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01/11 03:09
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents mixed signals: steady financial performance with some positive RevPAR growth and share repurchases, but concerns about debt maturities and economic uncertainties. The Q&A reveals management's cautious stance on cost control and renovation expenses. The market cap indicates moderate stock sensitivity, suggesting a neutral impact on stock price over the next two weeks.
Comparable RevPAR Increased 2% over 2024, driven by urban footprint growth, particularly in Group and Business Transient segments.
Total RevPAR Increased 1.6% year-over-year, with urban hotels contributing significantly to this growth.
Food and Beverage Revenue Declined 3.3% year-over-year, primarily due to the Chicago Marriott's exceptional performance last year; excluding this hotel, revenues increased 5.5%.
Total Expenses in Urban Portfolio Increased 2.1%, with a 1.5% increase in wages and benefits.
Hotel Adjusted EBITDA Margins Increased by 54 basis points.
Comparable RevPAR (Resort Portfolio) Declined 2.1% over 2024, with total RevPAR down 40 basis points.
Total Revenues (Resorts) Slightly up in January and February (0.4% and 0.9% respectively), but declined 4.3% in March.
RevPAR (Florida Assets) Down 5.9% in the first quarter.
RevPAR (Outside Florida) Increased 1.7% with total RevPAR up 2.9%.
Group Room Revenues Increased 10.4% over last year on a 5.2% increase in room nights.
Hotel Adjusted EBITDA $61.3 million, reflecting 2.2% growth over 2024.
Corporate Adjusted EBITDA $56.1 million, flat compared to last quarter.
Adjusted FFO $0.19 per share, an increase of $0.01 or 5.6% over 2024.
Free Cash Flow per Share Increased 10% to $0.63 per share over the prior four-quarter period.
Share Repurchase 1.4 million shares repurchased at an average price of $7.85, totaling approximately $16 million year-to-date.
Mortgage Loans Maturing in 2025 Totaling just shy of $300 million at a weighted average cost of approximately 4.2%.
Term Loan Maturity in Early 2026 $300 million with an average cost of approximately 5.8%.
Other Income (Bourbon Orleans) Increased over $200,000 or 90% versus first quarter 2024.
NOI (Westin San Diego Bayview) Increased 65% year-over-year.
Room Renovations: Completed guest room renovations at the Westin San Diego Bayview, resulting in a 28% RevPAR increase against a competitive set that declined 8%.
Room Refresh: Completed room refresh at the Hilton Garden Inn Times Square, first refresh since 2014.
Rebranding: Renovation of rooms at the Orchards in Sedona is complete, rebranding to Cliffs Sedona.
RevPAR Growth: Comparable RevPAR increased 2% over 2024, driven by urban hotels.
Group Room Revenues: First quarter Group room revenues increased 10.4% over last year.
Resort Performance: RevPAR for resorts declined 2.1% over 2024, with Florida assets seeing a 5.9% decline.
Cost Management: Reduced overall expenses by 2.4% compared to 2024, expanding hotel adjusted EBITDA margin by 76 basis points to 32.5%.
EBITDA Growth: Hotel adjusted EBITDA in Q1 was $61.3 million, reflecting 2.2% growth over 2024.
Share Repurchase: Repurchased 1.4 million shares at an average price of $7.85, totaling approximately $16 million year-to-date.
Debt Refinancing: Reviewing cost-effective options to refinance $300 million in mortgage loans maturing in 2025.
Competitive Pressures: The company is experiencing a pause in Group pickup, leading to a cautious stance on future bookings. This deceleration may result in lower revenue creation as hotels may start discounting to attract business.
Regulatory Issues: The uncertain macroeconomic environment and potential changes in trade policies could impact demand and pricing strategies.
Supply Chain Challenges: There are concerns regarding the ability to convert strong Group lead volume into actual bookings due to the unsettled economy.
Economic Factors: The company acknowledges that foreign visitation to the U.S. may be softer than expected, and it is unclear if U.S. travelers will compensate for this gap. Additionally, the overall economic anxiety may affect consumer confidence and spending.
Debt Maturities: The company has significant debt maturities approaching, including three mortgage loans totaling nearly $300 million maturing in 2025, and a $300 million term loan maturity in early 2026, which necessitates refinancing efforts.
RevPAR Growth: Comparable RevPAR increased 2% over 2024, driven primarily by urban hotels.
Cost Management: Successfully reduced overall expenses by 2.4% compared to 2024, expanding hotel adjusted EBITDA margin by 76 basis points to 32.5%.
Group Revenue Focus: Continued focus on adding Groups to resorts to preserve pricing and improve profitability.
Capital Projects: Completed guest room renovations at several properties, including the Westin San Diego Bayview and Bourbon Orleans, which are expected to drive future revenue.
Share Repurchase: Repurchased 1.4 million shares at an average price of $7.85, with a total of approximately $16 million year-to-date.
Debt Refinancing: Reviewing options to refinance $300 million in mortgage loans maturing in 2025, with a likely recast of the corporate credit facility.
FFO per Share Guidance: Unchanged at a range of $0.94 to $1.06 per share.
RevPAR Outlook: Revised to a range of -1% to +1% growth, about 200 basis points lower than prior guidance.
Corporate Adjusted EBITDA: Expected to be in the range of $270 million to $295 million, $5 million lower than previous guidance.
Adjusted FFO: Expected to be in the range of $198 million to $223 million, $1 million lower than prior guidance.
Interest Expense Outlook: Lowered by approximately $3 million due to anticipated refinancing.
Quarterly Dividend: $0.08 per share quarterly dividend in 2025, with a potential additional stub dividend for Q4 depending on operating income.
Share Repurchase: Repurchased 1.4 million shares at an average price of $7.85 during the quarter, totaling approximately $16 million or 2.1 million shares year-to-date. Remaining capacity on share repurchase authorization is approximately $160 million.
The earnings call summary indicates a stable financial outlook with positive elements such as increased EBITDA projections, a strong setup for future revenue growth, and a focus on shareholder returns through potential share repurchases. The Q&A section shows management's strategic focus on efficiency and growth, with no major disruptions expected. Although guidance is cautious, the overall sentiment and strategic initiatives suggest a positive impact on the stock price over the next two weeks.
The earnings call summary shows mixed signals: a revised down RevPAR outlook and EBITDA guidance, but positive factors like successful cost management, share repurchase, and refinancing flexibility. The Q&A section highlights urban group booking improvements and optimism about labor costs but lacks clarity on long-term sustainability and Chico opportunity specifics. Considering the small-cap nature, the stock may experience moderate volatility, but the lack of strong positive catalysts or negative surprises suggests a neutral movement in the short term.
The earnings call presents mixed signals: steady financial performance with some positive RevPAR growth and share repurchases, but concerns about debt maturities and economic uncertainties. The Q&A reveals management's cautious stance on cost control and renovation expenses. The market cap indicates moderate stock sensitivity, suggesting a neutral impact on stock price over the next two weeks.
The earnings call presented a mixed picture. While there are positive elements such as strategic asset management and a slight increase in adjusted FFO guidance, concerns remain due to weak RevPAR guidance and economic uncertainties, particularly in Florida. The Q&A highlighted management's cautious stance on economic conditions and unclear responses regarding specific financial allocations. The market cap suggests moderate sensitivity, leading to a neutral outlook as the positives and negatives balance out.
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