Day, thank you for standing by. Welcome to the DiamondRock Hospitality Company first quarter 2026 earnings conference call. At this time, all participants are in a listen-only mute mode. After the speaker's presentation, we'll open up for questions. To ask a question during this session, you will need to press star one one on your telephone. You will 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 call is being recorded. I would now like to hand it over to our first speaker, Briony Quinn, Chief Financial Officer. Please go ahead. Good morning, everyone, and welcome to DiamondRock's first quarter 2026 earnings call and webcast. 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 are pleased to report that first quarter results exceeded our expectations. This was a tough quarter as we comped over our strongest revenue growth from last year, particularly in the group segment, and faced disruptive weather challenges in several markets. Despite those headwinds, the portfolio performed better than anticipated. Comparable RevPAR increased 2%, and total RevPAR increased 2.5%. With hotel operating expense growth of less than 1%, we delivered corporate adjusted EBITDA of $60.6 million and adjusted FFO per share of $0.22. Our FFO margin increased an impressive 225 basis points this quarter. On a trailing 12-month basis, our free cash flow per share was $0.75, increasing 19% year-over-year. Starting with the top line, the comparable RevPAR growth of 2% exceeded our outlook of a flat quarter and improved sequentially in each month. Occupancy in the quarter declined 30 basis points while ADR increased 2.6%. As expected, our resorts outperformed our urban hotels. The magnitude of that outperformance was wider than we had anticipated. By customer segment, transient outperformed with revenues up 2.1% on improving demand and rate. Group revenues were down 0.8%, driven by softer demand early in the quarter. For the fourth quarter in a row, our guests continued to spend once on property across our restaurants, spas, and other retail outlets. Total RevPAR grew 2.5%, outpacing RevPAR growth by 50 basis points, out of room revenue per occupied room climbed 4%, right in line with the trend we saw through most of 2025. That tells us two things. Our guests have the spending power. Our out of room offerings are giving them good reasons to use it. For further context, out of room spend per occupied room at our resorts averaged $320 per night, more than 3x what we saw across our urban portfolio. RevPAR at our resorts increased 3.6%, with Total RevPAR growth modestly higher, outperforming the urban portfolio on both measures. We've been saying that our resort portfolio was due for an inflection in 2026 after three years of trailing the urban portfolio's accelerating growth. If you think back, our resorts were actually the first to bounce back from the pandemic, but then lost momentum as international outbound travel picked up and domestic leisure trends normalized through 2024 and 2025. Even so, RevPAR at our comparable resorts is up more than 20% from 2019 levels compared to high single-digit growth at our urban hotels. We remain constructive on the trajectory of our resort portfolio this year. In Sedona, the completed renovation and full integration are translating to both top line and profits. The property was under renovation in the first quarter of last year. If you compare the most recent quarter against first quarter of 2024, Total RevPAR is up over 23%, and Hotel EBITDA is up 67%. The property generated a 37% EBITDA margin, the highest first quarter margin in its history, driven by diversified revenue streams, rates matching their views, and the execution of creative cost efficiencies. In our urban portfolio, RevPAR increased 0.9%, and Total RevPAR increased 1.6% in the first quarter. January and February were modestly negative, while results in March meaningfully accelerated. The strongest urban RevPAR growth came from Hotel Emblem in San Francisco, the recently renovated Hilton Garden Inn Times Square, the Denver Courtyard, and the Hotel Clio in Denver, all of which posted double-digit gains. We've been tracking how our hotels with average daily rates above $300 stack up against the rest of the portfolio over the last several quarters, and the story is pretty compelling. When you consider that our guest average total bill runs about $450 per night, with several properties averaging over $1,500, it's clear we're serving a predominantly higher earning customer base. That strength at the higher end is showing up in the numbers. Over the past three quarters, our $300+ hotels have outpaced the rest of the portfolio by 290 basis points in Total RevPAR and 1,200 basis points in EBITDA growth. Simply put, robust spending from this segment and our ability to turn it into earnings has been a real engine for the company's growth. Turning to expenses. Right-sizing expenses for the demand environment remains a key focus for our team. During the quarter, total hotel operating expenses increased 0.8% on total revenue growth of 2.5%, resulting in a 127 basis point improvement in hotel EBITDA margins. This is our portfolio's largest quarterly margin improvement since the fourth quarter of 2024 and is 275 basis points higher than the margin achieved in 2019. Wages and benefits, which represent nearly half of our total expenses, increased just 0.7% during the first quarter, reflecting continued productivity gains. Looking back to 2025, total operating expenses on a per occupied room basis increased 2% during the year. This quarter, our expenses were up less than 1.5% on a per occupied room basis, a very disciplined start to the year. Before I turn to the balance sheet and capital allocation, a quick update on our Group Room Revenues in the first quarter and how our pace is shaping up for the rest of 2026. Group Room Revenues declined 0.8% in the quarter, with rates up 3.5%, but room nights down 4.2%. Winter storms in the Eastern U.S. and limited snow in our ski markets negatively impacted group travel in January and February. We are encouraged by our hotel's group pickup for the remainder of 2026, particularly in Vail, Greater San Francisco, Chicago, and Fort Lauderdale. Since our last call, our group revenue pace for the year has improved more than 100 basis points, with pickup in each quarter. Following a hard-earned new peak in group revenues in 2025, we are trending toward another record year for the portfolio. Turning to the balance sheet, our capital structure remains simple and conservative. We have no debt maturities until 2029, no secured or convertible debt, no preferred equity, and no off-balance sheet encumbrances. All of our debt is fully pre-payable. Our leverage sits on the lower end compared to peers, and that is by design. In a cyclical business, we think having the optionality and flexibility to pursue growth when the right opportunities come along is key. We paid a common dividend of $0.09 per share for the first quarter and expect to declare quarterly dividends of $0.09 per share for the remainder of the year, with the potential for a fourth quarter step dividend based on full-year results. Our payout ratio remains below historical levels as we continue to utilize net operating losses to offset our taxable income. As those net operating losses are utilized over the next few years, we expect our payout ratio to increase. We are currently under contract to sell one hotel and anticipate the closing to occur during the second quarter. Proceeds are expected to be used for general corporate purposes, which could include opportunistic share repurchases. Jeff will provide additional context on this transaction in his remarks. I'll conclude today with our updated outlook for 2026. We are raising our 2026 RevPAR guidance by 50 basis points to 1.5%-3.5%, with Total RevPAR 25 basis points higher, which is unchanged from our prior outlook. Our adjusted EBITDA guidance is now $296 million-$308 million, a 2.5% increase at the midpoint. Our adjusted FFO per share guidance is now $1.12-$1.18. The increase to our guidance reflects the stronger than expected first quarter operating performance, as well as the benefit of a more favorable renewal of our insurance program on April 1 than we had anticipated. This is the third consecutive year we have achieved meaningful year-over-year reductions in our premiums. In aggregate, over three years, we have reduced premiums by just under 40%. With anticipated CapEx of $80 million-$90 million this year, our raised guidance implies 7% growth in free cash flow per share. With that, I'll turn the call over to Jeff. Thanks, Briony, and thank you for joining us this morning. Earlier this week, we celebrated Bill McCarten as he retired from the board and his role as chairman after more than two decades of leadership. Bill's integrity and commitment to doing what is right will have an enduring impact on DiamondRock. We also welcomed Bruce Wardinski to his first board meeting as our new chairman. We look forward to the perspective and leadership he will bring as we execute our strategy. Nearly two years ago, we launched DiamondRock 2.0, and since that time, our shares have delivered the strongest returns in the lodging REIT sector, outperforming peers by roughly 2,700 basis points. Broad equity REIT indices by more than 500 basis points. We believe we are just getting started. DiamondRock's ability to drive the financial results behind our outperformance stems from deliberate and foundational decisions we have made in the past two years. First, culture. We've worked to build a culture of excellence where teams are encouraged to challenge assumptions and work collaboratively towards superior outcomes. We've also strengthened the organization with added expertise across IT, legal, capital markets, design and construction, and accounting. Second, we align compensation with total shareholder returns, not just at the executive level, but across the entire organization. The goal is straightforward. Our team benefits only when the shareholders benefit. This alignment and empowerment has slashed turnover and improved execution. Third, we invested in our infrastructure. We implemented new accounting and enterprise analytics platforms to amplify the strength of our asset management and accounting teams and to accelerate the use of AI-enabled tools across the organization. We took a comprehensive approach to simplifying the organization, modernizing corporate policies, shrinking the board, relocating our offices, and moving our listing to Nasdaq. The outcome is a leaner G&A structure with a headcount per hotel ratio that remains about 50% below the peer average. Taken together, these actions have helped make DiamondRock more efficient, more disciplined, and more focused on how we allocate capital. We're proud of the progress the team has made, and we're committed to earning your confidence through consistent execution. Last quarter, I walked through our five-year capital expenditure plan and our intent to recycle capital within the portfolio. Today, I'll build on that discussion with an update on the Westin Boston Seaport District, and then close with our outlook for 2026. The existing franchise agreement for the Westin Seaport expires on December 31st, 2026. We viewed this as a meaningful value creation opportunity, and beginning in 2025, we ran a comprehensive process to evaluate brand interest in representing Boston's premier convention hotel. We appreciated the level of interest and the creativity and flexibility we saw from brands throughout the process. After evaluating the proposals, we concluded that reinforcing the Westin brand's superior position in the Seaport would minimize disruption and create the greatest near, medium, and long-term value for shareholders. While we can't disclose the specific economic terms, given the strength of our balance sheet, we elected not to pursue a key money loan. The decision to avoid that expensive capital helped us stay focused on the fundamentals that matter most to shareholder value creation: the fee structure, the renovation scope and timing, and contract duration, assignments, and terminability. Value creation begins with the commencement of the new agreement on January 1st, 2027. As with all major capital decisions, we approach this with a focus on cash flow, flexibility, and risk-adjusted returns. With respect to the five-year capital plan we shared last quarter, importantly, our guidance remains unchanged. We continue to forecast investing 7%-9% of annual revenue across the portfolio, or about $80 million-$100 million per year in each of the next five years. The renovation of The Westin Boston Seaport District was already contemplated in our prior guidance as an internally funded project. The key takeaway here is we are working to provide greater transparency and consistency. Generating attractive risk-adjusted returns is central to our capital allocation philosophy. We deploy capital across both ROI-driven initiatives and more traditional cycle renovations. Each plays an important role, but they sustain and create value in different ways. In that vein, I want to provide an update on two recent ROI projects. The first is The Dagny in Boston. With the franchise agreement for the Hilton Boston Downtown/Faneuil Hall approaching expiration in 2022, we began evaluating long-term alternatives in 2020. We narrowed our options to remaining within Hilton or for an incremental $5 million, deflag and reposition the hotel as an independent property. We chose independent positioning because we are confident that even if we initially ceded ground on the top line, we could still drive higher profits through operating cost savings. We underwrote EBITDA would exceed $16 million in 2027 versus the $10 million earned in 2023. How are we doing? We delivered $15.5 million in 2025, and we're not finished yet. We are comfortable this ROI project will be ahead of underwriting. The icing on the cake is unencumbered hotels regularly achieve a 15%-20% valuation premium to comparable brand-encumbered product. Our repositioning has created value through earnings and asset value. The second example is L'Auberge de Sedona. In the third quarter of 2025, we completed the renovation of the Orchards Inn and fully integrated its operations within our adjacent luxury resort, L'Auberge. While Orchards enjoyed some of the best views in Sedona, it was operating as a mid-scale product with a premium location in a luxury resort market. Our strategy was to unlock that untapped value. By upgrading the room product and creating more connectivity between the two hotels, we were able to transform the properties into a cohesive luxury destination in a supply-constrained, highly rated market. We invested approximately $25 million and underwrote stabilization at a 10% EBITDA yield. Early results have exceeded our expectations. In the first two quarters following integration, revenues increased nearly 25% and EBITDA increased 55%. This project exemplifies our discipline. We right-sized the investment, focused on operational excellence throughout the project, and conservatively underwrote its potential returns with upside preserved for our shareholders. Let me remind you, 2026 was not underwritten as L'Auberge's year of stabilization. We prefer to consistently hit singles and doubles rather than hope for a home run on a complex, capital-intensive, and disruptive multi-year project. That said, when we look back, I expect we'll call L'Auberge DiamondRock's version of a home run. Our ability to execute consistent, cost-efficient, and impactful CapEx spending is a result of several unique portfolio traits, including a strong competitive position, unsecured capital structure, young portfolio age, and a high percentage of independent and third-party managed hotels. This gives us control over scope and timing. While we highlight four or five larger projects each year, our in-house design and construction team is actually executing on more than 400 individual projects this year alone, from elevator modernizations that reduce service calls to reconfiguring outlets to add seating and drive revenue, and room renovations to enhance guest appeal and housekeeper productivity. The effectiveness of our capital spending will ultimately be reflected in our long-term free cash flow per share growth. We view our capital program as a core differentiator that originates from our portfolio construction and is a key reason DiamondRock is a free cash flow per share growth story. Turning to capital recycling, as we noted last quarter, we expect to be a net seller of hotels in 2026. We are under no pressure to sell, but we believe we can accretively recycle capital within the portfolio. Though recent geopolitical events have slowed the pace of some discussions, ongoing engagement has continued. We are currently under contract to sell one hotel. We have a non-refundable deposit and expect the transaction to close in the second quarter. At that time, we will be able to discuss the factors that informed our hold-sell decision. We continue to place more lines in the water than in past years. Not every process will result in a transaction. We will only sell assets when, all else equal, recycling reduces risk or drives free cash flow per share growth over the medium to long term. ROI projects and share repurchases remain a compelling use of proceeds, but we have underwritten a few external opportunities that could be nearly as additive. These range from modern urban hotels with brand availability to experiential assets in supply-constrained resort markets. We have nothing to announce today, but trust that our focus is on accelerating our free cash flow per share growth and reducing risks to long-term performance. Turning to our outlook for 2026, we entered the year knowing the first quarter would be our toughest comp of the year. Despite that hurdle and the incremental headwind created by poor weather conditions, the portfolio was able to rebound in the second half of the quarter and delivered stronger than expected revenue growth and expense efficiencies. As we look ahead to the remainder of the year, we benefit from easy comps created by Liberation Day and the longest federal government shutdown, a favorable holiday calendar, outsized exposure to FIFA World Cup host markets, America 250 celebrations, and successful renovations. While it is early, we are not seeing a reticence for guests to take to the road this summer. For example, portfolio revenues on Memorial Day weekend are pacing up in the mid-single digits. Our FIFA World Cup host market hotels have experienced increased demand at elevated rates, but we don't expect to see activity accelerate until we're much closer to the event. As a reminder, our hotels have budgeted for 20 basis points of annual RevPAR growth from the games. We're seeing a similar booking pattern emerge around America 250 celebrations. Rates for early bookings have been strong, up double digits, but the pace at our urban hotels has been tepid. As citywide July Fourth programming comes into focus, we expect the pace of bookings to improve. Our resorts, however, are currently seeing more activity than our urban hotels over the July Fourth weekend. We are excited to reap the benefit from the hard work our team put into renovations last year. Among these renovations, the returns generated by L'Auberge de Sedona are expected to be the most material, driving at least a 50 basis point tailwind to DiamondRock's RevPAR growth rate in 2026. All in, we now expect our 2026 RevPAR to increase 1.5%-3.5%, a 50 basis point improvement from last quarter, with Total RevPAR growth outpacing RevPAR growth by 25 basis points. By right-sizing expenses for demand and maintaining a disciplined capital expenditure program, that 2.5% RevPAR growth at the midpoint should again drive DiamondRock to a new peak FFO in 2026. We also expect to generate 7% in free cash flow per share growth for our shareholders this year. This would mark over a 30% cumulative increase in the past three years. We appreciate the trust you place in us, and we look forward to building on each successive peak. Thank you for your time this morning, and we are happy to answer your questions. To ask a question during the session, you will 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. One moment for our first question. Our first question will come from the line of Jack Armstrong from Wells Fargo. Your line is open. Hey, good morning. Thanks for taking the question. How are you thinking about the best uses of incremental capital at this stage, given the recent performance of your shares? Are we nearing a point where you would shift away from repurchases and into more ROI projects or potentially some value-add acquisitions? We always shovel ready all the time. I would say that share repurchases are really the most appealing use. I think at the margin, you're starting to see some acquisition opportunities get there. I think you need a healthier spread to justify that. I guess to reiterate, share repurchases would be the most appealing. It makes sense. On the expense side, can you take us through some of the building blocks for the full year across wages and benefits, insurance and utilities? What's giving you confidence in your expense growth, you know, for labor significantly below where we're seeing national averages come in? I think, Jack, we've had, you know, some very good recent history, I think, leaning into productivity. Candidly, we're not necessarily seeing it on the wage rate side. We've been able to keep our labor rates relatively low because we've been finding less hours worked throughout the portfolio through productivity gains. That's been a myriad of different places, both in housekeeping productivity, focusing in on hours of operations, within our, you know, Food and Beverage outlets. Then, you know, like every other company, some small administrative efficiencies that we've found just through the implementation of AI tools. I'll add, Jack, that we actually had some savings or unexpected savings on our insurance renewal that starts on April 1st. That will be about a $1 million benefit to the full year. That was one of the other areas that we had some cost savings. Great. Appreciate the time. One moment for next question. Next question will come from the line of Smedes Rose from Citi. Your line is open. Hi. Thanks. I wanted to ask you a little more. You said you have a asset, I think, under contract for sale. Could you just sort of give some updated thoughts on the overall transaction market and in terms of kind of pricing and maybe what you're seeing and just overall sort of level activity? Yeah. I think the transaction market today certainly feels a lot better than it did about a year ago. I would tell you that, you know, when you, when you go back 12 months, I think people were, you know, remember it was post Liberation Day. I think, you know, we ended up having several consecutive quarters of flat RevPAR. You know, shortly after Liberation Day, interest rates, you know, for more of a PE buyer, who tends to use leverage, you were looking at interest rates that are all-in interest rates that were sort of 7%-8%. You know, now you look to today, I think RevPAR has certainly been much better this first quarter. I think there's a more positive outlook with more, sort of demand drivers in 2026. Interest rates are maybe 150 basis points lower. I think you have a better setup. It's definitely brought more interest to the market. You've seen many more assets come to market. There's sort of maybe two dozen assets out there in two large portfolios that I would say each of them are probably nine-figure plus assets. There's certainly properties beyond that. I think you're starting to see a little bit of loosening. Pricing is still robust. I would say that, you know, resorts continue to be sort of the priciest assets, you know, with urban maybe trading at a discount to that, largely because urban assets have, I'm speaking in broad strokes, haven't quite recovered as consistently as resorts have. Okay. I just wanted to go back. Briony, you mentioned, I think I just missed it, that the dividend payout ratio will go up, and I think you said if that's because the NOLs will be exhausted. Could you just sort of talk about that a little bit more, timing and when you would expect the payout ratio to move up? Sure. We generated significant NOLs, obviously, during the pandemic that built up over probably two to three years. I think, you know, we've got a significant balance left. We've worked through about 50% of it. Our intention is to sort of ratably use those, you know, over the next few years to sort of gradually increase our dividends. Okay. Thank you. Thank you. Our next question will come from line of Michael Bellisario from Baird. Your line is open. Thanks. Good morning, everyone. Good morning. Jeff, can you give us an update just on sort of 2Q and how April performed? You know, taking a step back, how would you sort of broadly characterize the recent change in trajectory for each of the customer segments, group, BT, and leisure? Thanks. So far, I would say the trajectory that we saw into April continued to be healthy. Some of the acceleration we saw in March effectively continued into that month, on, I think more on the leisure side. I guess as you sort of think about the segments for the rest of the year, I guess looking at Q1, BT was strong for us. Leisure or resort markets were pretty healthy. I feel like this will be the first year. I mean, it's still early, but I feel like this will be the first year where you have a very good probability that all three channels, sort of BT, leisure, and group, will be delivering positive growth for the industry and which has really been lacking for the last five years in the sector, and I think that's going to be, you know, pretty impactful for the lodging sector. It's, it's great when you have two working, but it's, you know, it's difficult because it's seven day a week business, and you can't always get to where you wanna get to when you only have two legs of the stool there. I'm encouraged by the way that the year is setting up. Got it. That's helpful. Then just sort of follow up there on the group side, the pace improvement that was mentioned in a few markets, anything you can point to in terms of reasons why, customer types, industry types that experience that group pick up in those three or four markets that you mentioned. Any color there would be helpful. That's all for me. Thank you. Mike, I'm not sure there's necessarily a great read-through just in terms of customer base, but I think we continue to be optimistic about the group outlook for the remainder of the year. I think particularly given where the calendar sits around a couple of the major holidays with, you know, things like Juneteenth, July Fourth, all sort of shifting towards the weekend. It really gives us a larger, you know, like a larger number of potential pattern weeks that we can sell group into where we have some availability. I think that's been more indicative of our short-term pickup, that we've just had a bit more availability given how the calendar's shifted around, and we've been able to sell into that. Thank you. One moment for our next question. Our next question will come from the line of Austin Wurschmidt from KeyBanc Capital. Your line is open. Hey, good morning. It's Josh on for Austin. You've discussed some additional group pickup you might need due to some tough comps in 3Q. I guess how much additional business do you need to backfill at this point in time, and what are some of the different strategies you could implement to fill that demand if need be? I think part of the-, part of our pace, also has to do with, you know, we have World Cup exposure, I would say World Cup availability in one of our biggest hotels in Boston. We have sort of displaced some group, hoping that that transient pickup is gonna fill in some of those gaps. I think generally speaking, as we get, you know, as we get closer to Q3, we move out of the booking window. We're really focused on, you know, transient strategies to drive incremental transient business. I think, you know, we're optimistic that given some of the demand generators that are going on, particularly in July, that we're gonna be able to backfill a fair amount of that with transient business. Josh, I'll add on just to give people some context. I mean, in some ways this emanates back from the Democratic National Convention. Remember we had a very good year out in Chicago at that time in third quarter, last year in 2025, you know, that was sort of the hole that we thought we had to climb over, we successfully climbed over it. In some ways we, you know, we were a victim of our own success. We continued to extend there. The actual magnitude of the hole that we referred to is actually it's a few million dollars on group business, just to give you a sense. It's, you know, it's not an insurmountable task, it's a single-digit millions of dollars, I think, on the group side. Yeah. Appreciate that additional color, Jeff. On the asset sale, should we view this as you guys testing the waters a little bit in the transaction market before you would bring additional and potentially larger assets to the market? I wouldn't call it necessarily testing the waters in advance of larger assets. I mean, I think, you know, we really kind of looked at this as, you know, you're always trying to find opportunities where you can monetize assets at attractive prices, and you don't always hit it out of the park on that. I think it's just more important to have more lines in the water, you know, and be exploring that. In the last year or so, you know, we've had a handful of properties that we've explored either, you know, sort of one-off or privately and some with listed situations. It's not necessarily a precursor. I think every asset kind of has its own unique setup and sort of buyers and market conditions. Yeah, I wouldn't assume that it's like one has to precede the other. All right. That's all for me. Thank you. Thank you. One moment for our next question. Our next question will come from the line of Duane Pfennigwerth from Evercore ISI. Your line is open. Yeah. Hi, this is Peter on for Duane. Thanks for taking the questions. Could you just unpack a little bit of your expectations for New York this year? I know you probably have an assumption on the upcoming contract renewal, but more curious on just how you see top-line growth in that market following a few strong years. Well, I think we continue to be optimistic about New York because, you know, it has the FIFA final game. I think in particular over the summer, you know, we're expecting to see some compression in the market. As you know, as you mentioned, there is gonna be some margin pressure given the contract renewal, which we factored in and I think accounts for some of the, you know, sort of forecasted uptick in our operating expenses as we progress through the year. Generally speaking, while, you know, maybe we saw a bit of a fall off in short-term booking pattern right at the beginning of the war, we've seen that level off and continue to see demand in New York as strong as it's been for the last two years. Okay, thanks. Just on CapEx, you know, Jeff, you mentioned $80 million- $100 million per year for the next five years as kind of a range. It seems like from your comments, maybe you're not considering or don't see another opportunity of something, you know, larger like L'Auberge. Is that correct? Just on L'Auberge, when is peak season in that market? Just remind us when the renovation finished last year. Appreciate the time. Yeah, I'll take the first one. Actually, no, that's actually already incorporated into that $80 million-$100 million a year to the extent that we see opportunities or ROI projects that's effectively embedded within that figure. Yeah, it's not that we don't sort of see those opportunities down the road. Yeah. You know, Sedona is a bit of an interesting market in that like you really have a couple of different peak seasons that sort of shoulder in between the winter and the heat of the summer. Part of, I think, the success of that asset is just given how, you know, hot it was in Phoenix, sort of, you know, I think record heat in Phoenix earlier in the year. We got a lot more of that drive to business earlier in the season. You know, typically we sort of see peak season kind of March to May, and then again on the back end of the summer, sort of September, you know, October. Candidly, the market does quite well year round. The hotel is under renovation from all of 2025 up until about September 1st. That's when the hotel reopened and launched as an integrated property. Got it. Thank you. Thank you. Our next question will come from line of Rich Hightower from Barclays. Your line is open. Hey, good morning, guys. I want to go back to, I think it was Briony's comment earlier about how the over $300 ADR hotels are outperforming pretty materially versus the rest of the portfolio. Just, you know, thinking more broadly, how does a statistic like that inform things like portfolio construction or how you think about CapEx on certain hotels and, obviously, the buy, sell, hold decision? Just walk us through maybe how that informs that sort of framework. Hey, Rich, this is Jeff. I actually missed the first part of your question. You were asking about how hotels over $300 inform our buy, sell, hold decision? Just the outperformance, I guess, you know, generally speaking in the luxury space. I don't think we're the only ones that are looking towards, you know, the very top end of the U.S. consumer base as being more resilient than perhaps the rest of the population. You know, that's a trend that we've seen over the course of the last 18 months, and it's definitely something that we feel, you know, we factor in acquisition decisions. Candidly, you know, this is not a revelation that the rest of the market participants don't also see. The assets that cater to that particular part of the market are the ones that are being bid up to pretty significant premium. You know, we're excited that we've got a number of those already in the existing portfolio, and continue to look for ways that we can enhance those, like a L'Auberge type project, where we can take more of our portfolio, shifting it towards targeting that particular consumer, and look at potential opportunities, you know, where we can add to the portfolio, but those are quite often very premiumbly priced. Yeah. Thanks. Yeah. The middle, I was gonna say the middle part of my question cut out. It was also a follow on about sort of CapEx, you know, within that same context. You know, how do you think about the returns? You spend the same dollars on a given hotel, but if it carries a higher rate, you know, arguably the returns are higher simply because of that. How does it inform the CapEx program as well? Sorry if that wasn't clear. Yeah. That, that's how I was gonna add, Rich, is that, you know, unfortunately, you don't always spend the same amount of capital on a luxury hotel or something that is true luxury. I would say that, you know, some of the properties we have that are very high rated, I wouldn't necessarily describe them as five-star hotels. I mean, in some ways, they're 4.5, and I know that's a subtle distinction, but, you know, I think it's an important one because you don't spend the same amount of CapEx on luxury hotels. I think some of the brands that, you know, folks are certainly familiar with out there, when you look at their operating margins and what their CapEx is, they're, you know, they're sort of very low return on investments historically. You know, you're trying to find situations, and I think this is where being independent in some of those hotels is more critical 'cause where you can drive the CapEx to where you think it, you know, is more critical to driving rate and profitability than trying to maintain someone else's standard. I think when you look at the margins on our higher rated, sort of more luxury resorts, they're quite high relative to maybe what you might see from some of our peers who are branded luxury hotels. No. It makes a lot of sense. If you don't mind, a second question just to go back to the Westin Seaport franchise renewal. You know, if obviously, you know, DiamondRock was in a position to get what sounds like a pretty good outcome, maybe relative to some other, you know, competitors who would be going through a similar process. You know, if we were having the same conversation or the same situation five or 10 years ago, you know, would the outcome have been equivalent to what you guys have achieved here? Does something about it imply any sort of change in the balance of power between the brands and owners or more sophisticated owners? Just walk us through the evolution there. Yeah. I mean, I guess, I think maybe Justin and I can both chime in on this. I guess from my take, I think, I guess I'd respond from the standpoint of, I think today's management team probably thinks about that a little bit differently than the past. You know, I think we tended to look about how we are creating those flexibility at the asset level and where we can ultimately, like, sort of create value, you know, whether that shows up in cash flows or whether that shows up in maybe a future value of that hotel. So necessarily, you know, having one particular structure or another, like franchised or managed or accepting key money, what have you, I think maybe the, our prior management teams might have thought about it differently than today. We were just looking, as I said, more for flexibility and really didn't see the need for key money. Yeah. I think to get to your question, given, I think as everyone on the line knows, you know, the brands, f ocus on net unit growth and the difficulty they're having and, you know, in sort of prompting incremental development. I would say that it has definitely gotten a bit more friendlier on the owner side. We had a very large audience of potential brands that was interested in the hotel, and I think the inducements that they, if you're comparing to 10 years ago, are definitely better than what you would have achieved. I mean, it's not double, but is it, you know, 15% or 20% better from an owner perspective? I think that's probably a fair assessment. That's great. Thanks so much. Thank you. Our next question comes from line of Chris Darling from Green Street. Your line is open. Thanks. Good morning. Circling back to the CapEx discussion, and the remaining value creation opportunities across the portfolio, whether it be franchise expirations, ROI projects, is anything more actionable in the near term, assuming continued fundamental strength across the industry in your portfolio? Just wondering sort of in your mind how flexible you intend to be as it relates to the five-year CapEx plan. Yeah, it's a great question, Chris. I would say that there are projects that are actionable. I mean, I'm not committing to it today, but we continue to look at timing and scope about whether or not Chico can work and pencil for us with the returns that we want. There's actually projects that are very small that we look at that are within properties, whether it could be back-of-house type work or, you know, energy savings type work, that it's not necessarily getting advertised, so they can be sort of small projects with good returns. There's a lot of that that's actually already embedded in our spending. I would tell you that I, you know, I guess, don't expect, and maybe that's where you're angling, is that do you presume that that CapEx number is going to swing around a lot? You know, we've actually spent a lot of time diagramming out, you know, every potential project over the next five years for all of our hotels and trying to phase them in a way that we can make that sort of a consistent figure and have things done on time, you know, at a level that's sort of impactful to the property at the same time, too. I, the intent there is to sort of de-risk our future earnings volatility at the margin, and it's something that we're gonna try hard to stick to. Okay. I can, I can appreciate that. Helpful to hear. Then, you know, just as a follow-up to some of the discussion around the consumer, just hoping you can elaborate on what you're seeing in out-of-room spend and how things have trended relative to expectations. Any other insights maybe just to double-click in terms of, you know, what you're seeing as it relates to the health of the consumer, whether it's broad-based or truly, you know, that high-end consumer strength relative to sort of mid or lower end? Yeah. I think we've continued to see in first quarter, you can see from the release, you know, out-of-room spend continues to accelerate at a faster rate than RevPAR we've seen in the hotels. We continue to see the ability, once we get the customer on property, to get them to spend in different ways. It's through a myriad of different things, whether that, you know, we have a number of spas throughout the portfolio that perform particularly well. I think one of the things we were encouraged by is what we were able to do in Food and Beverage this quarter, given that it was a down group quarter. I think both from a revenue perspective and particularly from a profitability perspective, you know, we saw some nice lift in the outlets throughout the portfolio, that was able to drive increased Food and Beverage profit even when we had banqueting catering that was slightly down. We do continue to see a customer, once they're there, that continues to spend freely. I would say, frankly, throughout the spectrum, not necessarily just at the high end. I think we saw that, you know, in, in all of the sort of ADR tiers throughout the portfolio. Okay. That's it for me. Thank you. Thank you. Our next question will come from line of sorry, Ken Billingsley from Compass Point Research. Your line is open. Hi. Good morning. I just wanted to follow up on World Cup. I believe you said it was 20 basis points that you have in RevPAR. Is that, is that correct? Yep, that's right. Given just kind of the shift that's going on there, are you seeing that this is becoming maybe less of an international event and shifting to more domestic? With that, it seems like it's also becoming more of a luxury event. Typically in the past, have you seen last-minute booking being successful when there's an opportunity for people to go to these kind of experiences that are typically higher ticket costs? I mean, we'll probably all have views on this. I would say, there's not much of a great precedent for this occurring in the U.S., I guess. I do understand, like, the initial ticket prices have certainly been high. I personally wonder whether that has given some pause to people's desire to attend. Ultimately, I don't think we're gonna be seeing all empty stadiums out there. I do think they'll get filled, so it leads me to believe that, you know, maybe folks who were speculating on the tickets early on will end up having to capitulate, and you'll find there's a market clearing price for folks to go to the games. As far as the demand, I don't know what the original expectation was, but I think just some of the anecdotes we've had from, you know, various cities that we kind of meet with hotel councils and sort of share with them data, I think it's been about a third, a third, a third between international demand for the tickets, domestic demand and local demand. My takeaway out of that is about 60-odd% or 2/3 of the tickets are being consumed by people who will ultimately require a hotel room. You know, time will tell as we get closer. Well, thank you. Thank you. As a reminder, to ask a question, that's star one one. One moment for our next question. Our next question will come from line of Floris van Dijkum from Ladenburg Thalmann. Your line is open. Hi. Good morning. This is Ohad on for Floris. Thank you for taking the question. Can you talk about how you reserve for potential bonus payments to third-party operators this year? Thanks. As in like the payments to folks at the hotel level, like, to the extent that performance is better? Yes, exactly. I mean, I think we, you know, generally bonus thresholds are multi-tiered throughout our properties, although a lot of them do actually have a gatekeeper around financial performance or financial performance relative to budget. That is one of the upticks that we actually saw in labor cost in the first quarter because we have a number of properties that are exceeding their operating budget for the year and expect to exceed operating budget for the year. It is something that we track on an active basis just to make sure that we're actively accruing the appropriate amount of incentive compensation for the performers that we have that are outperforming expectation. Yeah. It's an important distinction because I think accruing for it sort of, again, mitigates risk that is compared to hotels that don't accrue for it. There can be a year-end, lack of a better word, surprise on the labor expense side that there's a true up on bonuses that are owed at year-end, so we accrue throughout the year. Thank you. I'm not showing any further questions in the queue. I'd like to turn it back over to Jeff for any closing remarks. Thank you folks for dialing in. I know it's been a busy week for folks, but look forward to seeing you soon, and have a good summer. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.