Greetings, and welcome to the Apple Hospitality REIT Second Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A brief 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. It is now my pleasure to introduce your host, Kelly Clarke, Vice President of Investor Relations. Thank you. You may begin. Thank you, and good morning. Welcome to Apple Hospitality REIT's second quarter 2024 earnings call. Today's call will be based on the earnings release in Form 10-Q, which we distributed and filed yesterday afternoon. Before we begin, please note that today's call may include forward-looking statements as defined by federal securities laws. These forward-looking statements are based on current views and assumptions, and as a result, are subject to numerous risks, uncertainties, and the outcome of future events that could cause actual results, performance, or achievements to materially differ from those expressed, projected, or implied. Any such forward-looking statements are qualified by the risk factors described in our filings with the SEC, including in our 2023 Annual Report on Form 10-K, and speak only as of today. 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 terms 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 second quarter 2024 and an operational outlook for the remainder of the year. 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 today for our second quarter earnings call. As we move into the back half of 2024, the fundamentals of our business remain strong. The rate of new supply growth in our markets is muted relative to historical levels, allowing us to benefit more fully than we have in past cycles from incremental demand growth. We were able to grow comparable hotels occupancy more than 2% year-over-year during the quarter and achieved overall portfolio occupancy of 80%. While we believe that our greatest opportunity for growth will come as a result of the steady improvement we are seeing in midweek business travel demand, we were able to grow occupancy on both weekdays and weekends during the quarter, demonstrating the resilience of leisure travel demand and the upside we continue to realize as corporate, small, and medium-sized business travel normalizes. Comparable hotels RevPAR for the quarter grew 2.5%, with ADR up slightly year-over-year. Our revenue and asset management teams, together with our third-party operators, are intently focused on maximizing the profitability of our assets and optimizing their performance within their respective markets. Expense growth is moderating, supporting strong bottom-line performance for our portfolio. For the quarter, we achieved a comparable hotels adjusted hotel EBITDA margin of 39%, a year-over-year decline of 50 basis points. Second quarter Adjusted EBITDAre was $141 million, and modified funds from operations was $121 million, both up 9% as compared to the second quarter of 2023. Our portfolio continued to perform ahead of pre-pandemic levels, with comparable hotels RevPAR for the quarter up 11% and comparable hotels adjusted hotel EBITDA up 12% as compared to the second quarter of 2019. Supported by our strong operating performance, we continue to provide investors with an attractive dividend yield. Modified funds from operations for the second quarter was $0.50 per share, up 2% to the second quarter of 2023. During the quarter, we paid distributions totaling $0.24 per common share. Based on Friday's closing stock price, our annualized regular monthly cash distribution of $0.96 per share represents an annual yield of approximately 6.6%. Together with our board of directors, we will continue to monitor our distribution rate and timing relative to the performance of our hotels and other potential uses of capital. Our transaction activity has further enhanced our already well-positioned portfolio, creating increased exposure to high-growth markets, lifting overall portfolio performance, and driving incremental profitability. Recent acquisitions complement our existing portfolio and reflect our proven investment strategy. The 7 hotels we acquired since June of last year, together with the parking garage adjacent to our downtown Salt Lake City hotels and excluding the recently opened Embassy Suites in Madison, are yielding approximately 9% after capital improvements on a trailing 12-month unlevered basis, with meaningful upside from projected market growth and operational improvements. The Embassy Suites by Hilton in downtown Madison, Wisconsin, which we acquired during the quarter upon completion of construction, is ramping in line with our expectations. Through our long-standing relationship with the developer, we secured a fixed price takeout contract prior to the start of construction, which enabled us to acquire the asset at an attractive price despite rising construction costs over the course of development. We continue to feel good about the overall strength of the Madison market and the location and positioning of this hotel.... We have one additional hotel under contract for purchase, a Motto by Hilton, which is under construction in downtown Nashville for approximately $98 million. Similar to the Embassy in Madison, the asset is being developed under a fixed price contract, and we anticipate acquiring the hotel upon completion of construction in late 2025. We continually evaluate acquisition opportunities relative to returns that we can achieve through the purchase of our own shares and work to allocate capital in ways that maximize total returns for our shareholders. During the quarter and the month of July, with the recent pullback in our stock price, we repurchased approximately 1.6 million shares at a weighted average market purchase price of $14.29 per share for an aggregate purchase price of approximately $23 million. We are disciplined in our approach to capital allocation, seeking opportunities where we believe we can achieve the most desirable results for our shareholders, given market conditions. Our recent activity highlights the strength and flexibility provided by our balance sheet and our ability to opportunistically allocate capital in the current environment. We remain focused on maximizing long-term value for our shareholders and continue to be active, underwriting additional opportunities that align with our investment strategy, where we believe we can achieve desirable investment returns. We also continually monitor the performance of our existing hotels and work to strategically dispose of select assets to optimize our portfolio concentration within markets we believe to have higher growth potential, manage our long-term CapEx needs, and maximize returns on individual assets. Since the beginning of 2024, we have sold 3 hotels for a combined gross sales price of approximately $41 million, resulting in a gain on sale of approximately $18 million, including the 82-room SpringHill Suites by Marriott Greensboro, which we sold during the second quarter for a gross sales price of approximately $7 million. Since the onset of the pandemic, we have completed approximately $294 million in hotel sales and have invested $1 billion in new acquisitions while maintaining the strength of our balance sheet. These transactions have lowered the average age of our portfolio, increased revenue per available room and margins, helped to manage near-term CapEx needs, grown the size of our platform, and positioned us to continue to benefit from near-term economic and demographic trends. During the first six months of the year, we also invested approximately $33 million in capital expenditures, and we expect to spend between $75 million and $85 million during 2024, with major renovations at approximately 20 of our hotels. These reinvestments in our portfolio are a key component of our overall strategy to ensure that our hotels remain competitive in their respective markets to further drive EBITDA growth. The fundamentals of our business remain favorable, with continued strength in demand and limited new supply. At the end of the second quarter, approximately 55% of our hotels did not have any new upper upscale, upscale, or upper midscale product under construction within a five-mile radius, providing us with the ability to meaningfully benefit from incremental demand and improve the overall risk profile of our portfolio by both reducing potential downside and enhancing the upside impact from variability in lodging demand. We remain focused and disciplined in the execution of our investment strategy, which has proven resilient across economic cycles. We are confident that with our portfolio of high-quality rooms-focused hotels, broadly diversified across markets and demand generators, the strength of our brands and effectiveness of our management companies, the stability and flexibility provided by our balance sheet, and the depth and experience of our corporate team, we are exceptionally well positioned for the future. It is now my pleasure to turn the call over to Liz for additional details on our balance sheet, financial performance during the quarter, and annual guidance. Thank you, Justin, and good morning. We are pleased to report another strong quarter for our portfolio of hotels. Comparable hotels' total revenue was $387 million for the second quarter of 2024, and $718 million year to date through June, up 3% and 2% as compared to the same periods of 2023. With continued strength in leisure demand and additional recovery in business demand, second quarter comparable hotels' RevPAR was $130, up 2.5%. ADR was $163, up slightly, and occupancy was 80%, up 2% as compared to the second quarter of 2023. A strong second quarter brought year-to-date through June comparable hotels' RevPAR to $121, up more than 1%, occupancy to 76%, up more than 1%, and ADR to $159, essentially flat to the same period of 2023. Because of calendar shifts with the Easter holiday, April was our strongest month during the quarter, with year-over-year comparable hotels' RevPAR growth of nearly 5%. The shift of the Juneteenth holiday to midweek this year, as well as having 5 Sundays during the month, impacted performance for June, with year-over-year RevPAR growth of just under 1%. With a challenging start to the month with the Fourth of July holiday, preliminary results for July show essentially flat occupancy year-over-year, with continued pressure on ADR, resulting in modest declines in RevPAR. Looking at day-over-day trends, leisure travel continues to be resilient. Weekend occupancies were up 2.3% during the second quarter as compared to the same period last year... We also saw steady improvement in weekday occupancies, with growth of 2.3% during the second quarter as compared to the same period of 2023. While we have been pleased to see steady improvement in overall demand, leisure demand, which has produced the strongest rate growth post-pandemic, showed signs of increased rate sensitivity during the quarter, and midweek demand came at lower absolute rates than those achieved on weekends, with the combined effect weighing on our overall ADR growth for the quarter. Weekend ADR was up 1.1% in April, but down 1.9% and 2.3% in May and June, respectively. Weekday ADR was up 1.1% in April and up slightly year-over-year in May and June. Our strongest rate growth came on Monday nights, followed by Tuesdays and Wednesdays, where we achieved 86% occupancy during the quarter. Weekend ADR was $170, and weekday ADR was $156 for the quarter. We believe that future growth will come largely from continued improvement in midweek occupancy, which will support more significant midweek rate growth, both of which have lagged the leisure recovery post-pandemic. Same-store room night channel mix, quarter-over-quarter, remained relatively stable, with brand.com bookings at 40%, OTA bookings and property direct at 13% and 24% respectively, and GDS bookings representing 17% of our mix. Second quarter same-store segmentation was largely consistent with the second quarter of 2023. Bar remained strong at 32%, discounts represented 29% of our occupancy mix, group was 15%, and the negotiated segment represented 18% of our mix. Turning to expenses, comparable hotels' total hotel expenses increased year over year by 3.5% for the second quarter, decelerating from year-over-year total hotel expense growth of 4.2% in the first quarter. The deceleration was largely driven by a 100 basis point improvement in year-over-year growth in operating expenses. Total expense growth on a per occupied room basis also declined from 3.1% in the first quarter to 1.2% in the second quarter. A significant driver of operating expenses, total payroll per occupied room for our same store hotels was $38 for the quarter, up 3.4% to the second quarter 2023, but with a rate of growth decelerating as compared to the 5.1% growth in the first quarter of 2024. We anticipate that near term growth in payroll costs per occupied room will be more in line with the modest increases we saw during the second quarter, with labor markets stabilizing and overall inflation numbers coming down. Contract labor remained relatively stable during the quarter at 8.6% of total wages and was down 230 basis points or 17% versus the same period in 2023. With lower turnover and less reliance on contract labor, we are better positioned to drive incremental property-level productivity. We will continue to work with our management companies to enhance the efficiency of our operations over time. Also contributing to total hotel expense growth deceleration, property taxes, insurance, and other expenses decreased year over year by nearly 1%, with a favorable property insurance renewal April 1 and a decline in property taxes year over year due to successful appeals. As a result, we achieved comparable hotels adjusted hotel EBITDA of approximately $152 million for the quarter and $263 million year to date, up 1.5% and down less than 1% as compared to the same periods of 2023. With RevPAR growth coming through occupancy over rate growth, we are especially pleased with our comparable hotels' adjusted hotel EBITDA margin of 39.1% for the quarter and 36.6% year to date, down only 50 basis points and 110 basis points to the same periods of 2023. Adjusted EBITDAre was $141 million for the quarter and $242 million year to date, up 9% and 8% to the same periods of 2023, respectively. MFFO for the quarter was $121 million, and year to date was $205 million, up 9% and 7.5% as compared to the same periods of 2023, respectively. Looking at our balance sheet as of June 30, 2024, we had approximately $1.5 billion of total outstanding debt, net of cash, approximately 3.4 times our trailing 12-month EBITDA, with a weighted average interest rate of 4.8%. Total outstanding debt, excluding unamortized debt issuance costs and fair value adjustments, was comprised of approximately $278 million in property-level debt secured by 15 hotels and approximately $1.3 billion outstanding on our unsecured credit facilities. At quarter end, our weighted average debt maturities were 3.1 years. We had cash on hand of approximately $7 million, availability under our revolving credit facility of approximately $481 million, and approximately 71% of our total debt outstanding was fixed or hedged. In July, we amended our unsecured $85 million term loan facility, which increased the facility to $130 million, with the additional $45 million funded at closing, extended the maturity date to July 25, 2026, and set the interest rate margin spread to a range of 135-220 basis points, depending on the company's leverage ratio. Subject to certain conditions, the maturity date of the $130 million term loan facility may be extended by the company for one year. The incremental funding was used to pay down the balance on a revolving credit facility, resulting in an increase in capacity on our line of credit. We have a mortgage loan of approximately $20 million that matures later this year, that we intend to pay off using funds from operations or borrowings under our revolving credit facility. With the pullback in our stock price during the quarter, we repurchased approximately 1.1 million common shares at a weighted average market purchase price of approximately $14.35 per share, for an aggregate purchase price of approximately $15.5 million. In July, we repurchased an additional 500,000 shares, bringing the total shares purchased year-to-date through July to approximately 1.6 million shares at a weighted average market purchase price of approximately $14.29 per share, for an aggregate purchase price of approximately $23 million. As of the end of July, we had approximately $312 million remaining under our share repurchase program. Turning to our updated full-year outlook for 2024, as compared to the previously provided guidance, the company is, at the midpoint, decreasing net income by $6 million, decreasing comparable hotels' RevPAR change by 150 basis points, increasing comparable hotels' adjusted hotel EBITDA margin by 10 basis points, and decreasing adjusted EBITDAre by $7 million. For the full year, 2024, we anticipate the results will be in the following ranges: Net income of $202 million-$225 million, comparable hotels RevPAR change of 0.5%-2.5%, comparable hotels adjusted hotel EBITDA margin of 35%-35.8%, and adjusted EBITDAre between $456 million and $474 million. This outlook is based on our current view and does not take into account any unanticipated developments in our business or changes in the operating environment, nor does it take into account any unannounced hotel acquisitions or dispositions. While operational results for the first quarter, 2024, were in line with our expectations at the previously provided midpoint, and demand continued to improve during the second quarter, rate growth during the second quarter was modest, and the updated outlook takes into account increased price sensitivity in the leisure consumer and the impact of the increase in business transient as a percent of mix, which is currently coming at lower rates than those we've seen from leisure consumers following the pandemic. The high end of the full year range reflects relatively steady macroeconomic conditions, with continued strength in leisure demand and improvement in business transient, with greater ADR growth as we move past our strongest leisure-oriented months. The low end of the range reflects continued pressure on rate growth with a slight pullback in leisure demand. Despite the 150 basis point shift in RevPAR growth guidance, primarily due to lower rate growth, with strong bottom-line performance year to date, the updated range assumes better than originally anticipated variable and fixed expense growth, resulting in just a 1% decline in comparable hotels adjusted EBITDA. Despite some pullback in our expectations for the full year, we are confident we are well positioned for continued strong operating fundamentals and bottom-line performance. Our recent acquisitions activity has enabled us to drive incremental value for shareholders, despite challenges in the operating environment, which continue to put pressure on margins. Modified funds from operations are up on a per-share basis year-over-year, and our balance sheet provides us with meaningful optionality to drive incremental value. Our differentiated strategy has proven resilient through economic cycles, enabling us to preserve equity value in challenging environments and be uniquely positioned to improve value through opportunistic transactions when market conditions are more constructive. Our team works diligently to maximize the performance of our existing portfolio while staying ready to take advantage of market shifts and opportunities to further enhance shareholder returns. We would now be happy to answer any questions that you have for us this morning. Thank you. 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. A confirmation tone will indicate that your line is in the question 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 Dori Kesten with Wells Fargo. Please proceed with your question. Thanks. Good morning. In June, you talked about the expectation that business transient versus leisure rates should eventually return to a more normalized spread. Where are you now versus 2019, and what's your expectation for that spread in the second half of the year? We are still meaningfully behind that spread relative to 2019. We had seen a complete reversal in trends where we had been maybe 800 basis points higher midweek than we were on weekends. Post-pandemic, that switched and flip-flopped. We're shrinking the gap, but not as quickly as we'd like from a growth rate perspective midweek. We'd certainly like to see it there. You know, as leisure price sensitivity continues, that gap can shrink that way, too, which obviously would not be preferable, but we still have upside relative to the pre-pandemic spread between midweek and weekend occupancies. Rates, I apologize. As we highlighted in our prepared remarks, that's where we see the biggest upside on a go-forward basis. Okay. And then, based on your new guidance, would you need to, or I guess, potentially choose to change your dividend from the current $0.08 monthly level? No. I, you know, I, I think I highlighted in my prepared remarks, we have more than adequate coverage, given what we've anticipated for the remainder of the year. Okay. And last one: Are there potential acquisitions you may be close on, but have paused progress on, just given where your stock's trading? Just trying to get a sense of how much of a pipeline there is, to the extent that your stock price improves, in the near medium term. It's interesting, we are underwriting as many deals as we ever have, and a significant number of those deals meet our investment criteria in terms of strategic fit. Certainly, as I mentioned in my prepared remarks, we take into consideration where we're trading as we price those assets. And, you know, I think similar to others in the space, we've bid wide of seller expectations. In the current environment, with continued strength in overall operations, most sellers are choosing to hold assets rather than adjust pricing. And I think, you know, unless we were to see a meaningful shift in our overall cost of capital, I think it's unlikely that you would see us become more aggressive on the acquisitions front. That said, you know, we're poised and ready, and in continual discussions with a number of potential sellers. You know, we're incredibly pleased with the performance of our recent acquisitions to date. They've been meaningfully additive to our overall portfolio, and have lifted portfolio performance from a growth standpoint. DC, which is one of our recent acquisitions, was up top line over 9% during the quarter. Las Vegas was up almost 19% during the quarter. And certainly, you know, incredibly pleased with the yields we're achieving on those assets. Would love to be in a position to pursue more, but you know, as you saw in the quarter, we also see tremendous value in our shares. A strong, stable platform yielding very well at an incredibly attractive price per key. And, you know, we have the flexibility and the ability to pivot towards share repurchase when that makes sense. Okay. Thank you. Thank you. Our next question comes from Austin Wurschmidt with KeyBanc Capital Markets. Please proceed with your question. Thanks. Good morning, guys. What, what do you guys think needs to happen here for you to see some additional rate upside or, or shift in the mix of a corporate—of, of corporate accounts to drive that, that midweek ADR? And I guess, does any of the softening in, in economic data, you know, give you pause about how that plays out from here, and, and maybe the pace of improvement, as, as sort of, you know, supply's in a pretty good position? You suggest that demand still looks really good, but just wondering if you're seeing any of that, that change in sort of the booking pace. Thanks. You know, I think in terms of booking pace, we continue to feel reasonably good about how that's playing out, remembering again that we have very little visibility into the future based on booking patterns for the typical guests at our hotels. You know, that said, as I highlighted earlier, we continue to have markets that are growing at an incredibly strong rate. And because we're broadly diversified, we have exposure to a lot of different markets and different market types. I'd say overall, you know, what we saw yesterday and what we've seen in some recent economic data has yet to meaningfully impact our performance. Assuming we are able to continue to grow occupancy, we would anticipate on the margin that we would be in a better position to move rate, especially midweek. We've had the conversation in the past, and it's certainly worth mentioning, a portion of our corporate accounts are on fixed price contracts, which tend to renew on an annual basis, and we will very shortly enter negotiations around those accounts. With the backdrop of significantly higher occupancy, we see ourselves in a meaningfully better position, you know, to negotiate price, pricing that's favorable for us in those discussions, assuming a reasonably strong backdrop from an economic standpoint. And we will certainly be watching that over the next several months. As we approach RFP season, you know, we also will be focused, as I think the brands continue to be from the corporate side as well, to continue to move more of our local and corporate negotiated accounts to a percentage off of bar versus fixed rates. Which, you know, to the extent demand continues to improve and we are able to realize compression midweek, that should put us in a better position to drive rate as well. Have you analyzed, I guess, if you were in that position where it was the percentage of bar, what that would have done, you know, differently with the rate upside today versus, you know, having- Mm-hmm ... the fixed price contracts in place? ... No, I mean, as we have not dug in to all our various corporate and negotiated accounts to analyze what the delta would have been if it was a percentage off bar versus static rate. As you can imagine, with over 200 hotels and a multiple of that in negotiated rates, that would be challenging to do. That said, you know, we have seen where being able to manage your mix of business as it relates to supply and demand and compression on a given night and using a percentage off of bar puts us in the best position to manage negotiated discounts throughout the year. Understood. No, that's fair. And then just last one for me. As far as the guidance revision, you know, you provided a lot of detail, but, but how much of it would you attribute to the leisure weekend piece versus, you know, weekday? The revision is, particularly as it relates to RevPAR, is predominantly rate-driven. The net effect of what you-- both of what you mentioned, the shift from some leisure, and some price sensitivity around leisure, to midweek demand, you know, coming in at lower growth rates, but also at lower absolute growth rates. Similar to Dori's question at the beginning, you know, recognizing that the spread, is very different than it used to be, between midweek and weekend rates in a post-pandemic world. We've shrunk that gap a little bit, and given, you know, the prepared remarks just in the second quarter, we're probably still over 600 basis points, you know, of, of premium on weekend rates versus midweek rates. And so I think, you know, a big portion of the guidance revision was directly related to ADR, and it's really the net effect of both of your questions. That's helpful. Thanks for the time. Appreciate the thoughts. Thank you. Our next question comes from Jay Kornreich with Wedbush Securities. Please proceed with your question. Hi, thanks so much. Good morning. So it looks like there's a trend at the top end of the portfolio, kind of outperforming the lower end, both in your top 20 markets and also at the upper upscale and upscale hotels outperforming the, the lower end, upper mid-scale assets. So I'm just curious, can you maybe just talk about, you know, for the, the weakness that you're seeing on the lower end customer at the lower scale, and, you know, is that working up the chain scale? Is it working up to the top 20 markets, or is there really a divergence between those two? Really, most of what you're seeing in our portfolio is more market driven than it is, you know, asset category driven. So, while we have heard, similar to what you've heard, of weakness with lower-end customers, we have not generally seen that trend, at least absent, you know, pairing it with performance of individual markets. When we look at, you know, weaker markets in our portfolio or the performance of weaker assets in our portfolio relative to stronger assets, you know, that there's a reasonable mix of assets at both ends. If you look at our Upper Upscale assets, really, they were being driven by our Marriott full-serve properties, and that's market specific, as Justin mentioned. Houston is one of our top-performing markets for the quarter. We've continued to see corporate demand there increase, and we've also benefited from storm-related business. Just all in all, the market seems to be improving meaningfully, and that helped that Upper Upscale number look like it's outperforming. When you look at Upper Midscale, the Home2 Suites, where that is down, it's again, less a Home2 issue or a Chain Scale issue. It's more related to the negative impact of our Orlando Home2, which has underperformed. Okay, that's a very helpful context. Thank you. And then just one follow-up. You know, as I look at the monthly performance in the release, it looks like April started strong in the quarter and then a little bit worse each month as it progressed. So I'm just wondering, you know, how does that compare to your initial expectations for the quarter? I'm assuming that trend leading into July. You know, what are your thoughts going forward in terms of, you know, holding RevPAR flat for the second half of the year versus maybe any potential upside? Very good question. You know, I think when we put initial guidance together, we had assumed fairly consistent performance month to month throughout the quarter, and really across the second and third quarter. We were certainly benefited and met expectations in April as a result of the Easter holiday shift. And really, we started to see as we moved throughout the quarter an unanticipated pullback from a leisure rate perspective. And so that's really where we underperformed. If you think about our day-over-day occupancy performance that we mentioned in our prepared remarks, and if you look at occupancy performance for the quarter and throughout the month, generally speaking, occupancy held in where we continued to see degradation from a rate perspective. And some of that is nuanced, related to holidays and things like that. You had Juneteenth that really impacted June as well. But in general, you know, where we underperformed our expectations throughout the quarter and as we moved through the quarter and what we're seeing today is just that price sensitivity from the leisure consumer, which wasn't originally banked into our guidance. ... Okay, thank you so much. That's it for me. Thank you. Our next question comes from Bryan Maher with B. Riley Securities. Please proceed with your question. Thank you, and good morning. Two questions for me today. You know, we touched a little bit upon this, you know, kind of weekday versus weekend, but can you drill down a little bit more on the weekday mix of business? You know, are any, you know, business groups or type of business swapping out for the other? And we've heard that small and mid-sized business travel has come back more robustly than larger business travel. Are you seeing that, and can you give us a little color there? So I'll start with the second part of your question, and that is that we certainly, early in the pandemic, saw meaningful improvement in small and medium-sized business travel. That trend has continued, and that base has continued to be robust for us. We've seen a meaningful improvement in corporate travel as well. And so when you look at, you know, the growth that we saw midweek during the second quarter, it was a mix of both small, medium-sized business as well as larger corporate accounts. In terms of mix otherwise, between group, that trend has really stayed relatively consistent. I guess on the margin, when we look at shoulder nights, we believe that we've likely seen some pullback in leisure on shoulder nights, but in most cases, replaced with business travel on those nights. As Liz highlighted, Monday continued to be a strong rate performer with continued improvement in occupancy, and certainly Tuesday, Wednesday, which historically were among our highest occupancy nights, continued to see meaningful growth during the quarter as well. Thanks. And then over the past few years, you've had a couple of these, you know, takeouts of new construction at fixed pricing, which I have to believe with inflationary pressures on the builders, you probably got the better end of the stick there. Are you still seeing those opportunities? And when you do see those opportunities, are the developers jacking up the price such that maybe it's not as attractive as it was, and you may skew your acquisition dollar towards maybe a stressed seller sale or an asset owned by a financial institution? You know, I think construction costs certainly increased meaningfully during the pandemic. Those increases were further exacerbated by meaningful increases in borrowing costs, which you know blew budgets for a number of developers. As you highlighted, we feel incredibly good about properties like the Madison Embassy, which we acquired just north of $300 a key. The asset's super high quality in a wonderful location downtown, a block off the capital, a block away from the convention center. We believe it would be difficult to replicate that asset at that price. And you know, I think as we underwrite future development deals, you know, we're challenged to find deals that work for us and the developers. And you know, I don't think that's limited to us. I highlighted in my prepared remarks, we continue to see limited new supply in most of our markets. You know, I think that is not because developers have ceased wanting to develop. It's more that they're challenged in their underwriting of new development deals, given the meaningful increase in construction costs, interest rates, being meaningfully higher. And, you know, I think slower growth in terms of operating fundamentals for most markets. As a result, I think we'll be selective in signing up future development deals. We're excited about the development deal that we currently have under contract in Nashville. I think that's going to be an exceptional asset for us. But a significant portion of our focus recently has been on the acquisition of existing assets, where we've been able to achieve really strong yields, buying assets, we believe, below their current replacement values. You know, I, I think, at least in the case of Vegas, you know, having built into that acquisition a future development opportunity, that we're currently exploring. Well, developers I have found, never cease to want to develop if they can. So, it is what it is. Thank you for your comments. Appreciate it. Absolutely. As a reminder, if you would like to ask a question, please press star one on your telephone keypad. Our next question comes from Jonathan Jenkins with Oppenheimer. Please proceed with your question. Good morning. Thanks for taking my questions. Liz, you talked about the holiday impact in June and July. Can you just provide some additional color on the softness around the holidays and how demand has trended more recently in the second half of July and into August? And as a follow-up, it sounds like the leisure price sensitivity has consistently softened over the quarter, regardless of the holidays. Does your guidance assume a further softening in that leisure demand going forward? Good morning. So for trends related to July, because of the way the Fourth of July holiday hit later in the week, that first week of July, it really impacted both the first two weeks. Whereas we've historically seen not as quite as much impact, in that second week. The week immediately following that, we saw similar trends to what we had been seeing... where we were growing, occupancy and RevPAR overall, with some rate growth as well. The last week, unfortunately, was a little bit cloudy, with the CrowdStrike impact of travel, and I think that potentially that had some limited impact on or some impact on, last-minute travel. And we pick up a lot of business in the week for the week. So July was noisy. Thinking about that and looking at our booking position and thinking about guidance overall for the back half of the year, July was a little too noisy to draw massive conclusions from. But I do think the mix shift and the price sensitivity around leisure was something that we felt was prudent to bake in, given the consistency of that trend over, especially the last two months of the quarter. You know, looking at average daily bookings through the first of August, they're still up. So from a demand standpoint, you know, average daily bookings are still up from a room night perspective. You know, we've been materializing, you know, even with the noise in July, you know, flat or up from an occupancy perspective. So demand-wise, I, you know, I think we felt reasonably good with, you know, continuing to assume we'd have strong demand. And again, even on the weekends where we've seen some pullback, it's not meaningful. You know, overall demand is still strong. And so as we look forward, we did assume, and really, the guidance updates from a top-line perspective are primarily driven by that rate degradation with leisure sensitivity and the mix shift. Okay, very helpful. Maybe as a follow-up on that, you guys, in the past, have talked about the margin profile for the industry being dependent on rate growth. And I'm curious, given recent updates across the industry for a relatively muted rate growth environment in the near term, if you think that there's potential for the margin profile of the overall industry to stabilize, you know, at or around pre-COVID levels? You know, I think certainly we've been pleased with expense growth in the quarter and baked a portion of that into our guidance on a go-forward basis. I think we've benefited from a pullback in overall inflation. The job market has stabilized somewhat, and that's been beneficial to us, and we've been able to shift some of our workers away from contract labor, which has provided us some savings. I think it's important to note as well that as we continue to shift mix towards midweek, you know, increasing the percent of our business coming from business travelers, there's likely to be a benefit to margins given reduced costs to provide services to those guests. And so, given that a portion of the pullback in rate or the weight on ADR that we saw during the quarter was related to the mix shift, and the absolute lower rates that we've been able to achieve midweek, the fact that those guests are also among our our less expensive guests provide services to, has been a meaningful benefit as we look at impact to margins. I appreciate the color. And then last one for me, if I could, on acquisitions. Can you talk a little more about the pipeline? How many assets are you currently looking at today versus a few months ago? And as you look into the future, have you seen any shift in industry expectations for transactions, given the recent softening in industry demand trends, but seemingly heightened potential for lower rates, maybe increasing refi? You know, it's interesting. We continue to have a very strong pipeline. We've underwritten year to date, $ billions worth of assets. And, you know, as I mentioned earlier, a significant portion of them would be a strategic fit, for our portfolio, allowing us to enter into markets, where we have limited exposure, but would like to have greater exposure, you know, and, and/or, you know, further enhancing the quality of our overall portfolio. You know, I think, the bid-ask spread is real, and it's likely the single most important consideration as we think about actual transaction volume. You know, that said, because the hotels are not trading, they continue to potentially be available. Should we see a shift in our cost of capital, we would be well positioned to, you know, shift focus further towards acquisitions. You know, that said, I've been clear, I think in past calls, our expectation is that a portion of those deals will come to market as they approach refinancings, especially where ownership groups are forced to, you know, reinvest in the assets in order to pay down debt balances as part of that refinancing. You know, it's possible that we'll see better pricing on a portion of the assets in the coming months. That said, you know, in many cases, operating performance for these assets continues to improve. You know, many owners would prefer to sit on the assets, especially given alternatives for those dollars, rather than adjust pricing down for the assets today. Okay. That's excellent color. Thank you for the time and all the color this morning. That's all for me. ... Thank you. Thank you. Our next question comes from Daniel Hogan with Baird. Please proceed with your question. Hi, good morning. Thanks for taking my question. Can you just give some color on the New York property? Just how you're thinking about it in terms of run rate performance, and then where's the process in terms of resolution on that? Are you expecting to be made whole, or would there need to be a further adjustment to guidance? So, importantly, LuxUrban has failed to make timely payments from the very beginning, and so as we thought about how we would account for those payments, we have, from the beginning, accounted for cash as it was received, rather than accruing for payments that we anticipated we might receive at some future date. We received our last payment from LuxUrban in March, and in April, filed a petition to remove them. We have been awaiting a court date since, and anticipate we will have an opportunity to visit with them in court here shortly. We have, in addition to the petition to have them removed from the asset, filed suit against them, for over $82 million or approximately $82 million in damages, consistent with the terms of our lease. Importantly, that's much more than the company is worth today. And so I think we're realistic in terms of our expectations related to our ability to collect that full amount. From an accounting perspective, we have been and will continue to be conservative, taking into consideration in future guidance the fact that there may be, you know, a bit of time still before we're able to retake possession of the asset, and an expectation that in the near term there may be transition costs associated with taking the hotel back over. But we will continue to keep you updated on that. Certainly, we are unhappy with how things have played out with LuxUrban. We are not the only lessor that has a conflict with them right now. And, you know, I think it will be interesting to see how things play out over the next little bit. It's also important that to remind you that while the asset has taken up a significant portion of our time recently, it's still an immaterial piece of our overall business. As you look at the guidance revisions that we did make, with the second quarter update, we did assume the later transition date, where we would regain possession of the hotel later this year versus the original 7/1 assumption, given the fact that we've had to proceed this way to regain possession of the hotel. So that's accounted for, as Justin mentioned. Also, there is some transition and liability assumption in there as well. So anything that we can see today, we've accounted for. You know, part of the disconnect between Q1 and Q2 earnings is the later takeover date, so not benefiting from operations from the hotel. Got it. Appreciate that color. And then just one more on the channels. With the OTA usage and other discounted channels, I know you gave those numbers, but were those higher than your original expectations for 2Q? And, what would that signal to you, I guess, in terms of customer preferences for what you're seeing? They were fairly in line. You know, OTAs were up a little bit for the quarter, but not materially, not so much that it was dramatically different than what we would have assumed, given, you know, strong leisure-oriented quarter. You know, I think, again, where we got surprised was less around room night mix and more around ADR. Great. Thank you for the time. Thank you. Our next question comes from Floris van Dijkum with Compass Point. Please proceed with your question. Hi, good morning. This is Ken Billingsley for Floris. Wanted to ask a question on the market mix, and specifically, Tennessee and North Carolina. Obviously, both of them are positive from an EBITDA standpoint, but you're seeing falling RevPAR. In Tennessee, it looks like it's a rate issue, in North Carolina segment, occupancy. Could you just talk about those two segments? Tennessee is primarily driven by Memphis. That market has just been a little bit challenged in a post-COVID world, from a reputational perspective and safety perspective, and the convention calendar has been weaker, weaker there. So that's really driven the Tennessee performance. North Carolina, I'll have to look at quickly. Well, as you're looking that up, 'cause I wanted to follow on to some comments earlier, where you were talking about, obviously, you look at your assets and your portfolio to try and improve it. And I'm not saying that these are two – the two markets you would be looking at to maybe trade out assets, but as you identify assets in your markets to improve, how do you prioritize the use of the capital through stock buybacks versus acquisitions that you've discussed on the call or other options? And specifically, like, how do you balance the long-term versus the short-term decision to deploy that capital? You know, short term on improving maybe NAV and FFO versus growing EBITDA. ... So, the answer to that question is actually pretty simple. We prioritize EBITDA growth above kind of all other metrics. So we look at NAV growth, but you know, I have found that to the extent we're focused on EBITDA growth, both near and long term, we're more likely to see growth in the overall value of our portfolio. You know, as we weigh options for capital allocation between acquisitions, new developments, and share buybacks, I think we do so, you know, using simple calculations. You know, there's a slightly different dynamic purchasing a large stabilized portfolio versus an individual asset in terms of likely growth trajectory. But, you know, as you've seen recently, you know, given the pullback in our share price, we believe there's meaningful value in our shares. And you know, I think deployed capital, seeing that opportunity. So I think how we utilize proceeds from sale, proceeds from asset sales is very much dependent on the dynamics we see in the market at any point in time. I mean, would it be safe to assume that given how the whole sector is trading, that maybe there's a little bit more emphasis on stock buybacks right now? Or would you still say it's still gonna be formulaic? I would say that the pullback we've seen in our share price has not been matched by a similar pullback in the pricing for assets that we're underwriting. That certainly impacts our preference. You know, I think to the extent that changes, we are, we're in the mix and could adjust strategy. But I think given what we've seen recently, I think we continue to see value in our shares. Great. Thank you. I appreciate it. And cir- And, uh- Yeah, circling back on the North Carolina East question, it's really a combination of a couple things. Carolina Beach had more trouble from a rate perspective. Still really healthy occupancy. Actually grew occupancy year-over-year, but at a lower rate, so lost about 6% in rate. So that really is what was driving that. Also, we have a Fayetteville Home2 too in North Carolina East, which had a softer government quarter. Thank you for answering my questions. Appreciate it. Thank you. There are no further questions at this time. I would now like to turn the floor back over to Justin Knight for closing comments. We appreciate you making time to join us this morning for this earnings call. We look forward to visiting with many of you on the road. Please, as always, to the extent you're traveling, we hope you'll take an opportunity to stay with us in one of our hotels. Have a great day. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.