Greetings and welcome to the Pebblebrook Hotel Trust first quarter earnings call. At this time, all participants are on a listen-only mode. A brief question-and-answer session will follow the formal presentation. Due to the fact that there is another industry call this morning at 9:00 A.M. Eastern, we'll be keeping today's call to an hour. 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, Co-President and Chief Financial Officer. Thank you. You may begin. Thank you, Donna. Good morning, everyone. Welcome to our first quarter 2024 earnings call and webcast. Joining me today is Jon Bortz, our Chairman and Chief Executive Officer, and Tom Fisher, our Co-President and Chief Investment Officer. Before we begin, please note that today's comments are effective only for today, April 24, 2024, and our comments may include forward-looking statements as defined under federal securities laws, and actual results could differ materially from those discussed. For a comprehensive analysis of potential risks, please consult our most recent SEC filings and visit our website for detailed reconciliations of any non-GAAP financial measures mentioned today. Now let's move on to our first quarter results. We are pleased to share our solid financial results in Q1 despite the negative impact of some challenging weather conditions on both coasts. Our urban markets, which continue to recover, led the portfolio. Coupled with diligent operating cost reduction efforts by our hotel teams, asset managers, and the company, we handily exceeded the top end of our financial outlook in key metrics including same property hotel EBITDA, adjusted EBITDA, and adjusted FFO. Our urban markets were led by Washington, D.C., which has been a standout performer. In Q1, hotel occupancy in D.C. gained an impressive eight points, rising to 61%, and RevPAR increased by 7%. San Diego also produced significant gains, benefiting from a strong convention calendar that, in our case, was bolstered by our prior year redevelopment investment program. In downtown San Diego, occupancy at our properties climbed eight points to nearly 75%, and RevPAR surged by an impressive 21.8%. Our recently redeveloped properties, the Hilton San Diego Gaslamp Quarter and the Margaritaville Hotel San Diego Gaslamp Quarter, have been very well received by the market. RevPAR growth for these properties exceeded Q1 2023 by 88% and 60%, respectively. These downtown San Diego hotels quickly recovered from last year's redevelopment disruptions, regaining more revenue in EBITDA than was displaced last year. San Francisco and Los Angeles were also solid markets this quarter. The 1 Hotel San Francisco, known for its sustainability and luxury focus, grew RevPAR by 16% in Q1, continuing to gain market share following its redevelopment and reflagging. Overall, our urban properties increased RevPAR by almost 5% year-over-year, which helped to offset a 4.4% decline in RevPAR across our resort portfolio. Notably, our same property resort portfolio, excluding LaPlaya Beach Resort and Newport Harbor Island Resort, maintained stable occupancy levels compared to Q1 2023, though ADR declined 4.7%. Challenging weather conditions in California, the Pacific Northwest, and South Florida affected our resorts, hindering traditional short-term leisure bookings and leading to increased cancellations. In contrast, our Key West resorts experienced a robust recovery in Q1 compared with last year, generating positive RevPAR growth, reflecting the area's traditional strength in the first quarter. Despite the varied performance of our resort markets in Q1, they maintained a very significant 36% premium in rates compared to 2019. Overall, our same property portfolio has shown a continued recovery from the pandemic, gaining another 2 points in occupancy and a 1.7% increase in RevPAR versus Q1 of last year. Compared with Q1 2023, our weekday occupancies improved 3 points, with gains in both our urban and resort markets, demonstrating the continued recovery of business travel. Our weekend occupancies declined roughly 60 basis points, which was largely due to weather issues that discouraged leisure travel. However, it is noteworthy that weekend occupancies at our urban properties improved by 50 basis points in March, perhaps an indicator that leisure events and spring break travel continue to drive travelers into the cities at a greater clip than last year. In terms of our mix, the group segment led the portfolio as group demand increased 5.7% from Q1 2023, with group revenues growing 4.9% and group segment increasing to roughly 27.4% of our customer mix in Q1. Transient demand also improved, increasing 4% over last year as transit revenues rose 2.1%. On a monthly basis, RevPAR increased 5.1% in January, 0.1% in February, and 0.6% in March, which was negatively impacted by the Easter holiday shift. February room revenues rose 3.8%, higher than the 0.1% RevPAR growth due primarily to the extra day from leap year. Our same property EBITDA reached $59.8 million, surpassing the upper end of our Q1 outlook by $2.8 million. In addition, our recently reopened LaPlaya Beach Resort had a much better-than-expected Q1, exceeding our outlook by $2.3 million. This performance inspired our enthusiastic Vamos a LaPlaya to our Hotel LaPlaya team, which you heard from our opening song this morning. The strength in our same property hotel EBITDA results also was bolstered by the success of our highly focused efficiency and cost reduction efforts across all operating departments, which led to an EBITDA margin of 20.3% in Q1. On a per-occupied room basis, total hotel operating expenses declined by 0.7%, and before fixed expenses, they declined by 2.1%. This reflects our ongoing progress in combating inflationary pressures through an intense focus on efficiency improvements. These measures include optimizing staffing levels and job sharing, enhancing procurement processes, implementing our own workers' compensation program, and leveraging favorable contracts negotiated and arranged by Curator. We also reduced our reliance on third-party contract providers by successfully filling positions internally and reducing staff turnover, while also continuing to invest in productivity enhancement and energy-saving technologies and equipment. These strategies are part of a broader initiative to offset above-inflationary cost increases in wages, benefits, energy, and insurance across our portfolio. As a result of the better-than-expected same property EBITDA and LaPlaya's strong performance, adjusted EBITDA was $5.3 million above the top end of our outlook, and adjusted FFO per share was $0.05 better. Shifting to our strategic reinvestment program, this quarter we made significant capital investments and progress at several properties. The $49 million transformation of Newport Harbor Island Resort into a premier New England luxury destination is substantially completed, and the resort should open soon. Estancia La Jolla Hotel & Spa's $26 million multi-phase redevelopment is also substantially complete, and at Skamania Lodge, we introduced eight new alternative lodging accommodations, including the completion of two two-bedroom cabins, a three-bedroom villa, and on May 1st, the expected opening of five unique luxury glamping units. Over the next year, we will evaluate the performance of these new types of experiential accommodations, which also includes nine successful luxury treehouses. This analysis will guide our decision to what types of alternative lodging to add at Skamania in the coming years, as we have an opportunity to add 200 or more additional units over the long term. With the $33.9 million invested throughout the portfolio in the first quarter, we remain on track to invest $85 million-$90 million in the portfolio for the year, and we are confident about the substantial upside these repositioned properties will generate in both market share and cash flow in the foreseeable future. In terms of our balance sheet, we remain in very good shape, with no meaningful debt maturities until October 2025, following the successful refinancing efforts we completed just three months ago. The weighted average cost of our debt is an attractive 4.6%, with 75% currently at fixed rates and 91% of it unsecured. With that comprehensive update, I'll like to turn the call over to Jon. Jon? Hey. Thanks, Ray. As Ray indicated, we're very pleased with our overall performance in the first quarter. Our top-line operating performance was toward the upper end of our outlook range, with our RevPAR growth handily beating the industry. Our bottom-line results well exceeded the top end of our outlook. We benefited from our intense focus on creating further efficiencies in the operations of our properties, as Ray detailed. We also realized reduced energy usage and costs thanks to targeted sustainability initiatives and milder weather conditions. And although the bad weather negatively impacted leisure demand and revenues, it provided a silver lining in terms of energy savings. When we look at the industry results overall in the first quarter, the industry's 0.2% RevPAR growth turned out a little softer than we were expecting. Year-over-year demand declined every month in the quarter, now representing 10 straight months of year-over-year declines and 12 straight months of year-over-year declines in occupancy. And if you exclude Las Vegas from the industry's results, you get a RevPAR result that is 90 basis points worse at -0.7% for the quarter, which doesn't paint a particularly positive view of the rest of the industry's first quarter performance. We believe some of the industry's weaker performance in the quarter was related to bad weather impacting travel and potentially a greater negative impact from the Easter holiday shift, but clearly, the mid to lower price scale hotels continue to struggle in a major way. We believe the challenges at the mid to lower end are likely related to the economic pressures being experienced by the mid to lower socioeconomic class of consumers and businesses. This is consistent with what is being called out by many other industries and businesses in their operating reports. Industry results also mirror our results in segmentation performance. Demand from the leisure customer was flat to slightly weaker, impacted by bad weather as evidenced by softer weekend performance. Encouragingly, business travel continued to improve, with group leading the way, but with business transient clearly seeing further recovery. ADR growth was slightly softer than in prior quarters, and urban and upper upscale performed the best. Supply growth continues to run well below 1%. We think it will continue to run below 1% through at least 2026 and likely 2027 or even later for our urban and resort markets, where it takes longer to build and the project sizes are larger and harder to finance. In the case of the cities, hotel economics are far below those needed to justify these much higher new development costs. For our portfolio, RevPAR growth was led by our urban markets, which grew 4.9% despite Portland and Chicago being substantially negative. Our urban RevPAR performance exceeded the industry's urban category, which delivered 2.6% growth in the quarter. As Ray indicated, we gained 2.4 points of occupancy or 4.2% growth. However, we still have a huge occupancy recovery opportunity, as our urban occupancy was almost 16 points or 21% below 2019 levels, and 2019 was not even our prior peak level of occupancy. We've laid out the occupancy recovery opportunity for our urban portfolio in financial terms in our investor presentation, which we posted last night on our website, so you might want to take a look at that. Our best-performing RevPAR growth properties in the quarter were led by our properties that were redeveloped in the last few years. All of these redeveloped and repositioned properties are gaining share and have significant opportunities for RevPAR share growth and other revenue growth over the next few years. As Ray indicated, the two downtown San Diego properties gained the most in the quarter. They were both under redevelopment last year, so the comparisons were easier, but they grew beyond last year's displacement impact. The next best performers were Hotel Zena in D.C. with almost 34% growth, Viceroy Santa Monica at 18.1%, Viceroy D.C. at 16.4%, 1 Hotel San Francisco at 16.2%, and L'Auberge Del Mar at 15.6%. Again, all of these properties were redeveloped and repositioned in the last few years and demonstrate the upside opportunity of our very substantial investments. We've also detailed the upside opportunity related to these strategic investments in our investor presentation. With Newport Harbor Island Resort and Estancia La Jolla's redevelopments being substantially completed this month, we feel we're in a great position to drive significant RevPAR share and revenue growth over the rest of this year and the next few years, and now we'll be able to do it without all of the noise and disruption impact that comes along with these major redevelopments. In addition, with the rebuilding of LaPlaya finally complete, we believe its ramp-up will be reasonably quick, and we're already beginning to see that play out. In Q1, LaPlaya achieved $8.3 million of EBITDA, exceeding our expectations by $2.3 million. This was just $240,000 below 2019, but it was ahead of 2019 in total revenues and GOP, driven by the outperformance of the food and beverage outlets and the membership beach club. We expect LaPlaya to deliver approximately $7 million of EBITDA in Q2, which, if achieved, would be more than $2.4 million ahead of 2019 second quarter. Combined with the first quarter, these first-half results would give us greater confidence in hitting or beating our $22 million EBITDA forecast for LaPlaya for this year, which would put us well ahead of 2019's $17.7 million of EBITDA and well on our way to recovering to our $35 million pre-hurricane forecast for 2022. As another example, the returns on our major redevelopment investments, I also wanted to provide some color on the performance of 1 Hotel San Francisco, which was the beneficiary of a $28 million transformative redevelopment and reflagging from the independent Hotel Vitale, and also a property team that recently won several Pebby Awards. So far, we're really impressed by the power of the 1 Hotel eco-luxury brand and how well it resonates with the San Francisco customer. Recall that we reopened 1 Hotel San Francisco on June 1, 2022. In 2023, just our first full year of operations in what is a very difficult market, 1 Hotel San Francisco achieved a 116.7 ADR share and a RevPAR share of 128.3 versus its luxury competitive set, which was up from a 94.9 ADR share and 93.1 RevPAR share for the property as an unrenovated Vitale in 2019. So it's gained more than 2,100 basis points of ADR share and 3,500 basis points of RevPAR share, and it's far from being stabilized. In 2024 so far, through March, 1 Hotel's gained another 150 basis points in ADR share and another 1,400+ basis points in RevPAR share. In 2023, we achieved 63% of 2019's EBITDA. We recognize that may not sound great, but in a very slow-to-recover market like San Francisco, it represents by far the best performance against 2019 of all of our San Francisco properties. Please feel free to take a look in our investor presentation at this case study and a few other examples that show the returns we've achieved on our redevelopment and repositioning projects. As we look out into Q2 and the rest of the year, as indicated in our press release, we're maintaining our full-year outlook despite our bottom-line beat in the first quarter. As you know, Q1 is our smallest EBITDA contributor of all four quarters, and we've become increasingly concerned about the macroeconomic environment for the rest of the year given the changing expectations regarding the timing and number of Fed rate cuts and the continuing trend of weak demand and very modest industry RevPAR growth and the continuing normalization of the booking window as short-term bookings have not been keeping up with last year. We're not reducing our expectations for the second half of the year. We're just not ready to bank the Q1 beat. So far, for the first 13 days of April, we've achieved RevPAR growth of almost 10%. While that is certainly very positive, it should be recognized that these days have significantly benefited from both the Easter shift as well as the Passover shift. With Passover covering the last 10 days of the month, RevPAR, for our portfolio, is currently tracking to be negative between 1% and 2% for the entire month. For the rest of the quarter, May looks to be strong, and then June looks to be soft again. Convention timing has some impact on our monthly variability. For the second quarter, our outlook is for RevPAR growth to range from 0.5%-2.5%. Similar to the first quarter, we expect our RevPAR performance in Q2 will exceed the industry's results. And similar to our first quarter outlook, this is not a conservative outlook. It is a realistic forecast at this point in time. For Q2, we anticipate finalizing and recording several significant real estate tax benefits from prior year periods, and these have been included in our Q2 outlook. Despite the unpredictability of these credits and assessments over which we have no control, these credits would result in an estimated net reduction of approximately $4 million compared to our Q2 2023 tax expense. This will contribute to a reduced expense growth rate for both the quarter and the year. Looking forward, we expect to continue to achieve substantial savings from real estate tax assessments and credits, although the timing remains uncertain. Typically, these results stem from efforts spanning as much as three to five years. We also continue to be encouraged by our current group and total pace. Our group pace for quarters two through four shows group room nights ahead of the same time last year by 8.5% and group revenue ahead by 10.2%. With transient revenue pace up by 3.9%, our total room night pace is ahead by 7.9%, and our total revenue pace on the books is ahead by 7.1%. Q3 continues to represent the quarter with the largest pace advantage, followed by Q4 on a percentage basis. Nevertheless, given the slower in-the-month-for-the-month and in-the-quarter-for-the-quarter booking trends we've been experiencing, we remain cautious about the second half due to this normalization of the group booking window as well as the softening macroeconomic environment. Finally, as Ray indicated, we're very excited about the completion of the $26 million Estancia La Jolla multi-phase redevelopment and repositioning. The property looks fantastic, and it's already receiving glowing reviews from customers. We should be able to drive strong growth as the La Jolla submarket of San Diego is extremely robust due to the vast amount of capital flowing into the expanding biomedical industry that surrounds the property. In addition, UCSD, which is the largest university in the California system and is located directly across the street from the property, is also growing like crazy and will continue to drive increased demand into the resort. With the additional completion of Newport Harbor Island's $49 million comprehensive transformation and the completed rebuilding of LaPlaya in Naples, along with the recent redevelopments of Jekyll Island Club Resort, Chaminade Resort, Southernmost Resort, San Diego Mission Bay, and the alternative lodging being added at Skamania Lodge, our resort portfolio is poised for strong growth in the future as leisure and group demand strengthen. That completes our prepared remarks. Donna, you may proceed with the Q&A. Thank you. The floor is now open for questions. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. If you would like to remove your question from the queue, please press star two. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star key. Again, due to the fact that there is another industry call at 9:00 A.M., we will be keeping the call to one hour, so we ask that you please limit yourself to one question. Again, that's star one to register a question at this time. Today's first question is coming from Dori Kesten of Wells Fargo. Please go ahead. Thanks. Morning, guys. You noted that short-term group bookings have slowed. Can you provide a bit more context around that? And have you seen anything else that has given you pause, such as meeting planners pushing for lower F&B minimums or pushing harder on room rates? Sure. Yeah. I mean, our best guess today, based upon conversations with clients, is that it has more to do with the booking pattern normalizing. So really, what's been happening over the last year is that meeting planners and businesses are booking their meetings further out than they were a year before. And so when we're coming upon in the year for the year or in the quarter for the quarter, certainly in the month for the month, we're seeing less pickup versus last year because they've already booked a meeting. And so the pace advantage we have, that's part of why we're being a little more cautious with assuming it all converts into the same kind of percentage growth over last year because we think we're going to lose some of that pace advantage due to this normalization of the group booking window. We're not seeing any changes in attrition, in cancellation. We're definitely not seeing any reductions in spend outside of the room or what groups are committing to. So from our perspective, we don't think it's indicating any change in confidence on the part of businesses reacting to a more cautious economic environment. We do think it's primarily due to the normalization of the booking timing window. Okay. Thanks, Jon. Thanks, Dori. Thank you. The next question is coming from Floris van Dijkum of Compass Point. Please go ahead. Floris, please make sure your phone's not on mute. I'll move on to the next question coming from Smedes Rose of Citi. Please go ahead. Hi. Thanks. I was just wondering if you could talk a little bit more about any kind of visibility you're seeing into summer leisure trends across your resorts? Yeah. I mean, I think it's a little premature to have any kind of judgment based upon what we're seeing from the resorts. I mean, the comment I would make that we feel good about right now, and we indicated in our call, is that the group pace is up significantly in the third quarter, and some of that is in the summer months of July and August. So we certainly look like we have a good base on the books. From a transient perspective, it's not quite as clear. And as you know, folks make airline reservations well before typically they make their hotel reservations. So we're encouraged by the commentary that's coming out of the airlines about strong summer bookings. I think in terms of how we look, I think it's too early to make a judgment as to whether they're going to be up a lot or they're going to be positive or negative. Okay. Thank you. Thank you. The next question is coming from Floris van Dijkum of Compass Point. Please go ahead. Hi. Hey, guys. Morning. Morning. Morning. Wanted to ask you, if I look at your deck, the upside potential on your urban portfolio appears larger than some of the returns that you are penciling in for largely your resorts assets that have been renovated. As you think about capital allocation, Jon, where would you put incremental capital today? Where would you invest it? Would you invest in your resorts, or would you invest more in urban assets? Sure. So I think the answer is sort of different than the two alternatives that you provided. So any incremental capital, we have been and would continue to invest in buying our own stock back. So basically, we'd be buying a greater percentage, if you will, of the assets that we already own. We feel like it's a good mix between urban and resort, between business, group and transient, and leisure. We've invested hundreds of millions of dollars into the portfolio, repositioning properties to where we think they have their highest and best positioning, where there's significant upside in share growth, revenue growth, and profitability. And so today, we'd be buying our existing stock back, which trades at somewhere in the range of a 50% discount to where we think the individual assets would sell. So I think from that perspective, it's an easy answer. I think based upon where we sit in the portfolio, and maybe this answers your question in one way, if we're selling assets, we're still likely to be selling some urban assets in markets that have been slower to recover, not because their growth rate or their recovery rate isn't great, but the alternative capital usage returns are much higher, meaning buying our stock back and paying down debt along with the EBITDA that we sell. So it wouldn't generally involve selling our resort assets within the portfolio, which, again, we continue to believe have very significant upside in the portfolio. Floris, also just to highlight in our deck, yes, we have over $50 million of upside. We have in the bridge from the urban recovery. That's primarily because the urban markets have fell the most significantly, more than leisure markets, after the pandemic and slowly recover. So we ended 2023 at 69% occupancy in our urban hotels, and the bridge just shows us if we get to 80%, what the upside opportunity, which is still below where our prior peaks were. So that, again, shows the tremendous growth from the urban assets that are to be realized in the portfolio, and we expect the next couple of years to achieve that. Thanks, Jon, Thanks, Floris. Thank you. The next question is coming from Duane Pfennigwerth of Evercore ISI. Please go ahead. Hey. Thanks. Just on the group pacing and the give-back kind of in the quarter, I wonder if there's any trend of predictability to it kind of emerging. So maybe you could just replay the last couple of quarters, how much pace was ahead at the start of the quarter, and then ultimately where it ended up, just to kind of help put that 20% pacing in context. Sure. Well, in Q1, for Q1 of this year versus the pickup from the prior Q1, we were short a little less than $1 million in group revenue, which represented about a little under 3,000 group rooms. If we go back to the quarter before that, I think that was relatively flat, but we'll see if we can pull up that data, Floris. I mean, Duane. Sorry. No worries. Yeah. No. That makes sense. I think what's been hard, the reason it's been hard to predict is it's kind of been bouncing all over the place. So Gabby just pulled up the quarter before, and it looks like what am I looking at here? Three-month pickup. Oh, I see. Okay. Yeah. So yeah, it was about $500,000 of less pickup in Q4 for Q4. So again, pretty modest, pretty minor, but I think it's evidence of the normalization of the booking window. Makes sense. So that up 20%, I think, which is specific to the third quarter, if you had to guess, where do we end up in kind of realized revenue? And you can punt on that and say, "We'll tell you when we get there. Well, I think the challenge is certainly, here's the one thing I know is going to happen. The percentage will be much lower. All right? So I mean, as we put more business on the books, obviously, that percentage is going to come down. And I think right now we have do you know what percentage that represents of our target for the quarter? Maybe 60%. We'll see if we can pull that up, Duane. But the percentage is going to come down. It comes down naturally just as we book more, and the numbers get larger, right? It's just the math from that perspective. In terms of the impact of the booking window, it's just really hard to forecast that at this point in time. Thanks for taking the questions on our early conference call. Thank you. The next question is coming from Bill Crow of Raymond James. Please go ahead. Hey. Good morning. Jon, I'm hoping you can dig into the ADR decline at leisure properties, not just in the fourth quarter, but kind of what you're expecting going forward. How much of that was reactionary to maybe some, I don't know, some normalization in consumer spending? How much of that was mixed shift? And then you state in your release that you're kind of bullish on inbound international travel this year, but you're also saying you really don't have much of a window into the summer months. So if you could just kind of square all that up, I'd appreciate it. Well, I'll take a shot at it, Bill. I don't know if my comments will square it all up, but I think when we look at the resorts, the ADR changes are kind of all over the place. It really depends upon the property, what's been going on at the property, the region, the weather has had an impact as well. There is mixed shift going on at the resorts. So let's talk about the mixed shift first because that's the easiest one to look at. As we rebuild group at our resorts, generally speaking, the group rates are substantially lower than the transient rates. It's the base build. It's the midweek, particularly out of season. And so it gets priced lower, and it competes with urban markets as much as other resort markets. So as we rebuild that group, which is a significant part of our resort mix, that naturally brings the rate down in terms of the overall average. As we add and continue to recover leisure, which is still below where it was in 2019, that business has tended to be business that's being induced like it was pre-pandemic through promotions, where it represents wholesale international business, which comes in at lower rates, or it's off-season where you have to stimulate, typically have to stimulate demand, particularly local demand in markets like Florida that you live in, gets pretty hot in the summer. And so getting people to come to your location, hopefully driven by a cooler beach weather, bringing people in from inland Florida, it comes at a lower rate. So there's a good bit of this that is mix. I think the behavioral normalization has mostly happened, meaning the big premiums we were getting on compressed days, around some holidays for people coming out of their caves after the pandemic and splurging and paying up. I think most of that is normalized and gone away. So it's really where we're losing ADR. We're losing it at a relatively small amount at this point. And as we look into Q2 as an example, our rate decline for our resorts looks to be lower than what it was in the first quarter. And right now, it looks like rates for the second half of our resorts will be better than the first half. So I think we're getting pretty darn close to stabilization. And also, we're benefiting from the ability to charge more at some of the resorts that we've repositioned to a higher level in the portfolio. And Bill, and then the second part of your question, international inbound, just a couple of things to note on that. At least year to date through March, international inbound is over last year. So that shows it's improving. In fact, March, on a percentage basis, was closest to 2019 than any month in recovery. So it's heading in the right direction. It's still driven more by the transatlantic versus the Pacific demand. But encouragingly, noted on a couple of the airlines' calls this recent quarter, they're forecasting record summer travel, especially as it relates to international. Now, a lot of that, of course, is U.S. outbound, and we encourage more Americans to stay here to travel than go to Europe. But it does represent a more increased number coming up. And that fell significantly from the pandemic, but it's heading in a good direction. Thanks, Jon. I appreciate it. Thanks, Bill. Thank you. The next question is coming from Shaun Kelley of Bank of America. Please go ahead. Hi. Good morning, everyone. Ray or Jon, one thing that's come up on some of the other travel calls this earnings season has been a bit of a rebound on the technology side. I think this would probably be more on BT. I think we've talked a lot about group this morning, but kind of curious on what you're seeing. You have a lot of exposure in San Francisco, plenty in the PAC Northwest as well. So just are you seeing signs of life on the sort of large technology accounts? How has that trended? And is there more room here? I mean, we've heard you've been pretty clear that by segment, group's still the strongest, but I'm kind of curious if you've seen at least maybe some increased lead gen on the BT side from some of those technology accounts. Sure. So I think our general comment is business transient travel continues to recover, and it's noticeable. As we look throughout our portfolio, there's no doubt that we've seen significant increases in the technology firms. That represents itself in markets like San Francisco, like Boston, our Santa Cruz property, which doesn't benefit from corporate transient in the technology side but has seen a very significant change in lead volume and group bookings from the technology firms in the adjacent Silicon Valley. So there's no doubt we're seeing it in technology. We're also seeing increased corporate transient in the consulting businesses on the financial side in your business as well. And these are, in a way, the sort of—I don't know if it's the later-to-recover sectors or the ones that just got, maybe in the case of technology, maybe got ahead of itself during the pandemic and went through this period of time over the last 12 or 18 months of job cuts and a little more cautiousness in total spend. And we've definitely seen that turn around so far this year. Great. Thank you very much. Jon. Thank you. The next question is coming from Michael Bellisario of Baird. Please go ahead. Thanks. Good morning, everyone. Good morning. Jon, just want to go back to your expense commentary and maybe help us. What's new? What's incremental compared to your prior forecast, your prior outlook? And then how much of the savings that you've recognized in 1Q and expect to recognize in 2Q? What's a run rate savings look like, and how much of it is maybe just more of one-time savings that you've been able to achieve on the expense side? Thanks. Sure. It's a combination of the two. I mentioned the real estate taxes. I think we were pretty clear in our call 60 days ago that we did not forecast any real estate tax benefits because we had no idea of timing. Lo and behold, 60 days later, we've seen some success in at least one of our major markets within the portfolio. Of those real estate tax benefits, I mean, much of that is one-time, but there is a reduction in the run rate in our taxes that relate to those properties, which are primarily in Southern California. As it relates to the other expense, I mean, we have I mean, our number one initiative within the company right now is a focus on efficiencies, creating efficiencies within the portfolios, collaborating with our partners to do that, getting back to fundamentals, reimplementing all of our best practices, taking advantage of new learnings. Some of these efforts were put in place years ago. Ray, you can talk a little bit about our workers' comp program that we put in place and what we were doing before. But those are ongoing run rate savings. The bulk, the vast majority, I mean, maybe almost all of the savings in Q1 related to our efforts to lower expenses that should result in a run rate reduction and give us much more confidence in our ability to be well in the range in terms of our expense growth rate, of course, depending upon whether if we get a material acceleration in revenue in the second half beyond what we're currently contemplating, well, there are going to be expenses that come along with that and increase the growth rate. But obviously, that would dramatically increase the bottom line as well. So we feel really good about where we're going. We have a long way to go on this effort. There's a lot of programs and projects that are in place to reduce costs and I think will be increasingly effective over the course of the year. And Mike, some additional color in some of those programs. So the workers' comp program that Jon mentioned, that was something we it's unique. We took it back from our third-party managers because we thought we could do a better job actively managing it and being on top of it. So as a result of that program, we reduced our cost at our these are the independent properties. Again, the benefit of the independent hotel is we have more control than say if it's a brand-managed property, which we can't control. But we reduced our workers' comp cost by over 60% versus what it was when our managers were operating it. So that's millions dollars a year. We're getting a better outcome. The other side is Curator. Curator, in a way, is also our internal R&D group. They've gone out with new technology. We have new housekeeping tools that the housekeepers can be more efficient for how they clean rooms and schedule rooms in those areas. We're also working on a new tool that a Curator put in place is an AI chatbot, which reduced the call center volume and pressure on the staff at the hotels. We free up the staffing there, and ultimately, we result in lower staffing. So there's a lot of those areas that we're actively doing, and we have a lot more flexibility at our independent hotels because we could put those programs in place. And there's 100 of them that are in place. Some of them add more value than others, but some that we're excited about, and we should see the results in the coming quarters here. We've also been making investments in reducing energy usage and sustainability. A couple of examples I'll give you, which again, it's the same some of this stuff is not rocket science, and it's not new technology. But the installation of filtered water dispensers in our hotels, as we're replacing ice machines, we're replacing them with dual machines that also provide filtered water so that we can eliminate plastic bottled water and all bottled water in our hotels. As we near the end of life on many HVAC systems, we're installing new higher-efficiency systems in those programs in those properties. We've also added solar. We now have solar at two properties, Chaminade out in Santa Cruz, but we also have solar on the Monaco, D.C., in the center of the city. There's a lot of things we've been implementing over time, but this year, a much more intensive focus on frankly, some of this is just doing things the right way and not getting sloppy. I think perhaps we've gotten a little bit sloppy in the last 18 months. How helpful. Thank you. Thank you. The next question is coming from Greg Miller of Truist Securities. Please go ahead. Thank you. Good morning. Given your commentary on a softening macroeconomic environment, I thought to ask specifically on any affluent leisure trade-downs. When you review your STAR competitive set reports, superior resorts, have you seen any evidence of a transient leisure consumer trade-down? For example, are your upper-upscale resorts gaining share from competitive luxury resorts, or do you sense that you may be losing share to lower-priced resorts? Or just curious if you're seeing any impact. Sure. That's a tough one. I would say, I mean, the answer is no. We're not seeing competitive trade-down. I think I mentioned earlier, certainly, when we've seen sort of a trade-down from the perspective of trading back to maybe what people can actually afford versus the splurge suites or view rooms that in 2022, just coming out of being stuck in their homes during the pandemic. So there's no doubt we saw that. Again, I think that's normalized within the portfolio. We've continued, generally, to gain share within our resort portfolio. Our occupancy index, as an example, in Q1 was for our resorts in total, was up over 200 basis points. So I don't think that's probably more to do with the dollars we've invested in our properties and the benefits of having higher-quality properties with better service versus the properties we've been competing with in the market. Okay. Thank you very much, Jon. Hey, Greg, one other thing. Just one thing I want to respond to because it's sort of a general. It was a comment in your question. I don't think we're seeing a slowdown in the economy and in travel, per se. And I think we're just more cautious, trying to be pragmatic about what impact the Fed's higher for longer is going to have on the economy later this year. It may not materialize. To some extent, the fact that it hasn't materialized to any great extent yet. But it's also cautiousness based upon what we saw in Q1, although again, how much was weather, how much was the holiday shift, and how much was softer performance? It's hard to differentiate those three at this point in time. What we're not hearing, we're not hearing comments from clients saying, "We're changing our policy. We're slowing down. You have to get 35 approvals to travel." We are not hearing those things from the customer base. We're not seeing a reduction in lead volume for group business other than the normalization of the booking trend that we've been talking about. Great. I appreciate the clarification on that. Sure. Thank you. The next question is coming from Anthony Powell of Barclays. Please go ahead. Hi. Good morning. I guess, what are you seeing on the transaction side? I know rates are higher now. So are you still seeing higher interest for urban assets, and how is kind of the volume out there? Maybe a broad overview would be helpful. Hey, Anthony. Tom Fisher. Good morning. I think to Jon's earlier point on the Fed and the previous answer to the question, I think the uncertainty and I think everybody continues to wait for what the Fed's going to do. I would tell you, as we started the year, the investor sentiment was pretty strong. I think there was kind of a spring to action. I think that that's somewhat been delayed as people wait for the Fed to pivot. I think there is debt availability, but the debt's expensive, and that's impacting pricing. So I still think at this point, there's some pricing discovery out there, but I think that in terms of actual volume of transactions, I think that's going to continue to be somewhat stalled or delayed until we see some real movement in terms of the base rates. There's not a lot on the market today. I mean. What I would say to you is kind of doing my survey of broker interviews, so to speak, or just surveys of the brokers. I would tell you that there seems to be a very, very high level of the brokers doing brokers' opinions of values or BOVs, but not necessarily a lot of that's not necessarily translating into listings. And I'd also say that the listings that are out there, the conversion rate from listing to closing is probably as small as it's ever been given the fact that it's very difficult to secure any type of financing. Anthony, we were very successful last year with the seven transactions that we had. We generated over $330 million of sales proceeds. Certainly, as we look, as Tom mentioned, with the Fed keeping the rates up, it's likely to reduce the number of transactions that are going to happen this year, including for potentially us. We'll still be active and look at that, but to just think things are maybe taking a little bit slower now given everything that's going on with the interest rates and the Fed. All right. Thank you. Thanks, Anthony. Thank you. At this time, I'd like to turn the floor back over to Mr. Bortz for closing comments. Hey, great. Great job, everybody. I didn't think you'd actually follow the rules and limit your questions to one. So thanks for doing that. Clearly, we're here for additional questions that you have. We're happy to chat with you, and we thank you for your interest. Please enjoy the Hilton call that starts at 9:00 A.M., and we appreciate your interest in Pebblebrook, and we look forward to talking with you next quarter. Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.