We anticipate that substantial free cash flow from our increased asset-light earnings mix. In addition, the proceeds from asset dispositions will enable us to invest in growth, return capital to shareholders and maintain our investment-grade profile. Through the disciplined execution of our strategy we have outlined a path where we expect to achieve $750 million in free cash flow and an 80% asset-light earnings mix by 2025. Our asset-light fee-driven model combined with industry-leading net rooms growth demonstrates our earnings strength and durability. We also expect to significantly reduce our capital expenditures to a run rate of approximately $100 million by 2025. The journey to transform our earnings profile is well underway and we are confident in our ability to execute the strategy and achieve the long-term projections that we outlined at our Investor Day. The successful execution of our strategy has led to a significant growth of the World of Hyatt program, which added seven million new members in the past 12 months, an increase of 20%. And we continue to see strong enrollments at our ALG properties that have signed up over 650,000 new loyalty members since the launch in May of 2022. Additionally, Legacy Hyatt system-wide rolled of Hyatt room penetration increased 140 basis points in the first half of 2023 compared to the same period in 2022. To further deepen loyalty with our existing World of Hyatt members and attract new members, we announced several key initiatives this quarter. First, the announcement of Hyatt Studios our first Upper midscale brand in the Americas has been well received by our ownership community. Letters of interest for over 100 hotels have begun converting to signed contracts and we expect the first property to open in the second half of 2024. Second we completed the acquisition of Mr & Mrs Smith a global travel platform that enhances our luxury offerings and provides access to a collection of more than 1500 boutique and luxury properties across the globe with the concentration in Western Europe. We have seen the power of leveraging an effective distribution platform in a complementary segment with ALG vacations and we plan to enhance the value proposition for the owners of hotels represented on the Mr & Mrs Smith platform, while also expanding the choices for our members and guests. Third we successfully integrated Lindner Hotels in Europe and Dream Hotel Group into the World of Hyatt loyalty programs strengthening our lifestyle portfolio. The speed of integration of these two platforms enables us to deliver value quickly for our owners and guests. These strategic initiatives demonstrate our commitment to deliver unique experiences, expand our global presence and strengthen our role of Hyatt loyalty program. Moving to our latest business trends. I’m pleased to share the comparable system-wide RevPAR for the second quarter increased 15% compared to the second quarter of 2022 and 8% compared to the same period in 2019 for the same set of comparable properties. Average rates increased 5% compared to a very robust second quarter of 2022 and are 15% higher compared to the second quarter of 2019 for the same set of comparable hotels on a constant currency basis respectively. Additionally, occupancy contributed meaningfully to RevPAR growth in the second quarter increasing 660 basis points compared to the same period last year. The second quarter reached a post-pandemic record with absolute occupancy of 72%, which is below 2019 levels by 450 basis points. Average daily rates remain strong and we believe occupancy gains will continue to drive future growth. Turning to our customers. Leisure transient revenue growth sustained in the second quarter increasing 7% compared to the second quarter of last year. These results are particularly impressive considering the pent-up demand that drove very strong results in the second and third quarter of 2022 due to Omicron’s impact. While the year-over-year growth has moderated compared with the first quarter of this year, overall results in the second quarter continue to be very strong as we anticipated. Compared to the second quarter of 2019, leisure transient revenue increased by 26% in the second quarter, a 200 basis point improvement from the growth that we realized in the first quarter of this year compared to the — continue to prioritize travel. We’re also pleased to see the recovery in business transient revenue continuing to gain momentum up 36% compared to the second quarter of 2022 and 86% recovered to the second quarter of 2019. Led by large corporate accounts in the Americas, the recovery accelerated during the quarter with May and June 90% recovered when compared to the same months in 2019. Group revenue in the quarter was up 14% compared to the second quarter — 2019 even though room night demand was down 12%. From a geographic perspective, we continue to see recovery momentum in Asia Pacific and strong results in the rest of the world. Greater China RevPAR surpassed pre-pandemic levels for the first time up 6% in the second quarter. Markets traditionally dependent on international inbound travel integrator China like Shanghai and Shenzhen were below second quarter 2019 levels, but have shown meaningful improvement compared to the first quarter of this year. Outside of Greater China, performance in Europe was outstanding as RevPAR increased 23% compared to the second quarter of 2022 and was up 30% compared to the same period in 2019. Finally, RevPAR in the United States remains resilient, increasing 4% compared to the second quarter of 2022 and remains above 2019 levels. Turning to ALG. Comparable net package RevPAR increased — 18% in the first half of 2023. This quarter marks the one-year anniversary of the introduction of the World of Hyatt at ALG Resorts in the Americas, and we are thrilled to see strong adoption by our world of Hyatt members. In the Americas, World of Hyatt members accounted for approximately 22% of room nights at ALG Resorts during the first half of the year. As we look to the rest of 2023, we expect net package RevPAR growth to moderate in the second half of the year, relative to the second quarter, as a result of lapping extremely strong results in the second half of 2022 due to the condensed leisure travel season last year. Gross package revenue for the second half of 2023 is pacing 8% ahead of 2022. Turning to Group Pace for the Americas full service managed properties. Group revenue was up 31% in the first half of 2023, and Pace for the second half of 2023 is up 8% compared to the same periods in 2022. We had an extremely strong quarter booking nearly $500 million in the Group business for all future periods, an increase of 36% to the second quarter of 2022 and this was the highest Group production quarter since the first quarter of 2019. We’re seeing the booking window lengthening, with approximately two-thirds of group production booked for dates beyond 2023 setting us up for strong opportunities to yield rates into the future. For 2024, specifically, group pace is up 10% with average rates and room nights each up approximately 5% and I’m extremely excited about the future, as group room night demand continues to recover back to 2019 levels. The combination of group production trends and 2024 Group Pace, reinforces our confidence to achieve the illustrative RevPAR growth range that we provided during our Investor Day in May. In summary — we’re benefiting from the tailwinds from Greater China sustained demand for leisure travel, recovery of business transient travel and strong sustained demand for groups and events. We believe the combination of our commercial platforms and best-in-class hotel teams is driving higher loyalty preference, hotel profits and as a result, increasing owner preference. The growth in our footprint and pipeline is the direct outcome of owners preferring our brands. During the second quarter, we achieved an impressive 6.9% net rooms growth over the trailing 12-month period. Notably, conversion opportunities remained a significant contributor to our net rooms growth this quarter. We introduced the Impression by Secrets brand, to the inclusive collection this quarter, an ultra luxury brand that further solidifies our position, as the largest manager of luxury all-inclusive resorts in the world, including the newly opened Impression Isla Mujeres by Secrets in Mexico. For our Legacy Hyatt portfolio, we expanded our presence in key cities like London and Mexico City, while also adding luxury offerings with the openings of Andaz Nanjing Hexi in China and the Grand Hyatt La Manga Club Golf & Spa in Spain. Our pipeline reached a new record of 119,000 rooms representing a 5% increase year-over-year and up sequentially from the first quarter, with new signings outpacing new openings. The expansion of our pipeline and ability to convert existing hotels to our brand gives us confidence we will continue to realize outsized growth into the future. I want to provide an update on our real estate transactions. We continue to make progress on two assets that we currently have on the market for sale and we expect to be under contract for one asset and select a buyer for the other asset soon. We remain focused on realizing the most attractive valuations and securing durable long-term management or franchise agreements. And we continue to remain highly confident in our ability to achieve our $2 billion sell-down commitment by the end of 2024. Lastly, I’m pleased to report continued to remain progress on World of Care, which drives alignment across Hyatt and how we advance care for the planet people and responsible business to support thriving destinations around the world. We just published our 2022 World of Care report this week and our global teams are advancing care for the planet through continued actions towards our 2030 environmental goals that address carbon reduction, water conservation and responsible sourcing. Our hotel teams are bringing innovative solutions to meet these goals such as our 2022 Food Waste Reduction pilot program and adoption of 100% Renewable Electricity in US Hyatt-owned hotels. In connection with advancing care for people, we believe that our teams should reflect the diversity and experiences of the communities in which Hyatt operates hotels. And we continue to support that diversity in leadership positions across our workforce. We have also exceeded our 2025 goal for expansion of our spend with diverse suppliers and identified new opportunities to support businesses in underinvested communities through efforts like holding deposits at minority-owned banks and helping to expand suppliers businesses in several markets. The creativity and passion of our teams is powering our success in meeting our environmental and social sustainability goals and is one of the main reasons why, institutional investor recognized World of Care as a top three ESG program in 2023 in the mid-cap gaming and lodging category. In closing, I’m very pleased with another quarter of record results. I want to extend my gratitude to the entire Hyatt family for their dedication in executing our strategy and positioning Hyatt as the preferred brand for colleagues, guests, customers and owners. Our asset-light earnings mix is yielding strong free cash flow, and we remain confident in our ability to drive exceptional results for all our stakeholders. Joan, will now provide more details on our operating results. Joan, over to you. Joan Bottarini: Thank you, Mark. This morning, we reported second quarter net income attributable to Hyatt of $68 million and diluted earnings per share of $0.63. As Mark mentioned, this was a record second quarter with adjusted EBITDA of $273 million net deferrals of $28 million and net finance contracts of $14 million. Excluding the impact of transactions, results were up 11% compared to the second quarter of 2022. In the quarter we generated a company record of total management franchise license and other fees in the quarter, of $248 million, an increase of 21% from the second quarter of 2022 driven by the continued success of our asset-light transformation and the continued global recovery we’ve experienced in the quarter. As a result of our expansion in fee revenue our asset-light earnings mix relative to real estate earnings was 76% for the quarter. Turning to our legacy Hyatt results, adjusted EBITDA was $224 million for the quarter which is approximately 17% higher than the second quarter of 2022, adjusted for currency and the net impact of transactions. Our management and franchising businesses benefited from our larger system size and more fully recovered RevPAR environment. As Mark mentioned, our system-wide RevPAR in the second quarter was up 15% compared to the same period in 2022, or up 8% compared to the second quarter of 2019, fueled by strong rates and meaningful occupancy growth. And we are thrilled to see fully recovered RevPAR in the Asia Pacific region relative to the second quarter of 2019. Notably the region nearly doubled fee revenue to $42 million for the quarter, compared to the same period last year with Greater China accounting for over 40% of the region’s fees in the quarter. We’re encouraged by the momentum in the region and believe it will continue to serve as a tailwind as international and regional flight capacity increases in the second half of the year. Our Americas and EMEA regions continued their momentum with strong adjusted EBITDA in the quarter relative to 2022. The strength in these segments is driven by a powerful combination of the sustained demand of leisure travel, momentum from business transient travel and strong performance from group business. Moving to our owned and leased segment. When adjusted for the net impact of transactions, adjusted EBITDA for the second quarter decreased 2%, when compared to the second quarter of 2022, and increased 15% when compared to the second quarter of 2019. The recovery in group and business transient travel coupled with sustained demand for leisure travel led to impressive RevPAR growth of 10% compared to the second quarter of 2022. Our operational and commercial teams continue to do an excellent job driving strong top line results with rates exceeding 4% compared to 2022. It’s notable that second quarter comparable owned and leased margins remained strong at 27%, up nearly 300 basis points from the second quarter of 2019 for the same set of properties. Turning to ALG. Adjusted EBITDA was $49 million. Net deferrals were $28 million and net finance contracts were $14 million. Excluding the impact of foreign currency and onetime strategic investments, ALG’s results increased 7% compared to the second quarter of 2022. Three key areas drove financial results. First, ALG comparable net package RevPAR increased 8% in the quarter relative to the second quarter of 2022. Total fees remained flat at $36 million for the quarter due to headwinds from the Mexican peso, which strengthened 17% against the U.S. dollar in the last 12 months. It’s important to note that ALG’s hotel revenues are booked and paid in U.S. dollars with no FX impact on base management fees. However, most property expenses are denominated in Mexican pesos and are affected by FX fluctuations, impacting hotel gross operating profits and the related incentive fees we earn. Excluding foreign exchange impact on incentive fees, total fees increased 7% in the quarter. Second, approximately 9,000 membership contracts were signed for ALG’s Unlimited Vacation Club in the quarter, exceeding second quarter 2022 levels by 6% with an increase in the average contract price sold. UVC now has approximately 140,000 active members as it continues to expand at an impressive pace. Third, ALG Vacations continues to generate solid results, driven by a transformed business model and strong unit pricing, leading to revenue growth of 7%. In the quarter, there were approximately 740,000 guest departures and the business realized a margin of approximately 18% consistent with full year stabilized margin expectations we’ve previously shared. As we look at the second half of 2023, while we recognize the Mexican peso could continue to be a headwind on operating costs and incentive fees, we’re optimistic about the future given sustained strength of leisure travel demand and a favorable pricing environment. I’d also like to provide an update on our strong cash and liquidity position. As of June 30 2023, our total liquidity of approximately $2.4 billion, included $906 million of cash, cash equivalents and short-term investments and approximately $1.5 billion in borrowing capacity on our revolving credit facility. At the end of the quarter, we reported approximately $3.1 billion of debt outstanding. The only near-term debt maturity is the 1.3% notes due on October 1, 2023 in the amount of $638 million. On July 6, we issued $600 million in notes due in 2027, the proceeds of which will be used together with cash on hand to repay the 2023 notes by maturity. Record operating performance and asset-light growth are contributing to our strong free cash flow. In the second quarter, we repurchased $108 million of Class A common shares and we have approximately $1.4 billion remaining under our share repurchase authorization. We remain committed to an investment-grade profile and our balance sheet is strong. Finally, I’d like to share some additional insights into our full year 2023 outlook and capital returns to shareholders. We are updating our full year 2023 system-wide RevPAR growth expectations to a range of 14% to 16%, compared to 2022 on a constant currency basis driven by the recovery in Asia Pacific and improving demand in group and business transient we continue to anticipate RevPAR growth will be in the mid to high single digits in the back half of the year. We are reaffirming our expectations of net rooms growth of approximately 6% for the full year of 2023, driven by our strong pipeline and our ability to execute on conversion opportunities. We are updating our net income to approximately $215 million. And consistent with our estimates from Investor Day we maintain our guidance of adjusted EBITDA plus net deferrals and net finance contracts in the range of $1.2 billion to $1.25 billion with $1.225 billion at the midpoint. Additionally, we are reaffirming free cash flow of approximately $550 million for full year 2023, showing meaningful expected growth compared to 2022. We expect our adjusted SG&A to be in the approximate range of $485 million to $495 million in 2023 inclusive of approximately $20 million of one-time integration expenses associated with carryover projects from 2022 for ALG and the acquisition of Dream Hotel Group and Mr & Mrs Smith. We continue to expect capital expenditures to be approximately $200 million, including investments in ALG and the transformative investment in the Hyatt Regency Irvine renovation, which accounts for nearly one-quarter of 2023 capital expenditures. As a reminder, the Hyatt Regency Irvine will reopen this month and we will have fully renovated rooms and food and beverage offerings coming online through the rest of 2023 and we’re excited for a full grant opening in early 2024. And finally, our full year outlook for capital returns to shareholders is approximately $500 million inclusive of share repurchases and dividends. In closing our second quarter results demonstrate the effectiveness of our strategy, underscores the strength of our brands and highlights the performance of our talented colleagues around the world. We drove record total fee revenue through strong system-wide RevPAR growth and continued our industry-leading net rooms growth. Looking ahead our optimism is fueled by several factors. Further recovery in Asia, continued strength of leisure travel, forward bookings for group business and a record pipeline. We are excited for the future growth opportunities that build upon our successful transformation, unlock value through the sale of our real estate and continue to deliver shareholder value through an expansion of our asset-light earnings mix and free cash flow. Thank you. And with that I’ll turn it back to our operator for Q&A. See also 15 Worst Performing NASDAQ Stocks In 2023 and 11 Most Advanced AI Companies. Q&A Session Follow Hyatt Hotels Corp (NYSE:H) Follow Hyatt Hotels Corp (NYSE:H) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. [Operator Instructions] Our first question comes from Joseph Greff from JPMorgan. Please go ahead. Your line is open. Mark Hoplamazian: Joe, are you there? You maybe on mute. Joseph Greff: Can you hear me now? Mark Hoplamazian: We got you now Joe. Thank you. Joseph Greff: Thank you for taking my question. Mark, you had mentioned that the World of Hyatt accounted for 22% of room nights in the first half of this year for ALG. What you benchmark that against medium term in terms of percentage of occupancy at the ALG portfolio? Mark Hoplamazian: Yeah. I think there’s significant room for expansion. I think in the foreseeable future, we see the potential to increase that by about 1,000 basis points. And the reference point that we’ve got is other all-inclusive resorts that we’ve operated for a longer period of time. The one thing that I think hasn’t been realized in its fullest potential yet is MICE business, sorry, group business that we can pull into more of these properties. There are considerations I would say with occasional concerns around safety and security, but the more exposure that we get for meeting planners, travel advisers into our properties in Riviera Maya Cancun especially, the more comfortable that we see people are getting especially on the transient side. And I think group will follow. Joseph Greff: Great. And then just a follow-up on the real estate transaction environment and we heard you loudly and clearly on the progress made on the two assets. How are you thinking about other assets being market and being brought to the market? And maybe how has that evolved just given the current conditions in the transaction financing environment? Mark Hoplamazian: Yes. Honestly we’ve not been aggressively pursuing marketing efforts for other assets at this point. We do have a couple of discussions underway with respect to reverse inquiries on specific assets that we own. And we will continue those conversations. I think at least in one or two cases these are relatively bigger hotels and/or maybe more unique hotels that sometimes take some time to put to assemble a deal because they involve other development opportunities on site and the like. So we’ve got a I would say a constant dialogue underway but it’s just not the — in the context of an active marketing initiative. And the principal reason we’ve decided to wait is –well reasons there are two. The first is it’s a bit pp it’s a more challenging environment right now primarily because of financing. I would say that’s more much more acute in the United States than it is elsewhere because debt availability and pricing of debt in Europe is still quite reasonable and relative to historic levels. And the second reason is because we’re getting paid a lot to wait. Our own and lease results continue to be very strong. I think our — the pace of growth given how extraordinary our recovery was in the second and third quarter of last year has come down. But we have every confidence that we will end the year. We as you know have predicted that we will end up being able to sustain 100 to 300 basis point increase in margins and we think we’ll end this year at the top end of that range. So we feel really good about the progression of earnings and margin expansion. And so in many ways I don’t think even with higher cap rates in the U.S. the value expectations that we’ve got in terms of dollars and cents associated with sales of hotels is not going to we don’t think we’re going to realize any degradation in that. It might be the result of higher earnings and lower cap rates or sorry higher cap rates lower multiples. But it’s really hard. And I’m certainly the last one who’s going to ever predict the direction of interest rates so I’m not going to go there. Joseph Greff: Great. And then one final question maybe this is for Joan. When you think about your implied second half EBITDA adjusted EBITDA adjusted economic EBITDA guidance how do you think about the cadence in 3Q and 4Q just consensus estimates or at least reasonably aligned with how you’re viewing 3Q and 4Q?.....»»

Category: topSource: insidermonkeyAug 4th, 2023

Hilton Worldwide Holdings Inc. (NYSE:HLT) Q2 2023 Earnings Call Transcript

Hilton Worldwide Holdings Inc. (NYSE:HLT) Q2 2023 Earnings Call Transcript July 26, 2023 Hilton Worldwide Holdings Inc. misses on earnings expectations. Reported EPS is $1.29 EPS, expectations were $1.58. Operator: Good morning, and welcome to the Hilton Second Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note […] Hilton Worldwide Holdings Inc. (NYSE:HLT) Q2 2023 Earnings Call Transcript July 26, 2023 Hilton Worldwide Holdings Inc. misses on earnings expectations. Reported EPS is $1.29 EPS, expectations were $1.58. Operator: Good morning, and welcome to the Hilton Second Quarter 2023 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jill Chapman, Senior Vice President, Investor Relations and Corporate Development. You may begin. Jill Chapman: Thank you, MJ. Welcome to Hilton’s second quarter 2023 earnings call. Before we begin, we would like to remind you that our discussions this morning will include forward-looking statements. Actual results could differ materially from those indicated in the forward-looking statements, and forward-looking statements made today speak only to our expectations as of today. We undertake no obligation to update or revise these statements. For a discussion of some of the factors that could cause actual results to differ, please see the Risk Factors section of our most recently filed Form 10-K. In addition, we will refer to certain non-GAAP financial measures on this call. You can find reconciliations of non-GAAP to GAAP financial measures discussed in today’s call in our earnings press release and on our website at This morning, Chris Nassetta, our President and Chief Executive Officer, will provide an overview of the current operating environment and the Company’s outlook. Kevin Jacobs, our Chief Financial Officer and President, Global Development, will then review our second quarter results and discuss our expectations for the year. Following their remarks, we’ll be happy to take your questions. With that, I’m pleased to turn the call over to Chris. Chris Nassetta: Thank you, Jill, and good morning, everybody. We appreciate you joining us today. We’re excited to report strong second quarter results with RevPAR, adjusted EBITDA and EPS exceeding our expectations. Adjusted EBITDA for the quarter had a record $811 million, the highest single quarter in our company’s history. Performance continued to be driven by solid fundamentals, along with continued share gains. Our industry-leading brands, strong commercial engines and powerful partnerships continue to strengthen our system and differentiate us from the competition while a culture of innovation continued to fuel additional growth opportunities. Despite macro challenges over the near term, we’re confident in our ability to continue driving solid top line and bottom line growth and, in turn, growing free cash flow. Given the strength of our results thus far and our expectations for the rest of the year, we’re increasing our guidance for return of capital for the full year to between $2.4 billion and $2.6 billion. Turning to results in the quarter. System-wide RevPAR increased 12.1% year-over-year as strong demand drove continued pricing power across all segments. System-wide occupancy improved four points during the quarter to reach 77% in June, our highest level post pandemic. Business transient RevPAR remained strong, growing 11% year-over-year as trends continue to normalize. Leisure RevPAR increased 7% versus last year, driven by solid rate growth and despite more difficult year-over-year comparisons. Group recovery remained robust in the quarter with RevPAR growing 19% year-over-year. Compared to 2019, system-wide RevPAR grew more than 9% in the quarter with all segments performing well versus prior peaks and accelerating sequentially versus the first quarter. Stable demand and rising rates drove leisure RevPAR growth of 26% versus 2019 and business transient growth of 6% and group RevPAR was roughly flat versus prior peak levels and improved versus the first quarter. As we look to the back half of the year, we expect continued strength driven by recovery in international markets, business transient and group demand. On the group side, we continue to see very positive trends. Our bookings in the quarter for 2024 arrivals grew 30%, with group position now at 13%, up driven by the corporate segment. And our sales team saw the largest revenue bookings in our history for all future arrival periods. Based on all of that, we now expect full year RevPAR growth of between 10% and 12%. Turning to development. We signed more than 36,000 rooms in the second quarter, representing the largest quarterly signs in our history. Conversions accounted for nearly 1/3 of signings in the U.S. Signings in international markets doubled versus last year, accounting for roughly half of system-wide signings in the quarter, driven by strong momentum across Europe and Asia Pacific. In Europe, we signed agreements across 14 countries, including our first Tapestry Hotel in the French Riviera and our first Curio in Croatia. In China, Hilton Garden Inn continued to show tremendous growth since launching our new franchise business model. In the quarter, we signed approximately 3,700 HCI rooms in China more than 3x last year and accounting for more than 1/3 of our signings in China. Signings in America were up 20 in the Americas were up 25 year-over-year with strong interest in the U.S. despite tighter credit conditions. We’ve signed more than 50 true hotels year-to-date, representing the strongest pace since 2017 as the operating success of existing true properties is linked to a surge in new signings. Results were further helped by Spark with approximately 60 hotels signed and another 400 in negotiation just six months since its launch. Nearly all deals are conversions from third-party brands and half represent new owners to Hilton, with our first park scheduled to open in September and roughly 20 by year-end, Spark is well positioned to disrupt the premium economy segment while expanding our customer and owner base, especially in markets where there is no Hilton brand presence today. In addition to the strong start for Spark, we recently launched an inventive new extended stay brand in the U.S. Under the working title Project H3, the apartment-style accommodations are designed for guests booking 20 or more nights built with the staying power of Hilton’s award-winning hospitality. We have received tremendous interest from owners and developers due to the strong market opportunity, cost-efficient build and high-margin model, and we currently have more than 300 deals in negotiation. Our system-wide pipeline now stands at a record 3,000 properties totaling approximately 441,000 rooms, increasing 7% year-over-year and 3% from last quarter. Following another strong quarter of starts, up more than 73% year-over-year roughly and over 40% year-to-date, roughly half of our pipeline is currently under construction. We have more rooms under construction than any other hotel company ensuring guests will have even more options to stay with us in the years to come. Specifically in the U.S., our under construction pipeline has continued to increase, up 15% year-over-year which will contribute to increased openings later this year and next. In fact, in the coming weeks, we’re going to open nearly 2,000 additional hotel rooms in New York Times Square with the debut of our first-ever tempo by Hilton than a new tri-brand property featuring Home2 Suites, Hampton Inn and Motto. In the quarter, we celebrated several milestones, including the openings of our 2,900 Hampton Inn and our 600 Home2 Suites property, which remains one of the fastest-growing brands in the industry. Additionally, we surpassed 150,000 rooms in Asia Pacific, including the openings of the Hilton Okinawa, Miyako Island Resort in Japan and the Conrad Shenzhen, our first luxury hotel in China’s thriving technology hub. We expect openings to accelerate as the year progresses given strong international and conversion trends and expect conversions to account for around 30% of openings. For the full year, we expect net unit growth of approximately 5%. With forecasts for our highest level of signings, the largest pipeline in our history and approaching the largest under-construction pipeline in our history, we expect net unit growth to accelerate to 5% to 6% next year and to return to 6% to 7% over the next couple of years. As part of our commitment to deliver exceptional experiences for guests, we remain focused on initiatives to drive increased loyalty and satisfaction. We know, for instance, that food and beverage experiences are an integral part of travel and want to ensure our hotels themselves are great dining destinations. We recently formed a first-of-its-kind partnership with the James Beard Foundation serving as the premier sponsor of the 2023 restaurant and Chef awards and continue expanding our partnerships with world-class talents such as Michael Mina, Jose Andres, Nancy Silverton and Paul McGee. Hilton Honors remains the fastest-growing hotel loyalty program with more than 165 million members, up 20% year-over-year, driven by strong growth across all major regions. Honors members accounted for 64% of occupancy in the quarter, up 2 points year-over-year. Hilton team members and our award-winning culture continue to differentiate our brands from the competition, just yesterday, our Waldorf Astoria Home2 and Tru brands were named best in category by J.D. Power for their respective segments in North America. Last week, Hilton was again named as a top employer for millennials for the sixth consecutive year. Since 2016, we’ve been recognized by Great Place to Work as the world’s best hospitality company in over 60 countries. We’re thankful for the great work our team members do to serve our guests around the world. We have incredible opportunities ahead to further position ourselves as the leader in hospitality, and we’re very excited for the future of travel. With that, I’ll turn the call over to Kevin to give you a few more details on the quarter and expectations for the full year. Kevin Jacobs: Thanks, Chris, and good morning, everyone. During the quarter, system-wide RevPAR grew 12% versus the prior year on a comparable and currency-neutral basis. Growth was driven by strong demand growth in APAC as well as continued strength in leisure and steady recovery in business transient and group travel. Adjusted EBITDA was $811 million in the second quarter up 19% year-over-year and exceeding the high end of our guidance range. Performance was driven by better-than-expected fee growth, largely due to better-than-expected RevPAR performance as well as strong performance in Europe and Japan, benefiting our ownership portfolio. Management franchise fees grew 16% year-over-year, driven by continued RevPAR improvement. For the quarter, diluted earnings per share adjusted for special items was $1.63 increasing 26% year-over-year and exceeding the high end of our guidance range. Turning to our regional performance. Second quarter comparable U.S. RevPAR grew 6% year-over-year with performance led by continued recovery in both business transient and group segments. Leisure demand in the U.S. remained strong but grew more modestly year-over-year due to tougher comparisons. In the Americas outside the U.S., second quarter RevPAR increased 22% year-over-year. Performance was driven by strong group demand particularly at our resort properties. In Europe, RevPAR grew 26% year-over-year. Performance benefited from continued strength in leisure demand and recovery in international inbound travel, particularly from the U.S. In the Middle East and Africa region, RevPAR increased 30% year-over-year, led by rate growth and strong demand from our [logis] travel. In the Asia Pacific region, second quarter RevPAR was up 79% year-over-year led by the continued demand recovery in China. RevPAR in China was up 103% year-over-year in the quarter, an 18-point sequential improvement from the prior quarter and 3% higher than 2019. The rest of the Asia Pacific region also saw significant growth with RevPAR, excluding China, up 52% year-over-year. Moving to guidance. For the third quarter, we expect system-wide RevPAR growth to be between 4% and 6% year-over-year. We expect adjusted EBITDA of between $790 million and $810 million and diluted EPS adjusted for special items to be between $1.60 and $1.65. For full year 2023, we expect RevPAR growth to be between 10% and 12%. We forecast adjusted EBITDA of between $2.975 billion and $3.025 billion. We forecast diluted EPS adjusted for special items of between $5.93 and $6.06. Please note that our guidance ranges do not incorporate future share repurchases. Moving on to capital return. We paid a cash dividend of $0.15 per share during the second quarter for a total of $40 million. Our Board also authorized a quarterly dividend of $0.15 per share in the third quarter. Year-to-date, we have returned more than $1 billion to shareholders in the form of buybacks and dividends. And as Chris mentioned earlier, we now expect to return between $2.4 billion and $2.6 billion for the full year. Further details on our second quarter results can be found in the earnings release we issued earlier this morning. This completes our prepared remarks. We would now like to open the line for any questions you may have. We would like to speak with as many of you as possible so, we ask that you limit yourself to one question. MJ, can we have our first question, please? Q&A Session Follow Hilton Worldwide Holdings Inc. (NYSE:HLT) Follow Hilton Worldwide Holdings Inc. (NYSE:HLT) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: [Operator Instructions] Today’s first question comes from Joe Greff with JPMorgan. Please go ahead. Joe Greff: Maybe the first question relates to your net unit growth target for this year, approximately 5% versus the 5% to 5.5% previously. Can you talk about what’s driving that? I mean how specific to the U.S., is that — can you talk about the rate of China development recovery? And then obviously, we all heard what your expectations are for next year in terms of net rooms growth. What gives you the confidence for that acceleration? And what specifically, whether it’s brand or geographies is driving that acceleration? Chris Nassetta: Yes, great question. And no, I’m not surprised that, that would be the first question. For the record, I think, on the last call, probably three different times I said around 5%. So the truth is, since our last call, I don’t think our view has really changed much about where our NUG would be this year. And so it is what it is, it was always a bit back-end loaded. And the simple reason for that, Joe, is in the numbers. If you look at starts, what’s been happening with starts, we had a big surge in starts in the second half of last year. Starts were up second half of ’22, 40%. And if you look at what they are in the first half of this year, as I stated in my introductory comments, they’re up 40%. So that means that a bunch of stuff is just translating into the second half of this year and into next year. And so it really is entirely sort of the timing of — in the sequencing of how that happens. So, we thought it would be around 5%. We still think it will be around 5%. Our confidence in going back on the way back up, I do feel like — if we look at the data, it’s not just pure optimism, although everybody knows I’m an optimistic sort. I mean if you look at the data, as I already said, starts were way up in the second half of last year. They’ve been way up in the first half of this year we continue to see good momentum there. Same with signings, I mean, we expect, as I said in my comments, have a record year in signings relative to our prior peak and that — all of those things are translating into both our optimism about the second half of this year being much stronger than the first half and 2024 being much, much better. It’s a bunch of different things that are contributing to that. It’s really all regions, even though arguably the U.S. credit conditions are — make it more challenging. As I already said, we’re still up year-to-date over the last — over the trailing 12 months, 15% in starts. And we have some other nice things that are going to add to our growth here in the United States with Spark. We’re only going to open 20 this year. You should assume we’re going to open a lot more than that next year and Home3 will start contributing H3 will start contributing next year, probably not a ton, but that is a much more financeable product, even in today’s environment because it’s probably more apartment than it is a hotel. We are broadly having really good success on conversions and Europe, which had been slow, has really started to pick up. And Asia Pacific really led by China has woken up and the engines have not just restarted, but they’re really starting to fire on many more cylinders, I wouldn’t say it’s all the way there yet, but in the second quarter and our expectation for third and fourth is we’re going to start to get a very good momentum. And so that’s why we feel pretty darn good on the NUG for next year. Obviously, for giving you a range, I would sort of direct you to the middle of it. If some things go our way and the world stays relatively stable, I think we can be mid-range of that or above, but it’s a little bit early in the year to go quite that far. We’ll, obviously, next quarter and the following quarter, we’ll update you. But I think — what I would say to people is, again, it’s objectively based on things that success we’re having in conversions, the success we’re having in demand for Spark, conversions all over the world, Spark here. By the way, we will take Spark to Europe relatively quickly. And just what we have in the pipeline, I mean, almost half of our pipelines under construction more than anybody in the industry. And once they start, they almost always finish. So that pickup starting in Q3 last year is starting to pay dividends. And thankfully, the pickup in starts has continued everywhere in the world. And as I said, the world is a big place. So there’s a little bit more pressure in the U.S. even though the numbers are still good but a lot less pressure in some other parts of the world that had been feeling it, which is the benefit of a big diversified global business. Operator: The next question comes from Shaun Kelley with Bank of America. Please go ahead. Shaun Kelley: I guess if we’ve covered the net unit growth side. Chris, I’ll ask a little bit of the same around sort of the RevPAR outlook. I’d like to gear it to sort of incremental kind of changes or upside for the second half? Just kind of what’s the biggest difference to kind of your prior outlook that gave you some confidence there? And then just any pressures or concerns you’re seeing on the leisure normalization point. It’s a question we take a lot and just kind of maybe update us on the latest you’re seeing as we move through some of these really tough comps in the summer. How is behavior out there? And what’s going better or a little worse than anticipated at this point? Chris Nassetta: Yes, happy to. So yes, we moved our numbers up for the second half of the year and thus impacted the full year. That was set on the basis that we’re just seeing better results. We — as we say very regularly, we’re not economists, so we try and take the consensus view of what’s going on in the macro. The consensus view last quarter was that the second half of the year would see a little bit more meaningful slowdown. I think the consensus for you right now, I mean, you can pick somebody, but it broadly is that it’s going to slow down, but it’s more of a soft landing and later in the year and more into next year. And so when we factor for that and we look at the momentum, obviously, we’ve already booked a half a year and we look at what we have reasonable sight lines now into the third quarter, which we feel very good about. And as we look at the fourth quarter, we would probably say the macro views that things will slow. And so we’ve assumed that, but probably the macro view is that they saw a little bit less than maybe last quarter. And so when you flush all that through, it results in an increase in our guidance. Now there’s possible upside if the fourth quarter keeps going like we saw in the second and what it looks like we’re going to see in the third, there may be potential. But it certainly warrant increasing our guidance based on where — what we’ve already booked for the year, what we see at a macro view in the late part of the year. I mean the interesting thing is like everybody wants to will the business backwards, but we don’t really see it. I gave you the stats on leisure, business transient and group. I gave you some sense of where we have really good forward-looking information, which is really on the group segment remaining really, really strong. I mean, obviously, leisure is growing at a somewhat slower pace because of the comps, but I mean it’s still way over the prior high watermarks and business transient keeps grinding up and getting better and the same with group. So, as I’m sitting here today, honestly, while we will take a macro view of later in the year because we’re not economists, we’re not seeing any signs of weakness. I know there’s a lot of questions on the leisure business. I mean what I would say to you is like we’re not seeing — we’re having it a wildly strong summer in leisure. I mean the only places where leisure has backed off a bit is where you would expect it, where it’s normalizing from like crazy highs. It’s still in those markets, which I’ll talk about way over ’19 levels. But I mean it’s just sort of coming back, not even to earth, but sort of in our universe, I guess. And those are markets like South Florida, Hawaii, parts of Southern California where it was just like it was insane. But broadly, we have a very diversified leisure business. Broadly, we’re not really — again, other than comps being harder, we continue to see good growth, and we expect to — and at least what sight lines we have in the business transient, talking to a bunch of customers, which I’ve done very recently. And certainly, our sales team talks to them all the time, and we got everybody together as we always do last week to talk about it. They’re feeling quite good, particularly the SMBs, which is at this point, 85% plus of our business. They’re traveling more. They’re feeling reasonably good about soft landing in their business. And then group and there’s pent-up demand there and group, there’s still huge amounts of pent-up demand that haven’t been released, as I said, we’re — we had the best booking quarter in our history ever in the second quarter and our position is great for next year. And you’re still not where you’re going to be with all the big associations because that was really driven by corporate group. So a bunch of the big association groups, I mean, they are booking, but that’s multiyear booking cycles, that’s still to come. And so we don’t see weakness. Obviously, we’re sentient and we know what the Fed is trying to do. We’ll hear this afternoon, what the next steps are? I expect they are going to raise rates. But I do think we’re probably getting to the end-ish of that tightening cycle. Inflation is coming down, some of the lag caters that will eventually come into the inflation numbers. Housing in particular, is definitely real time coming down and will eventually show up. And so, I do think — we’ll see. Again, I’m not an economist, but I do think consensus view is starting to center around a softer landing, maybe late this year or sometime next year. And that feels rational based on everything going on. And as I said, our business, we’re not seeing any real cracks anywhere. And of course, the places in the world that had been lagging are now starting to like produce. So, the most significant lag everywhere was doing really well, but China — and now China is eclipsing prior high watermarks and getting going on development, as I already said, but also operationally, eclipsing 2019 numbers. So not to be a [indiscernible], it all feels pretty good and if we can orchestrate a slowdown but a reasonably soft landing, I think the rest of this year is going to be very solid and in line or better than what we said. And I think next year will be a darn good year because I still think there’ll be strength in leisure. But particularly, there’ll be if you get a reasonably decent slowdown soft landing, you’re going to have continued growth in business transient, particularly with SMBs, which is the vast majority of the business. And group is going to be pretty sticky because people just have to do some of the stuff and particularly in a soft landing environment, I don’t think you’re going to see a big change there, anytime soon. So, it’s early. I’m not going to — like, obviously, I’m not going to give guidance yet for next year. We’re not it’s sort of crazy to do that. We got a lot of year to see how things play out. But I sit here today, I feel quite good about the rest of this year. I actually feel quite good about as we later this summer, get into budget season, how we feel about next year. And that’s reflected, as you not surprisingly. And the guidance we’re giving the increase in our return of capital, I mean I think that should be read for what it is. Operator: The next question comes from Stephen Grambling with Morgan Stanley. Please go ahead. Stephen Grambling: I know you don’t want to get 2024 guidance, but if we go all the way back to the split off, you had outlined this algorithm of 1% to 3% RevPAR growth kind of translating to 14% to 23% EPS algorithm with kind of 6% NUG. You’re talking about the reacceleration of NUG basically in that range. But what other changes in the business should investors be thinking through as we compare and contrast that algorithm to today whether it’s thinking about royalty rates or pipeline or other fees? Chris Nassetta: I think that the algorithm stands. I mean — and in fact, even — by the way, while NUG has been a little bit lower, RevPAR has been higher. I mean it’s a pretty perfect hedge, meaning — we’ve been running a little lower on one a little higher on the other. My guess is it’s going to flip around over the next couple of years. And as I said, we’re going to get back to 6% to 7% and same-store growth is going to normalize. But we think the algorithm is alive and well and will deliver at those — in those ranges that we’ve talked about as a result of increased growth rates from where we are, increased license fee rates, overall RevPAR growth, the deals that we’ve done on the licensing side, which generally drag us up because they’re at or above algorithm growth rates. We feel very good about that algorithm that we laid out in 2016 that it’s alive and well in producing. And as a result, we’re producing today more free cash flow than we ever had in history, which is what allows us to return so much capital. Again, that will keep — both of those things will keep going up as well. Operator: The next question comes from David Katz with Jefferies. Please go ahead. David Katz: I wanted to talk about just the strategic philosophies around brands. You’ve been highly productive at launching brands and just observing that a lot of the growth has been sort of in the middle and mid-scale and limited service, et cetera. How do you think about launching stuff potentially at the higher end? Or do you not sort of want or need those? Or — and just help us understand how you decide where to launch. Chris Nassetta: Sure, David. Thanks. Really good question. So yes, I got here with Kevin and others about 16 years ago, and this company had brands that were pretty good, but not performing that well today, we have 22 brands. So we have, I think, really built a very powerful sort of engine of innovation to figure out what customers want, what segments we’re missing and to give them more of what they want and do it with very high-quality brands and then deliver commercial performance that’s winning performance and market-leading performance is that we attract lots of capital. I don’t think we have a brand and we have some that are early, but I don’t think we have a brand. I know we don’t that isn’t performing at — either equal to or above everybody in the space. And so listen, I say that sort of patting us on the back because I’m very proud of that. Every company has different strategies. We think this strategy is a winning strategy because it delivers better products for our customers over time that meet the market in a modern context, and it’s better from a return point of view because we’re doing it with blood, sweat and tears and not investing capital. And so it’s an infinite return and better for the customers is sort of how do you not like it. Many of those brands, not all, and I’ll talk about that, have been in the mid-market. Why? Because that’s the biggest opportunity. And so we’re trying to serve any customer for any need to have anywhere they want in the world. But obviously, we have focused a lot on where the big markets are, where the big addressable TAMs are total addressable markets. And there’s no way you could debate that every segment is important, but the mid-market is where the people are. I mean the big demographic trend in the world. I don’t have to tell anybody on this call is growing middle classes all over the world, right? And that’s where the money is and those people can afford mid-market hotels. And so when you wake up in 10 or 20 years, the bulk of the rooms growth in the world, that’s the bulk of the money that’s going to be made is in the mid-market. So that’s why we have focused there. But we have not focused exclusively there. We’ve done a bunch of things in the lifestyle space, with Urban Micro like Motto, with Tempo with Canopy at the upper upscale lifestyle segment. And obviously, in the luxury space, we have made huge strides. I mean, Waldorf existed but wasn’t really a brand and Conrad was not much to speak about. And LXR didn’t exist. And so, we’ve gone from essentially a few hotels to 100 world-class luxury hotels with another nearly 60 in the pipeline. And by the way, I said it, but this morning, if you look at Bloomberg or whatever, Waldorf Astoria was ranked the number one luxury brand Eclipse Ritz-Carlton and customer satisfaction in North America. So, we’re making really good strides there. And I think there are more opportunities. I would say, listen, we’ve talked about this for a long time. And the only reason we haven’t done it is because we’ve had other market opportunities that we thought would drive, would serve more customers, drive higher growth and create more value for shareholders, but luxury lifestyle is definitely — I mean, we’re in and around the lifestyle segment, LXR, to a degree is sort of luxury lifestyle. But we don’t have a pure hard brand in the luxury lifestyle. Yes, we will. I would say we’re doing developmental work there. We want to give our babies spark and H3. While H3, we need to give a name, which we’re close to. And then we need to make sure they become little toddlers and are successful but we’re doing developmental work in luxury lifestyle. I would expect in the next year, we’ll launch something in that space to sort of add to the three brands we have already in the luxury space to give us another shot on goal for luxury opportunities around the world. But the — and so luxury and lifestyle are hugely important to us because customers like it, and we give them lots and lots of opportunities, but again, the big mass market opportunity every — in every major market in the world, is the mid-market. And so, we are not ashamed of saying we are — we have every intention to have the best brands in every market to serve mid-market because we think that’s where the most money will be made over the next 10 or 20 or 30 years. David Katz: Understood, and if I can just follow up on one detail and if I’m over beating the horse, apologies. With respect to the NUG for the remainder of this year, I just want to be as clear as possible about whether there was some on tough comps pull forward or any projects that have slid into next year that are elevating. Chris Nassetta: I’m not really. I mean not really. As I said in the last call, I said around 5%. And if you go listen to it, maybe three times I mean a little bit, although it’s not meaning — I mean, listen, we were hoping from the standpoint of the momentum that we have in Spark. We were hoping to have 50 hotels open this year, I think by the last quarter, we realized that, that wasn’t going to happen. But we’re going to have, as I said, we’re going to probably have 20. There’s no problem. I mean we have 400 deals in negotiation with hundreds more coming over the threshold. It’s just — and the supply chain stuff is now set up and moving. It was a lot of moving parts as we get set up. And so — that probably has a teeny bit of impact. I mean 20 to 50 is a few thousand rooms, but otherwise, not really — No. I mean, again, I said around 5%. I’m still — we still think it’s around 5. Kevin Jacobs: Yes, David, I think not to go too far on. I think I’d just add that there’s a reason why we signaled last quarter, another quarter has gone by. So, the second quarter is sort of in terms of openings played out the way we were thinking it would, which is why we were signaling we weren’t yet ready to adjust the official guidance. All we’ve done now is crystallized with a happy year in the books and have a year left that what we thought was going to happen in the second quarter happened. And then if you think about the momentum, I mean, Chris already talked about this, but the momentum in approvals and starts, I’d say, it was a better experience in the second quarter than we were expecting a quarter ago. Operator: The next question comes from Smedes Rose with Citi. Please go ahead. Smedes Rose: I just wanted to ask you a little bit about occupancy levels. When we look at the U.S. data, and I think is true for Hilton versus 2019 is a reasonable sort of gap to prior peak occupancy levels or pre-pandemic occupancy levels. But it sounds like from what you’re saying, you think maybe the continued improvement in group trends will kind of close that gap? Or is certainly be something else you’re seeing? Or do you think it’s just structurally lower going forward? Just kind of curious how you think that evolves over the next — through the balance of the year and maybe just going forward? Chris Nassetta: Yes. For us, it’s been better than the industry. We’re 3 or 4 percentage points off of depending on when you look at it off of peak occupancies. I think that you sort of noted some of the issues. I think part of it is happening because of the group. It’s still — our group is getting there, but it’s still building. Part of it is — and that’s impacting a bunch of the cities, right, that have recovered a lot most of them. There are a couple of exceptions or one big exception, but most of the cities have recovered. But from an occupancy point of view, they’re still off because they don’t have the big citywide spec. So I do think it is partly the group. And then the other thing that’s going on is, I sort of kid not to be a smartass about it, but part of it is in, right? So if you said to me, could we drive occupancy consistent with the prior peak. The answer is, yes, I could probably do it in the next couple of days, but it wouldn’t be the right answer. Meaning, we are pushing hard on price because we’ve been obviously in a highly inflationary environment. And from the standpoint of trying to make our hotel owners the most money, that relative trade is the right trade, keep pushing price hard even though it might impact occupancy. The bottom line is better because the flow-through on rates a heck of a lot better than the flow-through on occupancy. So part of this is, yes, there’s still goods coming back. You have business transient is still particularly the big corporates are only 92% back, part of — and they’ll come back no matter what they say, by the way, over the next few years, they’ll come back. You heard it here. I’m telling you they’ll come back. But a bigger part of it is, honestly, yield management strategies. I mean, we’re really trying to push rate, and we don’t want to give — we’re not as worried because it’s a better outcome for every a better outcome for us, our owners make more money to drive higher margins. Operator: The next question comes from Brandt Montour with Barclays. Please go ahead. Brandt Montour: Just a follow-up on that, Chris. Industry ADR growth has been tracking below inflation since April. Inflation is probably expected to ease further. And I know your pricing is based on supply and demand and you’re pushing rate. And I’m trying to just reconcile those two forces as we look into the back half of this year, and maybe you could also just add in what your core SME or your core business transient ADR pricing growth is looking like and if that is in excess of inflation today. Chris Nassetta: The answer is yes. I mean there is a tiny disconnect in timing. But I’d say the core pricing of our transient products, whether that’s leisure or leisure transient or business transient is keeping up with inflation at its current levels. And obviously, we expect that to continue to come down. We feel good about the pricing power, again, with all the assumptions I already commented on about my view or the macro view that we’ve adopted for the back half of the year. And as we go into next year, and we think the broader environment is generally supportive for continued rate strength. I mean the one thing — it’s funny we talked — I kid our team around here, it’s like we’ve been living a little bit in bizarro world coming through COVID, obviously, and then in the aftermath, where you all be about fundamentals. That’s all we would ever talk about on these calls. It all has ever talked about with investors, the fundamentals of demand, what’s going on with demand and what’s going on with supply. In the bizarro world, nobody talks — nobody cares about supply. But we’re now in a lie. I mean, everything is just getting reasonably close to a more normalized environment. prices are higher, okay, but that’s just a broader reset that’s happened throughout the entire economy, which I think unless you have broad disinflation, which it doesn’t feel like that’s happening anytime soon, that’s sustained. And so you’ve sort of set a new water level, if you will, for pricing. And then eventually, in the very near term, it’s going to get back to basic fundamentals, like what’s going on with base demand and what’s going on in supply. And I think the thing that doesn’t get enough attention, like thankfully, as you can see in our starts and signings and NUG and our expectations for the future, we get a heck of a lot more than our fair share. But what’s really going on in supply, particularly in the U.S. is anemic levels of industry growth that are sub if the 30-year average is 2.5%, it’s running like 0.8% and it will be, and it’s been running low. And given the environment, it’s going to stay low. And so when you get to a more normalized environment, which is we’re sort of morphing slowly into over the next year or two, you’re going to find yourself in an environment where demand should be reasonably healthy if the economy is okay against a historically low supply side environment in the industry. And so, I think it’s going to feel pretty good. And I think it’s going to be another factor for sustaining performance and rate integrity. Operator: The next question comes from Duane Pfennigwerth with Evercore ISI. Please go ahead. Duane Pfennigwerth: Can you talk a little bit about the profile of your owners for new development and how that may be changing? With the signings activity you talked about in the second half of last year, first half of this year, any new trends or maybe some surprises you could speak to with respect to the organizations or the individuals that are investing in new development? Kevin Jacobs: Yes, Duane, I’d say, look, no surprises really. I mean, I think Chris mentioned in his prepared remarks, I mean, I think half of the Spark owners are new to Hilton, right? And that’s not a surprise to us when you’re heading into a different segment you’re heading into a different group of owners. And we view that as a positive thing, right? You’re filling the top of the funnel with a lot more demand for the product going forward. You’re diversifying your own base even further. I mean we’ve always had a really diversified owner base but we’re diversifying it even further. And we’re responding to — if you think about — Chris said before, when he answered David’s question is like evolving the product base to respond to where the demand is, well, the owner base evolves in that same way, too, right? The capital follows the opportunities. And so, if we were living in a world not that long ago, where 70% to 80% of our deals every year were with existing owners, we’re still doing the same absolute amount of volume with our existing owners. I have to assume, I don’t have the stats in front of me, I have to assume we’re doing more business with our existing owners, but then we’re actually adding a whole lot more owners around the world. So, I think globally, we’re down to like 50% or 60% of our deals are with existing owners annually. So, no surprises, but we view it as a huge net positive for the business. Chris Nassetta: Yes. The other minor segment, I think that’s well said, is on H3. I mentioned in my comments, it’s a hybrid, and it’s probably more apartment than hotel. We’ve been really excited about the institutional interest that we have from larger institutions that either want to develop or work with a partner and fund the development of large numbers of H3 just because of the cost to build the — it’s we think a 60% kind of margin business, and they really like the segment of demand and its existing profile and growth profile. So that’s been not surprising because we — when we were developing H3, that was our hope and expectation, but it’s nice to see it come to life. I mean, as I said, we’re negotiating 300 deals and that’s not with 300 different people at this point. We barely opened it up. This is with a relatively limited number of very well-heeled more institutional type players. We will ultimately open the floodgates on H3 once we get it going. But it’s been very nice to see. Operator: The next question comes from Robin Farley with UBS. Please go ahead. Robin Farley: Obviously, great news on the RevPAR outlook, I did have a question circling back to the net unit growth. You mentioned Spark, and maybe it sounds like some timing in China that was a little bit pushed out. But when we think about the strong start numbers that you’ve talked about, can you help us think about timing of interest rates are still moving up a little bit here? And obviously, some of those big increases in starts are due to sort of comping the pandemics, so there’s that going on, making the comps look different than normal. I guess just trying to think about the timing from here in terms of the factors like what has everything do you think bottomed. It seems like maybe not yet in terms of — with interest rates still moving up, but help us think about the timing of like rates moving up, starts being high, but — and kind of where you see things bottoming in terms of that. Chris Nassetta: Yes. Just for the record, in the signings numbers, then starts signings will be above prior high watermarks pretty materially, and starts will be about — even though the comps are resi be about where we were at our prior high watermark. So, it’s not just the benefit of comps. I’ll let Kevin take the next part of it. But I mean, Spark, the beauty of Spark is it’s a relatively low-cost entry product. And so, it doesn’t really require a lot of financing. Kevin Jacobs: Yes. Both Spark on H3 are more easily financeable products in this environment. So again, that’s not why we launched those brands. We launched those brands because there’s a ton of customer and owner and for the product. But if you think about the way it’s playing out, it’s sort of another example of diversification being a great thing. We have products that are more financeable. I think our lower-end products around the world are more financeable. And then I think I’d couple of things I’d guide you to as well. I think when you think about a tighter credit environment because not just rates, it’s availability of capital, that’s not a — that’s a Western world phenomenon. It’s not just U.S., but it is highly concentrated in the U.S. Only 40% of our deliveries this year are going to be in the U.S., right? So it’s a big world out there. We’ve got a lot of diversification. And I think that for all of the reasons we’ve given you, we think momentum can continue. And if you think about mean Chris talked about bizarro world on fundamentals. It’s also bizarro world a little bit on development because it sort of starts with approvals you got to sign them, you got to get them in the ground and then they deliver, and that’s all usually on a lag. And we’ve had COVID, and we’ve had a bunch of changes. But I think if you think about development being on a lag, it has to start somewhere. So, the outlook for approvals and starts bodes well for the future. The fact that we’re rounding out the product base with more easily financeable products bodes well for the future, the fact that we have more limited service and lower-end products to deploy in emerging markets bodes well for the future. And it’s not to say there won’t be hiccups along the way, but we do believe that it’s a progression back to normal, if you will, from here. Operator: The next question comes from Michael Bellisario with Baird. Please go ahead. Michael Bellisario: Wanted to go back to the new credit card deal that Amex announced on Friday, you guys didn’t mention it. So maybe hoping you could provide any commentary or incremental fees or economics that you expect to receive? And then maybe what’s new or different in this deal versus what you last signed in 2017? Kevin Jacobs: Yes. I think, look, there’s a fair amount of that is competitively sensitive, and we’re not going to get into a lot of details, but I can sort of give you a sense for what’s new and different. I think, look, the economics are a little bit better, which is as a result of the program just being better. I think our — if you look at total spend in the program for this year, it’s going to be about 2/3 higher than it was in 2019, right? So, we’re growing the program massively. It’s been a hugely successful partnership with American Express. We believe that those — we’ve said — we don’t give you a lot of details on packet, and we apologize for that. But again, it’s pretty sensitive competitively. It’s been growing ahead of algorithm. We think it will continue to grow at or ahead of algorithm over time. It’s a 10-year deal. I think a lot of people would have predicted the last time we did a credit card deal that credit cards were going to go somehow go away and be replaced by other forms of payments. I think it’s quite the contrary. I think travel co-brand cards have become extremely successful and attractive products. They drive engagement across the system. It’s not just about the economics on the card. And I think Amex feels the same way. So we’re super excited about the deal and probably will stop short on too many more details than what we’ve already said. Michael Bellisario: Got it. And then just one follow-up, any incremental economics included in the increased full year guidance from the credit card deal? Kevin Jacobs: I mean we’ve been assuming that we’ve been working on this for a while. So I think there’s nothing new on that front. Operator: The next question comes from Chad Benyon with Macquarie. Please go ahead. Chad Beynon: I wanted to ask about the owned portfolio. The performance in the quarter recovered better than M&F fee portfolio, leading to some of the positive variance versus your Q2 midpoint EBITDA guide. Kevin, you noted, I think, strength in Europe and Japan, obviously, where you probably have some of the smaller concentration. But can you kind of help us think if the outlook has changed for this segment as we kind of look into the back half of the year, given how much improvement you saw in the second quarter, does that give you more confidence that you could see some margin improvement and just overall EBITDA growth year-over-year in the back half? Kevin Jacobs: Yes, no problem. Yes, there’s a lot there. First of all, the whole portfolio is concentrated effectively in U.K., Ireland, Europe and Japan, so particularly Central Europe and Japan have been quite strong. There’s no real sort of change in — I mean, a little bit of year-over-year growth for subsidies last year. That’s just a little bit of noise. I think basically, there’s operating leverage in the business, right? Their own hotels, their leases, right? So there’s even more operating leverage than a regular owned hotel. So they’ve been growing at a rate that is quite in excess of the overall fee business. As long as fundamentals stay growing, that will continue to be the case. And I think we — our outlook for the segment is a little bit better now this quarter than it was last quarter because our outlook for Europe and Japan is better. Operator: The next question comes from Richard Clarke with Bernstein. Please go ahead. Richard Clarke: Just on the two new brands, [Arch] and H3. Are those going to be enough to get U.S. now back up to 5% that the international business will [indiscernible] recovery factor 6 to 7. And then maybe just related to that, by giving us some big numbers on where you think Spark can do in the near term. If I go back to when Motto was launched now 60 hotels, I think you’re 8 to 10, when you launched Tempo, you talked about maybe 20 to 30 having got a Tempo yet, but one coming through, just maybe what’s different here versus maybe where — what those brands achieved in the shorter term? Chris Nassetta: Yes. Good question. I think the answer is yes on not just Spark and H3 in the U.S., but Home2 in the U.S., Hampton is growing in the U.S. I’ll come back Tempo is just getting started. So I think the combination of all of those brands, the benefit of conversions in soft brands will get us back, I am confident to those levels. The difference between like a Tempo and Motto and Spark is night and day, honestly. I mean here’s what happened at Tempo and Motto. We launched them about a day before the pandemic and they are all new build. I mean it’s pretty much with both those brands. There are some adaptive reuse that will go on, but it is a vast majority of those — our new builds. And so we got into COVID, there was no financing if everything slowed down. Those brands, I think, will do incredibly well. I think Tempo, we have I don’t even have the pipeline number in my head. But as we open Times Square, we’ve got dozens of those under development around the country. We’re getting ready to take the show on the road around the world and now that we’re in — even though the environment has some uncertainty in financing and all that, it’s a heck of a lot better than it was in COVID. So, you’ll start to see a great trajectory and Tempo, there’s nothing wrong. Tempos are great, owners love it. It’s just COVID got in the away. Basically saying same for Motto, Spark is a totally different thing. One, it’s not — we’re not COVID. While there are challenges out there, it’s 100%, 100% conversion brand. And it’s basically taking hotels that are in much weaker brands and converting them into our system where there’s huge opportunities for market share gains and it doesn’t cost in terms of the quantum of money to do it, it’s a relatively low ticket for owners to do it, thus, why we have so much interest. So I think the ramp on that will be much, much faster, and it’s a very different thing. But I wouldn’t diminish the opportunities in Motto and Tempo. They’re going to — particularly Tempo, Mottos, a micro hotel in just the biggest urban markets, we’ll do a lot more of them. But I mean, Tempo will be a mega brand. It just got caught up in getting launched a minute before COVID. Kevin Jacobs: Yes. I wouldn’t connect — is a shorter way of saying, I wouldn’t connect too many dots. I mean the world is just different, and the brands, as Chris said, are different. And again, the beauty of Spark is you don’t have to get a building built to do a Spark. It’s all going to be buildings that are already built. Operator: Ladies and gentlemen, this concludes our question-and-answer session. I would now like to turn the call back to Chris Nassetta for any additional or closing remarks. Chris Nassetta: Thank you, MJ. Everybody, we appreciate as we always do, you spending a little bit of your morning with us. We know it’s a busy time and lots of earnings releases. We obviously remain really optimistic. Obviously, Q2 was a great quarter for us. That’s flowing through plus some given our expectations for the second half of the year. Again, we’re optimistic on our unit growth and optimistic for not just the end of this year, but in the next year, we’ll be able to deliver. But most importantly, the algorithm that we’ve described is alive and well and working and we continue to grow. We continue to maintain incredible cost discipline. The Company is at the highest margins by 800 basis points ever run at, thus producing the greatest amount of free cash flow in our history, and we intend to be super disciplined about how we allocate that otherwise known as giving it back to our shareholders. And so in any event, we’ll look forward after Q3, giving you an update on how everything is going. I hope everybody has a great rest of the summer. Operator: The conference has now concluded. Thank you for your participation. You may now disconnect your lines. Follow Hilton Worldwide Holdings Inc. (NYSE:HLT) Follow Hilton Worldwide Holdings Inc. (NYSE:HLT) We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»

Category: topSource: insidermonkeyJul 27th, 2023

DiamondRock Hospitality Company (NYSE:DRH) Q1 2023 Earnings Call Transcript

DiamondRock Hospitality Company (NYSE:DRH) Q1 2023 Earnings Call Transcript May 5, 2023 Operator: Good day and thank you for standing by. Welcome to the DiamondRock Hospitality Company’s First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please be […] DiamondRock Hospitality Company (NYSE:DRH) Q1 2023 Earnings Call Transcript May 5, 2023 Operator: Good day and thank you for standing by. Welcome to the DiamondRock Hospitality Company’s First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Briony Quinn, Senior Vice President and Treasurer of DiamondRock Hospitality. Please go ahead. Briony Quinn: Thank you. Good morning, everyone. Welcome to DiamondRock’s first quarter 2023 earnings call and webcast. Before we get started, let me remind everyone that many of our comments today are not historical facts and are considered to be forward-looking statements under federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ materially from those expressed in our comments today. In addition, on today’s call, we will discuss certain non-GAAP financial information. A reconciliation of this information to the most directly comparable GAAP financial measure can be found in our earnings press release. With that, I’m pleased to turn the call over to Mark Brugger, our President and Chief Executive Officer. Mark Brugger: Thank you for joining us today. The first quarter results from the DiamondRock portfolio set records for both revenues and total profits. In the quarter, comparable RevPAR increased 16.9% and comparable revenues increased 18% over the prior year. Hotel adjusted EBITDA increased $8.5 million or 15.9%. The results were also well ahead of 2019, with comparable RevPAR up 13.8% and hotel adjusted EBITDA up 19.5%. These record results speak to the quality of our real estate, our favorable geographic footprint and our strategy to have a portfolio of differentiated hotels and resorts. It is the DiamondRock portfolio that is our competitive advantage. The DiamondRock portfolio distinguishes itself from its public peers by having only two of its 35 hotels, subject to long-term management agreements. This increases both the liquidity and the NAV of these unencumbered properties. The portfolio today is comprised of 35 properties, 20 in urban gateway markets and 15 in prime resort locations. It’s a well-balanced portfolio. By full year revenue, it is about 60% urban and 40% resorts. We believe that we have carefully curated a unique portfolio that can outperform the industry averages over the long-term because of our focus on the right markets and the favorable experiential travel trend. Our urban properties are concentrated in some of the most desirable submarkets of the best gateway cities. These submarkets include New York’s Times Square and Midtown East, Boston Seaport and Financial Districts, Chicago’s, Magnificent Mile, Denver’s, Cherry Creek District, San Diego’s, Little Italy and Salt Lake City’s Temple Square. Just as importantly, we have largely avoided markets like San Francisco, Portland and Los Angeles, where values have been crushed for post-pandemic structural changes in demand, new transfer taxes and reduced operating efficiencies from recently adopted hotel ordinances. Our resorts like our gateway hotels are situated in prime locations, like the Vortex among the Red Rock Sedona, the snow-cap mountains of Vail, the Wine Country in Sonoma or the beaches of the Florida Keys. Collectively, these resort markets are positioned to outperform in the coming decade from the accelerated paradigm shift towards more leisure travel that powerfully is combined with little to no supply increases. Let’s get into the trends that we are currently seeing within the portfolio. The group segment is showing considerable strength. Compared to the first quarter of last year, room revenue increased 59% and in the quarter for the quarter activity was up nearly 15%. The benefit of owning well-maintained hotels in key submarkets is readily apparent in the performance of our group-centric hotels. RevPAR at the San Diego Westin increased 71% over Q1 2022. And RevPAR at the Chicago Marriott increased 62%. Similarly, RevPAR at the Boston Western Seaport increased 40% over the first quarter of 2022, which impressively was more than 10% over its prior first quarter peak. Business transient demand has also rapidly recovered. Midweek business transient occupancy at urban properties increased 50.8% in the first quarter from the comparable period. This strong business transient demand helped set records for our trio of select service hotels in Manhattan, which were stars in the first quarter with RevPAR increasing at an average of 45.6% over Q1 2022 and 8% higher than the comparable period in 2019. Business transient demand also propelled results at the Hotel Emblem, which cemented its status as the number one TripAdvisor ranked hotel in San Francisco. This tiny boutique delivered nearly an 80% increase in RevPAR over last year and double-digit RevPAR growth compared to 2019. Just as encouraging was the intra-quarter momentum for BT. In January, in business transient occupancy at our urban hotels was 51.7% of comparable 2019 levels. And by March, it was 16 percentage points higher at 67.7% of 2019 levels. However, it is really the resort segment that continues to be the big long-term beneficiary of travel trends that began before the onset of the pandemic. There is a fundamentally favorable imbalance of robust leisure demand for the limited number of resorts in the US. This imbalance underpins our belief that resorts remain a great capital allocation choice for the coming years. In fact it is now obvious that the more resorts you acquired prior to the pandemic the better off you are now. As you know, DiamondRock nearly doubled its number of resorts prior to the pandemic through the acquisition of seven different resorts in the five years prior to 2020. It was this delivered capital allocation that helped fuel our record-setting performance. For our entire resort portfolio, the results in the first quarter were very strong with RevPAR that was 30.4% higher than 2019 and adjusted EBITDA that was 47% higher than 2019. This operating outperformance yielded enormous NAV increases for our resorts where we estimate NAV increased by nearly $200 million or about $1 per share since 2019. For the industry, STR reported that the resort segment in the US increased year-over-year RevPAR by 12.9% in the first quarter. As the world settles down post pandemic each resort market is establishing a new normal baseline, which began happening around September of last year. Encouragingly, in this first quarter we saw record RevPAR performance from our luxury collection resort in Vail up 18.8%, our Hilton and Vermont up 13.5%, the lodge at Sonoma up 11.5% and the Kimpton Shorebreak in Huntington Beach, which is another number one ranked TripAdvisor hotel. After experiencing explosive growth during the last few years, we are seeing the resorts in Destin Beach and the Florida Keys stabilizing at their new normal still behind last year, but still more than 38% above 2019. We expect this new normal adjustment will continue until we get to lap this trend in late 2023. And when leisure is likely to resume its outperformance headed into 2024 and beyond. That’s a good transition to give you an update on the acquisition market more generally. While Jeff will discuss our current capital allocation options, including share repurchases at these steep discounts. We remain active in trying to find more acquisitions of the kind that have worked so well for us unique experiential hotels, generally owner-operated and held by non-institutional folks. We’ve been focusing these type of deals for almost a decade and have a first-mover advantage. DiamondRock’s well home skill set for identifying and unlocking value at these type of properties puts us in a great position to create value when we can pry them loose. Of course, a deal we would do this year will have to be something that we really love, but there are a few special opportunities out there where we are actively engaged in conversations. For broadly marketed deals, we expect the low transaction volumes to begin slowly picking up later in 2023, and into next year. Before turning the call over to Jeff to discuss our fortress balance sheet and earnings in greater detail we do want to provide comments on our outlook. Regarding group in full year 2022, we generated 83% of prior peak group room nights. Clearly, there is significant room for improvement and we are making excellent progress. In the first quarter, group room nights were 88% of prior peak and our current forecast is to finish 2023 at 94% of peak group room nights and 102% of peak group revenue. We are aggressively closing in on that target. Our group revenue booked in Q1 for the remainder of 2023 was up 28% over the last year with the strongest gains to be found in the next two quarters. Our full year forecast has group room rate up 14.5% to 2019, but it’s still about 46,000 room nights behind prior peak, including out of the room spend closing that gap and capturing those rooms could add $20 million of incremental revenue to our 2024 results. On leisure, it’s been the top performance segment over the past few years. In 2023, we expect each market will reach a different level of new normal after which leisure will likely return to its long-term secular growth trend line but off of a much higher base with the new normal 2023 resort NOI about 50% higher than 2019. As one point of additional opportunity for our resorts, they are projected to end 2023 at four percentage points of occupancy below prior peak and closing that gap next year could be worth another $24 million in revenue. Finally, business travelers are clearly getting back on the road, but we are seeing that positive BT trend line moderate a little on the demand side while we continue to push rate to maximize profitability. I’ll sum up by saying that, while the economic outlook is still too volatile to provide investors with useful earnings guidance. We continue to expect DiamondRock to achieve record revenues in 2023. With that, let me turn it over to Jeff. Jeff Donnelly: Thanks. As Mark said at the onset of the call, it was another strong quarter for DiamondRock. Comparable total revenue was up 18% over 2022 and 14% over 2019. Hotel adjusted EBITDA increased 16% over last year. This enabled us to generate corporate adjusted EBITDA of $55.4 million and adjusted FFO of $0.18 per share. Comparable RevPAR for the portfolio in the first quarter was $185, or nearly 17% higher than 2022 and nearly 14% higher than 2019. This growth was driven by a 23% increase in room rates over 2019. Occupancy was down 540 basis points to the first quarter in 2019. This is a 240 basis point sequential improvement, from Q4 2022. Closing this gap, remains one of several sources of future growth for DiamondRock. F&B and other revenue increased 14.1% or over $10 million on a combined basis, to nearly $83 million driven by several repositioned F&B outlets and new income streams created by our asset managers during the pandemic. We will share with you soon several new or upgraded outlets we are working on that will continue to drive profits to new levels, in 2024 and beyond. Comparable hotel adjusted EBITDA was $61.9 million, which beat first quarter 2019 by $10.1 million or nearly 20%. Adjusted EBITDA was $10.5 million and 23% better than 2022 and FFO per share was 28.6% better than 2022. Profit margins remain a great story for us. Comparable hotel adjusted EBITDA margins were 25.8%, up 117 basis points to 2019. Our resort portfolio finished the first quarter with a comparable hotel adjusted margin of 34.9% or 379 basis points higher than the same period in 2019. Importantly, this performance expanded upon the 341 basis point improvement reported by our resort portfolio in the fourth quarter of 2022. Comparable hotel adjusted EBITDA margins at our urban hotels were 18.2%, up 823 basis points over 2022. Urban hotels have yet to see demand recover to 2019 levels. So while we rebuild profitable corporate business, we are identifying permanent efficiencies to amplify our ultimate recovery. Operating efficiency is a critical factor in all aspects of capital spending on rooms, outlets and even back-of-house design. A more immediate example of efficiencies, can be found at our Chicago Marriott Magnificent Mile, which now operates with 20% fewer managers than it did in 2019. Our goal for 2023 is for hotel adjusted EBITDA margins to be roughly flat to 2019. Portfolio-wide increases in property insurance and property tax, are expected to be headwinds for the industry and for DiamondRock. Looking at the remaining three quarters of 2023, we expect total expense growth at our resorts will increase in the low single digits over 2022. For our urban hotels, expense growth is likely in the range of 12% to 13% for the remainder of the year, as we grow banquet business and fill positions as we rebuild occupancy. We are working hard to offset these increases through aggressive asset management, converting contract workers back to full-time employees and more efficient staffing models. Moving to capital allocation. As discussed in the prior earnings call, in early February, we executed two hedges to end the quarter with 64% of our total debt fixed or swapped. Subsequent to quarter end, we acquired the fee simple interest in the remaining land parcels under the Worthington Renaissance parking structure for approximately $1.8 million. We now own a 100% fee simple interest in the hotel. The transaction enhances the liquidity and financeability of this asset and more importantly, reinforces DiamondRock’s low exposure to ground lease assets. At the end of March, we acquired 56,400 shares of common stock at $7.26 per share before our window closed. This price represents nearly a 10.5% cap rate on trailing NOI or $270,000 per key of enterprise value, which is less than half our replacement cost. We were disappointed we could not be more active at these levels. Share repurchases are a key component of our capital allocation opportunity set and we constantly evaluate repurchases, against external growth opportunities as well as the high yields and long-term value creation, from our ROI pipeline. Speaking of ROIs, the portfolio continues to drive cash flow and create value as we execute our high ROI repositioning plans. In the last 24 months, we have completed the conversion and up-branding of the Vail Marriott to The Hythe, a Luxury Collection Hotel; the JW Marriott Denver to Hotel Clio, a Luxury Collection Hotel; the Key West Sheraton Suites to the Margaritaville Beach House and The Lodge at Sonoma to An Autograph Collection. In the first quarter these four hotels alone generated a collective RevPAR increase of 46% over 2019, with hotel adjusted EBITDA up 75% since 2019. Importantly, net asset values increased at these hotels and we are seeing a handsome return on our investments. Since 2021, we have, or will execute, a total of $90 million of ROI projects at 16 of our 35 hotels, creating and executing these types of repositioning is a core competency for DiamondRock. We are currently underway with three more ROI repositionings; the Hilton Boston to a lifestyle hotel that will be completed late summer; the Hilton Burlington to a lifestyle hotel to be named Hotel Champlain, a lakeside resort to be completed this fall as part of the Curio Collection; and the Bourbon Orleans repositioning to a premium urban lifestyle hotel in the French quarter to be completed before the Super Bowl and Mardi Gras in early 2024. We also have plans to create significant value and other — at several other properties including our Orchards Inn Sedona, our Lake Austin Spa Resort and our Landing Lake Tahoe Resort. These will allow us to grow value and drive premium core growth in future years. There is more to come, so stay tuned. Turning to the balance sheet. We remain committed to having a strong and flexible balance sheet. Our leverage is conservative as demonstrated by the low trailing four-quarter net debt to adjusted EBITDA ratio of 3.8 times. Our liquidity is very strong at $585 million, including $185 million of cash. Our $400 million revolver is undrawn. But just as critical, the $400 million is fully available to us even under our most restrictive debt covenants. Moreover, we expect to generate over $215 million of cash this year before capital expenditures and dividends. We have a few demands on our balance sheet and this allows us to play offense at a time when others may be forced to sell at depressed prices. Conversely, and to be clear, this is not our expectation, if real estate capital markets were to remain choppy for an extended period, we project we will have the capacity to retire all debt maturities, fully fund all capital expenditures, fund all pending ROI projects and pay projected preferred and common dividends through 2025 from current liquidity and retained cash flow. This scenario was not our house view of the future, but we believe it is an important point of differentiation for DiamondRock. We believe our well-maintained portfolio, low leverage, flexible and liquid structure, long weighted average maturity and strong cash flow are distinct and material advantages. Moreover, unwinding our balance sheet does not create a drag on our NAV. With that, let me turn the call back to Mark. Mark Brugger: Thanks, Jeff. Let me end by saying that we remain bullish on the future of travel. Travel is one of the most highly valued assets in our society and around the world. Leisure demand enjoyed a strong period of outperformance that began before the pandemic and we see that secular trend of outperformance continuing in the coming years. On group, the funnel for future business looks very strong. On business travel, while there is still some uncertainty as to where demand ultimately settles out, there clearly has been positive momentum and we are primed to take share from other hotels because of our excellent locations and from repositionings like the Clio, Denver, Luxury Collection hotel or the upcoming conversion of our hotel in Boston. To wrap up, the first quarter of 2023 was a record for DiamondRock’s portfolio in terms of both revenues and profits. Moreover, we believe that we are well positioned for this cycle with a very high-quality portfolio, a focused strategy and careful liquidity to move opportunistically. At this time, we would like to open it up for your questions. Q&A Session Follow Diamondrock Hospitality Co (NYSE:DRH) Follow Diamondrock Hospitality Co (NYSE:DRH) We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. First question comes from the line of Austin Wurschmidt with KeyBanc Capital Markets. Your line is open. Austin Wurschmidt : Thanks and good morning. Mark can you just put some further details around your comment that BT is moderating. I’m just curious if that’s specific to any markets? Do you think this is a little bit of an air pocket, or are we actually seeing BT stall given what’s happening maybe just more broadly given the macro backdrop? Mark Brugger: Very good morning Austin. So I think it’s somewhat in comparison to the other segments. So leisure has been great. We’re well above and elevated from prior peak levels. Group is rebounding. And I think as we mentioned our group revenues will exceed prior peak this year. And then BT it’s coming back. It came back behind those other two segments. And we saw good momentum in the first quarter. I think what we’re trying to convey is we don’t see it reaching prior peak levels this year and it may settle out at something below what as the demand levels were in 2019 ultimately. So good positive volume that momentum that came on in the fourth quarter continued through the first quarter. But what we’re trying to indicate we don’t see — we talked about 16 percentage points of growth from January to March. We don’t see that see that same velocity while we continue to see here we don’t see the same velocity for the balance of the year. Austin Wurschmidt : Okay. Got it. And then just on group. I know you gave some stats but what percent of group revenues on the books relative to budget? And how much do you expect to pick up I guess in the quarter for the quarter over the balance of the year? And can you just talk a little bit about how the short-term leads are today relative to maybe what you saw last year? Mark Brugger: So I’ll take the front of that question and maybe I’ll hand it over to Justin to talk a little bit more about group. So we have today we ended the quarter with about 80% of the group room nights already under contract that we need to hit our forecast for the full year. So we feel good about the position that we’re sitting in for group. Justin, do you want to add some comments on the group? Justin Leonard : Yes. I think we hit it in our highlights and we’ve seen group as an area of strength just in the industry generally. And in full year ’22 we did 83% of prior peak. Q1 was 88% of prior peak and our current forecast is to get back to 94% of prior peak just in group room nights and we’re expecting to exceed that in volume. But I think more importantly what we’re seeing is in the year for the year pickup is actually accelerating. So in Q1 our in-the-quarter pickup for the remainder of 2023 was up 28% just in room night volume versus Q1 2019. So we continue to see that velocity while being somewhat short term expand over what we saw last year. And so we’re optimistic that we can even further close that room night gap to what we’re projecting for full year ’23. Austin Wurschmidt : Got it. Thanks, Justin. Thanks, Mark. Mark Brugger: You bet. Operator: Thank you. One moment for our next question. Next question comes from the line of Dori Kesten with Wells Fargo. Your line is now open. Dori Kesten : Thanks. Good morning. You talked a bit about your appetite to apply this year Mark. Should you transactionally assume you acquire pretty similar to what you have over the last several years like relatively small relationship potentially owner managed? Mark Brugger: Hey, Dori, it’s a great question. So we’re still focused — this isn’t the time to go out and do a big deal. We think we have ample liquidity and something we do given our cost of capital would have to be something that has relatively high returns in a market where there’s still a lot of private equity chasing deals. So we think our competitive advantage remains in these relationships we’ve built often in kind of differentiated resort markets from owner-operators. So that continues to be the bulk of the conversations that we’re having. That’s where we think we can create more value. It’s where we think we can buy things relative to our cost of capital that might make sense. But I can say in the broadly marketed deals we’ve seen they’re still — it’s still very competitive in the pricing. The pricing on this probably doesn’t make sense for us. So we’re trying to focus on the things where we think we have a competitive advantage. Dori Kesten: Okay. And some peers have talked about selectively reducing FTEs in the near term. Do you feel the need to do so, or is your focus more on offsetting contracts with permanent workers? Mark Brugger: Justin do you want to talk about the efforts we have for maintaining our margins? Justin Leonard : Sure. I think specifically on labor, we’re doing a number of things. I think one of the things Mark spoke about, specifically on the resort side where we’ve really cultivated a unique portfolio of small independent experiential resorts. We continue to look at how we can more efficiently run those small businesses by pooling resources. And I think it gives us an advantage both from a margin perspective but also in potential acquisitions. So, for test like cultivating relationships with luxury travel agents or small group meeting sales or even optimizing e-channel placement, we’re using external third party resources in lieu of on-property staffing for some of these smaller assets. It allows us really to get best-in-class resources for a significantly lower cost and eliminate those on-property FTEs versus the owner-operated run rate model. I think with respect to contract, we are focused on decreasing reliance on contract labor portfolio-wide. I think in the tight labor market in the last couple of years, everyone was forced to step up quickly and really use all labor sources we could secure. But given that market contract, labor costs have really inflated much faster than overall wage growth in many of our markets. It now represents a premium cost in a lot of those markets to bring those associates onto our property level teams, especially we factor around additional turnover and training. So we are — we continue to push for more FTEs on staff within our individual assets. Just as an example since acquiring Lake Austin, we’ve moved entirely away from contract labor in our spa operations. And we’re seeing that benefit both on the spa expense side, but it also helps us deliver better service to guests and probably more importantly, eliminating that middle man delivers a better paycheck to the associate. Dori Kesten: All right. Thanks. Operator: Thank you. One moment for our next question. Our next question comes from the line of Duane Pfennigwerth with Evercore ISI. Your line is now open. Duane Pfennigwerth: Hey. Good morning. Thanks. Just on F&B, one of the trends we’ve seen really across lodging this sector is higher F&B relative to room revenue. I wonder if you could just provide some context on what you think is driving that. And again, from an industry perspective, if you see it as sustainable? Mark Brugger: Sure. So, this is Mark. I’ll kind of kick that off. So I think generally what we’re seeing is we’re seeing better than anticipated outside the room spend on banquet. So the groups that have been coming over the last really six months, I would say, have generally surprised to the upside on their AV rental, what they’re doing for the events the food items. I think there’s this general sense that from the event planners that if they’re going to get people on the road and get them together, it needs to feel meaningful and have satisfied attendees you need to really kind of roll out the carpet to make sure that they feel like it’s worth the effort given the tight labor market. So, we’ve been very pleased on that side. I think for the DiamondRock portfolio, specifically otherwise, we hit new records for outlets last year. So we’ve made a conscious effort to — and we think increase the guest experience by putting in a number of specialty restaurants within our hotels whether that’s a Richard Sandoval, Toro or a Michael Mina restaurant or Vivian Howard in Charleston, we’ve cultivated a number of these relationships, which have led to a much higher F&B, particularly in the outlet and that’s sustainable. I think that continues to be something that makes our hotels more desirable, and it continues to resonate with the travelers today to have those kinds of choices within the properties. Justin, anything else on F&B? Justin Leonard: I think on the resorts, we’re pretty pleased to see continued growth in outlets, in food and beverage, I think due to some of those repositioning. I do think that comparable on a year-over-year basis will probably moderate for the urban. I mean there were a few of our urban assets. And I think there’s just in the industry generally where the outlets were not fully open in Q1 of 2022 and we didn’t have, for example, room service installed in Q1 of 2022. So, I do think some of that fruit of average growth will probably moderate just in terms of outsized revenue growth as we go through the year. Duane Pfennigwerth: Thanks. And Mark, maybe I’ll stick with you. When we were together in Bethesda with investors in late March, you had talked about increased dialogue with private equity firms, kicking tires on the sector and potentially kicking tires on DiamondRock specifically. Can you give us an update on that kind of the tenor and the pace of those conversations? Mark Brugger: Sure. So I guess we always have a year of conversations with private equity firms. As you know, there’s probably about — I think what the last chart, I saw was about $230 billion raised to deploy against real estate and hotels have moved up as a desirable asset class among those private equity firms. That’s what we’re hearing. We’ve been engaged in some regular conversations with folks as we always are. I’m not sure, it’s appropriate to comment on some of the substances and details of those conversations. But, I can tell you the interest in the sector from our conversations remains very high. Duane Pfennigwerth: Thank you. Operator: Thank you. One moment for your next question please. Our next question comes from the line of Smedes Rose with Citi. Your line is now open. Smedes Rose: Thanks. I just wanted to ask you, you talked about return to the new normal in Florida. And I was wondering would you apply that to what you’re seeing at the Lake Austin property, which looks like it saw a pretty steep year-over-year declines? And are you still comfortable with what you underwrote those assets with — in your initial guidance when you had — when you purchased them? Mark Brugger: Sure. So let me start with leisure generally. So we are seeing leisure demand we think at an all-time high. If you look at the STR data the year-over-year Q1 RevPAR was up 12.9%. Recently we were just listening to airline CEOs and the cruise line CEOs, you’re hearing about the robust demand. And frankly the airlines probably have the best data set. So we’re believers that there is more leisure and that’s going to continue. I think some of what we’re seeing in the Florida Keys is the couple that might have gone to Florida Keys last year. They were nervous by COVID now maybe they’re taking a cruise or they’re going to the Caribbean, but the overall pie is just much bigger and that’s a trend that we think continues to be a smart place asset allocate capital. On Lake Austin Spa, specifically that resort there was an ice storm in the first quarter. That was about a $500,000 hit. On the bottom line we’re still — through cost savings we’re still on our underwriting for the first quarter. So we feel good about our position I know that Justin spoke about some of the things we did on the labor there. The systems we talked about when we acquired it, converting from an owner operator pretty primitive pricing model that they had in place with sophisticated new systems and best-in-class operating tools. Given the backlog on getting those implemented, they’re really getting implemented in April and May and we think we’ll see enormous returns from those and our ability to professionally asset manage and revenue manage that property going forward. Smedes Rose: Okay. Thanks. And then I just wanted to ask you in Sonoma, you were up but I was just wondering did you guys see any weather impact out there from the rating activity during the quarter that may be depressed results at all or? Mark Brugger: No. We thought Sonoma performed well. It hit our expectations, actually exceeded our expectations a little bit. So we didn’t see any weather impact. Jeff Donnelly: We had some minor disruption maybe day and a half, but it wasn’t significant to the overall quarter. Smedes Rose: Okay. Thank you guys. Operator: Thank you. One moment for our next question. And our next question comes from Floris Van Dijkum with Compass Point Research & Trading. Your line is now open. Floris Van Dijkum: Thanks. Good morning guys. I had a question on your redevelopment assets. Obviously, you’ve got a couple of hotels that you’re rebranding. I wanted to — you haven’t disclosed what you’re rebranding the Boston Hilton to. Maybe if you could give us a little bit of insight into your thinking about having that be a soft brand versus a lifestyle unbranded hotel, and what the cost benefits potentially could be, because we understand that soft brands while they might have been seeing like an autograph or a Curio might have been cheaper two years ago, they probably aren’t as cheap as they were back then. And if you could give us some more update on that that would be great? Mark Brugger: Sure. Well, one, we think it’s a fabulous location in Boston. It’s a seven-day a week location, which gives us a lot more optionality. We’re not dependent on the brand and the brand channel of that particular location. We’re spending about $31 million on the property this year. Now it was due for rooms redo. So that’s not all incremental to the repositioning. But we’ll have it repositioned brand new spectacular gym that we built out, as well as the meeting space lobby everything redone. So we think it’s a unique special property. We probably will go independent at that property this summer. Jeff, do you want to give some numbers? I know you have an analysis in front of you? Jeff Donnelly: Yeah. How are you doing, Floris? As Mark mentioned we’re looking at the path we ultimately take with that asset this summer. I think there will be some displacements depending on whether or not we go fully independent door remain within the Hilton system just the change is going to cause some disruption. I think the figures we looked at for the full year is probably going to be around $5 million to $6 million on sort of a revenue and EBITDA impact than the plan that as we grow back we’ll be able to pick up substantially more than that just because I think that in that particular location and being able to appeal to a leisure customer being so close to Altisource destinations, but also a business customer in the financial district having more of an independent field to that hotel will be able to command a much higher rate premium than we have in the past and ultimately better profitability. So, it could be several million dollars more than the disruption we’ll realize this year in terms of earn back on NOI in the future. Floris Van Dijkum: Thanks. And maybe my follow-up. I mean I looked at the EBITDA contribution of your Worthington Fort Worth Hotel and your Salt Lake and they jumped up significantly. Was the Worthington increase due to the buying out of the ground rent or what was behind the big jump in performance from those in particular those two hotels? Mark Brugger: So, worthy to let’s talk about that specifically. So the ground lease is relatively small as tens of thousands of dollars in lease payments. It was not a material difference to the earnings result, frankly it didn’t impact Q1. We are excited to — it covered a portion of the parties but we’re always excited to eliminate any ground lease and now we have complete control of the property. And frankly, there is probably other things in the future that could be done with that location of that parcel. So we think that that’s a win for DimondRock. Worthington had good group exposure. Markets like Fort Worth markets like Salt Lake City those cities are doing particularly well as some other major markets become less desirable those markets are really prime to take share from the San Francisco and this economy. We’re seeing office and the desirability of the kind of companies wanting to be in those decisions really exceed what we’re seeing on a nationwide trends. So they’re benefiting from that. Floris Van Dijkum: Thanks Mark. Operator: Thank you. The next question comes from the line of Michael Bellisario with Baird. Your line is open. Michael Bellisario: Thank you. Good morning everyone. Mark just wanted to go back to some commentary on the resorts and performance during the quarter. Maybe just give us your view of in aggregate how they perform versus your internal expectations? And were there any particular markets that were better or worse than forecasted during the quarter aside from the commentary you already provided on Sonoma? Mark Brugger: Yes, I mean in addition to Sonoma, Vail, Huntington Beach were ahead of our expectations. I think the ones that were that kind of were different than our forecast at Lake Tahoe. There is obviously a record amount of snow and that impacted performance a little but it’s a tiny asset so it doesn’t move our overall numbers. And I would just say the — except for Fort Largo, which was we were able to group up very effectively, the Florida Keys were behind our expectations for the first quarter as kind of things kind of new normal whether significantly ahead of 2019, we think we’re establishing the new normal for the Florida Keys in 2023. And hopefully, we’ll be able to grow from that as we move into 2024. Michael Bellisario: Got it. Thanks. And then just a follow-up and switching gears on margins. Just wanted to dig into the commentary there. Did you say flat margins for the remainder of the year, or is your expectation that the full year 2023 is roughly flat at the hotel EBITDA level? And then any quarterly cadence 2Q to 4Q that you could provide to help with modeling would be appreciated. Thanks. Jeff Donnelly: Hey Mike, this is Jeff. I would say that on a full year basis, the thinking was that margins would be approximately flat to what they were in 2019 which is I believe about 29.5% was the number back in 2019 that we had on a comp basis out there. In terms of the cadence I’m just eyeballing this while we’re talking. No, I mean I think when you look at the remainder of the year, I think from a timing standpoint, probably our most difficult quarter is the second quarter when you begin to think about margin gains just because you certainly had strong — when you think about the comparisons to last year you had revenues that were very strong and ramping over the course of the year so the comparison will get tougher. And at the same time, if you think about the rebuild of expenses last year you still were earlier in the year seeing wage rates rise and staffing obviously moves with occupancy recovery. So I think probably the first half of the year generally has more difficult margin comparisons for us than the back end of the year. Mark Brugger: Yeah. Just to add on to that. On the resorts if you look at the Sedona and the South Florida markets, you can see the new normal kind of getting into place starting September of last year. So those comps also get easier which I think will help the overall margin story as we kind of move into fourth quarter and start 2024. Michael Bellisario: Helpful. Thank you. Operator: Thank you. One moment for our next question. The question comes from the line of Anthony Powell with Barclays. Your line is now open. Anthony Powell: Hi. Good morning. I guess a follow-up on the fourth quarter and then leisure kind of reaccelerating. Is that based on booking trends you’re seeing, for the holiday period? And do you expect the growth to be more in occupancy or rate? Mark Brugger: Great question. So leisure doesn’t usually book out six to nine months. But what we’re seeing and kind of what we were watching in real time September, October, November, December of last year particularly in Sedona in South Florida as we could kind of see the world reopen. So while demand was robust, generally for leisure, people felt comfortable traveling to alternative destinations. So kind of got to that new normal, I think as the world was opening up the people were comfortable. So our expectation is that, that comp gets much easier when we approach the fourth quarter both on probably evenly split between knock-in rate is our expectation right now. Anthony Powell: Got it. Thanks. And then, maybe one more in terms of dispositions, we talked about maybe selling some group hotels in the past. But given what you said about group being kind of a strong segment does it make sense to retain the group hotels that you currently own or even add more in the future? Mark Brugger: Yes. We like group probably by room type about half of our hotels are — by room number are about 40 — let me calculate about 49% of our hotel rooms are in group-centric hotels over 400 keys. I think its fine. I mean, I think group will continue to be good this year and next year. We still like the leisure segment probably the best over the next five to 10 years. But this year our group hotels are doing excellent probably the value of all those hotels increases over the next 12 months. And for large hotels it still remains a difficult debt market. So, those things combined to lead us to, it’s probably better to hold any group hotel in 2023. Anthony Powell: Thank you. Mark Brugger: But that said, everything is for sale at the right price. Anthony Powell: Got it. Thanks. Operator: Thank you. . And currently showing no further questions at this time, I’d like to hand the conference back to Mr. Brugger for any closing comments. Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day. Follow Diamondrock Hospitality Co (NYSE:DRH) Follow Diamondrock Hospitality Co (NYSE:DRH) We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»

Category: topSource: insidermonkeyMay 7th, 2023

Retirement And Travel: Planning Your Dream Adventure

It’s not until retirement that people can finally relax and plan the trips they’ve always wanted. Whether you’re about to retire or have already retired, what better way to celebrate than with an epic vacation? In fact, when it comes to bucket lists, deepening relationships with family and travel are the most popular choices. It […] It’s not until retirement that people can finally relax and plan the trips they’ve always wanted. Whether you’re about to retire or have already retired, what better way to celebrate than with an epic vacation? In fact, when it comes to bucket lists, deepening relationships with family and travel are the most popular choices. It is noteworthy, however, that baby boomers and Generation Z respondents differ to a great extent. if (typeof jQuery == 'undefined') { document.write(''); } .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Henry Singleton Series in PDF Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q4 2022 hedge fund letters, conferences and more   Find A Qualified Financial Advisor Finding a qualified financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you're ready to be matched with local advisors that can help you achieve your financial goals, get started now. Only 18% of Gen Z respondents say family relationships are the most important area to focus on before they die, compared to 41% of baby boomers. In contrast, 42% of Gen Z respondents prioritize travel, compared with 25% of boomers. A bucket list is predominantly crafted by older generations, while young, idealistic generations prioritize their wanderlust. Regardless of where travel ranks on your bucket list, It’s time to stop making excuses. Instead, it’s time to mark the transition into golden years with an adventure of a lifetime. After all, as Anthony Bourdain once said, “Travel isn’t always pretty. It isn’t always comfortable. Sometimes it hurts, it even breaks your heart. But that’s okay. The journey changes you; it should change you. It leaves marks on your memory, on your consciousness, on your heart, and on your body. You take something with you. Hopefully, you leave something good behind.” So with that in mind, let’s share some tips on how to plan the best retirement trip. The importance of travel in retirement. With more time at your disposal, traveling seems a natural choice. Additionally, for retirees, it is the ideal pastime since travel comes with these tangible benefits. : Taking a vacation every year reduces the risk of heart disease by 32% for retired men. Traveling twice a year will reduce stress and depression in retired women. People who travel abroad are more open-minded and emotionally stable. When seniors travel, they move much more than they would at home, which has a number of benefits for their health. Finally, traveling helps you overcome fears and prevent loneliness by taking you out of your comfort zone. Plan in advance. “A survey by RBC Wealth Management found that travel and vacation made the top 10 list of activities people aged 50 and older are looking forward to the most, regardless of whether they were already retired or not,” writes Pierre Raymond in a previous Due article. The biggest concern when it comes to retiring and living well in your golden years is planning ahead. However, people often take for granted the time they have at the moment. “If you’re looking to tick off a few exotic destinations from your bucket list in the coming years, planning well in advance helps to determine your level of financial preparedness,” adds Pierre. “As a general rule, many people tend to budget for the basic things their retirement funds and social security will need to cover once they leave the workforce,” he continues. “Things such as rent, mortgage payments, insurance, and utilities take up a big chunk of any person’s retirement funds.” “When you’re looking to spend more time on the road or in the air, having a sizable portion of your retirement savings dedicated to this means you’re well ahead of schedule,” Pierre says. Planning and saving for your post-retirement travels should begin five to ten years in advance, according to some experts. While this may seem excessive, people often miss out on the opportunities and opportunities they were so keen to experience when they enter retirement and realize that they don’t have enough to put aside for leisure and vacations. Make a decision about when and where you will go. A senior traveler is lucky in more ways than one. You can take advantage of discounts during off-seasons and “shoulder seasons” since you are not tied to work schedules. Generally, in the “shoulder season” (April through mid-June & September through October), you’ll find the best weather, the cheapest prices, and the fewest people. When there’s a lull in holiday travel, you might also find travel deals during the first two weeks of December. And, since most people are back at work after the holidays, January is one of the cheapest months to travel. It’s also usually cheaper to fly Tuesday, Wednesday, or Thursday during low business travel times, especially late mornings or early afternoons. There’s a rumor that airlines offer discounts late on Monday night, so Tuesday is the best day to buy tickets. According to Skyscanner, that frugal travel tip turned out to be true. If you’re reasonably fit and in good health, you won’t have trouble traveling or participating in activities no matter how old you are. So, decide where you want to go and go for it. It is important to keep in mind that being as specific as possible is helpful during this process. Rather than naming a specific general region, try naming cities, neighborhoods, and landmarks. Do some research on flights and accommodations. If you’ve already decided on a destination, look at flights and decide where you want to stay. Taima of Poor in a Private Plane shares how she finds great airfares. Learn about flight booking sites such as Google Flights, Kayak, and AirWanderer. Don’t overlook budget airlines including Allegiant, Frontier, and Spirit. Consider local airlines. Search for flights incognito. Why? “When you show an interest in something by searching for it over and over web browsers know this and will see that you are intent to buy,” explains Taima. “As a result prices will go up.” For weary travelers, there are plenty of places to rest. The biggest expense in your travel budget will be sleep. The good news? There are plenty of options galore to satisfy every traveler’s wallet and sense of adventure, from ritzy hotels to free couchsurfing. Hotels & Motels. You can sometimes save the most money by joining a hotel loyalty program. When deciding where to sleep, keep your membership in mind. Hotel booking websites and Agoda are currently the best, according to Frommer’s. For the best price, they offer the most options. Accommodations other than hotels. Choosing an alternative accommodation such as a hostel, a hosted accommodation, a home exchange, or housesitting can stretch your budget. This is not only a great choice for Millenials, but also for seniors. Alternatively, you can join Affordable Travel Club, a private bed and breakfast membership club for mature travelers (40+). Home exchange. Home exchange or house swapping might be a good option if you want to live like a local for a few weeks. Short-term residence. A vacation or house rental may be the perfect choice if you’re traveling with friends or family and need more than two rooms. If you prefer, you can eat in instead of going to a restaurant (saving on restaurant costs). Also, sharing common spaces offers spontaneous moments. Your itinerary should be guided by research. As soon as you’ve chosen your landing spot, you need to decide what to do next. If you don’t have a personal guide in a city, creating an itinerary you will have to do on your own. Despite the usual tourist attractions, it’s good to spend time exploring hidden gems and deeper cuts. This makes trips more memorable and can help you plan your travel budget. You can follow location hashtags for your destination on social media platforms such as Instagram. You’ll be able to experience the city through the eyes of a local. When it comes to finding the best places to eat and see, TripAdvisor is one of the best resources. A travel tour, on the other hand, is a great option for those who prefer someone else to handle the details. Companies that organize travel tours put together packages and itineraries, and participants travel together as a group. You can usually rely on the tour company to book your flights, arrange housing, arrange sightseeing destinations, and even cover some of the costs of your meals and sightseeing activities. Getting lost, missing important historic sites, or not knowing the language is none of your worries. Enjoy your time, sit back, and relax. There are many types, sizes, and price points of travel tours. Travel companies offer tours tailored to seniors, while others offer itineraries that are suitable for multiple age groups (for multigenerational vacations). Determine your budget. “As a retired traveler, you may have a fixed budget to work with,” notes John Boitnott in a previous Due article. “Consider how much you can afford to spend on travel costs such as flights, accommodation, and activities.” It can be difficult to manage the financial aspects of retirement travel, if not impossible. If you are on a fixed income, you will want to find any way to save money you can, unless you have specifically saved up for retirement travel. “Moreover, retirement travel costs can really add up,” he adds. “From additional fees associated with flights to the local cost of food and drink, hidden costs can present an unpleasant surprise.” For unforeseen expenses, budget an extra amount as a buffer. You can also save on retirement travel by: Find a destination a few hours outside of a major city. A day trip can save you money on hotels and food while still allowing you to see the sites. Use points or other credit card travel rewards to cover the trip. Consider overnight trips if you’re traveling by train. Due to their low popularity, these fares are usually less expensive. Save on checked-baggage fees by packing as little as possible. Plan your travel well in advance. Airline and accommodation savings may be significant if you do this. Take advantage of ways to save on food, such as booking a room with a kitchenette or an Airbnb stay where you can prepare your own meals. Don’t forget to pack snacks as well. Look into AARP memberships, travel sites, and attractions for discounts. It can be challenging to plan a retirement travel budget. Your budget, however, can be set during your trip with some careful planning and research. Get an estimate of your expenses The first step in budgeting is to understand your potential expenses. Airline tickets. Find out what airfare would cost from your city to your dream destination online. When you’re ready to book, your airline ticket price may have changed since it’s not fixed. No worries – you’re just looking for a ballpark figure. By setting a baseline budget, you’ll be able to determine how much to allocate. To be prepared for any changes in costs, you can pull a new estimate as you get closer to the booking date. The cost of a passport. Traveling outside the country requires a passport. You’ll need one if you plan to travel overseas — or if your passport has expired. As such, adding the fees to your budget will be necessary. Lodging. Similar to how you research airline tickets, you can search for hotels. A budget estimate can inform your trip budget, and a price estimate will give you an idea of what to expect closer to your trip. Make a list of the activities you want to do. Would you like to visit museums, eat your way through the city, or tour castles during your trip? Make sure you do some research before you decide what experiences you want to have, even if you think you know what you want. You can find out how much admission and fees will be at the places on your must-see list once you have nailed down your must-see list. Don’t forget transportation. Are you going to hop between cities? Do you need to travel to do the activities you want to do? Take into account taxi fares, bus fees, and train ticket prices. Each of these items is an important line item in the budget. Health care. Keeping a budget for potential doctors’ visits when you’re overseas will prevent you from being caught off guard if the need arises. You should check with your health insurance provider to see if you are covered abroad if you are under 65. Mobile phone fees. Talk to your phone’s service provider about international travel if you want to FaceTime with your grandkids from a famous landmark or send pictures to friends back home. The fees can add up, so make sure you understand them and save for them. Currency conversion. In a foreign country, your $1 might not stretch as far as it does here at home. It goes further in some places, though. To get an idea of what to expect, check out the exchange rate of your destination. Unexpected expenses. In the event that your luggage is lost on your trip, what can you do? Depending on where you are going, you may need to purchase some items. Is that bag containing your prescription medication? In order to avoid being caught off guard, budget extra funds for these two examples. Start saving and get traveling. It’s time to start saving for your dream trip now that you know what you need to include in your budget. However, what if you don’t have enough money in your monthly budget to start saving for your dream retirement trip? Getting some cash freed up or finding alternative income sources will be necessary. To help you accomplish that, here are a few tips: Consider reducing every category outside of your bills if you have a household budget. You can make a big difference if you reduce your grocery bill by $10 or your movie ticket expenses by $15 each month. In just one year, you could save $1,200 by trimming $100 from your monthly budget. You should allocate any extra money to the category of “Vacation” in your budget. Is there a hobby or passion you have that can be turned into an income source? You could, for instance, double what you normally make for yourself and sell it to your family and friends! Earn some extra money on the side. Seniors can find a variety of jobs that require no commitments or full-time employment. Getting a temporary job could allow you to save up for your big trip even if you are retired comfortably. Instead of overspending on the grandkids, give them a souvenir. Don’t pay for memberships you don’t use. A gym membership, for example, may not be used despite your best intentions. The money you save can go toward your vacation budget, so there are plenty of other ways to exercise. Move to a more affordable place. “If the place you’re living in is eating up a large chunk of your income in rent or maintenance, it may be time to consider moving,” recommends Jordan Bishop in a previous Due piece. “Downsizing to a smaller home or apartment or even relocating to a cheaper city can free up a lot of extra cash every month that you can put toward travel in the future.” You can also recover a good chunk of equity by selling your current home and buying something cheaper if you’re a homeowner. If you have unwanted or unused belongings, you can even sell them to offset the cost of your move. FAQs 1. How do you define “travel”? Everyone has a different definition of travel. Several people will sell everything they own after retirement and hit the road. Some people are satisfied with day trips and weekend getaways. Additionally, RVs and roadmaps, cruises, and overseas vacations are always popular. To create a travel plan, you need to first determine where you fall on this scale. Ask yourself a few questions if you’re not sure: Do you have any specific locations in mind? Will you be traveling alone? Or, will you be traveling with family or friends? What is the frequency of your travel plans? It’s impossible to achieve what you want until you create a picture of what you want. 2. When you retire, how will you fund your travel? In retirement, funding travel is another challenge, but it’s not impossible. A lot depends on where you plan to travel and how you plan to travel. Discuss your retirement plans with a financial advisor if possible. Your travel agent can help you determine if your goals are realistic — and what you should do to achieve them. It’s recommended that you max out your 401(k) or Roth 401(k) and stash 10% to 15% of your income for retirement as soon as possible to fund your travels.   3. How can you save money while traveling? When you travel, you can also save money in a variety of ways. Consider swapping houses with someone in another country instead of staying in a hotel. You can find other people looking to swap homes with you by listing your home on Home Exchange. Think about house sitting as well. Avoid hotels and noisy neighbors who come and go at all hours by watering a few plants, caring for a pet, and taking care of a pet or two. A great resource is Trusted Housesitters. Interested in traveling and helping others at the same time? Volunteer vacations are a great idea. Both domestic and international projects are listed at International Volunteer HQ, including construction, education, healthcare, wildlife conservation, and more. Repositioning cruises are also available on some cruise lines. After getting from Point A to Point B, they will tell you what happens next – including how to get back to Point A. You can find senior discounts at airlines, hotels, and rental car agencies. Some travel benefits may also be offered by AARP and AAA memberships.. 4. Is Medicare going to travel with you? If you have Medigap or Medicare Advantage, Medicare will follow you wherever you go. Original Medicare and Medigap plans do not follow you everywhere. Even in the case of an emergency, Medicare rarely covers healthcare received outside the U.S. There are Medicare Supplement plans that cover up to 80% of the costs of healthcare in foreign countries. Medigap Plans C, D, F, G, M, and N are among them. Check your Medicare Advantage plan’s benefits to see if foreign travel is covered. Original Medicare can be used anywhere that accepts Medicare, so it’s probably a good idea if you travel frequently stateside. In the event of an emergency, most Medicare Advantage plans only cover you outside their service area. In addition to covering medical emergencies, travel insurance also covers common issues like lost luggage or cancellations. Travel insurance is probably a worthwhile investment if you plan to travel outside of the United States. Article by Deanna Ritchie, Due About the Author Deanna Ritchie is a financial editor at Due. She has a degree in English Literature. She has written 1000+ articles on getting out of debt and mastering your finances. She has edited over 40,000 articles in her life. She has a passion for helping writers inspire others through their words. Deanna has also been an editor at Entrepreneur Magazine and ReadWrite......»»

Category: blogSource: valuewalkMar 8th, 2023

FirstService Residential Appointed Property Manager of The Axel at 545 Vanderbilt Avenue in Brooklyn

FirstService Residential, New York’s leading residential property management company, has been appointed manager for The Axel, a high-end rental tower in Brooklyn’s Clinton Hill neighborhood. Located at 545 Vanderbilt Avenue, the 29-story building houses 284apartments, 30,000 square feet of hotel-inspired amenity spaces, and 60,000 square feet of prime retail space... The post FirstService Residential Appointed Property Manager of The Axel at 545 Vanderbilt Avenue in Brooklyn appeared first on Real Estate Weekly. FirstService Residential, New York’s leading residential property management company, has been appointed manager for The Axel, a high-end rental tower in Brooklyn’s Clinton Hill neighborhood. Located at 545 Vanderbilt Avenue, the 29-story building houses 284apartments, 30,000 square feet of hotel-inspired amenity spaces, and 60,000 square feet of prime retail space with frontage along Vanderbilt and Atlantic Avenues. To-date, the building has rented 60% of its units, a record time for a new development. FirstService Residential was selected to manage the property by Hopestreet Capital, a New York City-based real estate investment group that completed the tower in December 2022. The appointment recognizes the management company’s legacy of delivering luxury-line services to some of the highest-end properties in New York City. “Hopestreet Capital has delivered one of the most coveted new rental properties in the Clinton Hill-Prospect Heights area and we are excited to welcome the first wave of residents to the building,” said Calynne Oyolokor, senior vice president of FirstService Residential’s Multifamily Rental Division. “High-end design should be matched with impeccable service. FirstService Residential is one of the only companies in New York City that can properly retain, train, and retrain managers and building staff in hospitality principles retooled for multifamily buildings, and we look forward to making a difference for every resident at The Axel.” Designed by Morris Adjmi Architects, The Axel sits at the convergence of Clinton Hill and Prospect Heights, two of Brooklyn’s most pristine, historic neighborhoods. Set atop a four-story podium, the residential tower features a gentle, cantilevered form that maximizes views of the Downtown Brooklyn skyline, One World Trade Center, and as far north as Midtown, Manhattan. Within the building, apartments range from studios up to spacious three-bedroom floorplans. Each home offers floor-to-ceiling windows, premium finishes, high-end appliances, a washer and dryer, and generous closet space. “FirstService Residential’s deep understanding of building operations, high level building personnel and exceptional customer service to our residents was really the reason why we retained them for the project,” says Sha Dinour of Hopestreet Capital. The Axel’s amenity collection begins with an outdoor pool and sundeck above the retail podium. At this level there is also an outdoor terrace with grilling stations, communal seating, and tables for small gatherings. The building’s fitness center features state-of the-art equipment, dedicated yoga and Pilates studios, and direct connection to the outdoor terrace. Additional spaces include a co-working suite, private conference rooms, a virtual sports simulator, and a residents lounge. FirstService Residential has observed significant growth in its property management portfolio across all asset types including multifamily rentals, condominiums, and cooperatives. In 2022, the company added 7,200 units to its New York City management portfolio and continues its expansion into Westchester County. Among the company’s new clients are some of the city’s most iconic multifamily properties, including Madison House, an 805-foot-tall skyscraper in NoMad; 100 Eleventh Avenue, designed by Pritzker Prize laureate and renowned architect Jean Nouvel; American Copper Buildings, an award-winning, dual-tower rental property in Murray Hill; One Boerum Place, home to the most expensive rental apartment in Brooklyn history; and Parkway Village, a 675-unit garden-style community in Briarwood, Queens. Last year, FirstService Residential also announced a national expansion of its energy consulting and advisory services across the U.S. and Canada. Provided through its energy advisory affiliate FirstService Energy, the expansion will bring the benefits of the company’s sustainability advisory services to more than 1.7 million homes across 8,600 residential communities as well as the company’s own corporate offices. The post FirstService Residential Appointed Property Manager of The Axel at 545 Vanderbilt Avenue in Brooklyn appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyJan 10th, 2023

Asylum Seekers Overwhelm Shelters In Portland, Maine

Asylum Seekers Overwhelm Shelters In Portland, Maine Authored by Steven Kovac via The Epoch Times (emphasis ours), Facing an impending humanitarian crisis, Portland Family Shelters Director Mike Guthrie has a simple message to anyone who will listen, “We need help!” Families of asylum seekers warehoused outside of an overcrowded family shelter in Portland, Maine, on May 25, 2022. (Steven Kovac/Epoch Times) Guthrie, a hands-on, frontline worker in the effort to feed, clothe, and house a continuous flow of foreign nationals arriving in Portland by airplane or bus from the U.S. southern border, told The Epoch Times, “Our family shelter facilities, our warming room, and even area hotel space is at capacity. We have maxed out our community resources. “The time is coming when I’m going to have to look a dad in the face and tell him and his family that I don’t know where they’re going to sleep tonight.” The Portland Family Shelter is a complex of four rented buildings in various states of renovation located in the heart of downtown. Some of the structures are gradually being converted into small apartments where up to four families will share a single kitchen and bathroom. All four buildings are overflowing their present capacity. “The intake is greater and faster than we can process,” Guthrie said. Mike Guthrie, director of the family shelter in Portland, Maine, on May 25, 2022. (Steven Kovac/Epoch Times) To accommodate the stream of new arrivals, the family shelter program has in recent months placed 309 families (1,091 people) in eight hotels located in five neighboring municipalities spread over three counties of southeastern Maine’s prime tourist and vacation region. Those moves, with their attendant complications and problems, have resulted in some pushback from the local Mainers who fear their prized relaxed lifestyle may never be the same. And they resent not having a voice in any of it. “It’s just part of the state government’s plan to bring the slums to the suburbs,” said a Mainer from the resort and tourist community of Kennebunkport, a small town about 28 miles down the Atlantic coast from Portland. “The United States cannot rescue Africa.” Coming out of the Kennebunkport post office, long-time Mainers Virginia and Robert shared their opinions on what the locals see as the “invasion” of Maine by immigrants. Virginia commented, “We have sympathy for the asylum seekers, but resources are over-extended and now it’s going beyond Portland.” “Eventually, it’s going to impact our quality of life,” Robert said. A view of Dock Square in Kennebunkport, Maine, on May 25, 2022. (Steven Kovac/Epoch Times Pressures on Portland’s homeless shelter capacity last year inspired a York County community action group to obtain a federal grant to help house the city’s regular homeless population. The plan included renting half a dozen large motels in a three-mile corridor in the heart of southeastern Maine’s Atlantic-shore tourist region. Motels within walking distance of shopping opportunities were selected. The motels close in the off-season, so it appeared to some people to be a win-win arrangement. Included in the plan was the small, quiet, resort town of Wells, located about six miles from Kennebunkport. Though the program sheltered hundreds of individuals from the brutal Maine winter, the resulting wave of never-before-seen vandalism, burglaries, and other property crimes in the commercial district forced the city of Wells to evict every tenant for violations of several municipal ordinances. It is unclear where the evicted people were relocated. Homeless Victimized and Intimidated A motel in Wells, Maine, that was used to shelter the homeless of Portland on May 26, 2022. (Steven Kovac/Epoch Times) According to Captain Gerald Congdon of the Wells Police Department, the crimes were not committed by foreign asylum seekers, Wells residents, or by the many legitimate, disadvantaged, and debilitated people housed in the motel. “The perpetrators arrested were mostly ‘couch-surfers’ spending time with homeless friends staying legally at the motel. However, the bulk of grant-qualified motel dwellers had drug problems,” Congdon said. One small business operator, whose sweetshop was burglarized, told The Epoch Times, “The thieves were druggies in need of a fix. They came in through a window, stole the cash from the register, and took our digital scales. “These people were brought in around Christmastime. It was like an invasion. We never had a crime at our store before they came in and ruined things. “It’s not fair. We now think differently. They changed the whole landscape of how we do business. We don’t want to see them come back.” Congdon told The Epoch Times, “There was shoplifting at the bigger chain stores and car break-ins going after loose change in the strip mall parking lot. “A small bike shop was burglarized twice, losing thousands of dollars-worth of high-end bicycles—never happened to them in 42 years of business. “Our officers spent a lot of time on disturbance calls and enforcing warrants. We made quite a few arrests and recovered some stolen property. “The management of the area’s motels got tired of seeing us there. They were tired of their legitimate businesses being associated with crime. “The nice tenants, many of whom are truly deserving of help, were being victimized and intimidated. They were afraid to call us.” Congdon said his department was not consulted and was given no advance notice on the plan to bring hundreds of homeless people—including many known drug-addicts—into their city. The City of Wells was not compensated for the additional hours of policing. A broad, sandy, beach in the tourist region of southeastern Maine, on May 26, 2022. (Steven Kovac/Epoch Times) ‘Feeder Sources’ On May 1, a hotel in the resort town of Old Orchard Beach, located about halfway between Portland and Kennebunkport, evicted all of its residents for a different reason. This time, they were asylum seekers evicted in order to make room for the arrival of legally permitted temporary seasonal workers to lodge there. These special visa-holders make up the majority of the workforce needed by the region’s thriving hospitality industry. The asylum seekers were relocated to motels in three other southern Maine communities, according to Portland city officials. In Portland, 500 single asylum seekers are housed in a municipal shelter separate from the family shelter, according to a spokesperson for the city. It too is at capacity. Guthrie told The Epoch Times that city authorities have publicly notified what he calls “the feeder sources” at the southern border and in Washington D.C. about the immigration crisis unfolding in Portland. The city administration asked Border Patrol, Health and Human Services, and participating non-profits to stop sending asylum seekers to Portland until sufficient resources become available to adequately care for them. But the force of the city’s request was blunted when it announced immediately after the notification that it would not turn anybody away, acknowledged Guthrie. Maine Gov. Janet Mills in 2019. (Rebecca Hammel/U.S. Senate/Public Domain) Guthrie stated that the city asked Maine Gov. Janet Mills, a Democrat, to call out the National Guard to set up emergency shelters and feeding stations but has not yet received an answer. On June 2, in remarks before the Portland Regional Chamber of Commerce, Mills committed the state to building a new emergency shelter in the city and said she was working to create additional housing for asylum seekers in the area. She also spoke of the desirability of the in-migration as a source of labor to fill many existing job openings. Speaking of the migrants, Mills said, “We need the workforce here. We want them to be available for work. Some of them come with incredible skills and experiences that we can employ.” One long-time Maine resident, who visited the Portland Family Shelter to see the situation for himself, told The Epoch Times, “Mike Guthrie is like a man frantically trying to bail out a sinking rowboat, while his superiors continue to drill holes in it.” During the month of May, the family shelter took in 79 families consisting of 262 individuals with no slowdown in sight, Guthrie said. “220 people turned up in just 20 days. We’re trying to help anybody that comes to the door. Thus far, nobody coming to us has had to sleep outside but we can no longer guarantee shelter upon arrival,” he said. “We need the state of Maine to step in and create safe places for these people. We need a facility to be created and run like a FEMA camp. “Our legislators are talking about buying and renovating older apartments throughout the region that could house 140 families. That’s great in the long-term, but the problem is now! “At the rate things are going, we’d have those places filled in two months. Then what?” Guthrie asked. Portland’s pastors, church members, and its citizens have been stepping forward to do what they can. “Local churches and those in Cumberland are offering space for people to sleep and some Portland residents have even opened up their homes,” Guthrie said. A surge in asylum seekers crossing the border in the Rio Grande Valley has put a strain on the immigration system. Here, migrants are on the move, in Mission, Texas, on March 17, 2021. (Los Angeles Times via TCA) Where Are the Asylum Seekers Coming From? The vast majority of the new arrivals at the family shelter in Portland have come from Angola and the Congo in Africa, with some coming from Haiti in the Caribbean. They make the arduous and often dangerous journey any way they can—largely on foot. Guthrie told of a father and child who recently showed up at the shelter. “The man said that his wife, the young child’s mother, died on the way. She was swept away while crossing a river.” Guthrie explained that the route to Portland for most of the asylum seekers begins in chaos-torn western equatorial Africa. “They cross the Atlantic to South America. They go up through South America and then north through Central America, ending up in northern Mexico, from which they cross the southern border into the United States. “At that point, they present themselves to Border Patrol. “A new arrival tells Border Patrol ‘I am here to seek asylum. If I go back home, I will be killed. I fear for my life.’ That’s the difference between an asylum seeker and an immigrant,” he said. Those three short sentences guarantee a person’s admission for a lengthy stay in the United States as his or her claim is adjudicated. Guthrie went on to explain, “After some additional questioning, the individual is issued minimal paperwork by immigration authorities and told they will be contacted about a formal hearing on their asylum plea. They are then turned over to the U.S. Department of Health and Human Services.” Most are given cell phones. Public servants with the Department of Health and Human Services (DHHS), and representatives of various American non-profit, philanthropic organizations, ask the asylum seekers where they want to go in the interior of the United States to await their asylum hearing. For many, their answer is “Portland.” “They are then put on buses or airplanes and sent on their way,” Guthrie said. Lobsterman Tucker Soule unloads a trap at Cape Porpoise near Kennebunkport, Maine, on May 23, 2022. (Steven Kovac/Epoch Times) Why Portland? Guthrie said that Portland is often recommended to people enroute to the United States by relatives who are already living in the city. “Once they get here, the majority of the new arrivals want to stay in Portland. They tell their relatives and friends about us,” he said. Jessica Grondin, the city’s director of communications and media, told The Epoch Times in a phone interview, “Portland is happy about and proud of our good reputation as a ‘Welcoming City.’ We presently have a large Somali population, as well as many Iraqis and Afghans who arrived here previously.” Grondin said that several busloads of asylum seekers recently shipped off to Washington D.C. by Texas Gov. Greg Abbott, a Republican, ultimately made their way to Portland. She stated that, along with the lack of housing, one of the biggest problems facing the city is a shortage of staff to care for the volume of new arrivals. Guthrie said that the influx asylum seekers has exceeded the city’s ability to offer basic services. “As we outgrow our past limits, we are being forced to prioritize what we are doing for these people. We are no longer able to help them connect with local immigration attorneys, nor help them learn English,” he said. Effective May 7, a policy change took effect forbidding the shelter’s staff from assisting asylum seekers in finding an apartment. “Instead, these folks, who are complete strangers to this community and speak no English, are being qualified for a state General Assistance housing voucher. “They are given a sample lease, a rental form, and an explanation of the GA process, and are then sent out on their own to find a place to live,” Guthrie said. While most of the new arrivals speak Portuguese, some speak French, Lingala, or another tribal language. Many are bilingual, but none speak English. Weary of waiting around, some of the French-speakers asked to be sent to Quebec, but the strict Canadian rules concerning COVID-19 prevented them from entering, Guthrie stated. Condition and Needs of Asylum Seekers Guthrie described the migrants’ situation, saying, “Understand, the majority of these people arrive here with no money. They spent their life savings during their trip and have to start over. They need everything. “They come from hot climates wearing summer clothes. We have given away about 97 percent of our clothing stock to help them cope with the colder weather here in Maine. “We have to keep many people outside during the day and then pack them into our warming room for the chilly Maine nights, or on rainy days,” he said. Fathers, mothers, and their numerous small children are kept outside all day long. They stand on the sidewalk across the street from the shelter or sit in an alley between two old houses passing the time until the next meal. The grimy concrete and stony gravel of the alley serve as furniture. There are no chairs or tables. They sit or recline on whatever is at hand, or on the bare dirt. The shade formed by the receding shadow of the walls of the surrounding old buildings is their only comfort. Antsy and bored small children have no toys with which to amuse themselves, except for one little boy who rides a plastic big-wheel tricycle around the alley. A small bathroom is available to people upon request in one of the shelter’s buildings, or at a nearby city-owned singles’ shelter around the block. “For showers, we team up with a local church that comes by with a bus and offers showers to any of them that want to go,” Guthrie said. When asked if the asylum seekers are Christians, Guthrie answered that many ride a bus to church services on Sunday morning. The shelter provides families with three meals a day, prepared off-site by “community partners.” “We pick up the meals and bring them here and serve them indoors. The food is decent. A typical lunch is a sandwich, salad, soup, granola bars, snacks, milk and water,” Guthrie said. Guthrie told The Epoch Times that the family shelter is providing standard baby formula for the young children, but one baby is intolerant to it. This infant requires a specialty brand that is hard to get—a fact that is upsetting to the mother and her child. The Maine Immigrant Rights Coalition (MIRC) is providing asylum seekers residing in hotels and motels with some culturally appropriate foods such as fufu (an African staple), goat meat, greens, chicken, and rice, he said. A lot of the accommodations do not have kitchens. According to Guthrie, the cost per motel room is between $250 and $350 dollars per night and rising as the tourist season begins. MIRC is part of a network of 85 statewide organizations involved in the care of the thousands of asylum seekers already here and those that are arriving daily. Guthrie said the state is footing 70 percent of the family shelter’s expenses, with the city making up the remaining 30 percent. But Guthrie says that getting the children into school is among the best assistance that can be provided. “The schools offer all kinds of different programs. They have community resource officers. They keep the kids busy while giving them two meals a day,” he said. More than 60 different foreign languages are spoken by students at Portland area schools, further complicating every task associated with education. When asked about the overall health condition of the asylum seekers, Guthrie replied, “They are exhausted and scared. They haven’t travelled a safe route. Though clearly traumatized, very few will talk about the details of their experience. Counselling is available if requested.” Teams of health care workers are performing what Guthrie calls “health outreach.” They have set up clinics at some of the motels to perform triage and make any necessary medical referrals. The city of Portland has a busy public health clinic helping to provide treatment, but some people with more serious conditions end up in emergency rooms. To overcome the language barrier, the city provides interpreters, and health care workers make use of cell phone translation apps. On the whole, Guthrie said most of the people under his supervision are physically “very healthy.” “Pregnancy is the families’ most urgent medical concern, and their most pressing medical need is OBGYN (obstetrics and gynecology) care,” he said. He also said there is some sickle cell disease among them. A young Angolan mother and child outside the family shelter in Portland, Maine, on May 25, 2022. (Steven Kovac/Epoch Times) City Hall allowed The Epoch Times access to several families being warehoused outdoors and a number of parents were eager to talk about their current plight. Speaking through an interpreter provided by the shelter, and in the presence of shelter director Guthrie, Samantha, a young Angolan woman with a 10-month-old baby on her hip and a toddler in tow, was not shy about sharing her dissatisfaction. When asked if her family’s basic needs were being met, Samantha replied, “We just need a place to sleep. We stay outside in the sun and the elements because there is not enough space for us indoors. There are not enough clothes for my family. “Being outside all day is not good for my baby. Some of us have caught colds. Some had fevers. Some were so sick they went to the hospital. “My son eats a special baby formula. I have to ration his feeding. “What we are fed is very different than what we are used to. We are receiving no culturally appropriate food. There was no way for us to take a shower for five days. “We endured a seven-month journey to come to this! We are not happy. Conditions are not good! We really need help.” When asked if she felt welcome, Samantha said with a look of disbelief, “No! I do not feel welcome. Look at us. We are outside.” A Congolese family seeking asylum in Portland, Maine, on May 25, 2022. (Steven Kovac/Epoch Times) Landry, a housepainter and electrician’s helper, brought his wife Sylvie, two-year-old daughter, and 12-month-old son to Portland from the Congo. When asked why he risked the journey, Landry answered, “I left my country because of political issues and insecurity. There we could be sure of nothing. Here, it’s different.” Sylvie said, “We came from Texas unprepared for this Maine weather. I am not happy for how I am living here. I don’t feel welcome!” Tyler Durden Sun, 06/05/2022 - 20:30.....»»

Category: personnelSource: nytJun 5th, 2022

Sales Launch for 393 West End Avenue, a Historic Building Reimagined by CetraRuddy on Manhattan’s Upper West Side

Manhattan’s Upper West Side reached a pivotal residential milestone today with the announcement that sales have commenced for the homes at 393 West End Avenue, a storied building that has been tastefully transformed for the modern era. Located at the corner of 79th Street, 393 West End Avenue features a... The post Sales Launch for 393 West End Avenue, a Historic Building Reimagined by CetraRuddy on Manhattan’s Upper West Side appeared first on Real Estate Weekly. Manhattan’s Upper West Side reached a pivotal residential milestone today with the announcement that sales have commenced for the homes at 393 West End Avenue, a storied building that has been tastefully transformed for the modern era. Located at the corner of 79th Street, 393 West End Avenue features a collection of 75 upscale residences that merge old-world charm with contemporary comforts, and a series of garden-level amenities reminiscent of a private social club, signifying what is likely the last condominium conversion to come to market in the neighborhood.   Situated within the landmark West End Collegiate Historic District — a quiet enclave that exudes the cinematic charm of iconic New York films such as When Harry Met Sally and You’ve Got Mail — the 16-story building was originally designed by architects Goldner & Goldner and constructed in 1927. The building features Collegiate Gothic architecture and original 1920s details that are now being skillfully preserved by CetraRuddy, the award-winning architecture and interior design firm known for its sophisticated approach to modernizing historic properties. “The Upper West Side — the West End Collegiate Historic District, in particular — is one of Manhattan’s most coveted residential destinations,” said Stephen Kliegerman, President of Brown Harris Stevens Development Marketing (BHSDM), the exclusive sales and marketing firm for 393 West End Avenue. “Due to the neighborhood’s landmark status, newly constructed luxury residential developments are exceedingly rare. Without compromising on character, 393 West End Avenue offers the best of both worlds — impeccably preserved Pre-war details that convey a sense of history, paired with the modern layouts, high-end finishes and thoughtful amenities that buyers demand of new developments today.” Making an impression at first sight, 393 West End Avenue features a restored limestone portal with a contemporary bronze-and-glass marquee, antique bronze entry doors with one-of-a-kind lion medallions that showcase its 1920s heritage, and eye-catching plaster tassels that harken back to the great opera houses of the era. Inside, the 24-hour attended lobby, a sculptural stone concierge desk anchors the space, which features Bianco Spino and Grigio Collemandina mosaic floors, lacquered paneling and a soaring nickel leaf ceiling. Custom bronze-and-glass art screens inspired by the building’s historic architectural details lead to the elevator bank that ascends to the residential floors.   Here, a collection of 75 residences — many with captivating views of the Hudson River — respect the provenance of the late 1920s, with graceful layouts ranging from one to four bedrooms, and details that include wood floors with a French Chevron style in the living and dining areas. The open plan kitchens boast Naica Quartzite countertops and backsplashes, along with custom cabinetry composed of handpicked variegated smoked oak wood in a walnut tone and fluted glass. A suite of paneled Miele appliances echoes the cabinetry, while the stove’s brushed light antique bronze hood rounds out the warm, modern look.  “From the beginning, the design vision for 393 West End Avenue has been to create a unique and elevated residential experience that celebrates historic sensibility while introducing a modern vernacular,” said Nancy J. Ruddy, Founding Principal of CetraRuddy. “It’s an attitude of refined constraint, and a contemporary revival of romantic styles that brings a bit of magic back to this special part of the Upper West Side. Whether the bespoke mosaic floor in the lobby, or the custom club room mural and hand-picked marble in the kitchens and bathrooms, every element that you see and touch is crafted and curated with a focus on material richness, balanced proportions, and an eye towards creating a sense of home and wellbeing that fits how we live today. Engaging creatively and respectfully with historic buildings is part of our DNA at CetraRuddy, and 393 West End Avenue is truly an expression of everything we love about the juxtaposition between past and present.”  Envisioned by CetraRuddy as a light-filled private retreat, the primary bedrooms convey a sense of warmth through tone-on-tone natural materials and restored tray ceilings. Reminiscent of Parisian dressing rooms, the primary baths offer a striking combination of honed Pacific White Marble walls and mosaic floors; Calacatta Black Marble accents and vanity countertops; and custom white lacquer vanities with polished nickel accents and textile drawer fronts — all complemented by bespoke sconces. Secondary baths include Calacatta Gold Marble mosaic floors in a diamond pattern characteristic of the 1920s and polished nickel trim. Powder rooms feature a Breccia Capraia Marble slab accent wall that is unique to each residence. Taking inspiration from private homes, 393 West End Avenue features a series of garden-level amenities that seamlessly flow from one room to the next and accommodate every stage of life. Offering the privacy of an in-house club and spanning 4,000 square feet, these inviting spaces include a Great Room equipped with banquettes and private nooks for study or remote work, as well as direct access to a serene landscaped courtyard. Ideal for private dining or hosting intimate gatherings, the Club Room features a custom artisanal tile mosaic, a plush nine-foot sofa and a fully-equipped bar. There is also a state-of-the-art fitness center with private movement studio, a junior lounge with a gaming station and hangout space, and an enchanted forest-inspired children’s playroom known as “The Cottage,” which opens onto its own dedicated outdoor space — aka the porch and secret garden. Bicycle storage and a laundry room with extra-capacity washers and dryers are also available. 393 West End Avenue is being redeveloped by Rabina, a New York-based real estate investment and development firm that has been family-owned and operated for three generations. While Rabina has acquired and developed more than 25 million square feet of real estate throughout its 60+ year history, the firm’s early years were dedicated to repositioning residential properties on Manhattan’s Upper West Side. With its carefully considered transformation of 393 West End Avenue into a collection of Pre-war homes with a fresh perspective, Rabina has returned to its roots. Nestled among tree-lined blocks dotted with picturesque cafes and parks teeming with greenery, 393 West End Avenue offers a premier location just one block from Riverside Park and the Hudson River in the West End Collegiate Historic District. This coveted enclave represents 60 years of architectural evolution and features many of the Upper West Side’s most acclaimed row houses and apartment buildings.   Brown Harris Stevens Development Marketing is the exclusive sales and marketing firm for 393 West End Avenue. Sales are being led by Louise Phillips of The Louise Phillips Forbes Team, who has launched and managed successful campaigns for many of the neighborhood’s most esteemed residential conversions including 498 West End Avenue, 220 West 93rd Street and 905 West End Avenue. Pricing for initial inventory begins at $3.718 million for a three-bedroom residence. To learn more about current availability or to schedule a tour of the building’s on-site design studio, please call the sales office at (212) 319-4393 or visit  The post Sales Launch for 393 West End Avenue, a Historic Building Reimagined by CetraRuddy on Manhattan’s Upper West Side appeared first on Real Estate Weekly......»»

Category: realestateSource: realestateweeklyApr 6th, 2022

Futures, Global Markets Start 2022 With A Bang

Futures, Global Markets Start 2022 With A Bang If 2021 ended with a whimper, then 2022 is starting off with a bang, as futures on all major U.S. equity indexes rise on the first trading day of the year amid light volumes with markets including the U.K., Japan China, Australia and New Zealand closed for holidays. Europe’s Stoxx 600 rose 0.6%. In Hong Kong, property shares dropped and China Evergrande Group halted trading without an explanation. The dollar rose, as did bond yields and bitcoin, while oil erased earlier gains.  At 745am, emini S&P futures traded 29 points, or 0.61% higher, and rising as high as 4,790, just inches away from all time highs of 4,799.75; Dow futs were 172 points or 0.48% higher and the Nasdaq was also in the green by 29 points or 0.6%. Investors continue to weigh the impact of the rapid spread of the omicron Covid-19 variant on the economic recovery, even as it appears less severe than earlier strains. Investors are also focusing on the policy trajectory of the Federal Reserve and other central banks into 2022, particularly as inflation continues to present a challenge. In premarket moves, Tesla’s shares climbed 6.8% in U.S. premarket trading after the company reported record quarterly deliveries.  Alibaba ADRs dropped in premarket trading with shares listed in Hong Kong on concern that some investors may pare stakes amid data showing the conversion of company’s ADRs into Hong Kong shares has picked up pace. And with the new year, broad, sweeping assessments are hitting the tape, such as this one from Jefferies strategist Sean Darby who wrote that last year “was simply a period of ‘risk on,’” adding that “peering into 2022, we expect volatility to rise, meaning that the return per unit of risk comes to the forefront." European equities rose on the first day of trading in 2022 and headed for a record on bets that the global economy can weather the impact of the omicron coronavirus variant. The Stoxx Europe 600 Index rose 0.5% to 490.47, above the record closing level set in November, led by gains by automakers and chemical sector companies. Meanwhile, the Euro Stoxx 50 climbed 0.9%. U.K. markets were closed for a holiday on Monday. European stocks had climbed 22% last year and have posted seven consecutive quarters of gains -- the longest winning streak since 1998. Most strategists expect this year’s returns to be more muted, with an average target of 506 index points for the Stoxx 600. Among individual movers, Vestas Wind Systems A/S dropped after the company announced details of its fourth-quarter order intake. Sydbank AS said the order tally was “weak.” Asian stocks were mixed on their first trading session of 2022, with Hong Kong’s benchmark gauge dropping on concerns over the spread of the omicron variant and the financial health of China’s real estate sector.    The MSCI Asia Pacific Index was little changed after rising as much as 0.3%, weighed down by consumer discretionary and health-care firms. Hong Kong’s Hang Seng Index slid 0.5%, with Chinese developers tumbling on media reports that China Evergrande Group has been ordered to tear down apartment blocks in Hainan province. Read: Property Stocks Sink After Demolition Order: Evergrande Update Shares in Hong Kong also dropped amid a fresh wave of infections tied to an outbreak at a local restaurant. The city administered more than 7,000 initial injections on both Saturday and Sunday, the most since the end of November. “Any further restrictions to curb virus spreads remain a key risk to watch, and more clarity will be sought from economic data over the coming weeks to validate the resilience of the economy” of the U.S., said Jun Rong Yeap, a strategist at IG Asia Pte in Singapore. Malaysia’s stock index was the region’s worst performer, dropping 1.2%, while South Korea and Taiwan equities rose. Markets in mainland China, Japan, Australia and New Zealand were closed for holidays. Asia’s stock benchmark capped an annual loss of 3.4% in 2021 in its worst performance since 2018, lagging behind the U.S. and Europe. India’s key equity gauges posted their best gain in nearly four weeks, led by a rally in banking and software stocks as investors shift focus to the upcoming corporate earnings season for the latest quarter.  The S&P BSE Sensex rose 1.6% to 59,183.22 in Mumbai, the most since Dec. 8. The benchmark also posted its biggest advance on the first trading day of a new year since 2009. The NSE Nifty 50 Index gained by a similar magnitude on Monday. All of the 19 sector sub-indexes compiled by BSE Ltd. climbed, led by gauges of banking and financial companies. The corporate earnings season for the December quarter will start with Infosys and Tata Consultancy Services announcing results on Jan. 12. Investors will be focusing on the software exporters’ commentary on demand amid rising cost pressures. HDFC Bank contributed the most to the index gain, increasing 2.7%. Out of 30 shares in the Sensex index, 25 rose and five fell With much of Europe including the U.K. on bank holiday, Treasuries reopen around 7am ET with yields cheaper by 2bp to 4bp across the curve and losses led by belly.  U.S. 10-year yields around 1.535%, cheaper by ~2bp vs Friday’s close, while 5-year yields are higher by more than 3bp; 5s30s is flatter by ~1bp. Gains for most European stock benchmarks add to cheapening pressure on yields, as S&P 500 futures trade above Friday’s high.  Ahead of the cash open Treasury futures edged lower during Asia session European morning on light volume as S&P 500 futures advanced toward last week’s record highs. In FX, the Bloomberg Dollar Spot Index inched up and the dollar traded mixed against its Group-of-10 peers in thin trading, with Japan, Australia and New Zealand markets shut for holidays. The Canadian dollar was the worst performer while the New Zealand dollar climbed against all of its Group-of-10 peers. The euro slipped to trade around $1.1350 and Bund yields rose, led by shorter maturities, while European peripheral spreads narrowed. In commodities, in early trading oil rose towards $79 a barrel on Monday supported by tight supply and hopes of further demand recovery in 2022 spurred in part by a view that the Omicron coronavirus variant is unlikely to significantly dampen the outlook. Libyan oil output will be cut by 200,000 barrels per day for a week due to pipeline maintenance. OPEC and its allies, known as OPEC+, are expected to stick to a plan to raise output gradually at a meeting on Tuesday. Brent crude rose 95 cents, or 1.2%, to $78.73 a barrel. West Texas Intermediate crude added $1.03 or 1.4%, to $76.24. Last year, Brent rose 50%, spurred by the global recovery from the COVID-19 pandemic and OPEC+ supply cuts, even as infections reached record highs worldwide. "Infection rates are on the rise globally, restrictions are being introduced in several countries, the air travel sector, amongst others, is suffering, yet investors' optimism is tangible," said Tamas Varga of oil broker PVM. "It seems that the current strain produces less severe symptoms than its predecessors, which might just help us to struggle through the fourth wave of the pandemic." Some see more gains in 20222: "Crude and oil product prices should benefit from oil demand moving above 2019 levels," said a report from UBS analysts including Giovanni Staunovo. "We expect Brent to rise into a $80–90 range in 2022." Key U.S. events this week include minutes of the December FOMC meeting and non-farm payrolls; on deck today is the Flash Markit Manufacturing PMI read for December as well as the November construction spending data. Market Snapshot S&P 500 futures up 0.5% to 4,781.25 STOXX Europe 600 up 0.5% to 490.21 MXAP little changed at 193.17 MXAPJ little changed at 630.24 Nikkei down 0.4% to 28,791.71 Topix down 0.3% to 1,992.33 Hang Seng Index down 0.5% to 23,274.75 Shanghai Composite up 0.6% to 3,639.78 Sensex up 1.6% to 59,208.86 Australia S&P/ASX 200 down 0.9% to 7,444.64 Kospi up 0.4% to 2,988.77 Brent futures up 1.6% to $78.99/bbl Gold spot down 0.1% to $1,827.19 U.S. Dollar Index up 0.1% to 95.80 German 10Y yield little changed at -0.18% Brent futures up 1.4% to $78.83/bbl Top Overnight News from Bloomberg Senate Majority Leader Chuck Schumer is vowing to bring a revised version of the $2 trillion tax, climate and spending package to the floor for a vote as soon as this month, despite unresolved differences within his party that have stalled the legislation President Joe Biden reaffirmed U.S. support for Ukraine’s sovereignty on Sunday in a call with the country’s president, Volodymyr Zelenskiy Germany’s Finance Minister Christian Lindner said the new government is working on tax relief measures of more than 30 billion euros ($34 billion) Turkish inflation surged to a 19-year high in December, propelled by a slump in the lira and President Recep Tayyip Erdogan’s push for cheaper borrowing Asia’s factory activity continued its expansion in December, lifted by resilient demand and easing supply-chain bottlenecks as the omicron strain begins to spread in the region Top Asian News North Korean Defector Likely Crossed DMZ Twice, Seoul Says Property Stocks Sink After Demolition Order: Evergrande Update Alibaba Drops on Concern Over Conversion of ADRs to H.K. Shares Hong Kong’s Stock Benchmark Marks Its Worst Start in Three Years Star China Stock Fund Manager Suffers a Disastrous 2021 Tokyo Finds 103 New Covid Cases, Most in Nearly Three Months Top European News Nordea Analysts Who Wrote Retracted Report to Leave Bank Iveco Valued at $4.4 Billion in Spinoff to Navigate Truck Shift Germany Heads Toward New Pandemic Measures as Omicron Threatens US Event Calendar 9:45am: Dec. Markit US Manufacturing PMI, est. 57.7, prior 57.8 10am: Nov. Construction Spending MoM, est. 0.7%, prior 0.2% Tyler Durden Mon, 01/03/2022 - 08:02.....»»

Category: blogSource: zerohedgeJan 3rd, 2022

The office market is in trouble. Here"s what real estate experts say all that space could be used for instead.

Faced with empty workspaces, creative office landlords are eyeing alternative uses for their buildings. An empty, unfinished office floor compared to the kinds of offices that landlords are offering as spec space.Carlos Avila Gonzalez/San Francisco Chronicle via Getty Images and NurPhoto/Getty Images As remote work empties offices, landlords are exploring creative options for the space.   Hotels, manufacturing facilities, and film studios have been floated as possible alternatives.  Still, there are financial and physical hurdles to revamping offices into mixed-used spaces.  As remote work turns many offices into ghost towns, creative landlords are eyeing alternatives beyond the commonly touted approach to turning them into residential apartment buildings. Work from home has proven to be a lasting legacy of the COVID-19 pandemic, and it's sent the office vacancy rate to record highs across the US. The reality facing office owners has many of them thinking about office-to-residential conversions, a move also echoed by the Biden administration as a way to alleviate the housing shortage. But such redevelopment of office space is not easy, with Goldman Sachs saying in a recent note that the financing involved and the physical constraints of many properties make conversion to residential unfeasible. Given the hurdles, real estate experts say some landlords are starting to think outside the box, eyeing anything from hotels, advanced manufacturing facilities, or even film studios as possible uses for hollowed out workspaces.  Mike Watts, CBRE's president of Americas investor leasing, said in an interview with Business Insider on Friday that the most popular option after residential buildings are hotels."You do see some office buildings right now that over the last 20 years have taken a part of their building like the low-rise and converted it to a hotel," he said.According to Watts, hotels are somehow easier than residential projects to convert, particularly with a square floor plate, which allows for a more uniform interior layout and design features.In suburban areas, Watts has observed advanced manufacturing space — which includes industries that focus on things like artificial intelligence, robots, and 3D printing — as a target for office landlords looking for alternate uses. The shift has gained momentum in markets like Austin, where owners have dumped their office buildings for light manufacturing and potentially incorporated a lab component into the space.Old rural office buildings with three or four stories, large floor plates, lots of electricity, and plentiful parking are ideal for this type of conversion, Watts said. "It's not a wave [yet] but you are seeing it and you didn't see it two years ago."In less common cases, office owners in places like Los Angeles are pivoting their private buildings to film post-production sets.Steven Paynter, a principal at architecture firm Gensler, told Business Insider that aside from housing, some of his clients are transforming offices into movie studio-type filming spaces, driven by the booming demand for video content in the US. Medical offices are also options for landlords, Paynter said. "Right now, it's a case of trying to figure out what people want," he added. "The market always shifts, there's always something needed."Pitfalls to conversionReal estate experts cautioned that there are still stumbling blocks for converting to mixed-use properties, though the obstacles are different than converting an office to residential. From the standpoint of the physical space, turning an office into something else is a labor- and capital-intensive process. "If you convert an office building to storage, for example, the fire risk goes up," Paynter said. "So the code requirements get higher, the structural requirements get higher, because people are packing loads of stuff in." "It's very, very expensive because you're oftentimes going to have to add or rebuild the infrastructure in the building, meaning the plumbing, the electrical, piping, all those kinds of things," said Watts.Both Watts and Paynter emphasized that residential conversions are still the most profitable choice for owners due to current housing valuations, but other experts said warehouses may be the closest proxy for big office spaces.  "With the seemingly endless need for warehouse properties in close proximity to large population bases, low density office buildings with surface parking fields can be a viable option for warehouses," Todd Henderson, co-global head of real estate at DWS Group told Business Insider on Friday, though he emphasized that zoning challenges are a hurdle to this kind of conversion. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMar 3rd, 2024

Downtown KC"s former Federal Reserve building may pivot from hotel conversion

An out-of-town developer for years has faced challenges financing a hotel conversion of Kansas City's former Federal Reserve building. Foreign investors have learned that the historic property now instead may be renovated into something else — and reopen late next year......»»

Category: topSource: bizjournalsFeb 27th, 2024

I bought a California ghost town for $1.4 million. Living here gets lonely — but I"ve found my purpose.

Brent Underwood says restoring Cerro Gordo, an abandoned California mining town he purchased, has changed how he thinks about finding purpose in life. Brent Underwood bought the old mining town of Cerro Gordo in 2018.Brent UnderwoodWhen he was 30, Brent Underwood left Austin and moved to an abandoned mining town. While restoring the town he's realized that people approach finding a purpose the wrong way.Underwood spoke to Business Insider from 900 ft beneath ground level while sheltering from a snowstorm. This as-told-to essay is based on a conversation with Brent Underwood about his experience moving to a Californian ghost town. The following has been edited for length and clarity.In 2018, my friend sent me a listing for Cerro Gordo, an abandoned mining town in California. "This might be your next project," he joked.The idea of a remote town in the American West was very alluring to me. It reminded me of the old TV westerns my grandfather watched every day.I was running a pretty popular bed and breakfast in Austin, but it felt like I was just searching for something to shake me up from the routine monotony.Buying this ghost town has done that. It cost $1.4 million — more than half was a loan from a hard money lender. The rest was mostly split between my friend and me, but a few other friends also chipped in.Life in the middle of nowhereOn the surface, you understand it's going to be difficult when a place doesn't have running water and is at the end of an eight-mile dirt road an hour from the nearest store.In the late 1800s, Cerro Gordo was a prosperous mining town. Brent UnderwoodBut I don't think you truly appreciate the logistical challenges until you're actually in it — until all your pipes freeze, or you're trudging through snow up to your waist to get to the outhouse.It can be very lonely and isolating living in the middle of nowhere. Yesterday all my friends probably went to lunch together in Austin. But right now, I'm sitting 900 feet under a ghost town that's miles away from them.As I've become more comfortable with the town, either the ghosts have become more comfortable with me, or I've become more comfortable with the sounds I thought were ghosts. But I did once see a shadowy figure in one of the bunkhouse windows and I've since avoided that building.It takes perseverance to stay here though.Since I arrived, Cerro Gordo has been hit with storms, fire, a flood, an earthquake, and a blizzard. It would be very easy to just throw in the towel and say, "This is too much. I got my taste of it."I've had to develop a lot of skills — both practical and mental — to make it easier to exist every day.Finding purposeThe trade-off is I get to do something I truly believe is important — I'm working to preserve the history of this town.Brent is restoring a hotel in the town so that visitors can stay overnight. Brent UnderwoodA lot of people talk about finding purpose. They jump from job to job hoping that one of them delivers what they're looking for.But I think you define your purpose. You get to choose what's purposeful and meaningful to you.It's not going to be an abandoned mining town for everybody else, but think of the interests that made you excited as a kid and find a way to combine them.People also forget that there's comfort in long-term goals. Even those who start businesses these days do it with the goal of selling in a few years. I think that's insane.There's longevity to what I'm doing here. I could work on this project for the rest of my life. That helps ease some of those anxieties when things don't happen exactly to plan. It's a little bit like, well, if you look at this at a project in the course of decades instead of months, then it gives you a little bit more comfort.How I make a livingLife here is slow compared to living in a city. Your days don't just evaporate into 100 small tasks like running to get gas.But there are a dozen meaningful projects going on at any one time, so in some ways, I'm busier.I fund my life through my day job at a company called Brass Check. We have a platform called the Daily Stoic, and make podcasts and newsletters.Then there's the full-time job of trying to rebuild an abandoned town and creating content about that for my YouTube.I've never made any money from the town. But I'm hoping one day soon to reopen the hotel, and eventually, a campsite and cabins, for visitors to stay in overnight. We'll always welcome visitors for free to see the town.Right now I have to put in a lot of money for my day job to keep things running, which is stressful, but I hope eventually it can stabilize and take care of itself.Preserving historyIn its heyday Cerro Gordo was a silver and lead mine, so there are also 30 miles of shafts underneath the town that I'm exploring.It's 20-25°F warmer beneath ground level during February's snowstorms.Brent UnderwoodThe scale of operations that existed down here is crazy — there are the shafts, break rooms, changing rooms, dynamite storage, and even animal pens.We've rebuilt the old elevator, but it still takes 45 minutes to get down to the 40-foot by 20-foot area where I'm staying while I wait out a snowstorm. It's warmer and quieter down here, and I can record my audiobook.900 feet underground Brent was sheltering from a snowstorm and recording his audiobook.Brent UnderwoodI've mined about 100 lbs of this mineral called galena that's still down here. You reduce it down to make batches of pure silver, which I then make into rings, pendants, and some silver coins that I might sell to fundraise for our museum.If I hadn't made this life change, Cerro Gordo would've otherwise just been forgotten, like the hundreds of other towns that were set up in the American West. My hope is that this one has the chance to live on a little bit longer so people can draw inspiration from it like I have.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderFeb 25th, 2024

DiamondRock Hospitality Company (NYSE:DRH) Q4 2023 Earnings Call Transcript

DiamondRock Hospitality Company (NYSE:DRH) Q4 2023 Earnings Call Transcript February 23, 2024 DiamondRock Hospitality Company  isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day, and thank you for standing by. Welcome to the DiamondRock Hospitality fourth-quarter 2023 earnings conference […] DiamondRock Hospitality Company (NYSE:DRH) Q4 2023 Earnings Call Transcript February 23, 2024 DiamondRock Hospitality Company  isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day, and thank you for standing by. Welcome to the DiamondRock Hospitality fourth-quarter 2023 earnings conference call. [Operator Instructions]. I would now like to hand the conference over to your first speaker today, Briony Quinn, Chief Accounting Officer and Treasurer. Please go ahead. Briony Quinn: Good morning, everyone, and welcome to DiamondRock’s fourth-quarter 2023 earnings call and webcast. Before we get started, let me remind everyone that many of our comments today are not historical facts and are considered to be forward-looking statements under federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ materially from those expressed in our comments today. In addition, on today’s call, we will discuss certain non-GAAP financial information. A reconciliation of this information to the most directly comparable GAAP financial measure can be found in our earnings press release. With that, I’m pleased to turn the call over to Mark Brugger, our President and Chief Executive Officer. Mark Brugger: Thank you for joining us today for our earnings call and our outlook for 2024. We are pleased that we will be reintroducing guidance on this call. Let’s jump in. 2023 was another successful year for DiamondRock across several fronts. The company generated total shareholder returns of just over 16%, as our portfolio of high-quality hotels and resorts achieved total revenue of $1.1 billion, a new record for DiamondRock. As a testament to the success of our investment strategy, total comparable revenue was 11.3% higher than 2019, among the best of any full-service lodging REIT. And full-year hotel adjusted EBITDA was $19 million higher than 2019. Solid results from the DiamondRock portfolio led to full-year 2023 comparable revenues increasing 4%, adjusted EBITDA of $271.7 million, and adjusted FFO per share of $0.93. In the fourth quarter, adjusted EBITDA was $57.3 million and adjusted FFO per share was $0.18. All these results are in line or ahead of management’s expectations provided in our last earnings call in November, where we said we were comfortable with consensus estimates. I’ll briefly provide some highlights from the fourth quarter so we could see more time to discuss our outlook and allow time for your questions. In the fourth quarter, there were a few notable trends. First, resorts, which have been the biggest winners in travel since the pandemic, had some pullback earlier in 2023 as they settled into the new normal. Resorts found some firmer footing in the fourth quarter, and we believe resorts still have the best long-term setup. Let’s look at some encouraging resort trends. Quarterly RevPAR at our resorts troughed at 87% of 2022 peak RevPAR in the second quarter, improved to 92% in the third quarter, and improved even more to finish the fourth quarter at 96% of 2022 comparable peak. On a revenue basis, the sequential performance was even better. The resorts progressed from 92% of 2022 in the second quarter to finish the fourth quarter at 98%, or down just 2% to the 2022 peak revenue. The Florida Keys turned a corner, with our three resorts collectively delivering positive RevPAR and revenue growth of 7% and 8%, respectively, in the fourth quarter. Elsewhere in South Florida, the Westin Fort Lauderdale generated 5.8% comparable RevPAR growth. It is worth noting that our Vail Luxury Collection Resort experienced some headwinds from late snowfall in the fourth quarter, but RevPAR turned positive in January. Overall, we were relatively pleased with the resort portfolio in 2023. But we are most proud of the efforts of our asset managers working closely with our operators in maintaining tight cost controls to keep full-year total expense growth at our resorts to just 1.7%. That’s a fantastic result. As we look to 2024, we expect our resort portfolio will improve as the year progresses, with various resorts finding their footing in early 2024 so that the overall resort portfolio can achieve a more uniform return to growth. Resorts should benefit as competitive pressures from luxury revenge travel to Europe lessened this year. Moreover, South Florida and the Florida Keys look poised to deliver growth in 2024 after finding its new normal in 2023. Although South Florida was an early and robust beneficiary of pandemic leisure travel trends and peaked in late 2022, other resort markets did not peak until mid-23. These other resort markets are now finding their new normal several months later than we saw in Florida. For example, the wine country and Charleston markets saw RevPAR growth months after South Florida’s peak. So it is understandable that comparisons will not likely turn positive until we lap those initial declines later this year. Specific to DiamondRock, I did want to mention that there’s little around the rooms number at the Henderson resort, which took into its room inventory a number of adjacent condo units that were recently delivered by a master developer. This is good for our long-term profits, but the optics are a little noisy as we get those units into our room count during the seasonally slow period. So overall, for resorts, we are positive about the outlook as we expect near-term headwinds on comparisons will reverse as the year progresses and consumers continue to prioritize leisure travel. Let’s turn to our urban hotels. We are fortunate to have an urban footprint concentrated in better performing cities. We have largely avoided impaired markets like San Francisco, Portland, and downtown LA. Instead, we have focused our urban exposure more on markets like Boston, New York City, Chicago, Salt Lake City, Dallas-Fort Worth, and San Diego. In the fourth quarter, comparable total revenue at our urban hotels climbed nearly 2%, bringing the top-line revenue to over 102% of 2019. That’s a stat we think compares very favorably among our peers. Looking a little deeper, The Dagny Boston, our biggest repositioning in 2023, was a key performer in the quarter, generating top-line revenue $870,000 above our operator budget, with 233 basis points of stronger EBITDA margin growth. In December, The Dagny’s RevPAR index to the competitive set increased 15 points to a 110% index premium, surpassing our penetration last year at the Hilton. The initial results from The Dagny have exceeded our expectations, and we’ll discuss this more when we move to our 2024 outlook. There were other stars in the fourth quarter, such as our Kimpton Phoenix increasing total RevPAR to 34%, our Marriott Salt Lake City increasing total RevPAR by 9.8%, and our Westin San Diego increasing total RevPAR by 7.2%. Of course, group success bolstered overall urban results. DiamondRock’ group room revenue for 2023 surpassed 2019 by more than 3%. We had positive contributions from a number of our hotels. The Westin Fort Lauderdale was up 23%, the Westin Boston was up 2%, the Westin City Center DC was up 18%, and the Hilton Burlington was up a whopping 70% on a small base. Over the course of the year, we saw group momentum within the portfolio continued to build. In Q2, group room was flat to 2019. In Q3, it was up 3.8%. And in Q4, it was up nearly 7%. Compared to the prior year, 2023 group room revenues were better by 13% on nearly 4% higher rates. Growth in group room volumes and group room rates also improved sequentially throughout 2023. As we look out to 2024, DiamondRock’s group story is a major reason for our optimism and gives us the foundation to reintroduce guidance today. Our group revenue pace is up 21% versus this time last year. Our urban portfolio is particularly well set up for 2024 with a very favorable geographic footprint, leveraging some of the best group markets this year, a key advantage for DiamondRock. Markets like Boston; Chicago; Washington, DC; San Diego; New Orleans; Denver; and Fort Lauderdale are all expected to have stronger city-wide calendars in 2024 than they did last year. And Phoenix and Fort Worth are also within striking distance to see gains. We expect our urban hotel portfolio will deliver slightly stronger RevPAR growth in the second half of the year than in the first because of the city-wide calendars and on-the-books events. The main driver behind this timing is a significant shift in the convention calendar in Chicago and, to a lesser extent, Washington, DC. In Chicago, the city-wide demand was fairly bunched up in 2023 with peak activity in Q2. In 2024, the city-wide room nights are steady after Q1 in Chicago. This means the Q2 city-wide room nights in Chicago are lower than last year, but that the Q3 and Q4 activity is much stronger, almost two times stronger. In Washington, DC, the group room nights are up each quarter across the year, but most significantly in the second half of the year, up over 100% in Q3 and up 36% in Q4. Before turning the call over to Jeff to get into more details on the financials and a balance sheet update, let me provide you with our outlook. We are pleased to reintroduce guidance. Based on current trends, we believe that the lodging industry is likely to experience RevPAR growth in the range of 2% to 4%. With that backdrop, we expect DiamondRock to have similar RevPAR growth, but with the advantage of another 50 to 75 basis points of higher total revenue growth as our focus on outside-the-room spend initiatives bear fruit. Although January RevPAR was up 5.4% for our entire portfolio, we expect the first quarter to be lumpy and that the strength of the portfolio’s results will be weighted towards the back half of the year because of the layout of the city-wide convention calendars in our markets and increasingly beneficial comparison for our resorts. On the expense side, we have been hard at work managing expenses at our properties. On the positive side, we believe some of the difficult culprits will be much easier in 2024 as hotels are fully staffed to their new, but more efficient levels; giant property insurance increases are largely behind us; real estate tax increases will greatly moderate this year; and cost pressures will lessen from improved supply chains and lower inflationary pressures. However, wages and benefits, our largest cost categories, are likely to increase mid-single digits. And while other cost categories are moderating, some are still likely to increase above inflation. Accordingly if DiamondRock’s portfolio generates RevPAR growth in the middle of the 2% to 4% range, we expect the company to generate adjusted EBITDA of approximately $275 million and adjusted FFO per share of $0.95. I’ll turn it over to you, Jeff. Jeffrey Donnelly: Thanks, Mark. Recall that in our third-quarter earnings commentary and follow-up, we felt RevPAR would be in a range of flat to down 100 basis points. And we were comfortable with the then full-year consensus estimates of $270 million of adjusted EBITDA and $0.93 per share of funds from operations. Operating and financial results were in line or slightly ahead of our expectation. In the quarter, comparable RevPAR contracted 60 basis points from the prior period and total RevPAR increased 30 basis points, both in line with our expectation. Moreover, full-year adjusted EBITDA was $272 million, and FFO was $0.93 per share. The 30 basis points of total RevPAR growth in the quarter stems from a 2.4% decline in our resorts portfolio and 1.8% growth in our urban portfolio. It is important to highlight the steady improvement you saw in our resorts. Comparable total revenues at the resorts declined 8% in the second quarter of 2023, 4.6% in the third quarter, and just a 2% decline in the fourth quarter. We are optimistic we can continue this improving trend and pivot to growth in 2024. Moving on to profits. Comparable gross operating profit, or GOP, was $94 million, or a 36% margin on $261 million of comparable total revenue. This means our asset managers were able to keep same-store controllable operating expenses to just 3% growth despite 110 basis points of higher occupancy from the prior period. In fact, the growth in controllable operating expenses over the past three quarters has averaged just 3% despite a 150-basis-point average rise in occupancy. Hotel adjusted EBITDA was $65 million with a 24.7% margin, and corporate adjusted EBITDA was a little over $57 million. Hotel adjusted EBITDA margins were 500 basis points lower than Q4 2022 for a few reasons we discussed on our prior earnings call. First, the property tax headwind in Chicago was over $6 million or a 242-basis-point margin impact. Second, our insurance costs were $2.2 million higher in the quarter due to unfavorable industry conditions last year, and this accounted for an 80-basis-point impact. Finally, we elected to accelerate the one-time purchase of new brand-standard bedding in our Westin-flagged hotels to obtain discounted pricing. The $1.5 million bedding expenditure negatively impacted the margins in the quarter by 55 basis points. Collectively, these items explain about 375 basis points of the margin change from the fourth quarter of the prior year. The group segment remained a bright spot in the quarter, with group room revenue up 4% on gains in both room volume and average daily group room rates. As we discussed in the call last quarter, both of our Chicago hotels had difficult comparisons in late 2023 due to a shift in city-wide calendars compared to 2022. Overall, comparable full-year room revenues in the group segment were $21 million stronger in 2022 and exceeded 2019 by $6 million. However, group room nights were still 10% or 78,000 nights, below 2019 results. 2024 is shaping up to be strong. Our group revenue is pacing up 21.4% compared to the same time last year. Our footprint continues to serve us well. In our largest group markets, the Westin Boston’s group revenue is pacing up nearly 8% and the Chicago Marriott is up over 30. Outside of our two largest group hotels, the strength of our group revenue pace is broad. Group revenues at the Worthington, The Hythe in Vail, Westin Fort Lauderdale, and Westin San Diego Bayview are each up over 30%; and our Westin DC is up 80%. We believe the strength and breadth of our group setup for 2024 is a key point of differentiation for DiamondRock. Turning to capital allocation, there were no acquisitions or dispositions during the quarter and we did not repurchase any shares. However, we continue to explore dispositions, the proceeds of which can fund equity repurchases, ROI projects, or fund external growth. Maximizing shareholder value is the singular focus behind our capital allocation decisions. We remain committed to having a flexible balance sheet. Our leverage is conservative, as demonstrated by the low net-debt-to-EBITDA ratio of 3.9 times trailing four quarter results. Our liquidity is strong with $122 million in corporate cash, $102 million in hotel-level cash, and a fully available and undrawn $400 million revolver. Importantly, our current liquidity is 140% of our debt maturities through year-end 2025. We have provided RevPAR and adjusted EBITDA guidance ranges in our press release. As Mark said, it is our expectation that total RevPAR growth will be approximately 50 to 75 basis points better than our RevPAR forecast. In addition, we have provided preliminary ranges for corporate expenses, interest expense, and income taxes and our available room count. As Mark indicated, we expect the second-half growth will be stronger than the first half, owing to an evenly distributed convention calendar in our urban hotels segment that last year was more concentrated earlier in the year. In the resort segment, that should improve as we move through the year for the reasons discussed. In the first quarter, there was about $2 million of unfavorable impact for work at Hotel Champlain in Burlington and our Westin San Diego. Later in the year, we expect approximately $1 million of impact from renovation work at the Bourbon in New Orleans. In total, the displacement and disruption is consistent with prior years. On the expense side, we expect labor-related costs will remain the dominant industry headwind as we put rising staffing levels, a hard insurance market, and property tax true-ups in the rearview mirror. And with that, I can turn the floor back to Mark. Mark Brugger: Thanks, Jeff. We believe DiamondRock is well positioned for the future with a high-quality portfolio that aligns with some of the best long-term trends in travel. Our portfolio, the least encumbered of any full-service public lodging REIT, commands a net asset value premium. We also have a fortress balance sheet that gives us significant dry powder to take advantage of acquisition opportunities that should emerge this cycle. Even better, one of the things that I think is a little bit of DiamondRock’s secret sauce for superior future performance is our extensive list of ROI projects. While there’s a fuller list in our investor presentation available on our website, I’ll just hit a few. The Dagny Boston, converted only six months ago from a $30 million investment, should outperform for the next several years as it ramps to its full potential. The Hilton Burlington will [indiscernible] this year to a lifestyle resort named The Champlain with a specialty restaurant led by a James Beard-nominated chef. We are excited about this one. In the Florida Keys, we are in the final permitting process to build a high-ROI marina. And in 2025, we plan to expand our Lake Tahoe resort by adding 20% more rooms and building new group meeting space. And finally, our most exciting project, we are working diligently to transform the 77-room Orchards Inn into the Cliffs at L’Auberge de Sedona with a new mountain-side pool and restaurant with some the best use of the Red Rocks in all of Sedona. This should allow us to double the property’s revenue, and it will become one of the true gems in our portfolio. To wrap up, these continue to be exciting times at the rock. And while we believe that this will be a good year for the travel industry, we are encouraged with the setup for 2025 and 2026 as the economy is likely to reaccelerate against a backdrop of exceptionally low hotel supply. Our well-balanced portfolio is ideally suited for the most dynamic trends in travel over the next decade. And we are happy to lean into our strategy focused on the data that supports that traveler preferences will make hotels in markets like ours, Vail, Boston, New York City, Sedona, and Marathon Key, a smart capital allocation for long-term outperformance and NAV growth. At this time, we would like to open up the call for any of your questions. See also 11 Best Small-Cap Growth Stocks to Invest In and 11 Best Magic Formula Stocks to Buy Now. Q&A Session Follow Diamondrock Hospitality Co (NYSE:DRH) Follow Diamondrock Hospitality Co (NYSE:DRH) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: [Operator Instructions]. Your first question comes from the line of Dori Kesten from Wells Fargo Securities. Dori Kesten: Thanks. Good morning. Can you talk about the quantity of assets you deem of interest in a relatively small experiential that are in your pipeline today? And just given your comfort in providing guidance, is it fair to say that you may be more acquisitive this year with, perhaps, fewer uncertain variables? Mark Brugger: Good morning, Dory. It’s Mark. Good questions. I think the acquisition pipeline and our acquisition team led by Troy Furbay here, they’re always looking at deals. We have focused on off-market transactions, as you know, over the last several years. But those transactions go on their own timeline based on the individual owners’ circumstances. So we continue to maintain an active pipeline of those deals. Given our cost of capital and the discount to NAV of our stock, they have to be exceptional deals and continue to need to be exceptional deals to be able to do them. We are actively looking at things now, but we need to be sensitive to our cost of capital. We certainly have the dry powder and the balance sheet to do interesting deals, and we would hope to find one or two transactions this year. Briony Quinn: Okay. We’ve talked in the past about your likelihood of selling a large urban box. Do you think the pricing you’ve received today would be fair? And is there enough, I guess, capital out there interested in acquiring upwards of $100 million? Mark Brugger: Yeah. So we’ve seen some bigger trades, the [indiscernible] and some other big trades over the last six months. I think our opinion is the debt markets continue to improve and that rates will be much lower next year than they are this year or the end of this year so that you’re likely to get someone to stretch and pay a bigger number for a bigger asset if you have a little bit of patience. So our overall view is, while it may test the market, more likely that those transactions will occur either at the end this year or sometime in 2025. Dori Kesten: Okay. And Jeff or Briony, where are your NOLs today? And should we expect dividends to return — I guess what pace should we expect dividends to return over the medium term? Your earnings outlook for this year looks pretty similar to when you were paying out $0.50 annually. Jeffrey Donnelly: Yeah, I’ll take the NOL piece, and I can defer to Mark on the dividend. That’s something that we discuss with our Board. But on the NOLs, there’s about $140 million of NOLs remaining at this point in time. Mark Brugger: On our dividend policy, we actually have a Board meeting next week, and we review the dividend regularly with them. I think where we are now and looking at other alternatives of capital while we think about modestly, potentially, increasing the dividend, the focus really is on other uses of the capital that might drive the stock price. Dori Kesten: Okay. Thank you. Operator: Thank you. Your next question comes from the line of Smedes Rose from Citi. Smedes Rose: Hi, thanks. I guess just following up on some of your last comments, Mark, about uses of capital. You mentioned your perception that the stock is below NAV and stuff like that. So why not have a more robust share repurchase program at this point? Mark Brugger: No, it’s a great question, Smedes, and it’s something we’re actively talking to the Board about what the right level of that is. We wanted to make sure we have plenty of balance sheet capacity for all maturities for the next couple of years. But as the debt markets have opened up and gotten much better and rates seemed like they’re going to head south, we’re more comfortable using that balance sheet capacity. So that will be something we have a conversation with on the Board meeting next week. Smedes Rose: Okay. And then I just wanted to follow up. When you talked about The Dagny gaining, I guess, relative market share — and you mentioned some of the RevPAR index gains. Is that on the same competitive set from when it was a Hilton? Or when it goes independent, do they change the set that you’re competing against? Mark Brugger: That’s a relatively consistent set. I mean, there’s always renovations going on at pure hotels. So there’s a little bit of noise in that. I should mention that we did take what we felt was a risk mitigation strategy at the hotel to put some group in there — I mean, some contract business in there, which will benefit us more in the winter months which is the lower demand season. And that was something we wanted to do consciously, as we ramped up from the brand conversion. So we would not expect to command a premium for the full year 2024 versus our time at a Hilton. We think that that will take a couple of years to close that gap, and that’s really the upside performance of and asset as well. Smedes Rose: Okay. And then just final question. It sounds like you’re building maybe 15 rooms or so at the Lake Tahoe asset. What are you thinking about in terms of the costs per key there? Mark Brugger: Jeff, do you want to go and take that one? Jeffrey Donnelly: Yeah, we think we’re probably all in about a key for the 14 incremental, where we are utilizing an existing building that has been out of service for some time and then building six of those in a new purpose-built building in addition to adding some meeting space......»»

Category: topSource: insidermonkeyFeb 24th, 2024

Austin gave low-income residents $1,000 a month with no strings attached. One participant said the payments helped her get her first permanent apartment.

Stephanie Hendon got a new apartment, a new car, and other daily expenses thanks to monthly payments from the Austin Guaranteed Income Pilot. Stephanie Hendon participated in the Austin Basic Income Pilot.Stephanie HendonStephanie Hendon saw her life improve after participating in the Austin Guaranteed Income Pilot.Hendon could afford rent on a new apartment, a new car, and other daily expenses.The program provides $1,000 monthly to low-income families, who spent much of their payments on housing.Stephanie Hendon, 34, lived in a shelter while working as much as possible to provide for her four kids. Her husband was living on the street, and she was struggling to see a future for herself in Austin.She applied for the Austin Guaranteed Income Pilot, which gave 135 low-income families $1,000 monthly with funding from the City of Austin and philanthropic donations. Within a year, she had a three-bedroom apartment, a new car, clothes for her children, a new job, and new financial strategies for the future."With the security that the extra $1,000 gave me, I didn't have to worry or stress," Hendon said. "I was able to spend more time with my children, spend more time with my husband."Austin was the first city in Texas to launch a taxpayer-funded guaranteed-income program, and its results have been mostly promising. An analysis by the Urban Institute think tank found that participants predominantly spent their $1,000 payments on housing and food. The share of participants who could not afford a balanced meal declined by 17 percentage points by the end of the pilot.The pilot is expected to continue next year with a new group of participants. Austin's City Council is expected to finalize the grants over the next few months, and at least 85 families will be included, receiving $1,000 each month for a year.Still, the Austin pilot — and dozens of others nationwide — have not been entirely successful for every participant. Jessica Nairns, 43, told Business Insider that while the program helped her advance her career and buy essentials, she still is unhoused and doesn't have the financial stability to plan for the future.Ivanna Neri, senior director of partnerships at UpTogether, which partnered with Austin for the pilot, told BI that the pilot cannot drastically improve all participants' lives when there's an affordable housing crisis and inequality in healthcare and education.Navigating difficult circumstancesHendon was born and raised in Detroit in what she described as "really rough" conditions. She said her neighborhood had a lot of violence, drugs, and homelessness, and she said for most of her upbringing, she lived in various shelters with her mom. Growing up, she said her mom, who shares her name, used her credit and jeopardized her financial situation.She met her future husband at 13, and as a teenager, her performance in school dropped. When Hendon was 16, her future husband was sentenced to a few years in prison. Hendon went to college for a bit and then dropped out and continued to struggle with homelessness.She married her husband after he got out of prison, and then they both pursued bachelor's degrees in theology and philanthropy and joined a church as preachers. She and her husband have four children and both worked long hours. Hendon is still in school studying communications online while working full-time.Stephanie HendonStephanie Hendon2018 was a rough year for Hendon — she started receiving blood transfusions, and three members of her husband's family died within a month of one another. Her husband spent a few weeks in the hospital to recover from mental health struggles.In 2022, after her husband's last semester of college, they took out a loan and moved to Austin, where her adopted sister was living. After a few months with her sister, Hendon and her family used their savings to stay in hotel rooms."We left Michigan because there was just a lot going on, and we were kind of trying to start a new life," Hendon said.The next few months were bumpy — they landed in a shelter in June, and Hendon lived out of her car temporarily."We were outside, we were in cars. I'm working, and when I got down here, I landed a job within a month," Hendon said. "I'm working to keep the car so we can get around and figure our way out."Turning her life aroundHendon applied to the pilot program in June 2022, and after taking some surveys and doing some background checks, she started receiving payments in September.Hendon said she spent her first few payments on buying her children new clothes and shoes for about $400, as well as hygienic products and additional food and snacks for the shelter, totaling about $300. She also bought a TV for inside the shelter, while some of the money went toward transit and other daily expenses for her husband, who was still living outside.Stephanie Hendon has four children.Stephanie HendonIn November 2022, after a few months of saving whatever she could, she got her own place in an apartment community, which was $1,200 a month. It was a two-bedroom apartment, and it was a much more stable arrangement than the shelter."If it wasn't for the pilot program, I would not have had the money to be able to save up to pay for my security deposit, which was $2,100," Hendon said. "I'm trying to pay for the rental, so all the money that I'm getting is going into the rental."She transferred her kids to a new school closer to their apartment as she could afford uniforms for them. She used extra money from the payments, her work income, and her savings to buy a car with a $4,500 deposit.After a few months, Hendon and her family moved to a three-bedroom apartment down the street from her children's school, which she said is nearly $1,700 a month with utilities."We're not getting income from the pilot anymore, but it truly did help us set up a plan and help us to execute our plan well," Hendon said. "Without the extra $1,000 every month for that year, we would probably be back in Michigan or still homeless. I honestly can't even tell you where we would be if the pilot never approved us."She said she also used some of the money for interview clothes, which helped her secure a full-time job last June as a retention specialist for a telecommunications company. She had lost her previous job and was unemployed for over a month, and she said the pilot allowed her to quickly get back into the workforce as she could more easily afford gas to get between her work trainings.The pilot also gave her more flexibility to pursue her bachelor's in communications in hopes of becoming a crisis counselor or a trauma therapist for children."I just want to be able to inspire them and tell them to keep going and don't give up," Hendon said. "I had a really rough life, and I really do desire to give back to people and help people and let them know that they're seen and heard."She said she learned from the pilot how to budget and discipline herself for long-term financial success. She also received guidance for bettering her emotional health through podcasts and other resources.The only drawback of the program for her, she said, was that funds were difficult at first to access, though she felt that overall these types of programs are necessary for bettering the lives of many lower-income Americans nationwide. She said public attitudes need to change since many lower-income Americans are fighting to better themselves in whatever ways they can."A lot of people out here are not on drugs, everybody out here didn't get themselves into this situation, and some people do need help or assistance or did grow up in a situation that really wasn't their fault," Hendon said. "This program made it available for me to get more funds and be a better parent and person all around because they didn't judge me. They didn't say, I'm not going to help you, the world isn't fair."Have you recently received payments from a basic income program in a US city? Reach out to this reporter at the original article on Business Insider.....»»

Category: topSource: businessinsiderFeb 24th, 2024

All the A-list stars are staying in the Fontainebleau Las Vegas" luxury suites, which start at $5,000 a night. Take a look inside.

The Fontainebleau has become one of the hottest Las Vegas hotels, attracting everyone from Beyoncé and Jay-Z to Leonardo DiCaprio and Tom Brady. Inside the exclusive Fleur de Lis suites at the Fontainebleau Las Vegas. Connie ZhouThe Fontainebleau has become one of the hottest Las Vegas hotels since it opened in December. Beyoncé, Leonardo DiCaprio, and Tom Brady were all at the hotel during Super Bowl weekend. We got a tour of the exclusive Fleur de Lis suites, where all the VIPs stay. Even in a city packed with flashy competition, the new Fontainebleau Las Vegas managed to attract the biggest stars during Super Bowl weekend.Beyoncé and Jay-Z dined at Mother Wolf — one of the resort's 36 restaurants — while Leonardo DiCaprio and Tom Brady partied at Poodle Room, its exclusive members-only club. Mark Wahlberg was playing bartender over at Komodo, while Lana Del Rey made it to Papi Steak after celebrating the Kansas City Chiefs' win with Taylor Swift.I spent two nights at Fontainebleau Las Vegas during the Big Game weekend and was given an exclusive tour of Fleur de Lis — the luxury suites where all the VIPs stay in Sin City.Let's take a look inside, shall we?The Fleur de Lis suites span the top five floors of the Fontainebleau, which is the tallest occupiable building in Las Vegas. The Fontainebleau Las Vegas opened in December. PATRICK T. FALLON/AFP via Getty ImagesGuests staying in the Fleur de Lis suites have their own private entrance and elevators on the main floor, marked by two metallic golden doors that shimmer under one of the resort's many chandeliers.The suites range from 1,000 square feet to the 10,000-square-foot penthouse, and prices start at $5,000 per night.Guests are greeted with a welcome cocktail, the "Fleur de Spritz," before their in-suite check-in begins. The entry way to the Fleur de Lis suite that I toured. Anneta Konstantinides/Business InsiderThere are subtle changes to differentiate the Fleur de Lis suites from the standard rooms below.The halls are designed in a color palette of sunset orange and pink, rather than the soothing blues I saw on the floor of my room, and a signature (delicious-smelling) scent is pumped through the vents — instantly distinguishing the luxury suite experience.I toured the second-biggest suite, which features a large living room and dining area. The living room and dining area of a Fleur de Lis suite. Anneta Konstantinides/Business InsiderAs we opened the door, I immediately caught a glimpse of the Vegas skyline from the floor-to-ceiling windows, which take up nearly an entire wall in the spacious sitting and dining area.I loved the water-ripple glass panels at the suite's entrance, which I learned are a tribute to the original Fontainebleau Miami. The subtle bow ties on the parquet wood floor also pay homage to the late architect Morris Lapidus, who incorporated his signature accessory in the original Fontainebleau. His iconic bow tie is now the symbol of the Fontainebleau Las Vegas and can be found throughout the resort (including its 60-foot-tall centerpiece chandelier).The living room features plush royal-blue couches that match the modern carpet underneath. I loved the chic and modern couches in the living room. Anneta Konstantinides/Business InsiderEach suite features floral arrangements designed by Kardashian-beloved florist Jeff Leatham, as well as personalized welcome chocolates from Fontainebleau's executive pastry chef Patrice Caillot.The new Las Vegas Sphere winked back at me as I looked across the sunny Nevada landscape from the floor-to-ceiling windows. The view from the Fleur de Lis suite. Anneta Konstantinides/Business InsiderThe best view of the mountains surrounding Vegas is from the Fleur de Lis penthouse suite, which has four bedrooms plus an in-suite gym, sauna, and wellness room.One of my favorite parts of the entire suite was the gorgeous private bar. The private bar in the Fleur de Lis suite. Anneta Konstantinides/Business InsiderThe bar perfectly illustrates how different patterns and textures have been designed to dance together within the Fleur de Lis suites, infusing every room with depth and intrigue.The checkerboard wallpaper and navy leather stools add a dash of modernity to the bar, while the polished marble countertops and gold chandeliers retain that outspoken element of Las Vegas luxury.The bedrooms are also decorated with rich blue and red accents. One of the bedrooms in the Fleur de Lis suite. Anneta Konstantinides/Business InsiderI loved how the plush and textured navy wall added some dramatic flair to this bedroom, especially when paired with the scarlet couch by the window.The colors and textures used throughout the Fleur de Lis suites felt chic and cohesive, tying every room together.Each Fleur de Lis suite comes with a dedicated butler. The bedrooms are decorated in different shades of blue, gold, and red. Anneta Konstantinides/Business InsiderThe butler's evening service includes a pillow menu and tea program so guests can customize their pre-sleep experience.Fleur de Lis also offers accommodations for children, including balloon bouquets upon arrival, petite-sized robes, playpens, board games, and PlayStation 5.A sleek and subtle panel allows guests to control each room's lights and automatic drapes to their preference. Some of the rooms feature an extensive panel to select the lights and shades. Anneta Konstantinides/Business InsiderThere are also buttons to instantly call for towels or housekeeping service, as well as a privacy option.Personal concierge services are included in the Fleur de Lis package, and they can arrange any tickets or reservations a guest may need from the comfort of their own suite. Guests also have access to a personal valet and a private fleet of Rolls-Royces.The soaking tub was my favorite feature of the sparkling marble bathroom … The bath tub in this suite was beautiful. Anneta Konstantinides/Business InsiderThe butler can draw up a bath selected from the Fleur de Lis menu, which features everything from a milk bath to Epsom salt soaks.… as was the sunbed overlooking the Las Vegas skyline. This sunbed offers the perfect place to relax after a big night in Sin City. Anneta Konstantinides/Business InsiderThere's plenty of room in the spacious bathroom for guests to enjoy in-suite services from Fontainebleau's spa. You can even have an IV drip delivered to your room after a big night of partying.And who doesn't love a private sauna? The sauna in a Fleur de Lis suite. Anneta Konstantinides/Business InsiderThe sauna, which in this suite was subtly tucked between the tub and sinks, can comfortably fit two people.The showers were also huge, and offered stunning views. The marble shower glowed in the sunlight. Anneta Konstantinides/Business InsiderIn addition to Fontainebleau's custom shampoo, conditioner, and body wash, the suites also offer luxury Knesko face masks and Dyson hair tools.The Fleur de Lis suites illustrate how the Fontainebleau is ushering in a new era of luxury in Sin City. The centerpiece chandelier in the Fontainebleau Las Vegas casino. Connie ZhouWhether it's the big bets or wild clubs, Las Vegas has always been over the top. And, for many decades, that's often gone hand in hand with places that feel cheesy or gaudy.But the Fontainebleau clearly wants to provide something different to the Strip. There's a chicness and elegance to its design that's evident no matter which suite you stay in. The rich textures, refined fabrics, and tasteful colors reveal how real luxury is often subtle.No wonder it's become the hot spot for Hollywood's biggest stars.Read the original article on Business Insider.....»»

Category: dealsSource: nytFeb 24th, 2024

Hyatt (H) Q4 Earnings & Revenues Beat, System-Wide RevPAR Up Y/Y

Hyatt's (H) fourth-quarter 2023 results reflect robust global travel demand, thanks to increased leisure and group travel. Yet, increased costs and expenses dent the bottom line. Hyatt Hotels Corporation H delivered fourth-quarter 2023 results, wherein earnings topped the Zacks Consensus Estimate but declined on a year-over-year basis.The company's revenues surpassed the consensus mark and increased year over year.Hyatt’s quarterly results reflected year-over-year growth in comparable system-wide revenue per available room (RevPAR), driven by an increase in occupancy and average daily rate (ADR). This uptrend is mainly driven by strong global travel demand, especially among leisure and business guests, and group customers. Moreover, rapid improvement in Greater China and strengthening group demand in the United States are encouraging.Notably, global travel demand and net room growth fueled record fee generation in the quarter. Also, it achieved an asset-light earnings mix of about 76% for the full year, reflecting the efficient execution of its strategic initiatives.However, increased costs and expenses and foreign currency risks partially offset the aforementioned tailwinds and hurt the bottom line.Following the results, shares of this global hospitality company inched down 0.8% in the pre-market trading session on Feb 23.Q3 Earnings & RevenuesDuring the quarter under discussion, Hyatt reported adjusted earnings per share (EPS) of 64 cents, beating the Zacks Consensus Estimate of 38 cents by 68.4%. In the year-ago quarter, the company reported an EPS of $2.55.Hyatt Hotels Corporation Price, Consensus and EPS Surprise  Hyatt Hotels Corporation price-consensus-eps-surprise-chart | Hyatt Hotels Corporation QuoteQuarterly revenues of $1.66 billion also topped the consensus mark of $1.57 billion by 5.7% and climbed 4.5% on a year-over-year basis.Operating HighlightsDuring the quarter, adjusted EBITDA was $241 million, up 4% year over year. Our model predicted the metric to be $223.6 million. Adjusted EBITDA margin increased to 27.2% by 20 basis points (bps) from 27% reported in the year-ago quarter.Segmental DetailsHyatt manages business through five reportable segments, which are Owned and Leased Hotels; Americas Management and Franchising; Southeast Asia, Greater China, Australia, South Korea, Japan and Micronesia (ASPAC) Management and Franchising; Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management and Franchising; and Apple Leisure Group.During the quarter under review, adjusted revenues in the Owned and Leased Hotels segment totaled $359 million, up 8.8% year over year. The segment benefited from growth in group travel, and increased rate growth across group and transient customers. Our model estimated the revenues to be $306.8 million year over year.Segmental RevPAR grew 5.9% from the year-ago quarter’s level. ADR was up 5.1% and occupancy rate expanded 0.5 percentage points from 2022 levels.The segment’s adjusted EBITDA of $71 million up 1.2% year over year.Americas Management and Franchise segment’s total adjusted fee revenues amounted to $131 million, down 13% year over year. Our model estimated the metric to decline 1% year over year to $151.5 million.RevPAR for comparable Americas hotels rose 3.4% from the year-ago quarter’s level. ADR improved 2.6% and the occupancy rate moved up 0.6 percentage points from the year-ago quarter’s numbers.Segmental adjusted EBITDA increased 7.6% year over year to $114 million.In ASPAC Management and Franchising, RevPAR for comparable ASPAC hotels grew 37.6% from the year-earlier quarter’s figure. ADR grew 8.6% and the occupancy rate improved 15.1 percentage points from the year-ago quarter’s levels. The uptrend was backed by strength in each of the customer segments, mainly improvements in Greater China.Adjusted EBITDA was $36 million compared with $20 million in the year-ago quarter.In EAME/SW Asia Management and Franchising, comparable EAME/SW Asia hotels’ RevPAR increased 3% from the year-ago quarter’s levels. ADR increased 0.9% and occupancy rate rose 1.4 percentage points from the year-ago quarter’s numbers. This was driven by resilient leisure demand and strong business transient and group performance along with increased airlift from the United States, Middle East, and China.Adjusted EBITDA totaled $17 million compared with $15 million in the year-ago quarter.In the Apple Leisure Group segment, adjusted revenues declined 2.9% year over year to $305 million. Our model hinted at an increase of 4.9% year over year.Adjusted EBITDA was $21 million, down 52.8% from $43 million reported in the year-ago quarter.Balance SheetAs of Dec 31, 2023, Hyatt reported cash and cash equivalents of $896 million compared with $727 million reported in the previous quarter. Total liquidity was $2.4 billion in the fourth-quarter 2023 end. Total debt as of Dec 31, 2023, was $3.06 million, implying a sequentially flat growth rate.Sneak Peek at 2023Total revenues in 2023 were $6.67 billion, up from $5.89 billion in 2022.Adjusted EBITDA in the year was $1.03 billion, up 13.4% from $908 million in 2022. Adjusted EBITDA margin was 28.1%, up 60 bps year over year.In 2023, adjusted diluted EPS was $2.56, down from $3.28 reported in the prior year.Other Business UpdatesComing to hotel openings, 29 new hotels (or 9,648 rooms) joined Hyatt's system in the fourth quarter of 2023, thus making it a total of 101 new hotels (or 23,965 rooms) in the full year. As of Dec 31, 2023, Hyatt has a pipeline of executed management or franchise contracts for approximately 650 hotels (or about 127,000 rooms), including 17 Hyatt Studios hotels (approximately 2,000 rooms).2024 OutlookFor 2024, the company expects adjusted selling, general and administrative expenses to be between $425 million and $435 million. Capital expenditures are projected to be approximately $170 million. Net room growth in 2024 is anticipated to be between 5.5% and 6% year over year.Management anticipates 2024 system-wide RevPAR to rise 3-5% from 2023 levels. Adjusted EBITDA is estimated in the $1.18-$1.23 billion band. Management, franchise, license, and other fees are expected between $1.1 billion and $1.13 billion.Zacks Rank & Recent Consumer Discretionary ReleasesHyatt currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Marriott Vacations Worldwide Corporation VAC reported fourth-quarter 2023 results, with earnings and revenues beating the Zacks Consensus Estimate after missing in the preceding quarter. The top line increased on a year-over-year basis, but the bottom line declined.Following a challenging year, the company concluded the year positively, with contract sales increasing 4% in the reported quarter from the previous year’s levels. Volumes Per Guest remained consistent with the prior year, adjusting for the estimated impact of the Maui wildfires. Meanwhile, the company has progressed with the transition to Abound by Marriott Vacations. Looking ahead, the focus is on utilizing technology to boost revenues and enhance efficiency and cost savings across the organization.Choice Hotels International, Inc. CHH delivered mixed fourth-quarter 2023 results, with earnings beating the Zacks Consensus Estimate and revenues missing the same. The top line fell year over year, while the bottom line increased from the prior-year quarter’s figure.In 2023, the company reported an uptick in growth, exceeding its full-year adjusted EBITDA and adjusted EPS guidance. The upside was propelled by the effective strategy of incorporating hotels with higher royalties per unit. The company expanded its rewards program, extended its geographic reach, utilized platform capabilities and achieved substantial growth through the rapid completion of the Radisson Americas' integration. Given the strategic initiatives and the hotel conversion opportunities, the company is optimistic and anticipates the growth momentum to continue in 2024 and beyond.PENN Entertainment, Inc. PENN reported a wider-than-expected loss in its fourth-quarter 2023 results. Both the bottom and top lines saw a year-over-year decrease.The decline was primarily attributed to the sale of Barstool and losses incurred during the relaunch of an online betting venture ESPN BET, both of which significantly impacted the quarterly financial performance. Also, softness in the South and Northeast regions added to the decline. Nonetheless, sign-ups for the service surpassed management's expectations, with more than 1 million new customers joining within the initial two months. Penn Entertainment anticipates that ESPN BET will capture 46% of the online sports betting market once North Carolina and New York are included. Just Released: Zacks Top 10 Stocks for 2024 Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.See New Top 10 Stocks >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Hyatt Hotels Corporation (H): Free Stock Analysis Report Choice Hotels International, Inc. (CHH): Free Stock Analysis Report PENN Entertainment, Inc. (PENN): Free Stock Analysis Report Marriott Vacations Worldwide Corporation (VAC): Free Stock Analysis ReportTo read this article on click here.Zacks Investment Research.....»»

Category: topSource: zacksFeb 23rd, 2024

Toll Brothers, Inc. (NYSE:TOL) Q1 2024 Earnings Call Transcript

Toll Brothers, Inc. (NYSE:TOL) Q1 2024 Earnings Call Transcript February 21, 2024 Toll Brothers, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good morning, everyone and welcome to the Toll Brothers First Quarter Fiscal Year 2024 Conference Call. All […] Toll Brothers, Inc. (NYSE:TOL) Q1 2024 Earnings Call Transcript February 21, 2024 Toll Brothers, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good morning, everyone and welcome to the Toll Brothers First Quarter Fiscal Year 2024 Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] The company is planning to end the call at 9:30 when the market opens. During the Q&A, please limit yourself to one question and one follow-up. Please also note today’s event is being recorded. And at this time I’d like to turn the floor over to Douglas Yearley, CEO. Please go ahead, sir. Douglas Yearley: Thank you, Jamie. Good morning. Welcome and thank you all for joining us. Before I begin, I ask you to read our statement on forward-looking information in our earnings release of last night and on our website. I caution you that many statements on this call are forward-looking based on assumptions about the economy, world events, housing and financial markets, interest rates, the availability of labor and materials, inflation, and many other factors beyond our control that could significantly affect future results. With me today are Marty Connor, Chief Financial Officer; Rob Parahus, President and Chief Operating Officer; Fred Cooper, Senior VP of Finance and Investor Relations; Wendy Marlett, Chief Marketing Officer; and Gregg Ziegler, Senior VP and Treasurer. I’m very pleased with our strong first quarter results. We beat our guidance across the board and saw another quarter of solid sales with contracts, up 40% in units and 42% in dollars compared to last year. In addition, since the start of the spring selling season in mid-January, we have seen a meaningful uptick in demand that has continued through this past weekend. In our first quarter, we delivered 1,927 homes at an average price of approximately $1 million, generating record first quarter home sales of $1.93 billion, up 10.4% in dollars, compared to the first quarter of fiscal 2023. Our adjusted gross margin was 28.9%, 90 basis points better than guidance and 140 basis points better than last year’s first quarter. The outperformance versus our guidance was due to mix, driven by earlier than expected deliveries in certain of our higher margin Pacific and Mid-Atlantic communities and fewer than expected deliveries in lower margin mountain communities. SG&A expense at 11.9% of home sales revenues was 20 basis points better than last year’s first quarter and 50 basis points better than guidance. In addition to greater fixed cost leverage from higher revenues, we continued to benefit from cost reduction initiatives we’ve taken over the past several years. We continue to look for ways to operate more efficiently. Pre-tax income was $311.2 million and earnings per share were $2.25 diluted, up 23% and 32% respectively, compared to last year’s first quarter. With the outperformance in our first quarter and a strong start to the spring selling season, we are raising our full-year guidance across all of our key home building metrics. At the midpoint of our guidance, we now expect full-year deliveries of 10,250 homes, an adjusted gross margin of 28% and an SG&A margin of 9.8%. In addition, earlier this month we sold a parcel of land to a commercial developer for net cash proceeds of $180.7 million, which will result in a pre-tax land sale gain of approximately $175 million in our second quarter. We are raising our full-year joint venture and other income guidance from $125 million to $260 million. Factoring in both the increase in our home building guidance and the impact of this land sale, we now expect to earn between $13.25 and $13.75 per diluted share in fiscal 2024, up from the $12 to $12.50 we guided to last quarter. We now also expect a return on beginning equity to be approximately 21% in fiscal 2024, which would be our third year in a row above 20%. Turning to market conditions. Demand in the first quarter was solid. We signed 2,042 net contracts at an average price of $1.11 million up 40% in units and 42% in total dollars compared to the first quarter of 2023. Demand in our first quarter steadily improved as the quarter progressed, following the normal seasonal pattern. December was stronger than November and January was significantly stronger than December. Based on both deposit and agreement activity, our January was better than normal seasonality. The strong demand has continued through the first three weeks of February. From a geographic standpoint, demand was broadly distributed across our footprint. We saw particular strength in our Pacific region, including all of California and Seattle and also in Las Vegas, all of Texas, Denver and from Atlanta up through Boston, Demand was solid across all product types as well, with affordable luxury accounting for 45% of our units and 34% of dollars, luxury 36% and 49% and Active Adult 19% and 17%. Another indicator of healthy demand was our deposit-to-agreement conversion ratio, which at 76% in the first quarter was significantly higher than our five-year average of 67%. We are pleased that we have been able to continue taking advantage of healthy demand while managing our incentives. While mortgage rate buy downs are heavily marketed and offered nationwide, very few of our buyers use incentive dollars to buy down their rates. The vast majority of our customers can qualify for a market rate mortgage without buy down, and they prefer to use any incentive offered on design studio upgrades or to reduce their closing costs. Additionally, consistent with the past several quarters, approximately 25% of our buyers paid all cash in the first quarter and the LTVs for buyers who took a mortgage dropped to approximately 67%, 200 basis points lower than our average over the prior four quarters. So for the 75% of our buyers who took a mortgage, on average, they put down 33%. All of these factors highlight the financial strength of our more affluent customers. During the quarter, we once again benefited from our strategy of increasing our supply of spec homes, which represented approximately 50% of orders and 40% of deliveries in the first quarter. As we have discussed before, we sell our specs at various stages of construction from foundation to finished home. This allows many of our spec buyers the opportunity to visit our design studios and personalize their homes with finishes that match their tastes. So choice a pillar of Toll Brothers is still part of our spec strategy. This benefits our margins as design studio upgrades, tend to be highly accretive. We are also pleased that our cancellation rate in the first quarter remained consistent with recent quarters at 2.9% of beginning backlog. Our low cancellation rate speaks to the financial strength of our buyers, as well as the sizable deposits they make and how emotionally invested they become as they personalize their new Toll Brothers home. We continue to expect community count growth to help drive results in fiscal 2024 and beyond. In the first quarter, we were operating from 377 communities, two more than we guided to last quarter. and we remain on target to reach our year-end guidance of approximately 410 communities, which would be an approximate 10% increase from fiscal year-end 2023. Importantly, we control sufficient land for community cap growth beyond 2024. At first quarter end, we controlled approximately 70,400 lots, 49% of which were optioned. This land position allows us to be highly selective and disciplined as we assess new land opportunities. We believe we have a competitive advantage acquiring land at the corner of Main and Main, where very few of the big well-capitalized publics and privates play. Our main competition for this land tends to be the smaller local and regional builders who are not as well capitalized. Our balance sheet is very healthy with ample liquidity, low net debt and no significant near-term debt maturities. We also continue to expect strong cash flow generation from operations this year. In addition, as I mentioned earlier, we received $181 million in cash from a land sale at the start of our second quarter. As a result, we are increasing the amount we are budgeting for fiscal 2024 share repurchases from $400 million to $500 million. Longer term, we continue to expect buybacks and dividends to remain an important part of our capital allocation priorities. With that, I will turn it over to Marty. Marty Connor: Thanks, Doug. We are very pleased with our first quarter results. We grew both our top and bottom lines and operated more efficiently compared to last year. First quarter net income was $239.6 million or $2.25 per share diluted, up 25% and 32%, respectively, compared to $191.5 million and $1.70 per share diluted a year ago. Our net income and earnings per share were both first quarter records. We delivered 1,927 homes, and generated homebuilding revenues of $1.93 billion. The average price of homes delivered in the quarter was $1.3 billion. We signed 2,042 net agreements for $2.06 billion in that first quarter, up 40% in units and 42% in dollars, compared to the first quarter of fiscal year 2023. The average price of contracts signed in the quarter was approximately $1.11 million, this was up 1.6% year-over-year and 2.3% on a sequential basis. Our first quarter adjusted gross margin was 28.9%, up 140 basis points compared to 27.5% in the first quarter of 2023. As Doug mentioned, Q1 gross margin exceeded our guidance due primarily to more deliveries in our higher-margin Pacific and Mid-Atlantic regions and less-than-expected deliveries in our lower-margin Mountain region. We expect the inverse to be true in our second quarter, and this is reflected in our second quarter adjusted gross margin guidance of 27.6%. Overall, we have increased our full year adjusted gross margin 10 basis points to 28.0%. Write-offs in our home sales gross margin totaled $1.5 million in the quarter and were all associated with predevelopment costs on deals we are no longer pursuing. SG&A as a percentage of homebuilding revenue was 11.9% in the first quarter, compared to 12.1% in the same quarter one year ago. Note that our SG&A expense in that first quarter includes $14 million of accelerated employee stock-based comp expense that only hits in the first quarter. The year-over-year 20 basis point reduction in SG&A margin reflects leverage from increased revenues as well as benefits from tighter cost controls in the face of inflation. Joint venture, land sales and other income was $8.6 million during the first quarter compared to $16.8 million in the first quarter of fiscal year ’23 and compared to our guidance of $10 million loss. We exceeded our guidance due primarily to better-than-expected results in our mortgage unit and higher-than-projected interest income. Our tax rate in the first quarter was 23% or about 300 basis points lower than guidance due to the accounting benefit of stock compensation deductions, which we do not expect to repeat at the same level for the rest of the year. We ended the first quarter with over $2.5 billion of liquidity, including approximately $755 million of cash and $1.8 billion of availability under our revolving bank credit facility. Our facility has four years until maturity. Our net debt-to-capital ratio was 21.4% at first quarter end, down from 27.5%, one year ago. We have no significant maturities of our long-term debt until fiscal 2026 when $350 million of notes come due in November of 2025. Our community count at quarter end was 377 compared to our guide of 375. Looking forward, our guidance is subject to the usual caveats regarding such forward-looking information. We are projecting fiscal 2024 second quarter deliveries of approximately 2,400 to 2,500 homes, with an average delivered price of between $1 million and $1.1 million. For fiscal year 2024, we are increasing our projected deliveries to be between 10,000 and 10,500 homes with an average price between $940,000 and $960,000. As I noted earlier, we expect adjusted gross margin to be 27.6% in the second quarter and 28% for the full-year, 10 basis points better than our previous full-year guidance. We expect interest in cost of sales to be approximately 1.3% in the second quarter and for the full year. This is also a 10 basis point improvement from our earlier guide. We project second quarter SG&A as a percentage of home sales revenues to be approximately 9.7%. For the full year, we expect it to be 9.8%, another improvement of 10 basis points compared to our previous guidance. Other income, income from unconsolidated entities and land sales gross profit in the second quarter is expected to be approximately $180 million, which reflects the impact of the commercial land sale Doug mentioned. We now expect it to be $260 million for the full-year, which is up significantly from our prior guide of $125 million. Aside from the land sale, much of this full-year other income is projected from sales of our interests in certain stabilized apartment communities developed by Toll Brothers Apartment Living in joint venture with various partners. We project the second quarter tax rate to be approximately 25.8% and the full year rate to be approximately 25.5%. That’s 50 basis points of improvement, compared to our prior full-year guidance. Our weighted average share count is expected to be approximately $106 million for the second quarter and $105 million for the full-year. This assumes we repurchased approximately $166 million of common stock per quarter for the remainder of the year, to reach the $500 million guide, Doug referred to earlier. As Doug mentioned, with our updated guidance and the Q2 land sale gain we now expect to earn between $13.25 and $13.75 per diluted share in fiscal 2024. This would result in a full-year return on beginning equity of approximately 21% and would put our year-end book value per share at approximately $77 per share. Now let me turn it back to Doug. Douglas Yearley: Thank you, Marty. Before I open it up for questions, I’d like to thank our Toll Brothers’ employees for another great quarter. I’m so proud of their dedication, hard work and commitment to each other and our customers. Their talent and constant focus on our business is the driver of our long-term success. Jamie, with that, let’s open it up to questions. See also 10 Fastest Growing Energy Drink Stocks in the US and 13 Best Car Stocks To Buy Right Now. Q&A Session Follow Toll Brothers Inc. (NYSE:TOL) Follow Toll Brothers Inc. (NYSE:TOL) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Ladies and gentlemen, at this time, we’ll begin the question-and-answer session. [Operator Instructions] As a reminder, the company is planning to end the call at 9:30 when the market opens. [Operator Instructions] Our first question today comes from Jessie Letterman from Zelman & Associates. Please go ahead with your question. Ivy Zelman: Hey guys. It’s actually Ivy, but thank you. First, I just want to say congratulations. It’s a great quarter and really excited about your strategic initiatives of driving returns higher with the land sale expected in ’24, just thinking about other opportunities to generate cash flow to maybe do some continued buybacks or other ways to drive returns higher. But it’s really been quite a tremendous improvement in just overall management, working capital and returns and love to see continued improvement. And wondering how strategically you can do so. Douglas Yearley: Thank you, Ivy. Yes, the land sale was — I shouldn’t say never, but I think it was a one-off. We had a unique piece of property in Northern Virginia that we were processing for approvals to build homes on, and a data center operator came along and made us an offer that we couldn’t refuse. There could be something like that out there, one never knows. But we will continue to always look for opportunities to be more capital efficient, to drive gross margin, to grow this company. And that’s beyond just core homebuilding where we get bigger in the markets we’re in, and we have lots of opportunities to do that because as everyone knows, at our price point, we tend to have a fairly small market share in many of our markets. And as we expand our price points coming down in price, we have great opportunities in our 60 markets that we’re in to get bigger. We have the widest variety of product and the widest range of price of any of the builders. And so we think that gives us the greatest opportunity for core growth within home building. Outside of that, we’ll continue to focus on the apartment business. We’ll continue to focus on other opportunities to generate positive cash flow. And as you can see, as you know, we’re committed to return capital to shareholders. We’re taking the vast majority of the proceeds from the data center sale to increase our buyback. We are committed long-term to the dividend. We are committed to continue to grow that dividend. And so I’m just really pleased with where we are. The initiatives to come down in affordable luxury price points is now well on its way with 40% plus of our sales and our closings now in what we call the affordable luxury business model. We’ve also committed to a greater spec strategy, and that is really working well of 50% of our sales in the first quarter were spec, 40% of our deliveries were spec. The market is very much in place with the tight resale market. to gravitate towards Toll spec, particularly since, as I explained, much of that spec still allows us to offer choice where they can go to the design studio and pick finishes. And spec is not just affordable luxury. It’s not just the lower priced, lower margin communities. We are building spec across all of our price points, all of our product lines. And so — you gave me a general question, I gave you a general answer. Ivy Zelman: No, no. That’s really helpful. I think one thing that you’ve also done is a significant debt reduction, which the balance sheet is the best position it’s ever been in. So I think that you’re probably — my guess would be at a debt to capital level that you’re comfortable with. So — are there opportunities for bolt-on acquisitions, given that privates are really disadvantaged for many reasons, not to mention cost of capital. Or is it more likely that you’ll continue to grow organically and focus on share buyback to be capital efficient and generate higher returns? Douglas Yearley: Yes, thank you. We’re always in the conversation on M&A. We’ve acquired 15 builders in 30 years. We’re very selective. I’m very happy with our geographic footprint. So I can’t tell you that there’s five or 10 markets out there that we really want to get into where you use M&A most often to enter a new market. But there are a few markets we’re looking at that are new, and there’s many opportunities for bolt-on M&A to get bigger and diversify the offering in an existing market. About five of our 15 acquisitions were in existing markets. So those opportunities still exist. You’re right, the M&A market has heated up a lot, and we are certainly studying opportunities. But I think you’re going to see more with capital return to shareholders with Toll, and you’re going to see new M&A. Ivy Zelman: Great. Well, good luck, guys. Thank you. Douglas Yearley: Thanks, Ivy. Operator: Our next question comes from Sam Reid from Wells Fargo. Please go ahead with your question. Sam Reid: Awesome. Thanks so much, guys, and congrats on the quarter. I wanted to touch on the updated delivery guide for ’24. It clearly shows you’re seeing some momentum in the spring, but my question is kind of help us gauge the level of conservatism that might be embedded in that outlook? And what would we need to see specifically in March and April for you to be comfortable to take that number up again? Douglas Yearley: Marty, do you want to go with that? Marty Connor: That’s a tough question to answer the level of conservatism. I think, Sam, it’s safe to say there’s no difference in the construct of our guidance right now than there traditionally has been. I think, obviously, if we see a really strong March and April, particularly with our spec strategy, that could result in additional deliveries beyond the guide that we’ve given. But we’re very comfortable with the guidance we’ve given. And we’ll update it in three more months. Douglas Yearley: And remember, on the build-to-order side of our business, which is 50% to 60% of our operation, these houses are big. These houses are complicated. They have upgrades because we send everybody through our design studio and let them design their house to their lifestyle. And so they take some time to build. So we’re now 3.5 months into fiscal ’24, and there aren’t all that many communities remaining where the next sale of a build-to-order home can be delivered by the end of October. There are still some communities that can do that. But with every passing week, there are less and less. And we do have a lot of specs in process that are certainly going to be completed, sold and delivered by year-end. But I think as the year progresses, our guidance becomes even more definitive because of the build-to-order nature of our business. Sam Reid: No, that’s helpful. And maybe to drill down a little bit more on that kind of spec build-to-order dynamic here. So on your gross margin guide for second quarter, can you give us a sense as to what the spread between your spec deliveries and your build-to-order deliveries might be between those two buyer groups? And is there any inclination that, that could potentially narrow going forward? Thanks. Douglas Yearley: Yes, it’s a great question. It has narrowed. Let me give a little historical for the last few quarters. In Q4 of ’23, our spec gross margin was 26.3%. In Q1 of ’24, this past quarter, that jumped to 27.9%. And as you know, the gross margin for the company for the first quarter was 28.9%. So in the first quarter, specs ran exactly 100 basis points below the full gross margin for the quarter. Now some of those specs came out of the West, the Pacific region, California and were more expensive and had a higher embedded gross margin in them, but we are definitely encouraged by the increase in spec gross margin over time here, and we think that will continue. So in terms of the second quarter guide, I think it’s probably fair that, that 100 basis point difference is about where we’ll be. Marty Connor: Yes, I think so. It might be a little wider than that because back less from the Pacific it. But again, it depends to a certain extent on how strong the spring is, what we do with pricing as we progress. Douglas Yearley: Please understand our business strategy and our business modeling is for the spec business to have a lower gross margin. We expect that the houses tend to — the specs tend to be built on the more average lot that doesn’t have the high lot premium. We save that very high lot premium for the build-to-order business where that client will spend a lot more money in the design studio. We also — while we upgrade the spec homes, we don’t take them, in some cases, to the level that the client will, in a build-to-order purchase. So — and we also know that some of the spec inventory does make its way all the way to the end where it’s a completed home that is unsold. And when that does happen, we know we may have to incentivize a bit more to move it because it’s standing finished inventory that can deliver. So our strategy has always been, as we got into the spec business that there would be a lower gross margin, but we’re very pleased with how close it has been to the overall company’s margin. Operator: Our next question comes from Stephen Kim from Evercore ISI. Please go ahead with your question. Stephen Kim: Yes, thanks very much guys. Appreciate all the color. And I just wanted to zoom the lens out a little bit and try to get a sense for maybe if 2024 is a year where we can see some of the dust settle on rates and some of the volatility subside. If we could focus a little bit more on what your longer-term targets are and how you seek to operate the business. Let’s start with the with what you just were talking about with an increased spec mix, I would assume that, that would allow you to run at a higher level of absorptions or sales per community. I think that you’ve talked in the past about something in the 24%, 25% per year range. I was curious as to whether or not if this spec strategy is something that’s going to be a going forward kind of a thing. We might see that more approach something like 30 a year, how you sort of feel about that. And also whether we might see your backlog turnover ratio also sort of remain or move higher, let’s say, into the 40s on backlog turns. I’m not talking about the next quarter, I’m not even talking this year, I’m just talking about in general going forward. Douglas Yearley: Great question, Stephen. You’re spot on. We delivered 27 homes per community in 2023, and we expect to be at 27 to 28 homes per community in 2024. Marty Connor: In ’23, we did 23 to 24. Stephen Kim: Yes. Marty Connor: In ’24, we’re doing 27. Douglas Yearley: Did I not say that? Marty Connor: I think you said 23 twice. Sorry, you said 27 twice. Douglas Yearley: My apologies. 24 per community in 2023 and 27 to 28 per community in 2024. And that is in part the spec strategy — it’s in part cycle time coming down, but it’s primarily the new strategy we have of building more and more spec. We think that can improve as we head into ’25 and beyond, and we are certainly planning for that. You talk about 30 per year. Yes. That’s out there. That’s a goal that’s achievable. With the spec strategy, we’re nimble, we’re flexible. We follow the market. And right now, there is a very, very strong market for our spec homes that can be delivered faster, particularly those homes that we may put on the market at frame that still allows the client the opportunity to get the design studio and fix the finishes to suit their lifestyle. So it’s been a big move for the company to go from less than 10% spec to now the 40% to 50% range. We are committed to it. And it’s going to be another reason why we think we can increase community absorptions. And that’s where we’re certainly headed. The existing homes, the resales on the market are still historically tight even with a modest drop in rates that has not freed up the resale market. There is still a lock-in effect. And let’s not forget, even as rates do come down, which I think they will, and that market begins to modestly loosen up. The average resale home is now 45-years old. There is a flight to new that is not just because of unavailable inventory due to the lock-in effect, but because of the quality of that resale inventory, and that will continue even as rates come down and the resale market unlocks......»»

Category: topSource: insidermonkeyFeb 22nd, 2024

I spent 2 nights at the Fontainebleau, Las Vegas" hottest new hotel — and it"s ushering in a new luxury era in Sin City

Fontainebleau Las Vegas is the buzziest new hotel on the Las Vegas Strip. We got an inside look at everything it has to offer. The Fontainebleau is Las Vegas' buzziest new resort. Connie ZhouI spent two nights at the Fontainebleau, Las Vegas' brand-new resort. I went during Super Bowl weekend, and the hotel was packed with A-list celebrities. Its beautiful design, phenomenal dining, and stunning spa feels like a new era of luxury in Vegas.Whispers of their names floated through the halls, as soft and sweet as the custom scent pumped through the vents of the exclusive $5,000-a-night suites at the top of the building.  Leo. Gaga. Beyoncé.This is the Fontainebleau Las Vegas, and anyone who is anyone was here during Super Bowl weekend. A-list celebrities were sipping drinks at Komodo, dancing behind the DJ decks at LIV, and strolling under shimmering gold bow-tie chandeliers on their way to the next event. It's been a meteoric rise of success for the resort, which only opened its doors in December. I spent two nights at the Fontainebleau during Super Bowl weekend and saw firsthand how it's already ushering in a new era of Las Vegas luxury.The Fontainebleau Las Vegas has been two decades in the making. The entrance to the Fontainebleau Las Vegas.Jon Kopaloff/GettyAfter acquiring the legendary Fontainebleau Miami in 2005, billionaire Jeffrey Soffer announced his plans to open a second location in Las Vegas. The development was 70% complete when it was derailed by the Great Recession in 2008, and the property was sold twice before Soffer reacquired it in 2021.The hotel made up for lost time with a splashy opening night in December, making its presence known on the iconic Las Vegas Strip with a star-studded bash that drew in everyone from Cher to Kim Kardashian.And it's already making history in Sin City. Justin Timberlake, Tom Brady, and Cher during the opening of the Fontainebleau Las Vegas. Denise Truscello/Getty Images for Fontainebleau Las VegasAt 729 feet, the 67-story hotel is now the largest occupiable building in Las Vegas. It features 3,644 rooms — including 76 exclusive Fleur de Lis suites — 36 restaurants, a 55,000-square-foot spa, a 14,000-square-foot gym, and a brand-new nightclub and casino. "Once you arrive here, you really don't need to leave the building," Fontainebleau's former COO, Colleen Birch, told Eater Las Vegas in December. That's quite the claim in a city where flashy hotels, wild clubs, and celebrity restaurants cover every inch of the 4.2-mile Strip — one I'm all too familiar with thanks to the 25-plus trips I took to Vegas during my 20s. It was time for a shake-up in Sin City, and I couldn't wait to see what the Fontainebleau would bring. I was struck by the Fontainebleau's elegance from the moment I walked into the 20,000-square-foot lobby. Fontainebleau's lobby is sleek and stunning. Anneta Konstantinides/Business InsiderSoft, warm lights enveloped the vast and immaculate space as dozens of gold bow ties playfully glowed behind the check-in desk. Transparent beams that stretched from the pristine marble floors to the soaring ceiling felt reminiscent of Singapore's famous Supertree Grove.The space felt modern and tranquil, already promising a very different kind of oasis in Sin City.At the center was a stunning display of fresh roses and orchids. Beautiful flowers greeted me at the center of the lobby. Anneta Konstantinides/Business InsiderI counted nine large vases of flowers, and a friendly greeter I spoke with estimated there were about 100 stems in each. She said the flowers were changed every three days and switched out depending on the holiday season. The red roses were celebrating Valentine's Day."All the women love it," she said with a smile.Almost as if on cue, a young girl sprinted toward the flowers to see if they were real. It was exactly what I had done mere moments before.Tucked away next to the check-in desk is the exclusive 5,000-square-foot VIP lounge. The VIP entrance at the Fontainebleau. Anneta Konstantinides/Business InsiderMetallic gold doors beckon into the luxury lounge, where guests of the Fontainebleau's Fleur de Lis suites — which start at $5,000 a night — begin their stay.The lounge features a private place to relax and grab complimentary drinks and pastries. The VIP lounge at Fontainebleau. Anneta Konstantinides/Business InsiderAirport lounges should take note of the style achieved by Fontainebleau's VIP area. The deep-blue carpet and couches are luxe and sophisticated, and the gold mirrors and light fixtures — combined with marble detailing — look extremely elegant.A flute of crisp Champagne is offered to VIP guests on arrival, who can also grab fresh pastries or hot tea whenever they need. The lounge also provides a quick shortcut to the elevators, perfect for any famous guest who doesn't want to pass through the casino.But you don't need to be a VIP to enjoy the most beautiful parts of the Fontainebleau. Fontainebleau's main floor is filled with fresh flowers and sleek architecture. David Becker/Getty Images for Fontainebleau Las VegasI've always believed that real luxury is in the small details, and the amount of thought that went into every inch of the hotel's interior is immensely impressive.Subtle bow ties paying homage to the Fontainebleau Miami are hidden across the resort. The chandelier above Bleau Bar at the Fontainebleau Las Vegas. Anneta Konstantinides/Business InsiderThe late architect Morris Lapidus, who designed the original Fontainebleau, incorporated his signature bow tie into the design of the resort's interior. Now, it's the emblem of the Las Vegas edition.There are 1,200 golden bow ties sparkling from the 60-foot-tall centerpiece chandelier that hangs above the bar on the main floor, and miniature bow ties are hidden in a stylish pattern of circles that burst against the casino's navy carpet. There are tiny bow ties stitched into the back of plush periwinkle leather chairs beckoning you to each slot machine, while chrome bow ties gleam from the handles on every dresser in the suites.I didn't find the bow ties to be cartoonish or excessive, but rather sweet surprises I kept discovering throughout my two-night stay. Their subtle and sophisticated design paired well with the old-school Frank Sinatra rat-pack energy that exuded from the hotel's main bars.Even the hotel's 150,000-square-foot casino feels luxurious.The casino at Fontainebleau Las Vegas features 1,300 slot machines, plus card tables. George Rose/Getty ImagesIt's hard to make slot machines (1,300 to be exact) look sexy, but smart design touches help keep their presence from dominating the Fontainebleau's overall energy. Straight away, the 42-foot ceiling makes the main floor of the resort feel big and grand. I really noticed its impact when I went into a different luxury hotel for a Super Bowl party and instantly felt cramped. The Fontainebleau also helps keep the space serene by opting for muted blue carpets, soft blue lighting, and modern panels on the ceiling. Even the elevator shafts were covered in marble. And there's no usual ringing and pinging from the various machines. I immediately clocked that their sound was off, allowing Sinatra's lilting croon to fill the room instead. After taking a tour of the hotel's main area, it was time to check out our room. The Gold King room at Fontainebleau Las Vegas starts at $300 a night. Peter ArnellOne of my main gripes with many hotels is that they're either extremely bland or look like something out of a corporate office, even with a resort price tag.But the Gold King room, which starts at $300 a night, is thoughtfully designed in calming blues that felt fitting for a Miami-born resort. I loved the sky-blue textured wallpaper and navy headboard that framed our plush king bed, which was outfitted with super-soft 500-thread-count cotton sheets.Gold chrome nightstands and a coral-pink bench and chairs added pops of color that kept the space feeling modern and fresh.I adored the room's luxe and stylish details …My bed in the Gold King room was extremely plush and comfortable. Anneta Konstantinides/Business InsiderWe had a perfect view of the Sphere and High Roller wheel from our window, which flooded the room with natural light when we clicked on the automatic drapes. I could also spot Fontainebleau's six-and-a-half acre pool deck, which will open when Las Vegas' dayclub season kicks off in March.The room's overall atmosphere was coastal but stylish, a much-needed reprieve from the bright neon colors that tend to dominate Vegas hotels (look no further than the purple and red butterfly carpet that dominates Encore).... and the incredible shower. I loved the shower at Fontainebleau Las Vegas. Anneta Konstantinides/Business InsiderA great hotel shower is extremely important to me. What good is a perfect night's sleep if the morning starts with tepid temperatures and terrible water pressure?There was no such danger with the spa-like shower in our room, which ran the entire length of one of the bathroom's walls. The white mosaic tile glowed invitingly, and the ability to step right in without having to struggle with a jammed door or fumble over a high tub made it feel extra lush. The custom-made shampoo, conditioner, and body wash all smelled delicious and left my hair looking fantastic.We were starving after an early-morning flight, so we hit up the Promenade — Fontainebleau's luxury food hall — for lunch. The Promenade offered really delicious casual dining options. Anneta Konstantinides/Business InsiderI am no stranger to a Las Vegas hotel food court. It's where the bulk of my dining occurred when I was a 20-something trying to grab sustenance in the short period between the end of a pool party and the beginning of a nightclub. Meals were quick, fast, and usually in a brown McDonald's paper bag.But the Promenade offers fast and affordable dining options without yielding quality. Miami Slice and El Bagel pay homage to the resort's Florida roots, while Bar Ito offers hand rolls by Michelin-starred chefs Kevin Kim and Masa Ito. There's also an eponymous burger concept from celebrity chef Josh Capon, plus spots to grab fresh coffee, sandwiches, and tacos.The Promenade became one of my favorite places to eat throughout my stay. The Pepperoni Proper and La Salsera from Miami Slice. Anneta Konstantinides/Business InsiderFull transparency, my boyfriend and I became pretty obsessed with the Promenade. We were first blown away by our lunch from Miami Slice, which we agreed featured some of the best pizza we've ever tasted. The Pepperoni Proper had a delicious crust that was light, crispy, and flaky all at once, while the La Salsera — a twist on vodka pizza with drizzles of pesto — instantly reminded me of Rubirosa in Manhattan."I did not expect to find one of the best pizzas of my life in Las Vegas," I told Peter, who remarked that it was "one of the top five pizzas I've had, period."We went back to Miami Slice the next night and bumped into DJ John Summit, who has a residency at the Fontainebleau's club and told us how much he loves coming to eat at the Promenade.We also tried El Bagel, Bar Ito, and Nona's — the sandwich spot — and there wasn't a single dish that missed the mark.Later that day, I checked out the hotel's 14,000-square-foot fitness center. Fontainebleau's huge gym was spotless. Anneta Konstantinides/Business InsiderI have worked out in some extremely depressing hotel gyms, even at very nice resorts. There are usually a few stray machines, bad fluorescent lighting, and a sad pile of weights in the corner.But the Fontainebleau's fitness center, which is flanked by an IV drip lounge and IGK salon, is sleek and state-of-the-art. Among the typical treadmills and StairMasters were Peloton bikes, VersaClimbers, and Hydrorowers, with a fresh rolled-up towel waiting in every cup holder. The weights section had every dumbbell, kettlebell, and barbell you could need, along with space for sled pushing or tire flipping.A schedule at the front desk noted daily classes that were free for guests, including mat pilates, yoga, weight sculpting, and dance. Personal training sessions could also be purchased starting at $75.I was especially impressed by the huge recovery room. Enjoying a service in the recovery room. Anneta Konstantinides/Business InsiderI'm fairly certain the Fontainebleau's recovery room is bigger than my one-bedroom apartment in LA. The walls were lined with foam rollers and Theraguns, while different recovery stations offered treatments with acupressure, compression, and photon light.I opted for a 15-minute session with the compression leg sleeves (a $35 upgrade), and a staff member helpfully explained how the boots would help speed up recovery, reduce soreness, and boost circulation and lymphatic drainage. After an hour of cardio, it was extremely relaxing.We kicked off our first night in Las Vegas with a wild dinner at Papi Steak, which describes itself as the "ultimate in a hedonistic night out." Papi Steak is among the 36 restaurants offered at Fontainebleau. George Rose/Getty ImagesPapi Steak at Fontainebleau Las Vegas is the second edition of the famous party restaurant helmed by Miami hospitality king David Grutman and David "Papi" Einhorn. I learned from our waiter that the restaurant's original concept was born after Grutman put Einhorn's signature steak on the menu of Komodo — another Miami restaurant with a location at Fontainebleau Las Vegas — and it was an instant hit."They'd call Papi in when the Kardashians were there just to make steaks for them," the waiter said.And so Papi Steak was born, as was the showstopping 55-ounce wagyu tomahawk that arrives tableside in a sparkling briefcase for diners who are happy to shell out $1,000.The Papi Steak Beef Case moment is pure over-the-top Vegas. The Papi Steak Beef Case costs $1,000. Anneta Konstantinides/Business InsiderWe saw 15 different Beef Case presentations during our two-hour dinner, each accompanied by flashing strobe lights, whoops and hollers from every waiter, and a cloud of smoke that billowed from above their heads as the $1,000 steaks were branded. One woman waved her napkin in the air and danced along like it was a Greek wedding. Two guys ran over to take a thumbs-up selfie with the mighty tomahawk.The Beef Case is the restaurant's showcase, but I was also delightfully surprised that every dish we tried — including the $24 Caesar salad and $18 latkes — was truly delicious. I've been to plenty of celebrity restaurants that coast on the clout of Instagram clicks and crazy menu items, but Papi Steak's food makes for a memorable night even if you don't shell out for its signature dish.And a nightcap at Nowhere was one of my favorite memories from the trip. Nowhere was one of my favorite spots at Fontainebleau. Denise Truscello/Getty Images for Fontainebleau Las VegasNowhere was next to the elevator that whizzed us up to our suite, and my boyfriend and I couldn't resist popping in.Inspired by the late fashion designer Yves Saint Laurent's Parisian apartment, Nowhere exudes the kind of easy luxury and class that so many modern speakeasies search for — but few achieve. The walls, covered in varying shades of cream, glowed under the warm lighting as dark cabernet curtains framed the stage where a woman in a bright-red dress sang with a full band behind her.As we sipped our delicious drinks, I watched a couple joyfully spin to the jazz music. The woman was dressed head to toe in a turquoise outfit with a matching pillbox hat. It felt like we'd been transported to a different era.After a great night's sleep, I began my day at the Fontainebleau's 55,000-square-foot spa. The starry night napping room at Fontainebleau. Mark MedinaI have been to some gorgeous spas before (the hydrotherapy room at Casa Malca in Tulum remains a favorite), but I haven't experienced anything quite like Lapis at the Fontainebleau. The two-story spa features everything from an infrared sauna and steam room to a purifying salt cave and shower that rinses you off with falling snow.My relaxing morning began with the 45-minute "Reboot Signature Massage." I then went into the coed sensory room, which glows with mellow lights designed to mimic the body's circadian rhythms, and hit the sauna before taking a refreshing dip in the cold plunge pool.After unwinding in the hot tub, I cleared my senses (and sinuses) in the herbal inhalation room and relaxed on one of the heated stone loungers.Before hitting up a celebrity-packed Komodo for dinner that night, I got a sneak peek at its legendary Peking duck. The Peking duck at Komodo. Anneta Konstantinides/Business InsiderA window next to the entrance of Komodo offers a glimpse into its duck room, where I got to watch as the $115 dish was prepared from start to finish. The glistening crispy duck — eaten inside a delicate pancake topped with cucumber, scallions, and a hoisin-like sauce — was deliciously rich and tender.I could see why Komodo was one of the biggest hot spots of the weekend, attracting the likes of Shaquille O'Neal (who dined a few feet away from us before his Super Bowl party), Tom Brady, Kevin Durant, and Alicia Keys. Mark Wahlberg even went behind the bar to serve some cocktails for guests.We danced the night away at LIV, the Fontainebleau's brand-new club. Me in front of the sign at LIV. Anneta Konstantinides/Business InsiderLIV has already made itself competitive in Las Vegas' stacked clubbing scene by scoring residencies with Calvin Harris and Tiesto — two of the world's biggest DJs — as well as John Summit, who's currently headlining the biggest electronic music festivals. We caught Summit's set during the club's Super Bowl weekend kickoff and were impressed by everything LIV had to offer.Even at 50,000 square feet, LIV feels more intimate than some of the other big Vegas clubs and offers much better views and proximity to the stage. The sound quality was excellent, as reviewed by my DJ boyfriend, and the back bar behind the DJ booth made it surprisingly quick and easy to get drinks.Before our Vegas trip ended, I had one last phenomenal meal at KYU. The interior of KYU at Fontainebleau Las Vegas. Anneta Konstantinides/Business InsiderI also got to go behind the scenes at KYU and watch as Chef Christopher Arellanes prepared his signature dish, the $265 royal golden chicken.Arellanes told me he wanted to give KYU a showstopping dish with a fine-dining twist, and he's truly achieved it. The melt-in-your-mouth royal golden chicken — covered in foie gras, black truffles, and smoked caviar cream — is presented tableside alongside a laksa that instantly soothed my soul. It was all decadent and so delicious.My stay at the Fontainebleau couldn't have been more memorable. I can't wait to go back to the Fontainebleau. Jon Kopaloff/Getty Images for Fontainebleau Las VegasTypically, when a Vegas trip comes to an end, I'm so ready to go home. You can spend only so many days in a city built on overstimulation.But the Fontainebleau manages to stay true to Las Vegas' partying roots while still creating a relaxing resort. Whenever my boyfriend and I made it back to the hotel after a party or event, we would cheer as our cab drove up to that glowing bow tie at the entrance — that's how much we loved it.It's no wonder Hollywood's biggest stars and athletes can't get enough of the Fontainebleau. With beautiful rooms, a heavenly spa, and so much incredible dining, it's truly a Sin City sanctuary.Read the original article on Business Insider.....»»

Category: personnelSource: nytFeb 17th, 2024