Thank you for standing by. Welcome to DiamondRock Hospitality Company's Second Quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Briony Quinn, Chief Financial Officer. Please go ahead. Thank you, Justin. Good morning, everyone, and thank you for joining us. With me on the call today is Jeff Donnelly, our Chief Executive Officer, and Justin Leonard, our President and Chief Operating Officer. Before we begin, let me remind everyone that many of our comments today are not historical facts and are considered to be forward-looking statements under federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ materially from what we discuss today. In addition, on today's call, we will discuss certain non-GAAP financial information. A reconciliation of this information to the most directly comparable GAAP financial measure can be found in our earnings press release. We were pleased with our second quarter results, which exceeded our expectations going into the quarter. Comparable RevPAR grew 2.2% over last year, which was 260 basis points higher than the growth that we saw in the first quarter and exceeded the 100-150 basis points of sequential acceleration we expected. Total RevPAR increased 4.5%, also an acceleration from the 2.4% total RevPAR growth in the first quarter. The 230 basis points gap between total RevPAR growth and room RevPAR growth was the result of an intentional mix shift toward group business that drove strong out-of-room spend. The strategy has worked. Group revenue increased 7.2% over last year, and banquet catering and AV revenue increased over 20%. The strong revenue growth was driven by both our resort and urban hotels. Comparable RevPAR at our resorts was 1.9% higher than last year, with total RevPAR 2.7% higher. Comparable RevPAR at our urban hotels was 2.2% higher than last year, with total RevPAR 5.4% above 2023. Comparable hotel operating expenses increased 4.5% from last year, which was largely in line with our expectation. Total wages and benefits increased by 7%, a better growth rate than the prior quarter. Early in the second quarter, we renewed our insurance program with a better-than-anticipated outcome. Overall, our premium cost was reduced by 16%, which led to insurance expense for the quarter declining 14.5% from 2023. Comparable Hotel Adjusted EBITDA was $99.5 million, reflecting a 5.5% growth over last year on a 20 basis points increase in margin. Adjusted FFO per share increased 6% over 2023 to $0.34 per share. Turning to our outlook, the success of our group strategy has exceeded our expectations. Shifting our mix toward group, as well as a focus on building occupancy in our resorts, may reduce room RevPAR growth, but it has done so to the benefit of Total RevPAR and ultimately profit. Accordingly, we are adjusting our RevPAR growth outlook to a range of 1.5%-3%. However, we expect total RevPAR growth to be in the range of 3%-4.5%. Our group strategy has performed well, and we expect it will continue to drive incremental revenue and profit. But due to the types of groups on the calendar, we do not expect out-of-room spending in the second half of the year will contribute 250 basis points toward total RevPAR growth as it did in the first half of the year. We now expect 2024 adjusted EBITDA to range between $278 million and $290 million. Our 2024 adjusted FFO to range between $201.5 million to $213.5 million, and the resulting adjusted FFO per share range increases from $0.95 to $1. Turning to capital allocation, we commenced share repurchase activity during the quarter. To date, we have repurchased 2.8 million shares with a weighted average price of $8.36 per share for total consideration of approximately $23.5 million. We continue to explore asset dispositions, the proceeds of which can fund additional share repurchases, internal ROI projects, or external growth. Our balance sheet remains strong. As of the end of the quarter, our net debt-to-EBITDA ratio was 3.8 times trailing four-quarter results, and our liquidity was $630 million. We plan to repay our $73 million mortgage maturity in early August with cash on hand. In addition, we intend to exercise our one-year extension right on our $300 million term loan, bringing the maturity to January 2026. We continue to monitor and assess all available options to address our upcoming 2025 debt maturities, and we'll continue to keep you updated on that front. I also want to share that during the quarter, DiamondRock successfully completed the implementation of a new Oracle Cloud-based ERP system that has streamlined our accounting-related activities, as well as a new enterprise analytics system to better collect and analyze the enormous volume of hotel-level operating and financial data available to us. Together, we expect these systems will extend our impact while maintaining one of the most efficient teams amongst our peers. Kudos to our accounting and asset management teams for their efforts on this significant project. I'll now turn the call over to Jeff for additional color on the quarter. Thanks, Briony, and thanks to all of you for joining us this morning. I want to highlight the excellent efforts of our entire team, who worked hard this quarter to deliver strong Q2 results amid a transition in leadership and information systems. I also want to recognize Bill Tennis, who recently retired after serving as DiamondRock's General Counsel for 14 years. Finally, I want to welcome Anika Fischer, who joined DiamondRock as Senior Vice President and General Counsel from Essex Property Trust. She's been an excellent addition to our team, and I'm personally very happy to have this rising star on board. Now, let's talk a little more about the second quarter. It is critical to understand we're focused on maximizing profit, not RevPAR, not margin. This is why Justin and his team made the conscious decision a few quarters ago to increase our focus on group. All else equal, this mix shift can result in slightly lower room RevPAR growth to the benefit of higher total RevPAR growth. The year-to-date spread between our room RevPAR and total RevPAR growth was a robust 250 basis points. While higher total RevPAR growth can result in higher total expense growth and possibly even lower margin, it accrues to the benefit of higher bottom-line profit. To us, profit is king. As Briony mentioned, comparable EBITDA for the portfolio increased 5.5% in the quarter, and F&B profit at our urban hotels increased nearly 27% after the incremental costs, such as food and labor, associated with non-room group revenue. Urban hotels had the largest spread between total RevPAR and RevPAR growth. The Clio's spread was 1,000 basis points, The Worthington 780, Chicago Marriott 740, Westin Seaport 520, and The Gwen 480 basis points. Looking ahead to the second half of 2024, group room revenue on the books is up 14% over the prior year, with well over 30% growth at the Chicago Marriott, Westin D.C., and The Worthington. For the year, we have 704,000 group room nights on the books, which is a 7.3% increase over 2023 and represents 88% of our 2024 budget. Turning to our resorts, this was the first quarter of positive RevPAR growth in our resort portfolio since the end of 2022. Resort comparable occupancy increased 8.6%, offset by a 6.1% decline in ADR. Despite the increased reliance on occupancy, a historically more expensive source of revenue growth, we were able to drive EBITDA 7.1% higher by holding expenses to 2.5% growth. Importantly, we are outperforming our markets, taking share in 14 of our 16 resorts. Like our urban hotels, we have leaned into groups, sometimes to the detriment of average rate, to maximize Total RevPAR and profit. It is no longer 2021 or 2022 when resorts were richly rewarded for holding out for last-minute transient, but it isn't quite 2019 either. Our resorts are still operating over 40% above 2019 levels, and we are staying nimble on our revenue strategy to maximize profit. In the back half of the year, we expect we will profitably trade off ADR for occupancy. It is partly for this reason we expect our full-year room RevPAR growth will be slightly lower than original guidance, but the Total RevPAR and profit growth expectations are higher. We completed the room renovation of the Westin San Diego Bayfront. We also completed the conversion of Hilton Burlington to Hotel Champlain. The hotel has a casual, fun, and creative new restaurant called Original Skiff Fish + Oysters by renowned chef Eric Warnstedt. The hotel product feels great from the sense of arrival to the two-story lobby, new health club, and spacious rooms. We have a pipeline of additional ROI opportunities underway, such as the new hotel bar at Havana Cabana, a marina at Tranquility Bay, and the integration of our two Sedona resorts in 2025. We are constantly reviewing our portfolio for value-add opportunities, but are also re-examining our six-year capital expenditure plan to maximize efficiency for increased capital retention. In this regard, we've elected to reduce the scope of the ROI project we are pursuing in New Orleans by 40%. We had previously expected to spend about $13 million to renovate the 220 rooms and reconcept the lobby and pool areas to create new F&B outlets. The rationale for the original budget was based upon the expectation the expenditure would justify the implementation of an urban amenity fee, capture incremental market share, and drive incremental F&B outlet profit. Since conception, we have asset managed the hotel to gain significant share, and we now believe it is prudent to reduce the scope of the capital plan to focus exclusively on renovating the rooms product. The revised scope still supports the business case behind an amenity fee while retaining optionality to pursue the additional outlets later. We expect the renovation will be complete before Super Bowl. This is a good moment to step back and talk about strategy. Shareholders have asked us how the recent leadership transition will change strategy, and we've said we will continue to have a long-term focus on growing our leisure market exposure, whether those are resorts and unique destinations or hotels and lifestyle cities. But we also see value in targeted urban markets. We've also said you should expect we will be more deliberate and analytical in our actions. Our overarching focus is identifying avenues to drive incremental earnings per share as a path towards narrowing our discount to net asset value. The stock market focuses on RevPAR, but this only captures a portion of revenue and doesn't contemplate the effect leverage, branding, age, and other factors have on long-term earnings growth. To support our focus on earnings per share growth, we're working to reduce our costs. At the corporate level, we focused on our G&A through our leadership transition, as well as implementation of new technologies to drive efficiency. At our hotels, we are working to reduce our capital expenditures as a percentage of revenues through thoughtful scrutiny of what truly creates cash flow and value. Full-service hotel REITs historically spend about 11%-12% of revenue on capital expenditures. When you consider typical dividend payouts and that most companies are well over 5x leverage, including preferred, that is simply too high to have meaningful retained earnings to organically fund share repurchases, pursue ROI projects, or acquisitions to drive earnings per share growth. It is a priority for us to manage our annual capital spend to the high single digits. Every 100 basis points we reduce our capital expenditures is over $10 million preserved and potentially 50 basis points of per share earnings growth. The $5 million reduction in scope in New Orleans, while small, is significant because it highlights how DiamondRock is improving to be prudent and aggressive stewards of your capital. It also highlights that we are the sole decision maker on the scope and timing of renovations at our independent hotels in order to cater the product to our target customer in that specific market. What else can we do? Average age is important. Real estate can, of course, be renovated, but like a snowball rolling downhill, the frequency and scope of capital investment picks up speed and size with age. Yet market values do not always accurately reflect the obsolescence of older assets. We've all seen instances of new hotels transacting at similar EBITDA multiples despite the growing capital needs of an older asset. We are working to take advantage of opportunities to recycle non-core assets in our portfolio into higher after-capital cash flow yields such that it accretes to earnings. We also need to be flexible and cater our investment strategy to the local environment. For instance, in some urban markets, an upscale hotel may be far more lucrative over the long term than an upper upscale product, given the similar profit per key but reduced capital scope. In conclusion, our asset focus remains largely unchanged, but what has changed are the approaches we are taking to drive earnings per share growth. It is our belief this focus will ultimately drive relative multiple expansion and total shareholder return. At this time, we would like to open it up so Justin, Briony, and I can take your questions. Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question comes from Austin Wurschmidt from KeyBanc Capital Markets. Your line is now open. Thanks. Good morning, everybody. Jeff, I guess I'm just curious how far along you are in sort of identifying the non-core assets that you'd potentially like to sell and if you can just kind of provide an update on the transaction market, kind of depth of the buyer pool and interest for you to execute kind of on this new on strategy investments? Yeah, good morning, Austin. I would say that from the list of non-core assets, I would describe it as really the assets we've talked about in the past. I mean, we've highlighted previously like our Westin in Washington, D.C., Chicago Marriott, and even like our Fifth Avenue Courtyard in New York. I would tell you that list isn't more extensive. It hasn't changed materially. I think it's how we're looking at those assets when we kind of think about the long-term capital needs of them and where we think we can find reinvestment opportunities. It's not all going to happen in a day, but I think those are the sort of the most likely characters that we look at as non-core for us in the coming quarters. As far as the current market, and Justin can chime in as well, I think it's been challenging out there. I think for buyers, it's not that there's not a lot of capital chasing assets. I think with debt costs relatively high, it could be difficult for folks to get things financed and bought at a level that's accretive, but it's also appealing to us. And therein lies the bid-ask spread between buyers and sellers. But I don't know, Justin, if you want to add in? Yeah, we're still seeing a significant drop-off in transaction volume. I think if you look at the last sort of 8-10 years, hospitality transactions are sort of a $20-$25 billion transactional market on an annual basis, and the first half of the year was about $5 billion. So that gives you a sense of kind of the amount of transactions that are actually getting done relative to a normal run rate. We still see a pretty large bid-ask spread between buyers and sellers. Got it. That's helpful. And then just separately, in the last quarter, you had indicated that the rate impact to leisure was really more of this mixed shift strategy to more group, which clearly benefited you this past quarter by shrinking the base. But what's sort of the latest update on just rate sensitivity of that leisure transient customer? And does the group demand remain strong enough for you to continue kind of with that strategy of filling the base without having to sacrifice on rate too much? Thanks. Yeah, I think it's more of a reversion back to prior patterns as opposed to just seeing a weakness in the overall leisure transient customer. I mean, kind of during the period of COVID, you were penalized for having group. You were penalized for having base because the demand was so strong and the demand pattern was so consistent. I think we've seen midweek in some of our resorts reverting not back to what it was in 2019, but definitely not what it was in 2021. So we're having to layer in more of those discounted leisure customers midweek and more group. And I think that's where we've had success, honestly, in building the base. I think we can continue to do it. I mean, we were up 20% in group in our resorts for Q2, and we anticipate to be up about the same in Q3. That's where our pace is sitting. So that continued shift, I think we still have the ability to put more group into these resort assets and get back closer to what we were in 2019 from resort percentage of segmentation. Thanks for taking the questions. Thank you. One moment for our next question. Our next question comes from Patrick Scholes from Truist. Your line is now open. Morning, Patrick. Thank you. Good morning, everyone. When I think about your results this year and your portfolio composition, certainly the composition, I think of you folks more leisure-centric. I find it very interesting that you've been able two consecutive quarters to have raise your guidance, which is quite unique here. You certainly have talked about certainly shifting group mix in there. But anything else you'd like to call out there, how you've been able to do that, especially in relation to other public REITs that haven't been able to, that are maybe less resort-centric? And then I'll also relate that to one of the themes is earning certainly some pressure on the leisure customer. Jeff, any other color or thoughts around that? Thank you. And then I'll have another question. I mean, thanks, Patrick. I mean, we discussed this in our remarks and I think in our release, but I think Justin and his team were smart several quarters ago to really lean in on group and group, not just at our urban hotels, but even at the leisure hotels or more resort-oriented hotels. And as Justin just said a moment ago, I think in the last few years, a lot of hotels out there were effectively trained to always be taking transients, and they could be maximizing their rate every day of the year. And then as we began the transition to today, you began to see those patterns change. I think there's a little bit of re-education in some of these resorts to realize that this is a made-up example, but the $500 rate you get on a weekend, it's okay to sell it for $350 a night to a group midweek. The transient guest doesn't perceive that, but it's revenue to us that otherwise might have been missed had we been trying to hold out for a transient guest during the week. I think you're just trying to lean in and realize that those patterns are changing. But to be clear, it's not necessarily discounting per se, because again, that weekend customer isn't seeing that rate change. This is just sort of finding different guests at different price points that you can bring in. And I think it was just being smart to lean in on that early. There's groups that we can bring in at resort-oriented properties just as there are in urban-oriented properties. And our resorts might be more SMERF-type business, but I think it's just trying to be realistic about the current environment. Okay. No, that's great. Then another question, and I suspect I know the answer to this, but I'd like to hear it crystal clear from you. What is your appetite for dilutive trophy asset acquisitions and levering up now that rates are higher? Thank you. It's a little bit of a softball. Dilutive is not appealing to us. At the end of the day, I mean, you want to be allocating capital well. I recognize, to be clear, that there can be assets. I'm not saying that I'm amenable to them, where you sort of step back to step forward someday, where the initial yields can be low and the IRRs can be great. And I would tell you that there are a lot of those in the marketplace today. There's a lot of sort of distressed urban assets that are selling at a very low basis, but they have oftentimes zero or negative yields. And that's not really appealing to us because it's a very painful cost of carry and really weighs against a long-term IRR. So I would say it's very difficult for us to make those pencils. And conversely, at the other end of the spectrum, I know there's been deals that have been done at sort of mid-single-digit cap rates, but at a basis that oftentimes is very high or very close to replacement cost. And that's not particularly appealing to us either, given that it's hard to underwrite a lot of upside to that asset down the road. We're really trying to find that middle ground where we can get a good deal on the asset from a basis perspective, but also get some yield. So it's a little bit of a needle to thread, but that's really what we're looking for in urban markets. Okay. I'm all set. Thank you. Thanks. Thank you. One moment for our next question. Our next question comes from Dori Kesten from Wells Fargo Securities. Your line is now open. Thanks. Good morning. What does the new enterprise analytics platform give you access to that you didn't previously have, and how do you intend to utilize it? I think, Dori, what we're really excited about is we have, I think, 12 different managers within the portfolio, all with a different reporting process. And so it's really given us the ability to do a standardized remap every single one of those P&Ls into a standardized format and do a significant amount of benchmarking within the portfolio to identify issues, particularly from a cost perspective. I think before it was a lot more cumbersome for us to take all of those different packages and try to isolate where we were overspending within certain categories and what we've been able to do over the last 2 quarters. I think hopefully you can see that in some of the cost mitigation is really line all of them up and put them in buckets where they're comparable assets and look for some best practices that we can translate throughout the entire portfolio. Okay. And then as you think about the likely trajectory of occupancy over the next few quarters, are we in an environment where your FTEs may be contracting, flat, growing? I think on a year-over-year basis, if we continue to see what we're forecasting, which is significantly more out-of-room spend, we'll see FTE growth. The reality is food and beverage is a relatively labor-intensive business. So the last two quarters, we've had 11% food and beverage growth. Those do take a fair amount of man-hours. That's why it's a bit of a lower-margin business. So I think all else equal, if that continues to be the trend, we'll probably see a little bit of growth in FTE, but I think it stabilizes towards the end of the year. Okay. Then you addressed the ROI project at Bourbon, New Orleans. Have you made any other material changes to the ROI pipeline in the last few months, whether it's adding to plans, redlining completely, pulling in? There's been no material changes to the ROI pipeline at this time, Dori. Nothing that's really materially been added or altered at this point. But we're always looking at projects available in our pipeline or in our portfolio that we can identify. But no big changes. Okay. Just last one, I might have missed this. Did you provide any guardrails around Q3 RevPAR growth or margin expectations? Dori, this is Briony. We have not, but I would tell you that I would expect our Q3 RevPAR to be slightly higher than the growth rate we saw in Q2. Okay. Thank you. Thank you. One moment for our next question. Our next question comes from Smedes Rose from Citi. Your line is now open. Hi, thanks. I just maybe wanted to switch to uses of capital. Could you just talk about where share repurchase kind of falls in terms of priorities? And would you consider maybe just sort of putting in place almost sort of a programmatic repurchase program where you just have sort of a constant dollar amount being targeted to share repurchase every quarter? Good morning, Smedes. In effect, that's a little bit of what we did this quarter, as a matter of fact. Not so much that we had a specific dollar number that you had to hit at any price, but I would tell you that right now, I think allocation of capital to share repurchases is one of the more lucrative areas that we can put money towards. I think we trade at north of a 9 cap. Given that we have a little bit higher than average leisure exposure, just on that alone, you look at where cap rates are, resort-type assets in the marketplace, they're handled at probably 5 and 6 cap rates. I think we were able to buy those resorts relatively inexpensively. Same thing on urban. As I mentioned earlier, there's not a lot of urban assets that have transacted. They're a little more barbelled. If they're distressed, they're sort of at 0 cap rates. If they're operating, I think some of our peers are paying sort of stabilized 6s. There's a big gap. I would tell you that I think right now, share repurchases are very appealing. We do watch our leverage, though. I emphasize that all the time. While we're comfortable buying back shares and recycling capital from asset sales into share repurchases, we do try to be careful about where we maintain our overall financial leverage. Okay. Then I just wanted to ask you, I know I guess you have quite some time here to address the 2025 maturities, but just sort of in general, would you rather move to more unsecured debt or are you thinking of just refinancing at the property level? Kind of just generally, what's your sort of preference there? All else equal. Thanks, Smedes. Generally, our preference is to move to be more of an unsecured borrower. I think we continually evaluate the secured market, and we certainly would do that if it was more attractive. But I think becoming an unsecured borrower just provides us a little bit more flexibility at the operating level. Okay. Thank you. Thank you. One moment for our next question. Our next question comes from Duane Pfennigwerth from Evercore ISI. Your line is now open. Hey, thanks. Good morning. Just on your comments on grouping up, I wonder what is the downside, if any, of grouping up? Other than the reported metrics of RevPAR, which you did a good job of kind of walking us through, what are the set of circumstances that you'd be leaving money on the table by taking a more aggressive approach on group? Group is a, especially in the larger assets, it's a long booking window. And so I think what you're taking surety for potential rate upside if the market were to re-accelerate. I think we just decided a year ago that we would rather have some of the safety that goes along with taking a significant shift towards a group piece of the market and the ancillary spend that comes along with it. So I think that, I mean, that's really the risk, is that you put too much on the books at a low rate or a lower rate in the market you could ultimately achieve in transient. I think that that's really where the re-education has had to come across because in the middle, especially in leisure assets, during COVID, you got penalized for having group because the rates ran so fast and so far. If you had group on the books from a year prior, you were giving up, you were losing share in the market. So I think just sort of rethinking that as we return back to a little bit more of a normal pattern has taken a little bit of time to work that through our operators. Yeah. One thing I would add to that, Duane, is that when you think about the average size of our assets, we're around 200-225 rooms. The type of groups that's coming to our hotel are not necessarily groups that are going to book three years in advance. Our average group size is relatively smaller compared to some of the big box hotels in the marketplace, which are arguably going to have a longer booking window or maybe are not as appealing to a 30-person offsite. So we have a little bit of. That makes shorter windows. It gives us a little bit of the ability to be more nimble when we group up. Makes a lot of sense. And then just for my follow-up on the larger asset disposition front, if you had to guess, how long do we need to wait for that unlock? And again, what are the set of circumstances we need to see for your recycling strategy to really kick in? Thanks for taking the questions. I can't really give you a date. I mean, I think we're just looking for an opportunity where I think where rates fortunately seem to be moving or the expectation of rate cuts seem to be moving in a favorable direction and results in our hotels are doing well. So I think the stars are aligning for that. But as Justin mentioned, there's not a lot of assets that have been on the market that could play to our advantage, but I think there's going to be time in the coming quarters where we're going to investigate this. So I can't give you a specific date. I don't want to negotiate against ourselves. Makes sense. Thank you. Thank you. One moment for our next question. Our next question comes from Michael Bellisario from Baird. Your line is now open. Thanks. Good morning, everyone. Morning, Mike. For Jeff or Justin here, I want to go back to group. Yeah, that 14% pace that you mentioned for the back half, where do you think that actualizes by the end of the year? And then what's the pace differential, 3Q versus 4Q? My gut is I think forecast we've got a very high single digit in terms of actual on a year-over-year basis. It's slightly better in Q3 versus Q4 on a year, just from a pace perspective. Got it. And then that 88% of booked so far, that's of your target budget, let's call it 20% remaining for the back half of the year. What's the risk there? What are you hearing from your hotels or corporate planners? Any change in size of event or booking window or cancellation attrition just for that remaining piece that still needs to be booked for the year? We're not seeing any significant change in trend in terms of group room lists coming in at or above attrition levels or what we're seeing from an inbound lead perspective. I think we're a little bit more conservative in our forecast and in the year-for-the-year pickup for the back half of the year than what we actually produced in the first half of the year. I don't think we see any reason right now to sort of change that outlook. Got it. Then just one more on group, thinking here in Chicago with the DNC in a few weeks and just more broadly, big events. How meaningful is something like that, especially in maybe a slower week in late August in Chicago? Is something like that moving the RevPAR needle for your entire portfolio 0.5 percentage point, a percentage point? How meaningful are some of these big super events that are kind of one-time driving the RevPAR for your portfolio in the back half? Not as meaningful as you might think. I think the reality of the super events, especially for the large hotels, is a lot of that block is required to be given in order to secure the event in the beginning, right? So when you think through a lot of times Super Bowl or the DNC, for someone like the Marriott, they're part of that initial bid. So the room rate that you get is not as much of a premium as you might think. And a lot of times, it's actually more beneficial for some of our smaller hotels because they're outside of the large block that's required to be given in order to garner the group in the first place, and they can really compress around it. That's helpful. That's all for me. Thank you. Thank you. One moment for our next question. Our next question comes from Dany Asad from Bank of America. Your line is now open. Hi. Good morning, guys. Just to go back to the guidance update, when we think about your change in EBITDA, can you just, and I know you had in your prepared remarks and we kind of touched on it, the difference between RevPAR and Total RevPAR. But can you just explain what specifically it is that's offsetting the rooms, the RevPAR reduction to kind of drive EBITDA higher when we think about that Total RevPAR piece? Sure, Danny. So just to quantify a little bit the change in our EBITDA, I think a portion of that reflects a little bit of outperformance that we saw in Q2, maybe call that around $1 million. We also talked about on the call our positive insurance renewal, and that should benefit us about $1 million a quarter for the balance of the year, given that that was a Q2 renewal. And then the balance really reflects the benefit of our mix shift in the back half. Although lower than the first half, I think it's better than we originally anticipated. So there's a little bit of that in there. And then we are offset by a little higher corporate G&A, about $1 million on that front. But when you look at our G&A overall, it's still lower than pre-transition. Got it. Got it. Thank you. Thank you, Briony. And Jeff, in one of your answers earlier, we were just thinking about your capital recycling strategy. Some of the hotels you highlighted seem to tilt a little bit more towards urban versus resort and a little bit more on the urban side. As you look to redeploy that capital, are you going to—is it going to be one-for-one? Are you going to be looking to redeploy that same capital into urban markets? Where would it be in the country? Just given your mix of already leisure versus urban, are you comfortable with that? And kind of where would those extra dollars go? Meaning that if we were to sell an urban asset, where would we redeploy it? Yeah. Yeah. That's right. I mean, I think right now, maybe we're about 2/3, 60%, give or take, in urban markets. And I think longer term, it's appealing to us to grow our resort or leisure exposure. We want to do so profitably. And I think right now, it's very difficult to do that. That doesn't mean we've stopped looking. I think what could happen, or I guess I'd say I'd like to see happen, is that maybe you sell one of those larger urban assets and it doesn't result in two transactions. It results in an urban asset that you purchase that right now can have some attractive returns if we find the right situations. But maybe it results in a resort asset as well. And so potentially, you can replace the same or roughly the same amount of income and end up with sort of a higher concentration of leisure, but you have sort of two assets and a little more diversified that have a better growth profile. So I don't know if that answers your question entirely. We don't have specific target markets where we say we've got to be in market X or we've got to be in market Y. We're really just looking for situations where we can accrete value at the end of the day. Got it. That's it for me. Thank you very much. Thanks. Thank you. One moment for our next question. Our next question comes from Chris Woronka from Deutsche Bank. Your line is now open. Hey, good morning, everyone. Thanks for taking my question. Jeff, I think you guys still have about 13 independent hotels in the portfolio. I'm curious as to whether there's been any recent kind of thought on branding any of them. I I realize there are a lot of markets where the demand is kind of self-sustained and they're recognizable. But as I see some of the hotels that the brands are letting in, frankly, to the soft brands, it kind of makes me wonder whether is there something you're leaving on the table there? No. I would say definitely not. I think there's a lot of focus that people pay to the top line. But look to the Dagny. I know that's one where we went the other direction. We exited a hotel system. And we've said upfront that that's one where we could shed potentially 8%-10% of top line revenue leaving the system, but you will also gain back a significant amount of expense. And that decision was really based on that sort of middle of the P&L, if you will, to drive bottom line profit. And so far, we're continuing to be on plan with that. So I guess I would tell you that our job as owner is really to drive profit, not top line revenue. And so I hear you that there is an opportunity there to collect a check, but typically, the key money checks, I think if you speak to the brands, they tend to expect mid-teen IRRs on that money, which means it's not cheap. Yeah. Yeah. Fair enough, Jeff. You're right on that. Keeping with the brand question, so let's just hypothetically say that we do have a downturn at some point in the next year. Given the brands gave you guys a fair amount of flexibility during the pandemic on brand standards, do you think, A, would they be willing to kind of do that again? And B, are there things you can still do because it feels like you're in the post-COVID world, you're already running pretty efficiently? There's always opportunities to get more efficient. I mean, I don't think anybody ever sort of rows the perfect race or hits the perfect game. So I think there's always opportunities for efficiencies out there. As far as what the brands will do, I'd like to believe that they've learned from this past event that they can flex on brand standards in difficult times and things can be, I'll say, okay or successful for their system. So I'd like to believe that the next time that we confront another event, not necessarily a pandemic, but even a recession, they might be a little more tolerant on that front. So that could be appealing. Okay. Very good. Thanks, guys. Thanks. Thank you. One moment for our next question. Our next question comes from Chris Darling from Green Street. Your line is now open. Hey, thanks. Good morning. Circling back to some of the prior discussion around capital recycling, wondering if you could speak to your philosophy as it pertains to, on the one hand, trying to maximize the price at which you sell a property versus taking advantage of the arbitrage opportunity inherent in your fair price, even if you don't quite realize every last dollar of value? Yeah. It's a good question, Chris. I think there's a tendency, in my experience, for people to just sort of focus on maximizing that last dollar. And to me, it's sort of the paired trade, if you will. It's looking at what you're selling and what you're buying. And there are times where you might not maximize value on an asset, but if you're able to buy something, whether it's your shares or another property that has a more attractive IRR going forward, that seems like a sensible trade for me. Got it. Awesome, thanks. Maybe shifting gears just one more for me. When you look across your portfolio, whether it's on the resort or the urban side, are you seeing any evidence that the consumer is trading down in any regard? Or is the weakness kind of we've talked about in the leisure transient segment truly a matter of where those individuals are choosing to travel rather than a matter of whether they're spending to the same degree? Justin, do you have any thoughts on that? I mean, I think we'd just be speculating from a trading-down perspective. I think we do see a bit more people sort of looking for a discount or looking for a sale and willing to change travel pattern relative to price. I don't know if that's necessarily trading down or as much as it's trading days. But I think that's what we've been doing, I think, as we revert back to prior pattern, is really trying to do more kind of price variability between weekends and midweek and between peak periods and non-peak periods in order to encourage travelers to fill up our hotels off-season. I think that's definitely a trend that we've seen kind of continue over the last 18 months. I appreciate the thoughts. That's all for me. Thank you. One moment for our next question. Our next question comes from Bill Crow from Raymond James. Your line is now open. Hey, good morning, guys. Jeff, I'm wondering, as you think about grouping up smaller urban properties and your leisure-oriented properties, are those more kind of dependent on in-the-quarter, for-the-quarter group bookings, say, compared to Chicago or some of the bigger assets out there? And therefore, maybe a bit more sensitive to the leading edge of changing economic conditions? I don't necessarily think so, Bill. I mean, I understand the root of the question. I think for some of our properties, it can be everything from a wedding. It can be social-related like SMERF b usiness. It can be small corporate off-sites. And sometimes those follow restructurings at companies, which can be a negative event in the economy, but yet drives a sort of, "Let's get the team together and figure out new strategies." So it's difficult to say. I mean, there are times when we say this a lot internally where we think we're big enough to see trends, but we question whether or not we really see trends. And certainly, a bigger property like Chicago Marriott does tend to have a longer booking window just given the nature of that asset. We can, of course, accommodate small groups, but an asset of that size tends to have much greater success on those larger groups. So I'm not sure if I'm quite answering your question, but I think there's a very big audience of sort of small group activity that our hotels, both resort and urban, can tap into. Do you think that it's more or less sensitive to economic change, the smaller groups? And I'm not talking weddings because I think that's kind of independent of the economy largely. But do you think you're more volatile maybe on the group front in your hotels? I don't think so. I mean, it's hard to know the alternative, quite candidly. I think just looking at our pace for the rest of the year, vis-à-vis just what I've been hearing about some of our peers, it doesn't feel like we have been as sensitive. I guess just looking at very near-term results, it feels like we've actually been a little more resilient on that group front than some of the bigger box hotels. Just on near-term results, the answer would be no, but I can't say definitively. Okay. Thank you. Thank you. I am showing no further questions. I would now like to turn the call back over to Jeff Donnelly for closing remarks. Well, thank you, everybody, for joining us today. We really appreciate it. Have a great summer, and hopefully, we'll see you out on the road. Thanks. This concludes today's conference call. Thank you for participating. You may now disconnect.