Greetings, and welcome to Apple Hospitality REIT's first quarter 2022 earnings call. At this time, all participants are in listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Kelly Clarke, Vice President of Investor Relations. Thank you, and good morning. Welcome to Apple Hospitality REIT's first quarter 2022 earnings call. Today's call will be based on the earnings release in Form 10-Q, which we distributed and filed yesterday afternoon. As a reminder, today's call will contain forward-looking statements as defined by federal securities laws, including statements regarding future operating results and the impact to the company's business and financial conditions from, and measures being taken in response to COVID-19. These statements involve known and unknown risks and other factors which may cause actual results, performance or achievements of Apple Hospitality to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Participants should carefully review our financial statements and notes thereto, as well as the risk factors described in our 2021 annual report on Form 10-K and other filings with the SEC. Any forward-looking statement that Apple Hospitality makes speaks only as of today, May 6, 2022, and the company undertakes no obligation to publicly update or revise any forward-looking statements except as required by law. In addition, Non-GAAP measures of performance will be discussed during this call. Reconciliations of those measures to GAAP measures and definitions of certain items referred to in our remarks are included in yesterday's earnings release and other filings with the SEC. For a copy of the earnings release or additional information about the company, please visit applehospitalityreit.com. This morning, Justin Knight, our Chief Executive Officer, and Liz Perkins, our Chief Financial Officer, will provide an overview of our results for the first quarter of 2022. Following the overview, we will open the call for Q&A. At this time, it is my pleasure to turn the call over to Justin. Good morning, and thank you for joining us. During the first quarter of this year, performance steadily improved across our portfolio as the effects of the Omicron variant, which negatively impacted travel in January and February, eased. Both leisure transient and leisure group demand remained resilient. Smaller corporate and regional business travel continued to strengthen, and larger corporate business made additional strides towards recovery. First quarter RevPAR for our portfolio was $92, up 67% compared to first quarter 2021, and down only 9% compared to the first quarter of 2019. Throughout this recovery, our revenue management teams have done an exceptional job maintaining rate integrity and pushing rate beyond pre-pandemic levels on high occupancy nights. We are pleased to report ADR of $137 for the quarter, up 38% to 2021, and slightly ahead of our ADR for the first quarter of 2019. Occupancy for the quarter was 67%, up 21% to 2021 and down 9% to 2019. Occupancy, ADR, and RevPAR improved sequentially through the quarter, with March RevPAR down only 1.5% to March 2019. Positive momentum has continued and preliminary results show RevPAR for the month of April ahead of April 2019. Our corporate and on-site management teams have continued to maximize profitability despite a challenging labor environment and increase in inflationary pressures. First quarter operations were significantly ahead of the same period last year. With comparable hotels total revenue up more than 70% relative to the first quarter of 2021, we achieved comparable hotels adjusted hotel EBITDA margin of 34% despite weaker occupancies early in the quarter, adjusted EBITDAre of $78 million, and modified funds from operations of $63 million or $0.28 per share. The pace of recovery has exceeded our expectations, and the rapidly recovering and operating environment provides meaningful momentum as we enter the seasonally stronger summer months. We are encouraged that airlines are opening more business routes in response to rapid increases in demand and see this, together with strong group bookings, adding to the robust leisure demand to fuel the recovery over the coming months. With locations in 86 markets across 36 states, we benefit from broad geographic diversification and significant exposure to a variety of business-friendly markets that offer attractive cost of living, popular leisure and entertainment venues, a wide variety of demand generators, and various guest amenities. For the quarter, 33% of our hotels achieved RevPAR at or exceeding 2019 levels, even without a full recovery in business transient, which has historically represented more than half of our total revenue mix, and despite reduced travel during the quarter related to the Omicron variant. As the recovery spreads to an increasing number of markets, we see meaningful upside to 2019 for our portfolio. With fewer hotel projects under construction in our markets, we anticipate the pace of new supply, which represented a meaningful headwind for us in 2019, to be less of a factor over the next several years. Relatively low supply, combined with continued improvement in demand, should further accelerate and prolong this recovery. Almost 50% of our hotels do not have any exposure to new projects currently under construction within a 5 mi rad. Consistent strategic reinvestment in our hotels has ensured they remain relevant and well-positioned to take advantage of continued rate and occupancy growth opportunities. We invested approximately $8 million in capital expenditures during the first quarter of 2022, and anticipate spending a total of $55 million-$65 million during the year. Through our scale ownership of branded rooms-focused properties over more than two decades, we have significant experience in determining the most effective scope and timing of our investment to ensure minimal disruption to property operations and maximum impact for dollars spent. Our ability to maintain our assets with capital spend ranging between 5% and 6% of revenues is a meaningful differentiator for our portfolio and a contributor to total shareholder returns over time. Our acquisitions and dispositions activity since the onset of the pandemic has further optimized our portfolio for the recovery by lowering the average age of our assets, reducing near-term CapEx, and increasing our exposure to markets that we anticipate will outperform over the next cycle, all while maintaining the strength and flexibility of our balance sheet. We have been and will continue to be intentional in the build-out of our portfolio, pursuing assets that are additive to those we currently own, located in strong RevPAR markets with attractive cost structures and significant growth potential, and at pricing that will allow us to achieve our targeted returns. Increased interest in the type of assets we own from both private equity and public buyers continues to push prices higher in our space, increasing the value of our own portfolio while at the same time making accretive acquisitions more challenging. As we seek out opportunities, we are leveraging relationships developed over two decades as well as our unparalleled experience buying, selling, and owning branded upscale rooms-focused product. We currently have under contract the previously discussed Embassy Suites that is under development in Madison, Wisconsin, for an anticipated purchase price of approximately $79 million. We are actively underwriting and exploring dozens of opportunities both on and off market, and anticipate that we will be a net acquirer of assets in 2022. On our last call, we announced that our board of directors reinstated regular monthly cash dividends, beginning with a distribution in March of $0.05 per share. Based on our closing price yesterday, the annualized distribution of $0.60 per share represents an annual yield of approximately 3.6%. Moving forward, we will continue to interact with our board on a monthly basis and assess our payout in the context of the current operating environment, our expectations for the future, acquisitions and dispositions, and other opportunities to ensure that we are allocating capital to drive the strongest total returns for our shareholders. Our ability to provide investors with a meaningful cash yield on their investment early in the recovery and well ahead of peers is a testament to the merits of our investment strategy and the strength of our team. Our performance since the onset of the pandemic would not have been possible without the collaborative efforts of our corporate, brand, and management teams and the hard work and dedication of the associates at our hotels. I look forward to announcing our 2021 Apple Award recipients over the coming weeks. For these awards, we once again focus on the associates at our hotels, and we look forward to recognizing five individuals nominated by their management companies and peers for their outstanding contributions to the safety, well-being, and overall satisfaction of our guests. As we look forward to the remainder of 2022, we are confident in our ability to continue to produce industry-leading results. That confidence has been bolstered by recent operating trends, which have exceeded our expectations and created meaningful momentum as we enter what have historically been the strongest quarters of the year. Our strategy of investing in a broadly diversified portfolio of high-quality rooms-focused hotels with low leverage has been tested and consistently yielded compelling results for our investors. With operations moving beyond pre-pandemic levels and trends pointing to strengthening demand as we move through the second and into the third quarter, we have reason to be optimistic about the future of our business. It is now my pleasure to turn the time over to Liz, who will provide additional details on our balance sheet, operations, and financial performance during the quarter. Thank you, Justin, and good morning. Top line performance for the first quarter improved sequentially by month with the Omicron variant negatively impacting the seasonally slower occupancy months of January and February, followed by robust improvement in March. Despite the impact of the variant, first quarter ADR was $137, occupancy was 67%, and RevPAR was $92, showing growth over strong fourth quarter RevPAR. The March rebound resulted in RevPAR down less than 2% as compared to 2019 for the month, with RevPAR of $112, our highest monthly RevPAR since the onset of the pandemic. We are optimistic about the remainder of the year, especially our seasonally strong second and third quarters, as preliminary April results show continued increases in occupancy, ADR, and RevPAR, pushing past 2019 RevPAR levels, a meaningful milestone for our portfolio. Recent performance is both a reflection of the continued strength in leisure and the ongoing recovery in business demand. For comparable hotels, weekend occupancy and ADR exceeded 2019 each month during the quarter. January and February weekend occupancies were 63% and 78% respectively, and March weekend occupancy was 85%. Weekday occupancy improved sequentially through the quarter with January weekday occupancy of 54%, down 24% to 2019. February weekday occupancy of 65%, down 16% to 2019, and March weekday occupancy of 73%, down only 10% to 2019. With improvements in weekday occupancy, weekday ADR meaningfully improved, moving from $124 in January to $142 in March, an increase of 16%. These weekday ADR levels were down 10% to 2019 for January and improved to down only 4% in March. As we look at demand segments and business transient trends, travel patterns are beginning to normalize with Tuesday and Wednesday occupancies around 78% in March and pushing to approximately 80% in April. Performance across our Sunbelt markets continues to be strong and suburban demand continues to outpace urban. However, we are pleased to see some improvement relative to 2019 at some of our hotels located in markets that have been slower to recover. As Justin mentioned, 33% of our hotels had RevPAR for the quarter exceeding the same period in 2019. A decrease from the fourth quarter of 2021, due in part to the impact of the variant in January and February. However, in March, 41% of our hotels surpassed 2019 RevPAR, an increase to what we saw in the fourth quarter. Overall, our portfolio has benefited from continued strength in leisure demand, with improvements in business transient and group further bolstering portfolio results and underscoring the value of our significant market and demand diversification. With the recovery impacting a growing number of markets, we see meaningful upside for our portfolio. In terms of room night channel mix, Brand.com bookings were up two percentage points to the fourth quarter at approximately 38%. OTA bookings continue to be elevated relative to prior years, but declined again quarter-over-quarter to 13%. Property direct bookings dropped slightly to 29%, still up compared to the same period in 2019, a testament to the continued efforts of our property and management company sales support teams. Most notably, we continued to see improvement in GDS bookings, which were up a percentage point from Q4. GDS room night mix increased each month within the first quarter, reaching 13% for the quarter and moving in even higher in April. Looking at total room nights booked, GDS bookings increased 36% in the first quarter over the fourth quarter. Another positive data point as we review business transient trends. Looking at first quarter same store segmentation, BAR remained elevated to 2019 levels at 34%. Other discounts moved down from 30% in the fourth quarter to 27% in the first quarter. Even with the variant impact in January and February, negotiated increased a percentage point to 17%, showing continued improvement in business travel. Group was just under 16% in the quarter, up almost three percentage points from the same period in 2019. Turning to expenses, total payroll per occupied room for our same store hotels was around $34 for the quarter, up 1% to the first quarter of 2019. Total payroll on a per occupied room basis was impacted by the lower than anticipated occupancy levels as we started the quarter. Given the current labor environment, as we mentioned on our February call, we intentionally maintained staffing levels with the confidence that travel demand and our portfolio occupancy would return quickly. With improvement in occupancy, total payroll per occupied room was approximately $31 for March, down slightly to 2019. Our managers continue to focus on filling vacant positions as markets recover and adjust wages in a more competitive labor environment. Our teams remain intently focused on efficient labor models to help offset wage pressures while balancing service levels, morale, and turnover, all of which can be costly if overlooked for near-term financial benefit. Same-store rooms expenses, excluding payroll, were well controlled, down 5% per occupied room compared to 2019 for the quarter. Our team's persistent efforts to control costs and maximize profitability resulted in first quarter comparable adjusted hotel EBITDA of approximately $88 million and comparable adjusted hotel EBITDA margin of approximately 34%, down 250 basis points to first quarter of 2019. While lower occupancy in January and February, combined with continued supply chain challenges and wage and inflationary pressures negatively impacted margins relative to 2019 early in the quarter, hotel EBITDA margin improved with occupancy sequentially, and March finished approximately 190 basis points higher than March of 2019. Though we have been successful in managing productivity and expenses in a challenging environment, we continue to believe that growth and rate will be the primary driver of margin expansion as we move through the recovery. We continue to be encouraged and confident in the rate recovery, especially as we approach and exceed peak night occupancy levels. Following similar trends, modified funds from operations also improved sequentially each month and was approximately $63 million or $0.28 per share for the first quarter, up slightly as compared to the fourth quarter of 2021. Looking at our balance sheet as of March 31st, 2021, we had $1.4 billion in total outstanding debt, approximately 5x our 2021 EBITDA, with a weighted average interest rate of 3.5% and availability under our revolving credit facility of approximately $349 million. Total outstanding debt, excluding unamortized debt issuance costs and fair value adjustments, is comprised of approximately $491 million in property-level debt secured by 28 hotels and approximately $947 million outstanding on our unsecured credit facilities. At quarter end, our weighted average debt maturities were three years, with approximately $226 million net of reserves maturing in 2022. Our 2022 maturities include our revolving credit facility, which we have the option to extend for up to one year and $155 million of property level debt maturing in the second half of the year. We are in the process of exploring options with our lenders and are confident in our ability to repay, refinance, or extend our near-term maturities. As for our outlook for the remainder of 2022, we remain confident in the broader industry recovery and the performance of our portfolio specifically. While we are still not in a position to give specific operational guidance, first quarter performance exceeded our internal forecast. Preliminary results for April RevPAR are positive to 2019, and average daily booking trends are ahead of pre-pandemic booking levels. Although external economic and pandemic-related factors continue to add a layer of uncertainty, with the ongoing strength in leisure demand, an increase in business transient demand, and a demonstrated ability to achieve meaningful rate growth as occupancies improve, we believe our portfolio could continue to reach and potentially exceed 2019 RevPAR levels if current trends continue. As we move into the second quarter, we are optimistic. Without encumbering our balance sheet, we have transacted in ways that have optimized our portfolio for the future. We have a proven ability to drive strong operating results throughout economic cycles. With current trends showing continued strength in leisure and improvement in business transient demand, we are confident in our ability to drive shareholder returns. We would now be happy to answer any questions that you have for us this morning. Ladies and gentlemen, we will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad, and a confirmation tone will indicate your line is in the queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please, while we pull for questions. Our first question comes from Neil Malkin with Capital One Securities. Please proceed. Hey, everyone. Good morning. Nice quarter. Good to be with you. First one for me is about sort of the recovery in BT. You gave some good color in your prepared remarks, Liz. Just kind of wondering if you can talk about in terms of the larger national accounts, you know, what kind of, you know, demand are you continuing to see in the second quarter? And are you doing that sort of variable pricing model versus a fixed negotiated model? And then the other part of that would be, do you expect to compete just like some of the more sort of urban, quote-unquote, portfolios, as the corporate demand continues to accelerate? Thanks. Good morning, Neil. Happy to talk about business transient trends. In the prepared remarks, I mentioned how much we've improved midweek. Weekday ADRs already have improved in the quarter from $124 to $142 from January to March throughout the quarter, which was an increase of 15%. Part of that was driven by occupancy improvement midweek, but peak nights improved as well, and that was a reflection of some shift between CNR and LNR. That corporate negotiated historically, so going back to 2019, represented over 60% of our negotiated business. Through the pandemic, it's run more in line with, you know, 50/50 between corporate negotiated and local negotiated, local tipping a little bit higher than corporate over the course of the pandemic. In the first quarter, we actually saw corporate negotiated tip over 50%-53%, so being more dominant than LNR. Starting to see that shift back with corporate negotiated business. I think as we move forward and as we think about the trends and the GDS trends, which really is a reflection of that corporate demand continuing to increase month-over-month and quarter-over-quarter, despite the impacts of the variant earlier on in the quarter, we're optimistic. You know, we have an ability to mix manage in a way to drive rate, you know, with that mix of corporate negotiated layered in. As you mentioned, you know, we did shift some of those corporate negotiated accounts over the course of the pandemic to be a percentage off of bar rates or retail rates, which really will help as we compress those peak nights, with increased demand, to be able to drive corporate negotiated rates in line with retail rates. You know, taking that even one step further, if you look back pre-pandemic, our weekday occupancies historically ran premium, over weekday occupancies. While we are shrinking the gap slightly, there's still meaningful upside there as corporate negotiated comes back. Okay, great. Appreciate that. Other one, last one for me is, I guess on the acquisition front. Seems like most asset types have seen a, you know, big slowing in the first quarter from, you know, the fourth quarter. I think obviously interest rates have a fair bit to do with it. But just curious, you know, Justin, how you guys are approaching, you know, the transaction environment, you know, given the, you know, rising rates. Obviously, you know, stocks have been pretty weak here. You know, how that compares to how you think about, you know, obviously dispositions. As you know, we've seen some pretty high price per key trades on the select service side. I'm just curious to get your thoughts on how that all fits, you know, as you guys underwrite or think about, you know, growth in a sort of dynamic and, I guess, more uncertain environment than we've seen in the last several quarters. That'd be great. Thanks. Yeah, certainly. You know, as I highlighted in our, in my prepared remarks, we've continued to see significant interest in the types of assets that we own. Certainly, I think there's read through to the value of our existing portfolio. You know, I also highlighted that it's our intent over the course of the year to be net acquirers. We're in the unique position to be opportunistic, and given the current environment, we'll explore both acquisitions and dispositions activity, and pursue those options which we feel are most likely to drive returns for our shareholders. I think the rising interest rate disproportionately negatively impacts private equity players who use higher leverage levels in their acquisitions modeling. Certainly, you know, I think on a relative basis puts us in a better position to acquire assets that would meet our return threshold. We continue to be very active underwriting a large number of deals and having on and off market conversations. Talking to both brokers and with groups that we've had relationships with for a long period of time, and anticipate we will be active as we continue to move through the year. Just real quick, are you seeing an impact from rising rates in terms of deals, retrades or, you know, impacts, you know, versus, you know, call it beginning of the year? We have not experienced that directly. Anecdotally, there have been some who have used rising interest rates as an excuse to renegotiate pricing on deals that they have tied up. You know, that hasn't been the case in deals that we've been working on specifically. Thank you, guys. Thanks, Neil. Our next question is from Dori Kesten with Wells Fargo. Please proceed. Thanks. Good morning. Morning. Your dividend makes you stand out currently among your lodging REIT peers. How should we think about the trajectory of the dividend over the next year? I mean, is it fair to go back and look at historical payout, or is it likely to be a little bit lower, just expecting that you'll be a net acquirer over the year? That's a fair question. As we began the year and considered reinstating a dividend with our board of directors, we ran a variety of scenarios. As we've discussed with you and with others in the past, given the increased volatility that we're experiencing broadly in the markets today, you know, the range of possibilities was more extensive than what we've looked at in times past where we were operating in a much more stabilized environment. That said, we reinstated the dividend at a point that we felt incredibly comfortable we could maintain, given the broad range of scenarios that we were assessing as reasonable possibilities. Since that time, we have consistently performed above the high end of our internal projections. Should we continue to do that, we will certainly be in a position to reassess our dividend as we look at other opportunities, whether it's acquisitions or share repurchases, with the intent to again provide our investors with the highest total return. Okay. Thank you. Thank you. Our next question is from Anthony Powell with Barclays. Please proceed. Hi, good morning. Another question on the transaction market. You know, we've heard that we've seen more buyers look at hotels as an inflation hedge. That said, rising rates are an impact here. Do you think select service assets have risen in value year to date? And how do you think cap rates have trended for the segment year to date? Absolutely. We believe that the values for select service assets have risen year to date. If you look at publicly available information on recent trades and per key pricing for those deals, I think that's indicative. Certainly a number of factors playing into that. One, I think a broader recognition of the value of select service hotels, having lived now through a pandemic and viewing the relative performance of the types of assets that we own versus you know other assets within the hospitality category. I think there's been increased interest in ownership by a number of private equity buyers. I think relative pricing, looking at other forms of real estate, you know, versus multifamily or industrial or retail has also attracted groups to the space. You have that combined with strong underlying fundamentals, so a very rapid recovery in underlying fundamentals and meaningful increases in cost of construction, which are driving replacement value higher. All of that has been impacting the value of assets and, you know, I think driving values up over time. Looking at what's traded so far, you know, over the past 12-24 months, the quality of the assets generally has been high, you know, and in line with the types of assets that we own. Our sense is that. Again, now is a tricky time to peg cap rates, because a portion of the assets that have traded have not had pre-pandemic operating history. So they're being priced on forward numbers, and there isn't always transparency related to those. The sense we get, talking to groups in the industry, is that cap rates have compressed, you know, 100-150 basis points from where we were pre-pandemic. Right, that's despite the rising rate environment, so that's just positive. Given that, you know, where do share buybacks, I guess, look for capital allocation? Obviously, stock's been volatile. Some of your peers have signaled that they are, like, interested in buybacks. What's your kind of view on that? I know you have the authorization, but, you know, what's kind of the current view? We look at buybacks simultaneously with potential acquisitions and view acquiring our stock in the same way we view adding assets to the portfolio. We have authorization to acquire shares and a trading plan in place. Mm-hmm that allows us to trade during blackout periods. Certainly, you know, at appropriate times would look to buy shares as we have in the past. Got it. Maybe one more quick one. Looking out to the next, like, 90 days or so, how are your leisure hotels looking in pricing relative to last year in 2019? There's been a lot of back and forth about leisure pricing power over the near term. I'm curious what you're seeing in your portfolio. We still see positive trends on the leisure front. I mean, even as our mix shifted in the first quarter and OTA dropped a little bit as a mix percentage, OTA bookings were actually still up for Q1 relative to Q1 of 2019, absolute room nights booked. As we look forward and we look at what we have on the books through the remainder of the year, weekend occupancy or weekend bookings is strong. Rates are strong and higher than they have been in 2021. We're still very optimistic about leisure demand, and that coupled with the return of corporate negotiated and the continual recovery there, we think puts us in a great position to maximize ADR, both weekday and weekend. Really, on that point, we see much greater potential for upside in ADR for our portfolio with business coming back than we do downside from the potential with leisure you know becoming less strong. You know, in what we're looking at today based on forward bookings, we continue to see very strong leisure numbers reflected in our weekend bookings and the rates that those bookings are coming in at. What we're most excited about is the rapid improvement in business transient, which has historically been the leading revenue producer for our portfolio and has historically been the most meaningful driver of rate for our portfolio. You know, I think as we look at markets that have been slow to recover, coming online now and beginning to build back occupancy to levels where we should have similar pricing power midweek to what we've seen on the weekends, you know, I think we're much more optimistic about where rates could go for our portfolio over the next several quarters. All right. Thank you. Thank you. Our next question is from Floris van Dijkum with Compass Point. Please proceed. Hey, guys. Thanks for taking my question. Yeah, obviously, you mentioned that you think there's a possibility that you could achieve 2019 levels of RevPAR in 2022. Maybe if you can comment on margin. I know in the past you said that it's possible that your because of the various initiatives with the hotels, et cetera, that margin could be 100-200 basis points higher. Obviously, the margin in the first quarter was lower than what it was in 2019. Maybe as you look out, is it possible that you would improve margins later on in 2022 relative to 2019? We're looking at each other to see who wants to take the question first. First. You know, I think first, we've been reluctant to provide specific guidance around what we anticipate for margin growth. Really, that's less reflective of our optimism related to the potential for margin growth and more a reflection on the complexity of the calculation. I think as Liz highlighted in her prepared remarks, we continue to believe that the primary driver of margin expansion for us, and really for the industry at large, will be rate growth. You know, certainly we and others have done, I think, a very good job managing expenses in our business in a way that have enabled us to flow more of the top line growth we've seen, especially at higher occupancy hotels running strong rates, to the bottom line. We believe we will maintain the efficiencies that we've achieved in terms of productivity. How those translate to actual margins will depend on what we see in terms of continued inflationary pressures related to cost of goods and to wages. At this point, we continue to operate in a low unemployment environment. Wage pressure is real and certainly a factor that we're dealing with across our entire portfolio. That said, you know, our first quarter margins were negatively impacted by lower occupancy in January and February, which you know, due to Omicron. When you look at March numbers in isolation, we did very well from a margin standpoint, growing margins to 2019. We had signaled coming into the first quarter that because labor was challenging, even with the temporary downturn in occupancy, we would retain employees and would not make drastic cuts as we did at the onset of the pandemic, and that would potentially negatively impact margins. Given the strength of March, you know, the negative impact to margins was not nearly as meaningful as it might have otherwise been. In April, you know, where we're beginning to push past 2019 top line numbers, you know, we feel good, especially in the near- term, about our ability to drive margins. You know, to that point specifically, the fact that we've gotten back to top line numbers consistent with where we were in 2019 faster than many will benefit us because inflation compounds. You know, being at a point where we can begin to drive rate beyond where we were in 2019 on a consistent basis puts us ahead of the curve, you know, from an inflationary standpoint and you know, better positions us to achieve long-term margin expansion. Thanks, Justin. You know, another way, I guess, you know, the answer I was trying to get at is would it be feasible for you to achieve $423 million of adjusted EBITDA? It sounds like it's in the realm of possibilities, but you don't wanna go out there because there are a lot of things going on. I hear you. Maybe if I can ask a question, my follow-up is on markets. I noticed something, you know, Dallas, Oklahoma City, Orange County, San Diego, Seattle appear to be lagging, and then you got Phoenix, L.A., Fort Worth, and Fort Lauderdale, you know, are leading markets, and so is Miami. Maybe, you know, I don't know enough about your Dallas, Fort Worth. I mean, I usually think of them as one market. One is doing well, one is not doing well. Maybe you can walk through some of the reasoning behind that and why you think L.A. and why obviously L.A. is doing well, Orange County is not. What's gonna change there in your view, or what's gonna drive the profitability in some of those lagging markets? Some of the market impact is related to the fact that we're looking a long way back, you know, when we're comparing to 2019, and specific markets had events or, you know, special circumstances that inflated 2019 numbers. Looking at Atlanta, for example, for the quarter, we were down 37%. Certainly, in the downtown area of Atlanta, that part of Atlanta has been slower to recover. We're comparing to Super Bowl comps in that market, which, you know, artificially inflated it in 2019. You know, Denver, our Denver numbers were down just under 30% for the market overall. A portion of that is market-driven, and certainly with our downtown asset, we're somewhat dependent on convention business, which was soft in the quarter. We also had rooms out of service at that particular hotel for renovation. You know, I think it's difficult given that our ownership is a subset of the total market to draw large conclusions on a single quarter performance for individual assets. The overarching trend, though, as we highlighted earlier, is that leisure across all of our markets continues to be very strong, and increasingly, we're seeing business transient come back in individual markets. You know, when we look at Syracuse, for example, which was one of the markets that was meaningfully up in the quarter, a combination of drivers in that market, medical, university, and a significant amount of film-related business propping that market up. Really, we're seeing it expand beyond that. You know, looking at our Tidewater assets or Savannah or some of the other markets where we're up, really strong leisure combining with improving business transient. With markets opening at different paces, our expectation is that we'll begin to see those strong trends across an increasing number of markets moving into the summer. Floris, if you look at the sort of how those markets that you mentioned performed throughout the quarter, they improved as you move from January to March. Really, you know, the variant impacted some of those larger markets at the beginning of the quarter. If I look at April, for example, for Dallas, that decline to 2019 looks like, for preliminary numbers, it's half of what it was in the first quarter, and Atlanta actually turned positive in April. I think you're seeing a lot of shifts. You're seeing corporate rebound quickly. You're seeing demand pick up, and I think we're gonna see different market performance as we move into the second quarter. Some of these markets, I mentioned in my prepared remarks, we're really encouraged by what we're seeing in some of the markets that have been lagging, Chicago being one of them as well. That one was down almost 30% RevPAR at 2019 in the fourth quarter. That decline is almost half of that now in March. San Diego too, seeing good rebound there. Really encouraged by recent trends. Demand broadly is coming back strongly. Thanks, guys. That's it for me. Thank you. Our next question is from Tyler Batory with Oppenheimer. Please proceed. Good morning. Thanks for taking my question. Just one from me, multi-part question here, just to put a finer point on the acquisition discussion. Can you talk a little bit more about the pipeline, how many assets you're looking at today versus a few months ago? You know, what are you seeing in terms of the volume or number of assets that are on the market more broadly? As you look through the year, are you expecting, just given the dynamics, to perhaps be doing more off-market transactions than normal and really utilizing some of your industry relationships to source future acquisitions? To the first point or question, part of your question, we're definitely seeing more assets to date than you know, 12 months ago. I think as we anticipated, there's been a gradual increase of assets coming to market. Certainly, the pricing that sellers have achieved on trades early in the pandemic have helped to fuel that. Those trades are also being fueled by or supported by increased optimism in a growing number of markets and strengthening numbers, which make financing transactions significantly easier. You know, in terms of how we might transact on a go-forward basis, I think our expectation is that we will transact similar to the way we have in the past, continue to underwrite and compete for broadly marketed deals. Certainly tapping into our long-term relationships as well, and you know, looking to do transactions directly with sellers with whom we've had long-standing relationships. You know, I think, having been in the business for an extended period of time and having purchased hundreds of hotels, similar to those that we own now and those that we're looking to buy in the future, we have a very good reputation that enables us to be, you know, incredibly competitive in both areas. Okay, great. I appreciate that detail. That's all for me. Thank you. Thanks. Our next question is from Austin Wurschmidt with KeyBanc Capital Markets. Please proceed. Hey, good morning. It's Daniel Tricarico on for Austin. In the release yesterday, you reported ADR at your urban classified hotels had reached within 2%, roughly of comparable 2019 levels in the first quarter. Do you have what that figure is in March and/or April? I'm curious, even though urban rate is already above portfolio average, do you expect this segment to be the, you know, the primary driver of continued ADR growth going forward? I'll answer the second part while Liz is grabbing the first part. You know, I think we do not see urban being the exclusive driver of the recovery for the industry going forward. That said, you know, we have a quarter to a third of our portfolio that is urban. Certainly that portion of our portfolio has probably been slower to recover given increased restrictions related to higher density areas, and you know, the specifics related to the markets where we own or have urban exposure. Our belief is that the improvement will be broad-based. You know, I think it's a fallacy to believe that business travel only goes to large cities. Certainly historically, over half of our business has been, you know, business-oriented. As I highlighted in response to one of the earlier questions, that portion of our business has been higher rated, and more consistent over time, with the recent, you know, COVID pandemic, being a unique instance where we saw leisure meaningfully outperforming, for a period of time, business transient. Our expectation, though, is that, when you look across the country and specifically across our portfolio, we will see a lift, in our urban markets, but outside of urban markets in high-density suburban as well. Yeah, if I look at, and I'm gonna caveat this with it being preliminary, you know, for April, we did push past 2019 ADR levels in our urban locations, but we pushed past across location types. No, that makes sense. It was really in the context of, you know, the size of urban within your portfolio and just it growing off maybe a lower base, you know, being the primary driver going forward. Then I guess a follow-up question, a little bit separate. You mentioned maintaining staffing levels through the short downturn and demand in January, you know, but in terms of continuing to add back labor, where do you stand today on an FTE count per hotel and maybe how that compares to pre-COVID? Maybe where you see that, you know, reaching on a stabilized basis, versus pre-COVID. You know, I think in the fourth quarter, I shared we were probably around, you know, 75% 2019 FTEs, and that we would continue to look to fill positions in anticipation of, you know, a strong spring and summer season. We're probably, you know, around 80% now, and adding labor as occupancies and markets, you know, warrant. You know, I think when we think about long-term FTE counts relative to 2019, it's really gonna depend on a few things. The mix between occupancy and rate, you know, what levels of occupancy we get back to, you know, how much hourly labor do we need? From a salary position perspective, you know, what do we need at each individual hotel? Where is our business coming from? Do we need incremental sales associates or not? I think we're gonna be opportunistic and really focus on each individual market and what's needed. You know, the teams were really proud, and I mentioned in my prepared remarks, margin for March was up 190 basis points. It was over 42%, in March. It's up 190 basis points to 2019. The teams have done an exceptional job. To the extent we continue to see pricing power and more of our premium to 2019 coming through rate, you know, I believe we'll have efficiencies from an FTE count standpoint. As occupancies increase, we'll staff as appropriate, to make sure that we provide the best experience for guests, and that they'll come back and pay the rates that we're charging. No, no, that makes sense. Thank you. Appreciate the time. Our next question is from Michael Bellisario with Baird. Please proceed. Thank you. Good morning, everyone. Morning. Good morning. Liz, just sort of one follow-up there or a related question for us. Just what's the split today between fixed and variable hotel expenses? Then as urban markets recover, I would think the wages there are higher in absolute dollar terms. Would you maybe expect that as urban occupancy recovers, would that impact the cadence of margin recovery at all in your view? I think we're seeing pressure on wages, you know, across market types. You know, secondary urban locations are similar to high density suburban. It's really even broader, you know, more broadly market specific. For example, I know in Phoenix we've had labor challenges and wage pressure there. I mean, it's really universal. You know, maybe on the margin, you know, wages would be higher, but they've always been higher in urban locations. I think we'll see similar trends to what we've seen in other location types. Between variable and fixed, we've proven that can shift with occupancy levels. You know, I think, you know, we continue to optimize our operational models both on a labor front and a service and amenity front, and we'll continue to do that. There are fixed expenses in the business and, you know, utilities, even though that will fluctuate some with occupancy levels, you know, utilities have increased, and so there's some puts and takes. I think where we're most encouraged is that the teams have done such a great job. Our hotel managers have really worked hard consistently and haven't let up to drive profitability coupled with the ability to, you know, increase rate as we shift mix in our hotels and increase occupancy levels as we have in the past, peak nights midweek. Got it. Helpful. Then just back to your comment on March. I think I heard you say 190 basis points. Is it anything odd in March that maybe caused that number to be higher than it otherwise would have been? Perhaps demand coming back faster than expected and, you know, you weren't fully staffed yet, or expenses were still held back. Just trying to think about, you know, is April, May, June also gonna be somewhere in the 190 basis point range? Yeah, I would hedge there a little bit only to say that looking at one month in any quarter, regardless of the dynamics, there can be new, you know, nuances, based on accrual and timing of invoices and things like that. You know, in March, like you mentioned, demand came back very quickly and surpassed our expectations, so that's one. You know, we continue to try to fill vacant positions in markets where occupancy is increasing. You know, I think we continue to be optimistic about our team's ability to maximize, but I would not. I don't know that I'd extrapolate the full 190 basis points. You know, again, you know, some of it will depend on mix of rate and occupancy and, you know, what we continue to experience on the cost pressure side. Got it. Just switching gears, going back to the transaction market, Justin, are you getting outbid on deals, or is it that seller expectations broadly might be too high, so you're seeing a wider bid-ask spread today? Let's say a combination where we're actively bidding and not being successful. A portion of those are going to other buyers. I think it's safe to assume that we are bidding on everything that's quality that would be a fit within our portfolio. Certainly you've seen some of the trades that have happened recently where we're likely active, but not the high bidder. You know, I think there are also instances where sellers' expectations are higher than the market is willing to support at this point in time. You know, I think as I highlighted in my prepared remarks, we're incredibly tactical in our pursuit of transactions. What we have in terms of an existing portfolio is incredibly good. What we want, as we transact, either through dispositions or acquisitions, is to make it better on the margin. You know, I think, you know, hats off to our team who is very active in that space. By that, specifically our acquisitions team, but really our assessment of transactions ends up involving experts from all departments within our company for assessing and ensuring that what we pay is appropriate for the asset, and that the assets we pursue in earnest are assets that will add to the portfolio that we currently own. Just last one from me. You mentioned some deals that are getting priced on forward numbers. Any maybe anecdotal examples or ranges that you can provide on maybe what the cap rate or EBITDA multiples are on the forward basis that you know peers are pricing deals on that are getting done? Well, the trick there is that, you know, forward projections aren't fixed, and so, you know, there's not always a tremendous amount of transparency. Specifically, with that comment, I was highlighting the number of deals that have traded that didn't exist in, you know, 2018 and 2019. If you look at transactions early in the recovery, a greater percentage of them than we anticipate will be the case as we move through the recovery, have been newly constructed assets without historical performance. You know, as a result, they're pricing on futures or cap rates that are quoted are based on future projections. I think the market or the public disclosure generally puts them somewhere in the 6%-8% stabilized value. You know, to the extent we haven't been successful, our underwriting would show lower cap rates than that. You know, I think as we continue to progress through the recovery, you'll see an increasing number of transactions related to assets that have trailing history, and cap rates will be more of a valuable comparative metric than they have been, I think, recently. Got it. Thanks for clarifying. Absolutely. Our next question is from Bryan Maher with B. Riley Securities. Please proceed. Good morning, Justin and Liz. Yeah, I don't wanna be a Debbie Downer, but it seems like as we kind of wrap up lodging earnings here, everyone's hanging their hats on higher ADRs to drive profitability, et cetera. I'm not so sure that that's gonna be the case. I mean, you talked about three months out, but, you know, six months, 12 months out, I don't know too many college-educated millennials who are feeling really flushed these days with how much they have to spend on housing. Seniors on fixed income, you know, you look at if companies get squeamish about their profitability, travel is one of the first things that gets cut and then employees. It just seems like everybody's trying to drive rates so hard, and I don't know how sustainable that is. To the extent that you end up recognizing that, how quickly can you maybe pivot and, you know, kind of change course there as, you know, hoping that that's what drives your margins higher? Well, I mean, a couple of things. One, you know, unlike some of our peers, the rate lift that we're seeing is broad-based across our, you know, the entirety of our portfolio. We don't have a small subset of our assets that are charging, you know, 50%, 60% higher rates, and, you know, lifting the entirety of the portfolio. To your second point, you know, our experience over the past several decades has highlighted the fact that business travel tends to be less volatile for the types of assets, or business demand for the types of assets that we own tends to be less volatile than leisure in ordinary cycles. Part of the reasoning for that is that the assets that we own sit in a sweet spot looking at the full spectrum of hotel assets, where during periods of economic prosperity, corporate travel or business travelers tend to trade up into the types of assets that we own. During periods where the economy is more challenged, business travelers tend to trade down into the assets that we own. That over past cycles has helped us to maintain a level of stability and consistency unique to the types of assets that we own. You know, I think looking broadly at our portfolio and where we have outperformed over the past several months, and where we've underperformed and the likely trajectory of those markets, combined with what we anticipate will be a continued evolution in the recovery of business travel, you know, I think we're meaningfully less concerned that we're going to lose ground from where we are now. Now, you know, I think certainly, as we look at, you know, potential margin expansion over time, to the extent we saw, you know, a flattening of RevPAR for our portfolio at some point in the future and continued growth in expenses, you know, we could find ourselves as an industry in similar position to where we were prior to the pandemic, where we had seen slower growth in the top line, you know, combined with continued and consistent increases in bottom line expenses. There are a number of factors that are different this time. One I highlighted in my prepared remarks, we have significantly less supply currently under construction, you know, so potential deliveries in our market over the next several years than we did coming into the pandemic. Demand is only half of the supply-demand equation. I think what we see in terms of dynamics on a go-forward basis is positive in that area. What we're doing in terms of performance today, having reached now on several occasions top line performance in line with where we were in 2019, is still without meaningful recovery in business transient. Even if business travel were to stabilize nationally at lower levels than where it was before the pandemic, I think broadly held belief is that it will stabilize above where it has been in the recent past. All of those factors are reasons, you know, or are the reasons that support our optimism on a go-forward basis. Yeah. Bryan. For sure. Bryan, even if we don't drive incremental rates, the mix shift on corporate from local negotiated rate will provide a premium in ADR. Historically, looking back at 2019, corporate negotiated accounts typically were anywhere between 15%-20% higher in rates relative to local negotiated. Some of this is, as demand comes back, will be attaining rate through mix shift, and some will be through driving incremental retail rates. Look, for sure, you guys are better positioned than most. I think everyone would agree to that. People and companies are getting poor at a very fast pace right now between inflation and loss of stock market wealth, et cetera. I just think that, you know, everybody kind of hanging their hat on ADRs are growing to the sky is kind of a mistake and maybe I think people should be ready to pivot because not so sure it's there in four, five, six months. Just saying. Thank you for your thoughts on it. Absolutely. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. Our next question comes from Dany Asad with Bank of America. Please proceed. Hi. Good morning, everybody. I have a follow-up question on one of the earlier ones, but just can you help me walk through this? Like, if RevPAR trends are up or at least at, you know, 2019 levels, and if we're thinking about, you know, to Liz your prior comments about March being, you know, 200 basis points ahead of 2019 levels on margins, any reason why we shouldn't have April or Q2 EBITDA ahead of 2019 levels? Is there something that we should be thinking about? I would go back to, you know, the comments we made earlier in that, you know, demand came back quickly. We did not reduce staffing, anticipating that demand would return, for the spring and summer. We had open positions. We're continuing to fill open positions, and we're still in an inflationary environment where, you know, costs and supply chain issues, inflationary pressures and wage pressures will, you know, are evolving. We're optimistic. You know, again, looking at the top line, preliminary top line, for April, we're optimistic, and the team has shown, that we will maximize in any environment. You know, regardless of what may happen, on the top line, you know, our team has done an exceptional job, maximizing margin. Got it. Thank you. Thank you. Thank you. Ladies and gentlemen, this concludes the question and answer session. I would like to hand the call back to Justin Knight for any closing remarks. We really wanna thank you for joining us today. Appreciate the questions and the continued interest in our company. As always, to the extent you're traveling, we hope you'll take the opportunity to stay with us in one of our hotels, and we look forward to meeting with many of you, here in the near future. Thank you. This concludes today's conference. You may now disconnect.