Good morning. My name is Alex, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hersha Hospitality Trust fourth quarter 2021 earnings conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you'd like to withdraw your question, press the pound key. Thank you. Andrew Tamaccio, investor relations for Hersha Hospitality Trust, you may begin your conference. Thank you, Alex, and good morning to everyone joining us today. Welcome to Hersha Hospitality Trust fourth quarter 2021 conference call. Today's call will be based on the fourth quarter 2021 earnings release, which was distributed yesterday afternoon. Before proceeding, I'd like to remind everyone that today's conference call may contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and other factors that may cause the company's actual results, performance, or financial positions to be considerably different from any future results, performance, or financial positions. These factors are detailed within the company's press release as well as within the company's filings with the SEC. With that, it's now my pleasure to turn the call over to Mr. Neil H. Shah, Hersha Hospitality Trust President and Chief Operating Officer. Neil, you may begin. Good morning, and thank you for being with us as we kick off fourth quarter earnings. Joining me this morning are Jay H. Shah, our Chief Executive Officer, and Ashish Parikh, our Chief Financial Officer. Leisure and business travel was accelerating rapidly, and we were optimistic as forward bookings were shaping up for a very strong fourth quarter. We are pleased to report that despite the headwinds we encountered from the Omicron variant in December, we achieved our highest cash flow producing quarter in 2021, meaningfully outperforming our internal forecasts and consensus estimates for the fourth quarter on both top line and profitability metrics. We saw a pickup in demand for our urban portfolio on the wane as case counts continue to fall and corresponding COVID restrictions are lifted. In the fourth quarter, our strategically located portfolio of 33 consolidated hotels generated 63% occupancy at an average daily rate of $238, resulting in a $150 RevPAR, likely one of the highest among all of our REIT peers during this time period. We began the fourth quarter on strong footing as the Delta wave receded. Our portfolio RevPAR ended October at $153, approximately 12% higher than September, as increased urban demand translated into robust results across the portfolio. Despite typical seasonal pullback, November demand was sequential growth, fueled by international travel and a small but noticeable uptick in business transient. Momentum carried into December, and despite a noticeable drop-off triggered by the rise of Omicron cases, December results improved sequentially from November for the portfolio. During the fourth quarter, our revenue managers continued to execute their strategy of driving rates, resulting in our comparable portfolio ADR for the quarter matching that of the fourth quarter 2019. Rate integrity 45%, 150 basis points higher than 2019 GOP margins. We're encouraged to see both ADR and GOP profitability metrics surpass 2019 levels well before a recovery in business transient and group gets underway in our gateway markets. With domestic leisure activity anticipated to have another record year in 2022 and the recovery of business and group travel on the horizon, our portfolio's market performance. Our resort portfolio was strong again this quarter, with weighted average occupancy of 66% and ADR growth of 31%, driving weighted average RevPAR growth of 16% compared to the fourth quarter 2019. Our strong performance this quarter benefited from continued robust demand in South Florida, despite what is typically a slower period for travel to the region. The Parrot Key was our best performing asset during the fourth quarter from a RevPAR growth perspective as 73% occupancy and a $491 average daily rate resulted in a $359 RevPAR, which surpassed fourth quarter 2019's RevPAR by 48%. You may remember that we executed a comprehensive $26.5 million repositioning of the Parrot Key Hotel and Villas in 2019. The Keys continue to garner unprecedented demand, and we expect the Parrot Key Hotel and Villas to continue its ramp well into 2023. Once again, the Miami Beach market turned in great performance in the fourth quarter, demonstrating promise for the peak season ahead as the Cadillac and the Winter Haven on South Beach each exceeded fourth quarter 2019 ADR and RevPAR levels. Even in the more business-oriented sub-market of Coconut Grove, we were able to drive 16% RevPAR growth compared to the fourth quarter of 2019. Our South Florida hotels continue to generate robust rates into the first quarter, with significant growth on the horizon as peak travel is set to return during the winter months. We also expect to see very strong momentum from spring break travel and the Formula One Miami Grand Prix, which should rival some of the larger citywide events that are traditionally hosted in Miami, like Art Basel or the Super Bowl. The Cadillac is another hotel that underwent a major $47.3 million transformative repositioning in 2018, 2019, and we expect to easily surpass prior peak. Our Annapolis Waterfront Hotel occupies a one-of-a-kind position on the Chesapeake Bay. We recorded 70% occupancy and an average daily rate of $330 last quarter, which led to the hotel seeing significant demand continue into the fourth quarter, with 83% occupancy in October, 80 basis points higher than 2019. Demand was fueled by the return of the hotel having several years of growth ahead. In California, the Sanctuary Beach Resort continues to lead our resorts from a rate perspective as its $510 ADR and 69% occupancy resulted in 32% RevPAR growth versus the fourth quarter of 2019. Our Hotel Milo in Santa Barbara reported 29% RevPAR growth this quarter, recording 64% occupancy at a $346 ADR. Both of these hotels set record ADR levels and maintain pricing power even after the peak travel season to the California coast, further demonstrating that the leisure traveler remains very price elastic for high quality, well-located, differentiated hotels. Our repositioning of the Sanctuary Beach Resort and the upgrades we made in Santa Barbara have clear barriers to new entrants, and the likely return of corporate group and international in the quarters and years ahead provide optimism to our team in sustaining significant growth in the years ahead. Our recovery and continued robust performance of our regional resort destinations has led to record-setting EBITDA performances at multiple properties. While this narrative echoes our core urban portfolio, consisting of 75% of our rooms, that also saw steady demand increases to close out the year. We believe this provides a clear trajectory of growth for Hersha's uniquely positioned portfolio in this next leg of the recovery. The fourth quarter provided us a lens into how a return of the business transient and international, particularly in Manhattan. Weekday and weekend occupancies in Manhattan grew 2,230 basis points and 1,580 basis points, respectively, from September to November, with weekends aided by the reopening of Broadway, the New York City Marathon, international travel, and strong domestic leisure visitation. Although December faced headwinds from the Omicron surge, weekday occupancy was up 2,080 basis points versus September, and rates remained resilient as weekend ADR in Manhattan surpassed 2019 levels by 390 basis points. Omicron cases peaked in New York City in January and continue to plummet. February results have been encouraging and fuel our optimism for a rapid recovery in New York for the back half of this quarter and the second quarter. Events such as NY NOW, Winter 2022 at the Javits Center, which occurred last week, and the 2022 Big Ten NCAA Tournament at Madison Square Garden in March, will not only help drive compression in the market, but also act as an inflection point for the city. We anticipate, as events continue to occur in person and case counts continue to fall, that demand, particularly for the business traveler, will return to and surpass the levels we saw in October and November. New York City has historically been the market leader in occupancy, and this quarter we achieved 74% occupancy in Manhattan, by far the highest of our gateway or regional resort locations. We remain confident that we'll revert back to prior levels over the next few years. Our market knowledge and cluster strategy provides us with significant data and operating leverage to consistently drive meaningful outperformance in New York. We remain optimistic that New York will once again be an early market leader in this recovery. During the last cycle, we had record demand for hotel rooms in New York, but year-over-year mid-single-digit supply growth resulted in a very challenging operating environment for owners. Although we have seen new hotels open this year with more on pace to open over the next 12 months, it is important to note that offsetting this new supply, many hotels have permanently closed. Although a few have recently reopened following the passage of the severance law in the city, the mid-term supply picture looks extremely encouraging. Based on our internal projections as well as third-party studies, approximately 10,000 keys may be removed from inventory for the foreseeable future, if not permanently, by way of demolition, resizing, or alternate use conversions. On top of these changes, the special permit rules that New York City Planning Commission enacted at the close of 2021, which we have touched on in the past, have now come to fruition. Hotel developers will need to obtain a special permit before constructing a hotel in Manhattan, converting an existing structure to a hotel, or expanding an existing hotel by 20% or more. The special permit requires City Planning Commission approval, which is estimated to take at least 2 years to obtain. When we factor in this analysis and the aforementioned new supply, net supply over the next few years will actually be negative 1%-2%, especially as the cost of construction. Spend trends showed clear signs of acceleration heading into December. The return to more stable business travel post Omicron is closely correlated with employees going back to the office and resuming traditional travel. BNY Mellon and American Express have all communicated a return to the office in March. Conversations with our corporate accounts indicate we should continue to see a resumption in corporate travel as companies open their doors to the next several years of the cycle. With 75% of our rooms situated in major gateway cities, the return to office, along with the resumption of business travel, will present a major catalyst for us. We have benefited from the strong performance at our resorts, which drove significant growth last year and allowed us to generate property-level cash flow quicker than most of our peers. Because of our strategic approach of clustered hotels in urban gateway markets, our growth runway also remains long with the pending rebound of business travel demand. Achieving solid profitability and generating free cash flow as the industry continues to recover from the worst crisis in its history is testament to the quality of our hotels, the effectiveness of our cluster operating strategy, and our mix of urban and resort markets. Our ability to generate industry-leading margins and cash flow growth highlight the operating leverage inherent in our portfolio. With a refreshed portfolio and few capital expenditures on the horizon over the next few years, we can focus on hotel operations to drive high absolute RevPAR on industry-leading margins and expect to generate significant EBITDA and free cash flow growth in the coming years. This operating leverage positions us for outsized growth in a stabilizing environment. With the Omicron wave rapidly receding, local and international governments beginning to lift COVID restrictions, and businesses returning to an office setting and ramping up travel, we expect 2022 will still be an inflection point for the lodging recovery. From a strategic standpoint, we will continue to seek out ways to close the significant discount in our public market valuation to private market values for our assets and portfolio without diluting our shareholders or taking on long-term portfolio-wide encumbrances that limit our financial or strategic flexibility. We have carefully and methodically assembled this portfolio over the last decade and believe that we have some of the strongest growth prospects in the industry as we look at our market exposures, brand affiliations, manager relationships, and the market knowledge from the highly skilled and cycle-tested team here at Hersha. With that, let me turn it over to Ash to discuss in more detail our financial performance and outlook. Great. Thanks, Neil, and good morning, everyone. As the fourth quarter progressed, we continued to narrow the gap to 2019 operating results. October and November RevPAR trailed 2019 comparable month results by 30% and 21% respectively. While our December results trailed by 14%, despite the surge of Omicron cases late in the month, results in the portfolio were largely driven by continued robust performance in our leisure and resort portfolios. That being said, the key differentiator between the fourth and third quarters was the resurgence of our core urban markets, and most notably, the emergence of weekday demand. Our fourth quarter results demonstrate the inherent operating leverage of our portfolio and the benefits of our franchise model and close working relationship with our managers that have led to continued cash flow generation despite the continuation of significantly lower occupancy than pre-pandemic periods. These factors allowed our portfolio to generate $29.4 million in property level earnings and $8.9 million of positive corporate cash flow after all corporate expenses, debt service, and the payment of dividends on all tranches of our preferred equity. Fourth quarter corporate cash flow represents an almost 100% increase from the prior quarter. This sequential top line improvement, in conjunction with our continued focus on hotel operations and the ongoing asset management initiatives we have implemented across the portfolio, drove meaningful margin growth in the last year. GOP margins of 45% during the fourth quarter were approximately 150 basis points higher than the fourth quarter of 2019 GOP margin. This growth was primarily driven by our resorts portfolio, which posted a 49% GOP margin, 970 basis points higher than fourth quarter of 2019. The growth in GOP margin at our resorts benefited from our revenue management strategies and strong ADR resiliency as we registered 31% ADR growth compared to the fourth quarter of 2019. We once again witnessed sustained EBITDA margin improvement as well with a comparable hotel EBITDA margin of 31.6%, 160 basis points higher than the third quarter of 2021 and just 70 basis points lower than fourth quarter of 2019. In terms of profitability, our resort portfolio continued to deliver meaningful EBITDA margin performance. The group ended the fourth quarter with a weighted average EBITDA margin of 37%, 850 basis points higher than fourth quarter 2019. In South Florida, the Parrot Key and Cadillac each surpassed their fourth quarter 2019 EBITDA margin by at least 700 basis points, despite October and November being seasonally softer months for the South Florida portfolio. West Coast results were highlighted by our Sanctuary Beach Resort and Hotel Milo, which both finished the quarter with greater than 30% EBITDA margin. In the Annapolis Waterfront Hotel, aided by a strong start to the fall, recorded a 48% EBITDA margin, one of the highest margins in our comparable portfolio last quarter and a 700 basis point increase from fourth quarter of 2019. In the urban portfolio, the Manhattan and Boston markets led the way, as New York achieved a 38% EBITDA margin on par with fourth quarter 2019, and Boston posted a 35% EBITDA margin, 420 basis points gain from fourth quarter 2019. Turning to wages and labor costs, which is clearly top of mind for us. Over the last two years, we have absorbed 10%-15% wage growth in each of our markets. While wage pressure is expected to continue into the future, we do expect this trend to level out. Despite this rate absorption, our total cost per occupied room remains approximately 15% below pre-pandemic levels. We are encouraged by recent trends, but the hiring market, especially for hourly employees, remains tight. Fortunately, our cluster strategy, close relationship with our third-party management company, allow us to run our properties with staffing levels capable of offering the top service our hotel guests expect, all while continuing to drive GOP and EBITDA. Although wage pressure has been prevalent across the industry, the primary source of savings at our hotels has been the significant reduction in total labor in the early stages of the recovery. We were able to run our properties on a lean staffing model with occupancies between 35%-60% at many of our hotels. As demand picked up again in the spring and continued into the fall, we began to expand our open position across our portfolio to rehire staff to support the increasing occupancy. Over the past few months, our on-property and corporate level management and HR teams have been very focused on our recruiting efforts. From June to December of 2021, we've seen a 200% rise in applicants for new posting, with total hires in December up 10% versus August following the expiration of additional unemployment benefits. As RevPAR and out-of-room revenues increase in 2022 and beyond, our current operating model will yield much higher levels of absolute GOP dollars and allow us to amortize our fixed operating expenses as well as our property taxes and insurance expenses. Our portfolio and operating model allow us to maintain a high level of confidence in achieving our margin growth objectives, which we see as a clear differentiating factor in the lodging sector as we emerge from this pandemic and in the years following. Our portfolio has experienced sequential F&B revenue growth each quarter since the height of the pandemic in the second quarter of 2020. In the fourth quarter, we recognized $11.9 million in F&B revenue, up 23% from the third quarter. This was led by The Rittenhouse in Philadelphia, which generated $2.3 million across its numerous F&B offerings, 56% higher than third quarter of 2021. Meanwhile, our timely renovation and expansion of the rooftop and kitchen, along with our ability to maneuver the arduous approval process, is helping us produce strong results at Boston's Envoy Hotel, which generated $1.9 million in food and beverage revenue. The rooftop enclosures allowed us to continue our strong performance at the Lookout Rooftop Bar, proving this can be a revenue driver in all four seasons despite the harsh Boston winter. A few closing remarks on our balance sheet and outlook for the first quarter. We ended the year with $72.2 million in cash and cash equivalents and deposits. As of December thirty-first, 78% of our debt is fixed or swapped with a weighted average interest rate of 4.42% and 2.7 years life to maturity for our total debt. As we move forward, we are in active dialogue with members of our bank syndicate and are evaluating a range of refinancing options, providing flexibility and extending the duration of our debt. We are very comfortable with our ability to refinance our upcoming debt and to simultaneously lower our overall cost of financing. In the years before the pandemic, and as the prior cycle came to a close, Hersha invested approximately $200 million in ROI capital projects across the portfolio. We've already begun to see significant returns on this investment at locations such as Parrot Key Hotel and Villas, Cadillac Hotel and Beach Club, the Annapolis Waterfront Hotel, and the Sanctuary Beach Resort. These investments have helped fuel the robust performance of our resort and leisure portfolio and enabled us to drive cash flow faster than most of our peers. Because of this proactive capital infusion, we've been able to limit our capital expenditure strictly to maintenance and life safety renovation without sacrificing the quality or longevity of our portfolio. During the fourth quarter, we spent $2.9 million on capital projects, bringing the 2021 total spend to $10.9 million, more than 58% below our 2020 spend. As we enter into the next cycle, we project very little disruption or capital spend for our portfolio across the next few years, which is materially beneficial from a cash flow perspective. It is no secret that the Omicron variant has caused disruption thus far in 2022. Despite the negative impact on corporate and weekday travel, it is our view that this will merely delay the impending recovery and increase pent-up demand as we emerge from this wave of cases. The first quarter typically has the softest demand in our portfolio. While Omicron cut into our expected production in January, we have already recovered that loss in February and are seeing a stronger booking pace every week since mid-January. We view the timing of this surge as more palatable than that of Delta, as second and third quarters are typically among the strongest in our portfolio. Despite the impact of the spike in cases, which have already dropped significantly in our major markets, we have experienced some green shoots in our portfolio. Cadillac and Parrot Key set ADR records between Christmas and New Year's. Despite the surge in COVID cases, these locations maintain great resiliency, and the momentum has continued into 2022, beating our top-line expectations for the month of January. Our Metro New York City portfolio also beat our initial top-line budget as we were able to secure room blocks from NYC Health + Hospitals and first responders from the outer boroughs. We will continue to focus on hotel operations and leverage our extensive revenue management and sales footprint to drive efficiency as we navigate post-Omicron. As case counts continue to fall and restrictions are lifted in the U.S. and abroad, we remain confident in the significant and sustainable growth of our portfolio in 2022 and beyond. With our balance sheet right-sized to allow for accretive opportunities through the recovery and our on-property operations set to capture continued demand at our hotels, we look forward to continued robust leisure demand at our resort portfolios in an inflection point in the return of meaningful and sustained business travel that will drive outperformance across our portfolio for the next several years. This concludes my portion of the call, and we are happy to address any questions that you may have. Operator? Thank you. At this time, I would like to remind everyone in order to ask a question, please press star and the number one on your telephone keypad. Our first question for today comes from David Katz of Jefferies. David, your line is now open. Hi, good morning, everyone. Thanks for taking my questions. I wanted to just circle back on, you know, one element of all this and that, you know, that is the debt on the balance sheet. Could you just talk about what opportunities, you know, you could have to, you know, either refinance or, you know, are there opportunities that might be coming forth to, you know, pay some debt down and how you sort of think about going about that? Sure, David. You know, as we look at the financing environment, it's the best financing environment we've seen, clearly, since the beginning of the pandemic. Right now, it's not just the bank group and our traditional lenders that we will look forward to working with, but it's also the life companies, the CMBS market, the institutional term market, the high yield market. I mean, they're all wide open. We would be remiss to say that we're not exploring all of them at this time. We think that there's a lot of flexibility that different financing sources could offer for us, and we feel that it's an opportune time as Omicron is really fading and the markets continue to improve and the outlooks continue to improve to refinance this debt. You know, we are in active dialogue, and we feel very confident in our ability to refinance all of our debt, including the unsecured notes that we took on last year. Understood. And if I can just go back to the portfolio in total, you know, the likelihood or prospects or, you know, thoughts around, you know, selling some incremental assets and what would we need to see before you start to, you know, play some offense and is that, you know, maybe another year away? David, thanks for the question. In terms of dispositions or sale candidates, I think we've mentioned that we're going to be pretty opportunistic about sales. We sold six hotels. We had some very good executions on some sales last year, and we really focused on assets that had capital upcoming or had significant competitive pressures in the market that would not allow those assets to grow at the same rate as our existing portfolio. Today, as we look at our portfolio, and we think about dispositions, we do have one asset in the marketplace right now, in Seattle, our Pan Pacific Hotel. We believe that, you know, the New York market is going to—as we continue to see this midweek recovery and we see the rebound in business and international, we think the New York market may provide some attractive sale opportunities for us as the year goes on. It's not a very big focus, but we're always in the marketplace talking to buyers and exploring it. I think right now those are the areas that we've been focused on. We have been seeing a lot of interest in, with this kind of resurgence in or this expected resurgence in business travel this year, there has been also a pickup in interest in urban select hotels. There's a lot of parts of our portfolio we've always claimed and believe that it's very liquid and very attractive to the private market. We'll take advantage of it when the time comes. On the acquisition side, it's really just a matter of two things. One, the opportunity set, finding opportunities that provide true accretion to our growth rate and provide real cash flow at a time like this. We're not seeing anything that compelling on the acquisitions market, particularly in light of our cost of capital right now. Until this discount It is closed a bit. I think it's going to be hard for us to find opportunities that are compelling on the buy side. We remain open and flexible in looking at opportunities. Right now, we think we'll be able to benefit from selling into it a little bit with a few assets. Okay. Perfect. Thank you very much. Thank you. Our next question comes from Ari Klein of BMO Capital Markets. Ari, your line is now open. Thank you. Can you talk to your views on the sustainability of rates and demand at resorts as we move through 2022 and comps get tougher? Then the Cadillac and Parrot Key, you know, I think pre-COVID post-renovations EBITDA was expected to stabilize at $20-$25 million. Sounds like, you know, that should be higher than that now. But can you give us a sense of what it was in 2021 and where you think it can get to? Hey, Ari. In 2021, those two assets combined did about $22.4 million in total in EBITDA. Our range of $20 million-$25 million, I mean, we're right in the middle of that, and we would say we're still pretty far from stabilizing these assets at this point. I think $25 million seems very realistic, if not a little conservative. Yeah, Ari, I think that's what's important. When you look at our resort portfolio, our resort portfolio went through meaningful transformative renovations pre-pandemic. We do expect all of these hotels to perform well above prior peak. These weren't just, you know, kind of a refresh of a room or something. We added 27 rooms to one hotel. We added major event space, a spa, and lifestyle amenities to our resort on the West Coast. We added air conditioning to a hotel that didn't have it because of the landmark codes. We took Cadillac and Parrot Key up a full kind of star segment. You know, we went from 3.5 to 4.5 star kind of positioning, and added suites and the like. We do expect that our resort portfolio will continue to have a very strong 2022, and we believe we were gonna continue to have some significant growth into 2023 just based on the repositioning of these assets and their stabilization in their new kind of market position. If you think of our resort portfolio, you know, California Coast, PCH, big kind of international destination. You think of Miami, not only do we have no international today, but we don't have any major group events. Like there's, you know, it's a big convention market. We feel like, you know, on resorts and on the Sun Belt, broadly, you have to focus on what are the assets and what are the markets. You know, I think there has been, you know, kind of commodity assets close to major destinations have had a inordinate run that will retrace over time. When you have truly differentiated high-quality assets at Main and Main, that have gone through major renovations and transformative executions, we expect a significant runway. Thanks. Ashish, you mentioned cost per occupied room has been stable despite the wage headwinds and growth. Does this change at all, you know, as you hire more people back and, you know, more services come back? Where are you on staffing versus, you know, where you ideally want to get to? On the second part of that question, we're still probably at around 60%-65% of our FTE count that we had pre-COVID. We think that, you know, as we get to full occupancies later this year or into 2023, we probably get to, you know, 80%-85% of our pre-COVID FTE counts. We really don't foresee getting to 100% due to just efficiencies that we've garnered through the pandemic, different housekeeping protocols, just ways that we've found ways to use technology to reduce the number of bodies in a building. You know, we're still long ways away from getting to that because occupancies are still significantly lower than what we would consider stabilized occupancies. On a cost per occupied room basis, you know, we think that when you look at the amortization of the fixed cost, we can still bring our cost per occupied rooms down, even with the wage increase, one, with just a lower number of bodies, and you're going to have a lot more absolute gross operating profit as your occupancies grow. Right now, our fixed costs are very high. As we grow occupancies, we just need to add, you know, some variable costs, housekeeping, front desk, doorman, things to that effect, which aren't really, you know, which goes lockstep with increasing your revenues and your GOP. Thanks for the color. Thank you, Ari. Our next question comes from Bryan Maher of B. Riley Securities. Brian, your line is now open. Good morning. I'm just curious, with, you know, the inflationary pressures out there impacting consumers with their day-to-day costs and how high ADRs have been able to run, especially at the leisure resorts. How are you thinking about ADRs over the next, you know, couple of quarters to couple of years? Well, listen to the fact that, you know, you're still not running at 80%, 90%, 100% occupancy at most of your properties. How are you weighing, you know, the two within the portfolio? Bryan, thanks for the question. You know, clearly ADR has been the bright spot of this recovery, and we have been able to push ADR well beyond what kind of erstwhile kind of rules of thumb used to be. Like, we used to think you couldn't push ADR until you got to a certain level of occupancy in these markets. As you've seen, we're 20 points down in occupancy in a place like Manhattan, but we're actually pushing rates higher. I think it's a, you know, it's a function of the consumer is very healthy. You know, there's a lot of wealth in the world. There was a lot of wealth created from the stock market, from stimulus payments and the like. Now, most of our hotels and the pricing that we have is really. I don't think we had that much business from unemployed folks just kind of collecting checks. I think it's just a function of a very strong consumer, and so we are expecting that to continue. Business travel just hasn't kicked in. Group compression hasn't kicked in, and that should lead to even more ADR potential. You know, how much can the consumer bear? I'm not sure. You know, I don't know how to answer that one, Bryan, but you're seeing it not only in lodging, but in all parts of the economy. There's people are willing to pay more for what they had before, or than they did before. I think the big story really is less about the consumer. The consumer, I think, will kinda continue to be, at least for the next, you know, for this coming year, in a very similar position. It's the business balance sheets that are also very healthy that I think we're going to see. You see this great need to hold on to top managers and top team members. You know, the best perk is travel for young people. So I, you know, we still have lots of, I think, ADR growth ahead in a portfolio like ours. Thanks. My follow-up question would be, we're getting a lot of calls, increasing amount of calls from institutional investors who are kind of zeroing in on those companies that halted their dividends entirely or took them to a penny. And their thought process is, you know, "Look, it's going on two years. You know, we own or wanna own these things for yield. And when are the dividends back?" I know that your balance sheet and, you know, upcoming, you know, maturities maybe make it a little bit more challenging than some of the other peers. But what is management and the board's thought on maybe the back half of 2022 or early 2023, you know, reinstating a dividend at some level, at least, to grow upon? Hey, Brian. I think that, you know, like you said, the first possible time for doing potentially the back half, early next half, but right now we're focused on refinancing all of our debt, making sure that the operating results are coming in line with where we want them to be, and, you know, just ensuring that we have enough balance sheet flexibility. I think that it's not inconceivable for 2023 to think about a dividend, and we may even think about it as kind of a special dividend. You know, instead of a recurring quarterly dividend that starts, you know, in 2023, it could be something midway through the year, it could be something at the end of next year. But I think to give any kind of set timeline for dividends for us right now would be a little premature. Okay. Thank you. Thank you, Bryan. Our next question comes from Tyler Batory of Janney Montgomery Scott. Tyler, your line is now open. Hi, good morning. This is Jonathan on for Tyler. Thanks for taking our questions. First one from me, wanted to dive in to the comments on the strong bookings in the prepared remarks. I'm curious if you can provide any additional details there on perhaps it relates to the fourth quarter where things were trending before, and any commentary in general on what you're hearing from your corporate accounts. Yeah. You know, on the fourth quarter, you know, why don't I just start with kind of the start of this year? You know, it's early January. We had Omicron out there, but we are starting to see some real pickup across all of our markets. It's still a little too early to be able to share any kind of significant data, but we are seeing incremental velocity in net bookings week over week, since January fifteenth, in our urban markets. We're seeing a reduction in cancellation activity, and we are expecting a very strong President's Day weekend ahead. I think we'll have much more insight, you know, one month from now, on how that's progressing. As you know, our portfolio is highly transient-oriented, not a lot of group, and so we don't have as much visibility. As I mentioned in the prepared remarks, a lot of the major corporate clients are starting to travel again. It just hasn't picked up to a level where we can compare it even to prior years. It's just building. We expect kind of the cadence in February, March, April to be somewhat similar to what we saw in October, November, and December. That kind of building and I think that for the foreseeable future, like right now, we have more visibility in some ways than we've had since you know, the vaccine was announced or since the summer. You know, I think we're in a good position, but there's not much data we can share yet. Okay, great. I appreciate all that detail. And somewhat of a follow-up. I'm wondering if you can provide some color on your thoughts, Neil, on the pent-up corporate demand. I mean, will it be comparable to what we saw in leisure travel? Given I know it's a heavily transient portfolio, but just curious your thoughts on that. Yeah, you know, we do think there is some pent-up demand for travel. Just as we speak to our investors and we speak to our bankers and the like, they're on the road at a higher. Like, the ones that have started travel, they are allowed to travel, they are traveling more than they have in years, and very similar to what they were doing pre-pandemic as they just go out and try to see their clients again. We do see that. Again, there's just not a lot of data that we can really point to yet on it. It's something that's building. Okay, great. I appreciate all the color. That's all for me. Thank you, Tyler. Our next question comes from Michael Bellisario of Baird. Michael, your line is now open. Thanks. Good morning, everyone. Good morning. Neil, just one question for you. I wanna go back to kind of capital allocation on the first question that was asked, maybe zoom out a little bit though. You talked about closing the public versus private market valuation gap. Can you walk us through what you're thinking about aside from maybe an opportunistic asset sale in Seattle? You know, kind of what can be done to narrow that spread? Yeah, you know, Michael, you know, I think there are some capital allocation things we could do to help narrow that spread just for the market to see values that we're able to trade at some of these assets and to be able to sell hotels at very high multiples. I think all of that can help. Frankly, you know, I expect we expect that the data is just going to become pretty clear. You know, like it's the recovery happening in major urban markets and the operating leverage that a platform like ours offers, not to mention the financial leverage that it offers. It's just we would expect just performance to help close this gap. The last several quarters, we felt it building and that's continued. We've had a couple of Delta and Omicron slowed it down a bit, so I think our discount didn't close as early as we might have expected last year. I think with the performance we're starting to see and what we hope to be able to report across the coming months, we expect that in itself will help close the gap. Got it. There's a couple more then just as a follow-up. Do you have any updated view on kind of the way you think about NAV or comparable asset transactions, valuations that, you know, either shade your estimate of NAV higher or lower versus 90 or 120 days ago? Yeah, you know, Michael, we don't change it all that often. You know, there's no question that replacement costs are escalating, and there's no question that the replacement cost of our portfolio is well over $500,000 a key. On private market value, we think of kind of performance pre-pandemic. We think of performance expected in those markets. We kind of triangulate between recent transactions in those markets and a more financial analysis to come up with our sense of NAV. Some of the other analysts have also published kind of NAV estimates and things. I think they're all kind of in the range of where private market values are between $400,000-$450,000 a key. You know, our portfolio, Mike, as you know, we have. Our portfolio is almost 50/50 between luxury and lifestyle and urban select. Both of those portfolios are performing and the urban select clearly is having a bigger rebound this year. We expect significant growth from both of these sets of assets. We'll see kind of where the transaction market looks like as the year goes on. I think we'll be able to trade some assets at some attractive multiples over the course of this year. Again, if the performance itself doesn't close the gap, we hope some of those moves will. Helpful. Thank you. Thank you, Michael. Our next question comes from Chris Woronka of Deutsche Bank. Chris, your line is now open. Hey, guys. Morning. Thanks for taking the question. Wanted to ask, I think you guys mentioned 10%-15% increase in labor costs over the last couple of years. I know there's a couple of markets in the U.S. with union negotiations coming up for the fall, and I know you're not a union company, but what are your thoughts around whether that's gonna cause another potential reset in costs higher later this year? Thanks. Hey, Chris. As you mentioned, most of our portfolio is not union, so we're not bound by those contracts. I think for us, we believe that the minimum wage in most of these markets has now somewhat stabilized. We've seen huge jumps over the last 5 years in most of our markets. A lot of it is also just availability and, you know, availability of employees, and we're seeing that improving as well. We are not forecasting the same type of 10%-15% wage growth for this year. We're closer to 5% in our portfolio. We think that with more people entering the workforce, case counts going down, just the overall environment improving, benefits expiring, you know, we should be able to stay in that range. Okay. Fair enough. Then on the Pan Pacific sale, can you talk a little bit about whether that's more of a call on the market or the brand or the hotel itself? You know, do you expect to be able to get out of there with a, you know, with a net win on price? Yeah. You know, Chris, the Pan Pacific Hotel in Seattle, for us, it's a phenomenal asset. South Lake Union is one of the hottest markets in the whole nation for life science, tech, office demand. The hotel is a very special asset. We've always considered Pan Pacific as nearly kind of an independent kind of execution, and we had a very pay-as-you-go kind of licensing deal there. We really focused. We acquired that hotel about three, four years ago, and we really focused rather than putting a significant capital in or repositioning, rebranding. We just tried to bring some value in operating the hotel better and driving returns. As we look forward, for that hotel to perform and to grow at the same level as our existing portfolio and to really achieve its ultimate business plan, it does require capital that will be disruptive and significant. Meaningful capital can really position this asset at a different level. For us, kind of like last year, assets that we're identifying as sale candidates are generally assets that would require some capital in order to grow at the same rate as our portfolio. That's a good example of that. To add to that, Seattle is a very hot market, so we expect that we can trade at a very high multiple. Second, it is only one asset that we have there. You'll remember when we acquired the asset, we were expecting to continue to grow in that marketplace. But some of the disruptions related to the convention center there, and where just pricing got in that market, led us to not build out a cluster in Seattle. Having a single asset definitely makes it a little bit easier for us to sell. Yeah, so that's the Pan Pacific story. We remain very price sensitive, so we'll see how the transaction goes. We're in the marketplace. We'll start to get feedback in March. But it's not something that we would trade without a fair, reasonable price, which we think will get will be above our basis, is what we would expect at this time. Okay. Very helpful. Thanks, guys. Thank you, Chris. As a reminder, if you'd like to ask a question, please press star then the number one on your telephone keypad. Our next question comes from Bill Crow of Raymond James. Bill, your line is now open. Good morning. Very quickly from me. When you talk about refinancing, the debt and the Goldman Sachs debt, are you also talking about deleveraging at the same time? Not necessarily, Bill. You know, the cash flow profile of this portfolio is very significant. In the private markets, the levels of debt that we currently have are kind of in the range, you know? I think, frankly, we could do a CMBS financing to pay off all of our bank facility and our unsecured notes and keep rates kind of somewhat similar, you know? Our deleveraging is gonna be a function of EBITDA growth. When we think of refinance- You complained for a while about the disparity, and I agree, between public and private market valuations. If you're running leverage like private market, the public market may not give you the credit in the future, even as fundamentals continue to strengthen. Is that, you know, something you think about? Yeah, we absolutely think about it. We get a lot of reminders from you, Bill, and your friends on the call. You know, we're sensitive to it. We're open to it. Like, if we sell hotels, clearly that will lead to meaningful pay downs. We just don't think that should be the main focus for investors today. Financing is available. Cash flow will likely cover it. We're in an inflationary environment. You know, we would suspect that leverage will become less of a focus as EBITDA starts to grow more meaningfully. Now, if we're wrong about that, Bill, you know, we can obviously sell hotels to bring down leverage and the like, but we do think that our performance and our EBITDA growth profile will be more of a focus for investors. Okay. All right. Thank you. Thank you, Bill. Our final question for today comes from Anthony Powell of Barclays. Anthony, your line is now open. Hi, good morning. I guess question on, I guess, supply in Boston and New York as, you know, some of your peers have sold large hotels in those markets that appear to be destined for redevelopment into other uses. I know at the beginning of the pandemic, there was a thought that there was gonna be a lot of, I guess, hotels being converted, and then that may have reversed a bit as we got further in the pandemic. What do you think now about, I guess, conversions of hotel stock into other uses and how that impacts supply growth over the medium term? You know, we do think that there's going to be a significant number of kind of permanent deletions. You know, like some of the really big box, kind of increasingly becoming obsolete kind of assets like The Roosevelt Hotel or the Hotel Pennsylvania, those have all been kind of announced and discussed, and there are thousands of rooms, and they're low-rated supply that's getting taken out of the system. One of our peers sold a hotel on Lexington Avenue, that is likely going to a student housing kind of use. We're seeing a lot of demand even for affordable housing in New York, which is gonna continue to lead to a bunch of conversions. So, you know, we do think that as much as 10% of the supply can be permanently deleted, at least for the midterm. Then there might be a hotel portion to some of these projects, like the Grand Hyatt. You know, it'll just shrink in size as part of the mixed-use development on that site. So I think the supply picture, Anthony, is. It looks really good for the coming couple of years. We have a lot of supply that's opening right now that was delayed during the pandemic, so I think this next 12-18 months we'll see some new openings. They are offset by the amount of hotels that are closed. We think that the supply-demand picture in New York for the next, if we take, like, on a 3-5-year view, is less than 2% kind of supply growth. Got it. Thanks. Maybe just one on, you know, your technology, you know, clients, and how that impacts, you know, Silicon Valley. You know, it's been two years, and it seems like those companies are a bit less eager to get back. There's more work from home. In your conversations with those clients, are they saying that they're gonna be back traveling at the same level or is it a permanent decline? What's the timeline there for that segment of the business traveler? You know, the timeline is, at least some of them, like, Microsoft made an announcement, Apple's made some announcements in Silicon Valley and in Seattle, for early March. The expectation is for March, April to really start seeing that come back. Our sales team has been in constant communication with Google, Facebook, and all of the major tech clients that we work with, and they are all producing a little bit right now. We just don't have the significant kind of training business that's coming in and out of the hotels that used to come in and out from Google and Facebook on just a, you know, kind of on a series basis throughout the year. All the discussions that we have with the travel planners, who are all still employed by these tech companies, is that it's going to come back. They just don't know in what volume and in what month it's really going to pick up. You know, our expectation in how we're pricing inventory and things is that in March we will start to see some real midweek pickup in markets like Silicon Valley and Seattle. If you look at rates 45 days out, you'll see significant midweek rates. You'll see that throughout the industry actually. You know, that's what's helping. People aren't just lowering rates across the board. They might lower for the next 30 days, but if you want to book on Wednesday in a particular market 45 days out from now, most people are expecting that rates are gonna move up very quickly. I think just even as a consumer you can see that just checking around in hotels. Right. I may have missed this earlier. I wasn't on the first part of the call, but was part of the decision to maybe market the Pan Pacific just due to uncertainty about technology, or is that purely more of an opportunistic, you know, Seattle market kind of decision? Yeah, no, more of an opportunistic Anthony, it's a phenomenal market. It's a phenomenal asset. But in order to achieve its business plan goals, it would require capital that would be disruptive. Yeah. Since we expect that we can get a very good price for the asset, we're thinking we can trade out of it and pay down leverage a bit. Right. All right. Thank you. Thank you, Anthony. There are no further questions at this time. Mr. Neil Shah, I turn the call back over to you. Well, thank you. Thank you to everyone for joining us on this busy day of earnings. We're gonna be around most of the day. If you have any further questions, just reach out to any of us. Thank you for your time. Thank you for joining today's conference call. You may now disconnect.