Greetings, welcome to the Pebblebrook Hotel Trust fourth quarter and year-end 2022 earnings call. At this time, all participants are on a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Raymond Martz, Chief Financial Officer. Thank you. Please go ahead. Thank you, Donna, and good morning, everyone. Welcome to our fourth quarter 2022 earnings call and webcast. Joining me today is Jon Bortz, our Chairman and Chief Executive Officer. Before we start, a reminder that many of our comments today are considered forward-looking statements under federal securities laws. These statements are subject to numerous risks and uncertainties as described in our SEC filings. Future results could differ materially from those applied by our comments. Forward-looking statements that we make are only effective as of today, February 22nd, 2023, We undertake no duty to update them later. We'll discuss our non-GAAP financial measures during today's call, and we provide reconciliations of these non-GAAP financial measures on our website at pebblebrookhotels.com. In 2022, we made significant progress on our road to a full recovery. We want to thank our hotel teams and operating partners for their hard work, sacrifices, and creativity. Our portfolio continues to benefit from their tremendous effort as we continue on the path of recovery and growth following the pandemic. Our Adjusted EBITDA finished at $356.7 million, compared with $99.8 million in 2021, a very significant progress from a year ago. While we still have much work to do, we believe we have considerable upside ahead. Adjusted FFO per share ended at end of 2022, $1.69, a substantial improvement from 2021 at a negative $0.23 per share. On the investment side, we are very active. We acquired two leisure-focused resorts for $330 million and sold four urban hotels for $261 million. Since 2020, we've acquired six leisure-focused resorts for over $820 million while selling 11 hotels in slower to recover urban markets for a total of $957 million. Between acquisitions and dispositions, since 2020, we've recycled almost 30% of our portfolio, representing a dramatic transformation of our company. As a result of these investments and divestitures, we have increased our market segmentation from leisure, both group and transient, to roughly 50%. We are extremely excited about the many operating, re-merchandising, and redevelopment opportunities at our recent resort acquisitions, some of which are already underway, which Jon will discuss later. We expect that these major projects will generate outsized growth over the next several years. For the fourth quarter, same-property total revenues of $310.6 million were 94.1% recovery to 2019. This was driven by continued solid demand at our resorts and further improvement in group and transient business travel. These results exclude LaPlaya Beach Resort & Club due to its closure from Hurricane Ian, which negatively impacted our same-property RevPAR growth by approximately 150 basis points at an estimated $16 million in property revenues and $12 million of same-property EBITDA. In terms of markets, we continue to experience solid demand in Los Angeles, San Diego, and Boston. Encouragingly, we are seeing the demand recover accelerate in our slower to recover markets, including San Francisco, Chicago, and Washington, D.C. Shifting to Q1 2023, demand and operating trends have generally been in line with expectations, excluding the impact of the severe winter storms we've experienced to date in the first quarter. The significant rainfall in Northern and Southern California disrupted leisure travel to these markets, and then cold temperatures in Boston disrupted business travel and causing water damage, resulting in an estimated $1.1 million in additional operating and capital expenditures, which also includes estimated costs to remediate and clean up following these multiple storms. On the demand side, despite the numerous layoffs announced across many industries, we have yet to experience any notable changes in demand, booking activity, or increase in cancellations. Leisure demand remains healthy despite concerns about the consumer becoming more cautious. Except for some softer demand in Key West, which was robust and relatively price insensitive in 2021, when Florida was one of the few states to fully open for business, our leisure-oriented demand is maintaining its strength. Demand started the year on an encouraging note in San Francisco with a J.P. Morgan JP Morgan Healthcare Conference in early January. Compared with 2020, the last time J.P. Morgan was held in person, demand at our hotels was at 76.8% of 2020 levels, with ADR up 9.7% and overall revenues at approximately 84% of the 2020 conference levels. This is a very positive start to the year for San Francisco, which we expect will continue with a much-improved convention calendar this year. Overall for the company, January same-property RevPAR was up a very strong 49%, benefiting from easy comparisons to the Omicron impact in January last year. We anticipate same-property RevPAR for Q1 to be 15%-18% higher than Q1 last year. Not surprisingly, the quarter's RevPAR growth will slow substantially from January's growth rate versus last year as Omicron eased as the quarter progressed. Our Q1 operating results will be negatively impacted from the closure of LaPlaya for repair and remediation work due to Hurricane Ian, which will reduce our Q1 hotel revenues by an estimated $25 million and same property EBITDA by approximately $14 million. In addition, we will experience displacement due to several major transformational projects underway. This is expected to negatively impact Q1 RevPAR by approximately 225-300 basis points and overall same-property EBITDA by $4.5 million-$6.5 million. These include the comprehensive redevelopments at Hilton San Diego Gaslamp Quarter, Hotel Solamar as it converts to a Margaritaville in downtown San Diego, Estancia La Jolla Hotel & Spa, Jekyll Island Club Resort, and Viceroy Santa Monica. Combined, the disruption of LaPlaya Beach & Golf Resort from Hurricane Ian and our redevelopments will negatively impact Q1 same-property EBITDA by approximately $18.5 million-$20.5 million. Shifting to our capital improvement program, for 2023, we are targeting to invest $145 million-$155 million into our portfolio, including several major redevelopments that we're very excited about, and we expect will generate healthy returns on our investment. Jon will discuss this year's strategic redevelopment projects and overall programs in more detail later in our remarks. As we detailed in last night's press release, we have made substantial progress in repairing and restoring LaPlaya. We reopened the property's Bay Tower and expect to partially open the Gulf Tower shortly. The Gulf Tower houses the lobby, restaurant, bar, and club areas. It's a significant component of the resort. We'll also open with one of the three pools and a temporarily relocated spa and fitness center. The beach has been cleaned and reopened and will be providing full beach services to our resort and club guests. Our beach house, however, is still undergoing restoration work, which we expect to be substantially complete in the fourth quarter. We have received $25 million so far from our insurance providers to complete the necessary repair and remediation work. We expect additional proceeds from our insurers for the work needed to fully restore this fantastic resort shortly. Upon completion, it will be better than ever, and we expect it will be quickly returned to its pre-hurricane performance. We're also expecting the first preliminary installment of business interruption proceeds, in this case, $7.2 million for lost business during the fourth quarter of 2022, which is net of our $2 million BI deductible. This has been incorporated into our Q1 outlook and will hit other income and benefit Adjusted EBITDA and Adjusted FFO. We expect to receive additional BI proceeds for Q4 in 2022 and 2023 later in the year or by the time we reach a final settlement. We'll update you currently as we progress in this area. Turning to our balance sheet and other capital uses. Since the start of the fourth quarter of 2022, we have utilized proceeds from prior dispositions to repurchase 5.5 million common shares, or just over 4% of our outstanding shares, at a weighted average share price of $15.12, a roughly 51% discount to the midpoint of our recently updated NAV. In addition, we repurchased one million shares of our Series H preferred equity at a 36% discount to par, or $16 per share, compared with a $25 per share par value. We also used disposition proceeds to pay down debt last year. Our board has authorized an additional $150 million common share repurchase program, which combined with the remaining unused portion of our prior authorization, implies we have $224 million available for common share repurchases. The board also approved a $100 million preferred share repurchase program. As we sell additional properties, we will evaluate how to best utilize our proceeds, including reducing debt into additional share repurchases, depending on our outlook on the economy and how our performance progresses. If we do utilize a portion of the proceeds for repurchasing our stock, which we believe is currently trading at an approximate 50% discount to our net asset value, we do so only while reducing our debt no worse than a leverage neutral basis. We have been comfortable taking advantage of the public to private valuation arbitrage for several reasons. First, our net debt is just 43% of the net book value of our assets, which we believe is very reasonable. Assuming that $750 million of convertible notes, which comprises about one-third of our total debt, are converted to equity before their maturity in late 2026, this would drop to 29% of debt to net book value. Second, our net debt to our estimated NAV is also a reasonable 33%. Third, most of our debt, over 90%, in fact, is unsecured bank debt or notes, largely held by our bank group, with whom we've had relationships for many years and several decades for some of them. These relationships go well beyond just a lender-borrower relationship. Whether it's investment banking, substantial cash deposits, credit card processing, and many other services, we are a very attractive client to our banking partners. As we've seen during the depth of the pandemic, relationships do matter. We are one of only a handful of hotel REITs that did not have to secure our debt during the pandemic. This highlights the confidence and trust our banks have in us. In addition, only $220 million, or less than 10% of our debt, is secured property level debt, of which only $162 million will mature before 2028. That is very manageable. Finally, our existing liquidity is very substantial. We have more available than we did before the pandemic. Our $650 million unsecured credit facility, which is largely undrawn, provides flexibility while reducing any refinancing risk. Our average debt cost is currently just 3.5%, perhaps the lowest in our industry. This, of course, enhances our cash flow and our fixed charge ratio, which reduces risk. In addition, 75% of our debt is fixed through the end of 2023, and 63% is fixed through the end of 2024. We used a very attractive window in the market in January to complete $400 million of swaps for two to three years to effectively extend swaps that expire this year. The cost to service our debt is very predictable and manageable, even if interest rates surprise to the upside. On that positive note, I'd like to turn the call over to Jon. Jon? Thanks, Ray. I'm gonna focus my comments on two important topics. First, our setup for 2023 and what we're seeing in the market. Second, the EBITDA bridge we laid out in our investor presentation, where we are, where we're going, and how we're going to get there. It is far easier to predict long-term value creation than it is to forecast short-term performance, especially in highly uncertain times like today. As Ray indicated, we've not yet seen any material impact from the macroeconomic slowdown that is either occurring or that many are forecasting. Group, business transient, and international inbound travel all continue to recover, and leisure travel remains very healthy. We're not so naive to think that we won't see an impact or that we're suddenly no longer a cyclical industry. We are humble and recognize we've never been through a pandemic and recovery before, let alone one where the Fed is working overtime to slow down the economy in order to bring inflation down to its target. It's extremely difficult to forecast how these conflicting waves will impact each other as we move forward in 2023. All we can do is plan for different scenarios and monitor all of the macro and micro indicators very closely, and we'll let you know when we see the trends changing. In the meantime, we expect our first quarter to significantly improve over an Omicron-impacted Q1 2022. As Ray said, we saw healthy year-over-year RevPAR and total revenue growth in January, though it was negatively impacted by unusual weather on both coasts early in the year. February continues to see improvement over 2022, though we had a nice benefit from the Super Bowl in L.A. last year. As L.A. is one of our largest markets, it does represent a year-over-year headwind for the month. Yet we're seeing significant continuing improvement in L.A., which is definitely mitigating a significant portion of that great four-day period. Group pace is looking good for 2023. As of the beginning of February, Q1 group room night pace was ahead of last year by 54%, with ADR pacing 5.6% up to last year for a total group revenue improvement of 62.7%. Transient is also pacing ahead of last year's first quarter by 16.2% in transient room nights, while rate is up by 1.4%. Total group and transient pace for Q1 was ahead by 27.5% in room nights, 2.1% in ADR, and 30.2% in total revenues. While Q1 is an easy comparison, we're currently pacing ahead year-over-year in group and transient in every quarter. This is partly a reflection of the ongoing recovery and demand, and partly due to greater confidence on the part of group and transient customers booking further out than they did last year. For 2023, our group revenues are pacing ahead by 29.1%, with rate up by 7.2%. Total room revenue on the books for 2023 was stronger by 21.3%, with ADR ahead by 4.4%. Our urban ADRs are driving our rate advantage while our resort rates are up marginally, driven by group rates that are substantially higher while our transient rates are slightly down. We expect this will likely be the case for the year. As we look at our bridge to the short to intermediate term EBITDA upside in our portfolio, we expect our urban properties will recover to their 2019 EBITDA in total over the next couple of years, led by our earlier to recover markets like San Diego, Boston, and Los Angeles, followed by current recovering markets like San Francisco, Washington, D.C., Chicago, Portland, and Seattle. In 2022, our resorts achieved an EBITDA level greater than the high end of our $55 million-$60 million range of improvement over 2019 EBITDA that we have been forecasting. This assumes we utilize LaPlaya's actual results for the first three quarters of last year and their forecast at the time the hurricane hit for the fourth quarter of last year. We expect the resorts are likely to generate total EBITDA that is roughly flat in 2023 versus 2022. Again, ignoring the impact from LaPlaya being closed. Our resorts are already ahead of the bridge to a more normalized level of EBITDA upside that we provided in our investor presentation. In addition, we've already achieved the cost reductions in our property operating models detailed in the same EBITDA bridge presentation. From a margin perspective, we wouldn't expect higher margins until we regain a significant portion of last year's almost 19% occupancy deficit and as total revenues continue to recover along with that demand. There are still more operational efficiencies available in our portfolio, and the continuing efforts of Curator to bring down cost based on the growing scale of Curator and the increasing use of technology will offer further benefits in 2023 and beyond. That brings us to the last portion of our upside opportunity detailed in our EBITDA bridge. That's the upside from our multi-year extensive property redevelopment and transformation program emanating from the LaSalle assets we acquired in late 2018 and the resorts we acquired in the last two years. We historically have had great success redeveloping, repositioning, and re-merchandising properties to a higher level that we believe to have significantly more potential than their prior positioning. While these projects tend to take anywhere from one to three years for planning and construction, and then three to four years to ramp up RevPAR share gains and substantially higher EBITDA, they have pretty consistently delivered high single-digit to low double-digit unlevered cash on cash returns on our investments upon stabilization. Since the LaSalle acquisition back in late 2018, when LaSalle had completed three de-redevelopments, we have redeveloped and repositioned 13 of the acquired properties, including Mission Bay Resort in San Diego, which was a former Hilton, L'Auberge Del Mar, Viceroy Santa Monica, Le Parc, Montrose, The Chamberlain, and Grafton on Sunset to Hotel Ziggy, all four of which are in West Hollywood. Chaminade Resort in Santa Cruz, Hotel Vitale in San Francisco, which is now 1 Hotel San Francisco, both Southernmost Resort and Marker Harborside in Key West, and Mason & Rook and The Donovan, which are now Viceroy DC and Hotel Zena, both in Washington, D.C. In addition to these recently completed projects, we're in the process of a dramatic reimagining of Hilton Gaslamp in San Diego as a lifestyle hotel. A block away, we're in the process of a major redevelopment of Hotel Solamar, which is being transformed into a Margaritaville. During the same time frame, from 2018 to today, we also fully renovated, redeveloped, or transformed eight of Pebblebrook's properties, including Westin Gaslamp and Embassy Suites San Diego Bay Downtown, Mondrian Los Angeles, The Hotel Zags in Portland, Hotel Zelos San Francisco, Skamania Lodge in the Pacific Northwest, W Boston, and LaPlaya Beach Resort in Naples. Of course, we also renovated or redeveloped most of our previous acquisitions, but we generally did so one or two years following their acquisition, just as we're doing now with the redevelopment and transformations of Jekyll Island Club Resort in the Golden Isles of Georgia, Estancia La Jolla Hotel & Spa, and Newport Harbor Island Resort, the former Gurney's Resort in Newport, Rhode Island. The total investment in all of these projects, both completed since 2018 and currently underway, is over $520 million. Most of these properties have yet to ramp to their full stabilized potential. As detailed in our EBITDA bridge, we expect these projects to deliver $27 million of additional EBITDA over the next three to four years. As evidence of the confidence that we have in delivering this additional EBITDA, we have a sharp focus on how our customers are responding to our new products. Since 2019, our portfolio, taken as a whole, has climbed from an average customer popularity ranking of 45 on Tripadvisor to an average ranking of 33 at the end of 2022, a 26%+ improvement that historically correlates with an ability to gain share through both rate and occupancy. It seems pretty clear to us that our investments have dramatically improved the overall quality of our portfolio, that our service levels have also improved, and that this substantial improvement will lead to significant RevPAR share gains and EBITDA gains. We expect performance over time to prove the value of this large investment program. As it relates to this year's projects, the $25 million complete upgrading and reimagining of the 286-room Hilton Gaslamp Quarter as a lifestyle hotel has been underway since November of last year and is due to be complete in the second quarter. The $27 million redevelopment of the Solamar as a Margaritaville Hotel in downtown San Diego began in January and should be complete early in the third quarter. The $20 million plus repositioning of Jekyll Island Club Resort began early this year and should be complete late in the second quarter. The first phase of the repositioning of Estancia commenced earlier this month and is due to be complete late in the second quarter, with the final phase starting late this year and finishing in the spring of next year. The rooms renovation at Viceroy Santa Monica started in November last year and should be complete later this quarter. This will complete the two-phase $19.5 million repositioning of this iconic luxury lifestyle hotel on Ocean Boulevard in Santa Monica. At Skamania, we just completed the addition of three more tree houses, bringing the number of luxury tree houses to nine. Later this year, we'll complete five luxury glamping units, the first of their kind at Skamania, along with a three-bedroom villa and two two-bedroom cabins, and our second large outdoor pavilion. As we test these new alternative lodging experiences out with our guests, the results will help guide the programming for the remaining 100 acres, where we believe we can add up to another 200 lodging units. This summer at Southernmost Resort, we'll undertake a complete $220,000 per key redevelopment and upgrading of the four guest houses totaling 50 rooms. Recall that two of these guest houses were purchased in late 2021 and immediately integrated into the resort as unique and distinct products. We commenced the first phase of the redevelopment and repositioning of Newport Harbor Island Resort in December last year. We'll commence the second phase later this year in November, with the completed product delivered in Q2 of next year. The total project is currently estimated as a $45 million investment. The first phase is focused primarily on deferred capital maintenance. The second phase represents all of the improvements that will reposition this property as a luxury resort. Taken together, this long list of major repositioning investments, along with a very substantial transformation of our portfolio from a heavily weighted urban coastal portfolio to a more balanced business and leisure segmented urban and resort portfolio, positions us very well for significant growth in RevPAR share and EBITDA over the next three to five years, regardless of the macro environment. By the end of the first half of next year, with the exception of Paradise Point, we will have completed the investment portion of the strategic redevelopment program opportunity that emanated from both the LaSalle acquisition and the resort purchases we made in the last two years, with only the significant upside to achieve and enjoy over the next few years. I'd also like to make one final announcement on behalf of myself and our board. It is my great pleasure to inform you that Ray Martz, our Chief Financial Officer, and Tom Fisher, our Chief Investment Officer, have both been promoted to Co-Presidents of Pebblebrook. Frankly, the new title merely reflects the much greater leadership responsibilities these two have undertaken on over the last few years. As my long-standing leadership partners, I want to congratulate them on this long overdue recognition of their superior efforts and value to our company. With that good news, that completes our prepared remarks. We'd now like to move to the question and answer portion of our call. Operator Donna, you may now proceed with the Q&A. Thank you. Ladies and gentlemen, the floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. Participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Due to upcoming peer lodging calls, we are asking you to please limit yourself to one question today. Once again, that's star one to register a question. The first question is coming from Shaun Kelley at Bank of America. Please go ahead. Hi. Good morning, everyone. Thank you for taking my question, and congrats to Ray and Tom on the new titles. guys, there's a few different places we could go, but, you know, I guess in the interest of time, maybe the right way to think about it is it feels like Q1 is always a really hard quarter to extrapolate too much from, and obviously there's a lot that's idiosyncratic that's going on with Pebblebrook's portfolio. Can you just help us think through the balance of the year to some degree? I mean, obviously, if trends hold, and it seems like everything you're seeing right now is pretty positive, is it reasonable to think, you know, Jon or Ray, that we can see, you know, year-over-year growth in the Pebblebrook portfolio for the remaining three quarters of the year if, again, you know, given that we there's a lot we don't know about the macro right now? 'Cause I think what we're struggling with a little bit is. The bridge, Jon, that you laid out versus the sort of absolute number in EBITDA that kind of came in for Q1 when we look back to places like 2019, and I think some of that's seasonality and a lot of these renovations. Just trying to kind of get a sense of how to model or balance the remaining expectations for 2023. Yeah. Shaun, I think the best way to answer it is if we assume that we don't see any material impact from an economic slowdown or recession later this year, that we would expect Q2, Q3, and Q4 all to exceed last year with the caveat of LaPlaya's impact. Let's set LaPlaya aside for the moment. We expect to be fully compensated for its performance or what it would have performed had it not been the hurricane through our insurance proceeds. Yes, we would expect that, you know, continuing significant improvement on the urban side, I would say generally flat performance in our resort portfolio with ups coming from repositioned assets and continuing improvement in the West Coast markets and probably some weakness, particularly in the Keys, in terms of bottom line performance. Yes, we would expect two, three, and four to be improved over last year. Thank you very much. Thank you. Thank you. The next question is coming from Duane Pfennigwerth of Evercore ISI. Please go ahead. Hey, thanks. Good morning. Just with respect to the hiring environment, if you could just play back for us, your experience in the fourth quarter. You know, was this a function of you had a bunch of open positions that were filling at a certain rate, and the catch-up of that surprised you? And, you know, going forward, are you at kind of a more... Can you just sort of qualitatively speak to kind of the number of open positions you have going forward and if you sort of fully caught up on staffing? I'd break it into two areas, sort of the management team members, as well as, you know, folks who fall under the administrative and general category. So, you know, that's your general managers, your accounting team, finance team, et cetera. Then your sales and marketing team, your sales agents, your catering folks, related to group, and finally your engineering team. I'd separate that from your sort of hourly FTEs on housekeeping and on banquet and catering, in particular food and beverage. We've had these open positions really since we've reopened the properties on the management team side and on the sales team side. As volume came back, we added. We sought to add people. We had a lot of struggles in the first half of last year doing that. Filling those open positions occurred on a much slower pace than what we would have liked, albeit, as we indicated last year, helping the bottom lines, from, frankly, people having to work extra shifts, managers having to work shifts, having to wear lots of hats, et cetera, within our hotels. It started to improve in the third quarter as we were having success, more success filling open positions, but still, it was still a struggle. By the fourth quarter, all of a sudden, it was like you turned a switch on, and those positions generally got filled. They did fill more quickly than the pace they had been on. I think that's probably something experienced by a lot of different industries in the back part of last year. Where we still have hiring to do just relates to volume. I think as it relates to our management staff, our sales team, our engineering team, while we still have openings, they're not materially different than they were pre-pandemic. We always have openings. We're always turning over people. We always have vacancies, and we're generally filling those on a continuous basis. Where we're still hiring is as volume returns. We're still hiring hourlies, both in housekeeping and in food and beverage. I'd say it's a lot easier than it was, but there's still positions on the FTE side, on the hourly side, that we'd like to fill that are probably still having a negative impact on some of the revenues we can generate in those areas. I think we're in pretty good shape. I think our run rate for what I would call the fixed portion of the business throughout the portfolio is generally where we want it to be, or at least, at the very least, it's at a similar level to where it was pre-pandemic, and we're just hiring on the hourly side as volume goes up. Duane, on the cost side for the fourth quarter, if you're gonna model sequentially versus. You shouldn't model it sequentially because it's very seasonal. The fourth quarter behaves differently than the first quarter. Also in the fourth quarter this year, we had some one-time bonuses for a lot of our management teams, that totaled about three and a half million dollars or so. That was more of a one-time number. I wouldn't necessarily extrapolate that out to future quarters. As your model out for 2023. I think the one other thing to mention is when we've indicated the EBITDA impact, but having La Playa out of service in the first quarter when in the first quarter of last year with a pretty much a full team there, our EBITDA margin was 56%. Between that and the negative impact on margins when we do redevelopments. When we do these redevelopments and we have properties that are running at call it 50% or 60% of the rooms available with public areas under renovation, we still have all the fixed costs from ANG, sales and marketing, accounting, engineering, et cetera. We just don't have the revenue volume. There's not much ability to flex other than the hourlies, which we do, and it's indicative of, you know, the negative flow on the redevelopments in the first quarter with seven and a half million dollars of lost revenue, we're losing five and a half million at the midpoint of EBITDA. You can see there the flow is challenging and so those two combined make our frankly, make our margins in Q1 look far worse than the way the business is actually performing underneath that. Okay, thank you. Thanks, Duane. Thanks. Thank you. The next question is coming from Bill Crow of Raymond James. Please go ahead. Hey, good morning, Jon. I appreciate the detailed discussion on the renovation and repositioning program. As you went through the timeline of three years to design and plan a year or so of construction and then three years of ramp. You just think about where that fits within an industry that seems to go through problems every seven years or eight years. Just wondering whether the benefits of that are actually ever going to be found within the public markets? Well, I mean, I can't speak to the public markets. I can only speak to the value creation that goes on at the individual property level, and whether that ultimately is recognized in the public market, I'll leave to you and the investment community to determine. But there's no doubt, as we've done these projects and in cases where we've actually sold assets that have been redeveloped, you know, the returns have been quite attractive. You know, building cash flow over time in the long term, you know, that's our business, and in the short term, like a lot of businesses may not be recognized. I mean, obviously, there's a lot of cyclical businesses out there. You still need to invest for the long term in order to generate the most attractive returns. I'm just looking at some of your recent sales that have been flat, potentially to where you bought them, ex the reinvestment. I'm gonna follow up with a second question for Ray. Congratulations on the new title. Given where the stock is today, it's more difficult to make the assumption that the converts are going to be converted in 2026. I'm just wondering whether that plays any role in your capital allocation decisions. Sure. Well, we look at each of these decisions as we make additional progress on sales and what to do with that, whether it's pay down certain pieces of debt and/or reinvesting in our portfolio and stock repurchases. We look at each of those. 2026 is still a long time from now. We have other, you know, levers to pull. You know, one market we haven't accessed is the high-yield market. That's something we could evaluate down the road after the yield curve comes down from where it's at, because right now it's, for us, it's not that attractive. Right now the... There's a potential we could also just extend the... or well, issue a new convert in of 2026 to pay out that one if the markets are there we desire. There's a lot of leverage we can pull. That's a lot of time between now and 2026. Really our focus now is on over the near term here on addressing the, you know, the various capital uses that we have planned. We have a couple of maturities coming up, nothing too significant. We only have one property mortgage that's maturing between now and 2028, and that's very manageable. Also just a reminder, we have a $650 million line, which is basically unused. That always provides that ability to pay off some of this debt in short periods of time if the capital markets aren't accommodated for any refinancing. I think the other thing we should not forget, to put it all in perspective, is, you know, a year ago, the stock was over the convert price with operating performance that was far lower than where it is today, with fewer dollars invested in the portfolio in terms of its transformation. I think where the stock price is has more to do with near-term sentiment and the cyclicality of the overall economic cycle and its potential impact on our industry than it does the actual value of the company. Sentiment can change, as Bill, as you know, you've been around as long as I've been around in this industry. When things turn positive, the industry tends to move a lot, and it tends to move very fast in the public market. As Ray said, we're a long way from 2026. We do obviously look at that, and we're not making an assumption necessarily that it will get converted. Okay. Thank you both. Thank you. The next question is coming from Gregory Miller of Truist Securities. Please go ahead. Thank you. Good morning, Ray and Tom. Very well-deserved news. Kudos, gentlemen. My question, between upper upscale and luxury resorts in your portfolio and competitors, which chain scale do you think is overall better positioned on occupancy and room rates this year? Is the traditional luxury leisure customer booking distinctly from the traditional upper upscale customer? Thanks. It's an interesting question. I'm not sure I know the answer to that. I think the actual luxury customer is in great financial shape as, frankly, as is the upper upscale customer. I think at the margin, what we don't know is how will the customer who was spending up, if you will, maybe on a short-term temporary basis or, you know, maybe it's a change in how they allocate their dollars towards higher-end experiences. We don't know how that's gonna react in a downturn, right? Whether people either naturally come back down and say, that was a one-time experience coming out of the pandemic. I really wanted to splurge, or whether on a longer term basis, the answer is, hey, this is the way. Life is too short. I wanna have these great experiences all the time, and I'm willing to spend money on this and not buy another pair of sneakers or another sweater, whatever it might be. I'm not sure I can give you a great answer to your question. I think we're gonna have to see how those sectors perform in the industry overall. I think our portfolio is more heavily weighted to the upper upscale in resorts than it is to luxury. Properties certainly like La Playa and L'Auberge at the highest end of our portfolio, certainly appeal to that luxury customer. We're just gonna have to see, Greg, how it plays out. I'll take a vacation over a pair of sneakers, but I appreciate the color, Jon. I appreciate that. Yeah. Thank you. The next question is coming from Smedes Rose of Citi. Please go ahead. Hi. Thanks. I just wanted to go back. You provided, what sounded like a lot of good news on the, on the group front, and I was just wondering if you could talk a little bit more, kind of where you're seeing that. Is it at your larger kind of Boston, hotel, which I think does a lot more group business, or are you just seeing it evenly across the portfolio? Maybe just kind of any sort of themes in terms of what the demand is coming from in particular versus kind of pre-pandemic levels? Sure. I think from a, from a segmentation perspective within group, I'd say it's coming from two areas. One is a corporate group, which is, I would say, back with a vengeance. We're seeing an awful lot of group, corporate groups that wanna meet, that need to meet for various different reasons, whether it's bonding, whether it's meetings with their, with their customers, and events related to them, whether it's incentive to reward their people. We're seeing big increases in corporate group. Then on the association side, which of course, a lot of the biggest ones come through, either the big houses that we have, whether it's Copley in Boston or Westin Michigan Avenue in Chicago or Westin Gaslamp in San Diego. It's our larger resorts like Paradise Point in Mission Bay or the Mission Bay Resort in Mission Bay or Margaritaville in Hollywood, Florida. They're all benefiting from both association and corporate group increases. I'd say a modest moderation in the number of weddings, which I think last year was sort of a catch-up year, and this year seems more normalized in the overall wedding pace. Big increases. It's throughout the portfolio. I think we've said this before, and it shouldn't be forgotten. We do a lot of group at our resorts. Some of them, like Skamania and Chaminade that were previously conference centers, do well more than 50% of their total business in group. I would say pretty much throughout the portfolio, group is up. It also means we also have a pretty favorable convention calendar this year. Which should benefit the urban hotels in those markets. In San Francisco, the convention center room nights are doubling versus last year, which is now about in line to where they were in 2018, so a good encouraging increase. Boston is up about 37% year-over-year. San Diego, up 25%. Seattle, about 20%. Those are all, again, encouraging themes for travel, and that really doesn't take into consideration the international inbound, which is continuing to improve from global, especially in the West Coast, which really hasn't benefited yet from the Asian Pacific travel, which has been very, very low for the last several years. I think the other thing we've been seeing, which sort of doesn't come through pace, but it comes through results, is certainly last year and earlier in this quarter, I would say attendance versus what was on the books at either citywides or large group tended to be softer. Even you know, earlier this year, with sort of the increase in number of cases, and not really people being scared about it, but frankly, more people having COVID or the flu or RSV, we probably had a little more wash than what we're seeing now, as things settle down on the health side and you know, it's good that people are sensitive about maybe not traveling when they're sick. I hope that's a new long-term trend that would benefit all of us. It certainly helps attendance throughout the portfolio. Great. Thanks. Congratulations, Ray and Tom. Oh, thanks, Ian. Smedes. Smedes. Thank you. The next question is coming from Ari Klein of BMO Capital Markets. Please go ahead. Thanks, and congrats, Ray and Tom as well. I had a quick follow-up on the comment to grow EBITDA year-over-year, the remainder of 23 ex Naples. 2023 ex- Naples. ex- Naples. Would that include the renovation impact as well? Yes, it would still be growth even with the impact from the renovations. Got it. How are you thinking about dispositions moving forward? The markets that have challenges are also seeing that reflected in their prices. You've obviously sold in some of those markets, but to what extent are you willing to maybe cut bait or are you more inclined to wait it out? I think the way we evaluate dispositions is we look at what our what the opportunities are related to what we would otherwise do with that capital. While it's not as easy to sell an asset and buy an asset, as easy it is to buy a stock and sell a stock, in the market, we do look at risk-adjusted returns in our markets, you know, over a minimum of a five-year period and understand are there better places to put that capital, whether it's in other markets, whether it's in other types of assets like we've done over the last two years, or whether it's to repurchase our stock, which is trading at a 50% discount, due to the leverage level of the company, but a 25%-30% discount in actual private market value, compared to how that's valued on an unlevered basis, with the company. We're taking all of that into account. We obviously also are looking at what's saleable in the market and what might be much more challenging to sell in a market. You know, I would say today size is probably the biggest deterrent to a sale unless it's a high cash flowing asset, a resort. I think if one were trying to sell a, you know, 1,000-room convention hotel today, and I'm not taking a shot at anybody, we have a couple of 750 and 800 room properties, it would be more difficult to sell because of the debt markets today. Now, obviously, all-cash buyers can buy those, but they're generally not sold to all-cash buyers. We try to take everything into account, Ari, but we're looking... The primary driver is where's the best return, risk-adjusted return for the shareholders and then we have to take into account the time that it takes to do these transactions. Thank you. Thank you. The next question is coming from Anthony Powell of Barclays. Please go ahead. Hi, good morning. I guess maybe a related follow-up. You know, looking at your NAV schedule and your deck, you kept kind of the, you know, the mid-high size on a cap rate basis versus 2019 NOI. That's pretty positive, I guess. We've seen other, you know, cap rates rise elsewhere in real estate. What's holding in, I guess, your views on cap rates and value for your portfolio? Is it the unencumbered nature, smaller assets? Overview there would be great. I mean, it's, it's a whole bunch of factors. You shouldn't look at the cap rates and how the cap rates change to determine whether we're either properly adjusting values or that they're a proper reflection of where we could sell these assets. Some assets. First of all, our sector, it generally doesn't trade at a cap rate. It trades at price per key. It trades at five-year IRRs. It, it's very different than, you know, a long-term lease product like we have in a lot of the other sectors or a shorter-term product like apartments that are far less volatile. We have markets today where, you know, take much of our San Francisco portfolio. You know, the biggest influencer in San Francisco is just price per key at this point. Just like New York went to price per key, over a long span of period in the mid to late teens and into the early part of this decade. That's a, that's a factor as it relates to valuations. The cap rates are just a mathematical result of us valuing each individual property the way a buyer would value those properties, which as I said, is not a cap rate approach. The other thing to keep in mind is, you know, we've invested, I think last year out of the $100 million, I think, you know, you can argue that somewhere between you know, $70 million and $80 million went into significant upgrades at the properties. Out of the $145-$155 this year, you know, over $100 million is going into these transformations and repositionings. The dollars being invested in the portfolio increase values. Now, maybe not by the amount we put in. That'd be to a buyer to determine. It certainly reduces the amount of capital that a buyer would be allocating in their own underwriting when they look at buying a property, that's, you know, been redeveloped, renovated, and repositioned. All of these things get taken into account when we look at these values, but it's traditionally it's done by what do we believe a buyer would pay for that today? Outside of a market that's non-functioning, these are pretty... I mean, when we are selling assets, we're selling them within our NAV range. Sometimes it's at the low end, sometimes it's at the high end, sometimes it's above or below, but never by much percentage. Thank you. Thanks, Anthony. Thank you. The next question is coming from Jay Kornreich of SMBC. Please go ahead. All right. Thanks very much. I'm just wondering if you can provide any further commentary on the underperforming urban markets you called out, you know, San Francisco, DC, Chicago, how you see those improving in 2023. I guess maybe conversely on the leisure side, you mentioned some softness expected in the Keys, but any other markets you'd call out there for either strength or softness that you'd expect this year? Sure. I mean, I think when we think of these slower to recover markets, there are obviously a number of factors that have impacted them. One being, you know, how they dealt with the pandemic and what impact that had on their cities, both from a business, you know, underlying industry perspective, change in use patterns, change in work patterns, whether people come into the office or they don't, whether they support their local restaurants and retailers, and the impact that has on the leisure experience and the convention experience that people would have coming to a market. They all had for the most part, outside of the southern cities, most of the cities had a meaningful impact from the pandemic and the issues that have been created around that. Some of them have had quality of life issues going into the pandemic, may have worsened, may have gotten better in some markets, and they're all focused on improving that today. We are seeing that improvement in a number of cities like San Francisco, like Chicago, and even D.C., which we think is the activity on the streets is continuing to get better. They're just slower to recover. We're seeing a significant ramp in recovery in those markets as group and transient comes back. We shouldn't forget, cities like San Francisco, like San Diego, like Seattle and Portland, like Boston and D.C., these are big leisure destinations. That leisure customer really didn't begin to come back in those markets until the middle of last year. We're going to see significant growth in the urban markets. I think I said most of the growth in our portfolio at the bottom line this year will come from the urban markets, much of that is coming from the recovering markets, albeit some of them will still be below where we were in 2019, and some like San Francisco, which may only get to about 50% of the EBITDA it was at in 2019 this year. There's a lot of operating leverage in these markets, we do expect them to fully recover. As I indicated in my remarks, we expect the full portfolio to get to 2019, the full urban portfolio to get there in the next couple of years. It still may mean a market like San Francisco or Seattle or Portland may still be below, where it was in 2019. Okay. Thanks very much for the help of color. Appreciate it. Yeah. Thanks, Jay. Thank you. The next question is coming from Chris Darling of Green Street. Please go ahead. Thank you. Just a quick one for me. Can you comment on how the cost of insurance is changing, particularly as it relates to some of your Southeast resorts? Maybe just for context, you could maybe comment on, you know, how much insurance premiums maybe represent as a percent of revenue, percent of expense, et cetera. Sure. Chris, well, they're going up. That's something we know. Look, part of this is we don't want to negotiate against ourselves with our insurance carriers. We're starting the process of the renewals. For us, our property insurance renews in June, and then our GL is later in the year. All indications of what we're seeing in the market is it is going up. Look, there were a lot of events last year, which we all know apart. We obviously took part of that with Hurricane, you know, Ian there, but there are other kind of losses there. Expect that to go up. Also the number of players in the insurance market has also shrunk. It's a double hit there. Right now on a full year basis, our kind of property in GL, that's about 1.5% of our, you know, total operating, you know, costs there. It's a large number. We're talking about, you know, $20 million or so, but it's not, you know, a material number. We expect it to be challenged, especially some of the markets on the windstorm markets like Florida. The good thing is we have a very diversified portfolio. The carriers like us because we have a. You know, we've done a good job here. We'll have to monitor that. We'll provide an update. My guess is by the third quarter or July earnings call, we'll have good indication of where that came in in the renewals. We'll update you accordingly there. Ray, we would expect the increase for the P&C to be, you know, greater than the GL, the general liability. I mean, we don't see the pressure on GL that we're seeing on PC. No. Yeah, actually, last year, our general liability insurance actually went down on a year-over-year basis because of the losses we have were pretty managed. Yeah, the PNC will be going. That'll be the area we'll be increasing. Look, areas like cyber actually are also being held in check, coming down. That was a year for because of the ransomware. Now that's much smaller than the other sides, but the PNC is the more of a challenge here. Got it. Appreciate the comments. Thanks, Chris. Thank you. At this time, I'd like to turn the floor back over to Mr. Bortz for closing comments. Well, again, thank you all for taking the time to join us for our fourth quarter call. We have a quick turnaround to the next quarter in late April. We'll continue to provide these monthly updates as we've been doing. We look forward to many of you to seeing you down at the Raymond James conference and the Citi Conference early next month. Thank you. Ladies and gentlemen, this concludes today's event. 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