Greetings, and welcome to Park Hotels & Resorts Q1 2022 earnings conference call. At this time, all participants are in a listen only mode. A Q&A 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, Ian Weissman, Senior Vice President, Corporate Strategy. Thank you. You may begin. Thank you, operator, and welcome everyone to the Park Hotels & Resorts Q1 2022 earnings call. Before we begin, I would like to remind everyone that many of the comments made today are considered forward-looking statements under federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed, and we are not obligated to publicly update or revise these forward-looking statements. Actual performance outcomes and results may differ materially from those expressed in forward-looking statements. Please refer to the documents filed by Park with the SEC, specifically the most recent reports on forms 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. In addition, on today's call, we will discuss certain non-GAAP financial information such as FFO and adjusted EBITDA. You can find this information together with reconciliations to the most directly comparable GAAP financial measure in this morning's earnings release, as well as in our 8-K filed with the SEC and the supplemental financial information available on our website at pkhotelsandresorts.com. This morning, Tom Baltimore, our Chairman and Chief Executive Officer, will provide a review of Park's Q1 performance and outlook over the balance of this year. Sean Dell'Orto, our Chief Financial Officer, will provide additional color on Q1 results, as well as more detail on our balance sheet and liquidity, as well as provide additional information on Q2 performance. Following our prepared remarks, we will open the call for questions. With that, I would like to turn the call over to Tom. Thank you, Ian, and welcome everyone. I'm very pleased to report stronger than expected Q1 results as we enter a new phase of the recovery. More specifically, I am incredibly encouraged to see demand accelerate across all segments. While we expect a continuation of strong leisure demand across our portfolio, the recovery of both group and business transient is gaining momentum, with some of the most negatively impacted urban markets seeing demand up 300% since the start of the year. In addition, with COVID case counts down significantly in the U.S. and more companies returning to the office, our urban portfolio has witnessed a sharp rebound, specifically in San Francisco and New York, where Q occupancy is forecasted to nearly double over the Q1 to nearly 60% in both markets. Further support of a broad-based recovery taking shape within our portfolio. In Hawaii, we are very excited about the upside potential, especially in Honolulu, with the return of travelers from Japan expected toward the back half of this year, which should help support a meaningful acceleration in our earnings, with Japan representing nearly 20% of demand in Hawaii in 2019. Looking at Park's 2022 priorities, we continue to see the benefits of our operational initiatives in realizing a more efficient model and the opportunity to create value by executing on our capital allocation priorities, including stock repurchases and ROI initiatives. We remain committed to upgrading the overall quality of our portfolio and plan to take advantage of the strong bid for real estate in the private market through targeted asset sales. Supported by our diversified portfolio, a rapidly improving backdrop, and a healthy balance sheet, we believe Park is incredibly well-positioned in the quarters and years ahead. Touching briefly on the macro backdrop. Despite concerns over global geopolitical uncertainty and higher commodity prices, we have not seen a noticeable impact on our business as the U.S. economy continues to grow, driven by healthy consumer spending, strong corporate profits, and record low unemployment. Coupled with the widespread shift in return to work policies among the largest companies in the U.S. and declining COVID cases, the macro environment should help fuel a full recovery in the lodging industry by the end of 2023, if not sooner. Starting with group, we have witnessed a material increase in demand within the past two months as declining COVID cases and loosening travel restrictions have translated to significant increases in both lead volume generation and actual group bookings. The pent-up group demand that we saw in the Q4 pre-Omicron resumed by mid-February, with Q1 group demand achieving a 35% sequential improvement to Q4 despite widespread cancellations in January. Group bookings for both 2022 and 2023 increased threefold in March by approximately 200,000 room nights versus just one month prior, with over $44 million of group business added during the month. Currently, our group pace for Q2 through Q4 of 2022 sits at 66% of what 2019 bookings were as of March 2019, and group pace for the full year 2023 sits at 73% of 2019 pace as of March 2018. The improvement in group trends is particularly evident at our urban hotels. In markets like San Francisco, New York, Boston, D.C., and Chicago, 2022 group bookings accelerated materially from February to March, with some markets seeing a 25% increase in pace, while group demand improved 400% from January to March for our urban hotel portfolio overall. We are seeing similar pricing power among our groups that we have seen with leisure travelers, including very strong ancillary spending that resulted in March group contribution exceeding 2019 levels in markets like San Francisco, New York, Orlando, and Key West. We are encouraged by recent trends and feel confident that our group-oriented hotels will realize outsized growth over the near term and will return to pre-COVID group demand levels in 2023. Additionally, we expect business travel to accelerate during the Q2, paving the way for healthy portfolio-wide growth in the H2 of 2022. Business transient demand saw promising improvements beginning in February, overcoming a 34% sequential decline in January with a 25% sequential growth in February and a 46% sequential growth in March, resulting in March business transient revenues that were just 16% below March 2019 levels. In addition, midweek occupancies for our hotels that cater more to business travelers improved to 56% in March, up from just 27% in January, highlighting increased mobility as the COVID wave receded. Looking ahead, Q2 transient pace is down just 11% from the same time in 2019, while the pace of improvement continues to accelerate. In just the last 4 weeks, we have seen overall transient pickup increase by 7% over 2019 levels, an encouraging indicator of demand trends as a broader return to office unfolds and leisure demand remains healthy. In sum, we expect business transient demand to continue to build throughout the year and into 2023, accelerating Park's overall growth profile. Looking briefly at portfolio results, Q1 came in ahead of our expectations, and portfolio-wide ADR surpassed Q1 2019 levels for the first time since the start of the pandemic. As mentioned earlier, results were driven once again by robust demand trends in Hawaii, Florida, Southern California, and Puerto Rico. Importantly, we are seeing an inflection for urban markets, as we have also witnessed a strong uptick in business transient and group demand across several of our core urban hotels, including San Francisco, New York, Boston, D.C., and Chicago by the middle of the quarter. More specifically, hotel occupancy for our core urban hotels across these five markets increased by more than 2,700 basis points on the January lows to nearly 47% in March and are on pace to be near 68% during the Q2 based on our current forecast. Turning to some highlights from our core markets. Hawaii continues to exceed expectations. Waikoloa surpassed Q1 2019 RevPAR by 32% and exceeded Q1 2019 EBITDA by $1.2 million or 9.5% on half as many hotel rooms compared to 2019, while hotel EBITDA margins exceeded 2019 levels by nearly 700 basis points. The hotel hosted 2 near buyouts during the quarter, which helped push banquet revenues 19% ahead of Q1 2019. At Hilton Hawaiian Village, the hotel consistently outperformed budgeted expectations throughout the quarter, with March RevPAR just 5% below 2019 levels, while EBITDA margin was up 140 basis points compared to March 2019, a testament to effective operating model changes. Based on our current forecast, we expect our Hawaii hotels to surpass 2019 RevPAR on a combined basis during the Q2, despite the lack of international demand, which has historically been around 30%. Overall, with the return of the international traveler expected to occur during the H2 of the year. Further accelerating our growth profile. South Florida remains incredibly strong, with our Key West hotels exceeding 83% occupancy during the Q1, while ADRs continued to climb, reaching $752 during the Q1, or more than 60% higher than levels achieved during the same period in 2019. Miami occupancy topped 82%, while rates at our Royal Palm Hotel were nearly 30% higher than Q1 2019. We do expect a modest deceleration of growth during the summer as our hotels start to lap RevPAR growth rates of 150% to 200% on average, achieved last year. However, fundamentals remain strong in South Florida for continued leisure strength. Looking at some of our urban hotels, in New York, Omicron hit particularly hard in January, but the market quickly rebounded in February, with occupancy improving nearly 21 percentage points sequentially to 34% and to 54% in March as the removal of the vaccine and mask mandates in early March led to a sharp increase in reservations. Based on preliminary results, April occupancy is on pace to be approximately 70%. Domestic leisure is made up the bulk of the demand thus far, but there are encouraging signs of material improvements for both business transient and international travelers, and the group outlook looks strong, with group pace up over 96% for the balance of 2022. Overall, we expect the hotel to end the year at over 80% occupancy with average daily rate above 2019 levels. In San Francisco, the outlook is very promising. Based on preliminary results, our open hotels are expected to report occupancy of over 64% in April and more than 22 percentage point improvement from March, with the pace of improvement expected to continue throughout the Q2 as group returns to the market, tech companies resume travel and leisure production accelerates. Performance has been particularly strong at our 1,900-room Hilton San Francisco Union Square, with occupancy improving to 60% in April based on preliminary results, up from just 30% in March. Given better than expected group production, we made the decision to accelerate the reopening of Parc 55, which is now scheduled to open on or around May 19. The hotel is expected to quickly ramp up, with forecasted occupancy over the back half of the year expected to be just 10 percentage points below 2019. Performance should accelerate as we move through the Q2, with hotel occupancy for our San Francisco assets, excluding the still closed Parc 55, forecasted to exceed 70%. As demand trends improve, our efforts to reimagine our operating model since the onset of the pandemic have translated into improved flow through and strong margin gains with our cost-saving initiatives expected to yield 300 basis points of margin expansion, peak to peak. As a reminder, we have eliminated $85 million of operational expenses across our portfolio, the majority of which are managerial salaries and benefits that we expect to continue to maintain even as demand levels return to pre-pandemic levels. By way of example, at our two Hawaii hotels, we have successfully maintained a nearly 30% reduction in mid-level management staff despite nearing 80% occupancy during the Q1. In addition, our properties continue to evaluate their food and beverage offerings, flexing outlet openings based on demand and rethinking concepts and products to ensure profitability and alignment with changing guest preferences. As demand returns, our properties will continue to employ thoughtful staffing strategies to help minimize unnecessary cost creep going forward. Turning to capital allocation priorities. We remain laser focused on pursuing strategies to create long term shareholder value. Accordingly, we remain committed to taking advantage of a strong private market bid for real estate and anticipate executing on our stated goal of $200 million to $300 million of non-core dispositions this year with over $100 million already under contract. Proceeds will be reallocated to repay debt, repurchase stock to the extent the deep discount to our internal NAV estimates persist, and invest in our pipeline of in-process ROI projects, including the Bonnet Creek meeting platform, the rebranding and renovation of the Casa Marina in Key West to a Curio, and the conversion of the DoubleTree in San Jose to a Hilton, all of which should generate returns in excess of 15% to 20% while enhancing the overall quality of our iconic portfolio. To briefly recap, we are very excited about Park's setup for the balance of 2022 and into 2023. Hawaii is expected to continue to outperform expectations, particularly from the robust pent-up demand from our Japanese travel partners that is expected to materialize by this summer. Accelerating group and business transient demand should help push growth among our urban assets, with these assets expected to fully recover next year. While labor remains a near-term headwind in certain markets, we remain confident that our cost savings initiatives will translate into more efficient operations as demand recovers. With over $1.5 billion of liquidity and just 1% of debt maturing in 2022, we have ample liquidity to execute on our capital allocation priorities to help drive growth. Overall, we remain laser-focused on creating shareholder value and narrowing the valuation gap with our peers with our 2022 priorities squarely focused on operational excellence and realizing the embedded 300 basis points upside potential in operating margins, recycling capital and taking advantage of a strong private market bid for real estate, unlocking the significant embedded value in our portfolio by reinvesting in our hotels through our robust ROI pipeline and continuing to improve the quality of our balance sheet to provide for enhanced financial flexibility and optionality to execute on our long-term growth plans. Now, I'd like to turn the call over to Sean, who will provide some additional color on operations along with an update on our capital allocation priorities, balance sheet, and guidance for Q2. Thanks, Tom. Overall, we were very pleased with our Q1 performance as recovery has expanded beyond leisure travel. Pro forma RevPAR improved sequentially to $116 despite a 60 basis point decline in occupancy to 51.9%, while rate averaged an impressive $224 during the quarter, a 7% sequential improvement over Q4 2021 and in line to the same period in 2019. Q1 results were negatively impacted by the spike in case counts in January. However, as concerns over Omicron waned toward the tail end of the month, we witnessed a sharp rebound in demand over the balance of the Q1, with RevPAR improving by 45% in February from January and by 26% in March to $149. Total operating revenue for the portfolio was $463 million during the Q1, while hotel adjusted EBITDA was $89 million, resulting in hotel adjusted EBITDA margin of 19.3%. Margins quickly ramped up as we moved through the quarter, increasing from a low of just 2.8% in January to 29.3% in March. Note that our Q1 EBITDA margin was down slightly from Q4 2021 due to a $7 million sequential increase in property taxes. Overall, Q1 adjusted EBITDA was $82 million and adjusted FFO per share was $0.08 for the quarter, with March AFFO coming in at nearly $35 million. Turning to the balance sheet, our liquidity currently stands at over $1.5 billion, including over $900 million available on our revolver and approximately $640 million of cash on hand, while net debt sits at $4.2 billion. With respect to potential refinancing opportunities, we continue to monitor the credit markets as both treasuries and spreads have widened, resulting in a meaningful increase in borrowing costs over the past couple of months. In spite of this, Park's balance sheet remains in very good shape with 99% of its debt fixed and just $84 million of debt maturing within the next twelve months. We will continue to closely monitor the debt capital markets and update you on our refinancing efforts over the course of this year. On the capital return front, as previously announced, we reinitiated our quarterly dividend in the Q1 at $0.01 per share and expect to continue paying a $0.01 per share dividend over the next couple of quarters, ending the year with the potential for a Q4 top-off dividend. Also, as previously reported, we bought back a total of $61 million of stock during the Q1 at an average price of just under $18, with nearly $190 million of capacity still available, subject to the limitations outlined in our credit facilities. Overall, buybacks were executed at a nearly 40% discount to our internal NAV estimate or just 10.3x 2019 pro forma adjusted EBITDA. In fact, when comparing to recent transactions we have evaluated in recent months, there is simply no better use of our capital, with buybacks more than twice as accretive to earnings than buying hotels at north of 14x 2019 EBITDA. We believe the stock remains undervalued, and we will update you on future buybacks during our Q2 earnings call. Finally, as Tom noted in his earlier comments, the pace of improvement has been remarkable. While COVID led to an unprecedented uncertainty over the last two years, I am thrilled to announce that we've decided to reinstate earnings guidance for the Q2 based upon the broad-based recovery taking shape within our markets, especially across our urban portfolio of hotels. Accordingly, we are establishing Q2 RevPAR guidance of $160 to $164 or 15% below 2019 levels at the midpoint. With adjusted EBITDA guidance for the Q2 between $160 million and $180 million or 18% below 2019 pro forma adjusted EBITDA at the midpoint. Hotel adjusted EBITDA margins will range from 27% to 29%, while AFFO per share will range between $0.40 to $0.49 for the Q2. This concludes our prepared remarks. We will now open the line for Q&A. To address each of your questions, we ask that you limit yourself to one question and one follow-up. Operator, may we have the first question, please? Thank you. Ladies and gentlemen, at this time, we will be conducting a Q&A session. If you'd like to ask a question, you may press star one on your telephone keypad. 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. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from the line of Smedes Rose with Citi. Please proceed with your question. Hi, good morning. It's Smedes. I wanted to ask you just two quick questions. Just relative to our forecast, the kind of other revenue line was quite a bit higher than what we had been anticipating. I was wondering if you could maybe talk about just customer spend or sort of out-of-pocket spend during the quarter, what you're seeing there, and, you know, were there maybe some cancellation fees booked into that number as well? Yes, Smedes, this is Sean. You're talking through Q1 reporting here, and you can recall with, obviously, with a lot of Omicron-related cancellation on the group side, cancellation fees were certainly a bit elevated. If you're kind of tracking relative to, you know, prior pre-pandemic levels to kind of model that way, I'd say that's the biggest gap you're probably seeing at this point is I would say we're probably normalized around $2 million or so of cancellations any given quarter, and we're around $10 million for the quarter. I think it's probably the biggest gap. I think, you know, as you look at occupancy levels and whatnot, certainly being, you know, down meaningfully to pre-pandemic levels, but our, you know, from a resort fee standpoint and, which is in that line, we're probably about 5% down. I think those probably the two combined are probably where you might be a little bit off. Okay, thanks. I just wanted to ask you touched on the private bid for asset sales. I just was wondering, given the sort of rising costs of debt and some things we're seeing going on in the CMBS market, kind of what have you seen just kind of more recently from potential buyers and, you know, would you guys consider doing, you know, seller financing as a way of maybe getting a deal done? Yeah, I would say, Smedes, it's great to speak with you. That obviously there's tremendous capital, whether it's private equity, whether it's high net worth, whether it's sovereign funds. Clearly, as we look out and certainly limited supply growth, we demonstrated last year, as you know, we sold five assets for $477 million at pretty attractive cap rates and multiples. We see really no slowing down of that. The debt markets are a little choppy and have widened out a little bit, but it's still no real hindrance in getting a deal done. You know, seller financing is really not something that we're considering at this time, and we don't really think it's needed for the types of deals that we're looking at transacting on. Great. Thank you very much. Thank you. Have a great day. Our next question comes from the line of Floris van Dijkum with Compass Point. Please proceed with your question. Hey, good morning. Morning. Tom, you know, capital allocation, you talk about, obviously, you have some, a little bit of flexibility. You did buy back some stock. I think that's. I think a lot of investors appreciate that you're willing to put your money where your mouth is. Maybe talk about how do you weigh potential new investments, for example, building another tower in Hawaii at Hilton Hawaiian Village, where essentially, potentially you double your capital when the doors open, because the values there are so much higher than replacement costs. How do you weigh, you know, those competing demands on your capital? Yeah, Floris, it's a great question. I think the first thing, and I think we've been really crystal clear about that, and that is that, you know, when you're trading at the kind of discount that we are at 30% to 40%, as Sean noted in his prepared remarks, you know, the highest and best use of available cash for us is really investing back into our portfolio, either in buying back stock or in the case of reinvesting in the ROI projects, and Bonnet Creek is a great example of that. You know, finding that right balance is important. You will expect we've set a target here of selling obviously non-core assets of $200 million to $300 million. I would expect that we will at least meet that, if not exceed that. We'll use those proceeds, and we'll allocate carefully between where the stock is trading in that discount in terms of buybacks and what we're permitted to do. You know, we certainly expect to be out of the covenant restrictions here in the near term, if not Q2, shortly thereafter, which will also give us increased flexibility. Reinvesting back in the portfolio, as you look at something like Hawaii, which is just an extraordinary asset, 2,900 rooms, we're working through the entitlement process now. We're still a few years out, where we really have to make that decision in terms of investing. We're doing all of the entitlement work. We'll obviously design and work through that. Fortunately, we don't need to make that allocation decision on that in the near term here. Great. My follow-up, if possible. You sort of touched upon the fact that you're gonna be. You expect potentially to emerge from the covenant waivers in the Q2. Where do you see your split between resort and urban at the end of this year? And do you have like an optimal, you know, percentage of your portfolio? And has that changed over the past, you know, 18 months in your view? Listen to two things. Sean is going to just give you a little more clarity on the covenant piece. He'll come back to that in a second. I said possibly by Q2, he'll clarify that just where we are. The other point is, look, we don't look at. Obviously Hawaii is 25%. We have two phenomenal assets there. We're certainly not looking to necessarily add more product in Hawaii. We're not looking to obviously sell either of those assets at this point as well. You know, on the urban front, we'll continue to evaluate markets. As we've said, we certainly, like others, are looking at what's happening obviously in the Southeast, and certainly markets that we too find attractive, whether that's a Nashville or an Austin or Phoenix. Obviously, there's a lot of supply coming, so we certainly wanna be thoughtful in that respect as to how we're allocating capital. But as we look at the urban markets, as we're seeing, we fully expect here that you're gonna continue to see that recovery accelerate, and that's gonna be very attractive to us as we move forward. Yeah. Floris, just to clarify, we're certainly expecting. We have the covenant waivers through Q3, and certainly expect to be in a position where, you know, our covenants when you annualize Q2 will be really strong. But just ultimately, since it's not really truly tested and you don't get out and test it that way on Q2, we're certainly expecting kind of more towards Q3. Obviously, we did a lot of work to give us a lot of flexibility during that covenant waiver period, so we're not too worried about us functioning as we need to through Q3, but I think technically we won't be out of it until Q3. Thanks, guys. Are you guys still on? Yeah, the Park team is here. Sorry. That was it for me. I will open the floor up to others if I'm still live. Yeah, I think we had. Operator, we can ultimately go to the next question in the queue, please. Our next question comes from the line of Anthony Powell with Barclays. Please proceed with your question. Hi. Good morning, everyone. Question on leisure pricing. I think that you said that you expect to see tougher comps in the summer on your leisure properties, which we all expect. I'm curious, do you expect to be able to push pricing over 2021 levels in some of these markets? Or do you worry about inflation maybe taking away some purchasing power for some of these properties this summer? Anthony, great to hear from you. Sorry, we had a little bit of a delay there, but hopefully we've gotten that corrected. Look, we were seeing a little bit of moderation really in the context of what we're seeing in Key West. As Sean noted, you know, we're looking at numbers that are 150% to 200% above, obviously previous thresholds, which obviously are healthy. Having said that, as we sort of look out here at, you know, Q1, both Casa and The Reach were, you know, 46% to 50% over in RevPAR, certainly, versus 2019. You know, we're expecting we're probably gonna be in that 40% to 50% range here as we look out. There's a little bit of moderation, but they're still gonna continue to be strong. You know, as we sort of look out over Hawaii, I mean, Hawaii really hasn't had the great run, so we are just incredibly encouraged. As we said, as we look out in Q2 there, you know, we're looking at probably both properties combined probably being a RevPAR over 7% of what we had in 2019. Clearly, Waikoloa has just been an incredible performer and clearly in that 45% range, and fully expect that that's gonna continue there. You know, we see no real retreat other than probably pockets of just trees don't grow to the sky. Given the fact that Key West has just been so extraordinarily successful that a slight moderation there is not unreasonable. Got it. Okay. Maybe on Hawaii, I mean, you mentioned you're very positive on the H2 of the year, given the return of the Japanese traveler. We have the yen, which looks like we have a 21-year low. I'm curious How currency plays into your view of Hawaii in the back half of the year as those travelers will face some interest, but have some currency headwinds, I guess? Yeah. I mean, it's a fair point, Anthony. I think if you look at Japanese travelers into Hawaii over the long run, I mean, they've consistently been about 1.5 million visitors. As you think about Hilton Hawaiian Village, for us, it's about 30% international. Of that, about 60% of that, so 20% in total, obviously coming from Japan. That's down over the last 2 years. There has been significant pent-up demand, and they've been absent. Their visitation is down about 97% ±, so they spend more, and they stay longer. We just hear and we believe just based on the trends and the discussions that we're having, that that recovery and that return is coming and really gonna be robust and pretty significant. We are really encouraged by that and fully expect that in the H2 of 2022 into 2023 and beyond. Again, over the last 30 years, it's really been that group, that important partner base has been just consistent, and we fully expect it's gonna return. Okay. Thank you. Okay. Thank you. Our next question comes from the line of Chris Woronka with Deutsche Bank. Please proceed with your question. Yeah. Hey, good morning, guys. Morning. Morning. Appreciate the decision to give guidance again. Think that gives us all a little bit of confidence, and since it's your first time going back into it, I wanna go easy on you. Based on what you said about March, the numbers you gave out and then, you know, with the acceleration into April, it seems like those could be pretty conservative. I guess the question is, you know, is April the strongest month of the quarter from where you sit now? Yeah. A couple of things, Chris. Look, it's a conservative team here, and just based on the trends, we are confident in the guidance. Look, we hope that we're having this discussion less than 90 days from now and certainly meeting and exceeding that. The reality is, I think what listeners should gain confidence that the management team is confident. We are seeing very encouraging signs. I think remember, there have been a lot of people that have been certainly understandably concerned about certainly on the group and the transient business in the urban. I think it's clear that those segments are accelerating, and we are confident that that's certainly gonna continue. Okay. That's fair, Tom. Then, on the dividend, I think you mentioned the penny for the next couple quarters. Beyond that, understandably, you're still getting the balance sheet back to where you want. You have to come out of the covenant relief. Beyond that, with the 10-year at 3%, you know, where do you think you might land, or would you like to land, relative to, say, 2019, given that you know, the competitive yield is now a lot higher? Yeah. It's a great question. Look, we've decided as a team in the past, you know, we had a set dividend, and then, of course, we would do a modest little top off. You know, we've decided in this environment, particularly as we will be continuing to recycle capital, that we'll use more of a Q4 sort of top off strategy here in the near term. We'll be thoughtful. We'll continue to put out additional information. We thought it was important to lead with the $0.01, and then we'll continue to adjust that as asset sales and as the business operations improve, and you can expect to get more clarity on that in the weeks and months to come. Okay. Very good. Thanks, Tom. Thank you. Our next question comes from the line of Dany Asad with Bank of America. Please proceed with your question. Hi. Good morning, everybody. Morning, Dany Asad. Tom or Sean, I'm just gonna ask Chris' question a little bit differently, but you know, the Q2 RevPAR outlook of down 15% is just lower than your April run rate. Just when we're thinking about May and June, can you kinda just help us unpack that, whether it's you know, is there like an implied decel in specific markets, in specific segments, or is it just you know, you're like, "Well, we don't have as much visibility into some parts of the recovery, so we're gonna be conservative and kinda lay it out that way"? Yeah, Dany, I'll give it a shot, since Tom already went there and say that, you know, again, I'll kinda underline the conservativeness in here. As Chris went easy on us, you know, we certainly were coming out for the first time, you know, guidance couple years one to kinda certainly take a conservative tone, but realistic tone. I would say that bottom line is May, we're coming off the leisure strong leisure elements of April, so May is a little weaker than April. June, I would say is in line to slightly better than April. It's, you know, just May is a little bit soft. Overall, again, I think we feel pretty good about what our guidance, you know, the guidance we've given here. Understood. Thank you. For my follow-up, it's been a bit tricky to map out that margin recovery pattern only because, you know, you have so many moving pieces, right? There's permanent cost reductions. You have some labor issues in some markets that are offsetting that we don't know. You know, we haven't seen the full picture of the labor, kind of, you know, in some of those markets, you have some returns from ROI projects. All these things are beyond kind of how we would think about the core portfolio's normal, you know, margin recovery. How do we think about that, you know, for the balance of the year? Is there any? You know, are there any significant milestones that we can look for to see kind of, oh, there would be an inflection, for example, if New York or San Francisco hits certain thresholds or something like that? Yeah, I mean, I think when I think about it, for one, I think getting back the group in a more stabilized. We're down 600 points or 600 basis points on mix on group, and we're down significantly relative to, you know, to 2019 on banquet and catering revenue. You're talking about a line item that you're getting 45-ish% margin on versus, you know, more reliance on outlet, which has been great, and we're actually more profitable in that than the outlets. It's only about 12% margin or so, 12 to 15% margin. Getting that mix back, I think it's gonna help, I think, demonstrate some of the margin strength here. We just need to get to a more stabilized mix in our business when you start comparing to prior, you know, pre-pandemic times. But when you look back at the portfolio, you know, we've got obviously had this group of assets, you know, even in Hilton's private ownership, we have the data. You look at kind of the, you know, Great Recession, 2008 to kind of 2010, 2011, you got RevPAR drops of 10% to 15%. You know, margins are down 500 to 600 basis points relative to where we're talking about 50% down at the midpoint on our for the quarter and only down 300 basis points or so on the margin. I think you're seeing it in different ways, but it's gonna take a little bit of time to kind of get through kind of the variability of some of these different elements of the business coming back at different times. Hey, Danny. The other thing I would say, Avi, here is, you know, we are laser focused, as we've said, on working with our operating partners to reimagine the operating model, and we stand by the $85 million in cost. It's about, you know, 1,200 jobs. The vast majority of those are really in management positions. Obviously, the pandemic forced all of us to think about the business differently and to respond to customer preferences and the changing customer preferences. There's one evidence of that. As you think about Q1, you know, our labor expenses were down $73 million just in the quarter, and a lot of that coming in food and beverage labor, a lot of that coming in sales and marketing. Look, we understand it's a bit of a show-me story. Investors aren't giving us any credit, and certainly analysts aren't giving us credit for it. We are very confident that we're gonna continue to demonstrate that. As occupancies in the business comes back and continues to accelerate, you're gonna see that it is a very different operating model and that they are a much better profile, as we look out. Very helpful. Thank you very much. Sure. Our next question comes from the line of Ari Klein with BMO Capital Markets. Please proceed with your question. Thanks. You know, maybe on the group bookings, they've obviously been improving quite a bit of late, but wanted to dig in on the rate side, which is flat for 2022 and up 2.5% for 2023 versus 2019. The rate backdrop has evolved quite a bit since some of these bookings were originally made. Was hoping to get some color on how more recent bookings compare versus 2019 and if you expect more of an uplift from the newer bookings on rate. Yeah, I couldn't really give you a you know big hard you know a lot of hard data. I'm sorry. Ultimately talking with our folks you know at the brand you know operators who are ultimately saying yes they're seeing you know a little more pricing power on the group side. They're also implementing and working through ways to you know bring in some adjustment factors in as you think about bookings that are done in some of the outer years. As you think through inflationary elements too to kind of have the ability to adjust which really has not been there over the last several years even in the last cycle. Those kind of elements are being now brought into the contract discussion. You're starting to see that, you know, more push on the rate side in the group. Got it. Then just on group pace, 2023, you know, at 73%, you know, that's kind of flat to where it was at the end of December. Do you expect that gap to continue to narrow moving forward? Yeah, there's no doubt about that. I mean, if you look into that, obviously seeing Orlando continue to really accelerate, New York City, Hawaii, D.C., you know, even as we look out on San Francisco. Very encouraging there is. Again, given the booking window, what we saw here just in one month of that $44 million in incremental on about 200,000 room nights, you know, we expect that's gonna accelerate. Thanks. Our next question comes from the line of Jay Kornreich with SMBC. Please proceed with your question. Hey, thanks. Good morning. Morning. Morning. As you mentioned, seeing solid pickup in the urban markets, can you just give us a little more color with what you're seeing on the ground and maybe highlight how San Francisco is improving and driving back business transient and group demand? Yeah. I mean, I've obviously, we've been talking a lot about San Francisco. I've been out personally several times over the last several months. No doubt, I think you know, the mayor's leadership there, we continue to have outreach through our operators there with chief of police, the other leaders, and you know, street conditions continue to improve. The safety and security issue is an important part of that. As you think about citywide, about 34 events just south of 400,000 room nights. As we look out you know, here, obviously in the Q2, you got RIMS conference there, Heart Rhythm, about 6,000 attendees. RSA, probably about 20,000 attendees, providing you know pretty good citywide coverage here as we look out, hence giving us more confidence to reopen Parc 55. Very, very encouraged. Obviously, as we said earlier, you're looking at Hilton San Francisco, which was at 30% occupancy in March and increasing to, you know, 60% there in April. We expect probably Q2 to be in the 65% range. It's a very, very encouraging picture. Obviously, the JW Marriott and the Hyatt Centric Fisherman's Wharf have been really strong performance for us in the mid- to high 80s in what we saw in April. We expect, obviously, in the Q2, having occupancies in that mid-70s as we look out. Still a little flat on RevPAR. A little bit more of a discount there than we're seeing in other markets, but no doubt the outlook is far more encouraging than what we saw 30, 60, 90, you know, 120 days ago. Yeah, I would add to that if I could, just to say that as you think about pickup activity across the portfolio, it certainly has been driven a lot by some of the urban markets here lately. You know, Hawaii and Orlando remain consistent performers, putting up, you know, together about $4 to $5 million a month for the year for, you know, each month for pickup. You think about looking at the four main urban markets, I think they've been really challenged. New York, San Francisco, Chicago, and D.C., you had about $4.5 million of cancels at the end of the year for 2022. By the time you got to February, it was just over $1 million of cancels amongst those four markets. Then you turn around in March, it was $11 million positive pickup across those four assets or four markets, I should say, with a big jump for New York, which is up $7 million of pickup. I think in the end, you clearly, you're seeing that turnaround, that inflection point driven by the urban markets and on the group side. Got it. That's great color. Thanks for that. Then just as a follow-up, I believe you previously targeted the summer months for international demand to more strongly return to markets like Hawaii, San Francisco, New York. I know we spoke about the Japanese customer base, but I'm curious about your updated thoughts on demand from other countries returning as there's been some uptick in COVID cases abroad, specifically in China. Just curious how you see the international demand coming back throughout the year. Yeah, I don't see China. Obviously, China's been a pretty small part of it when you think about it. Largely, you're getting the international coming from, obviously the U.K., coming from Canada, you're having from Mexico. If you think back, you know, you're about 79 million in terms of inbound on the international front in 2019. You know, we don't expect to probably get back to those levels for certainly a few more years. But and as we think about the Japanese travel, we're very confident that's gonna come back. But really, you're gonna see it coming out of, you know, the three markets that I mentioned. Coming out of Europe, coming out of Mexico, coming out of Canada will be clearly where it will be anchored. All right. That's great. Thanks so much for the time and congrats on the quarter. Great. Thanks. Our next question comes from the line of Bill Crow with Raymond James. Please proceed with your question. Hey. Yeah. Good morning, guys. Good morning, Bill. Tom, I'm curious whether y'all are building in a recession scenario for 2023. I think 30% of the economists are kind of there now. I'm wondering how you think about that when you think about capital allocation. You know, Bill, it's obviously on everybody's minds right now. We've got the parade of horribles out there. The war, clearly rising inflation. There is some evidence that some believe perhaps inflation's starting to peak. You know, certainly my crystal ball is not better than anybody else's on that front. You've obviously got you know really a challenging environment and certainly given that uncertainty. I would say one of the things, Bill, that this team has done as well as anybody is just think about how we handled the last crisis. We didn't panic. We didn't do a dilutive equity raise. We shut down hotels. We reimagined the operating model. It's really part of our DNA and really part of our strength is to be able to toggle between defense and offense. As we look out, we're very encouraged what we're seeing on the demand side as we've articulated and you're seeing, and obviously providing the guidance and having confidence there. There's no doubt we're gonna continue to work really hard to reshape the portfolio, continue to sell the non-core assets and reinvest, obviously back, whether it's through buyback, whether it's through the ROI projects, whether that's through paying down debt. We'll find that right balance. You will continue to make sure that we will continue to make sure that the balance sheet is protected here so that we have that optionality. All right. And my follow-up is on the group demand. The pace that picked up so dramatically in the quarter. I'm curious, since a lot of that was year-over-year, does that mean it's smaller groups? Were there some markets, and I know you just hit on New York that seemed to gain a lot of share, other markets that really did a good job of increasing their group pace over the last 90 days? On the pace side, Bill, I would say, you know, the ones that I mentioned on the urban side, I think naturally saw a good 300-400 basis points improvement. New York specifically, we talked about that. Chicago's been one that really has picked up, and D.C.'s been really strong of late and has continued to strengthen. I'd say it's probably in the 85% range at this point. You know, really encouraged by that. Boston's also showed some good pickup, and it's actually been a little bit lower on the scale coming into the year. It's actually picking up in the year for the year pretty well. We like those markets. San Francisco has been one where it's been more, you know, reducing the cancellations and starting to kind of get to the inflection point. We're actually picking up. I think we're at that juncture right now. I think overall, again, it's mostly the urban side. The resort areas have been just currently consistent, and I would say not driving the recent resurgence as much because they've just been solid throughout. Great. Thanks for the time. Appreciate it. Thanks. Our next question comes from the line of Stephen Grambling with Goldman Sachs. Please proceed with your questions. Hi. Thanks. Following up on Smedes Rose's question about the volatility in the hotel transaction debt markets, what do you think changes that dynamic? As a related follow-up, I guess with residential mortgages now well over 5% versus maybe 3-ish% before, seems like cap rates there are probably following as some of these properties look like they're more likely underwater versus the debt load. What do you think this dynamic means for hotel cap rates? In other words, do you generally see any crossover in the investor base or a correlation with multifamily resi properties? Thanks. Yeah. I mean, it's a fair question, Stephen, but I think if you know, if you look historically at where cap rates have been, and maybe we're seeing 25 to 50 basis points, depending on certain particular markets. But we're not seeing any kind of softening as we're looking to market assets right now. Again, just given the amount of capital that's out there, and we're talking hundreds of billions of dollars certainly looking for a home. There are only so many resi deals, industrial deals and low cap rate deals that get done in 3-4x, 3-4% versus where we think hotels are gonna trade. We think in many respects, it's just gonna make this asset class even more attractive and certainly being a daily leasing business. We're not seeing any issues. We're not seeing really the need for any seller financing. And we have a robust process in all the assets that we're currently marketing at this point. Awesome. That's it for me. Thanks so much. All right. Thanks. Our next question comes from the line of Neil Malkin with Capital One. Please proceed with your question. Hey, everyone. Thanks. First one, you know, Blackstone has been pretty active recently, you know, acquiring some of the public REITs, you know, kind of trading at discounts to private market values. Obviously, I think the lodging sector would be a good poster child for that. I know that Blackstone had a couple of failed attempts at acquisitions of lodging REITs over the last several years. I'm just wondering, you know, do you think that, you know, Blackstone could potentially look at your sector? You know, what do you kinda think the likelihood of some M&A or, you know, private equity take-privates are this year for lodging? Thanks. Well, it's a great question, and I think listeners know that I've been one of the stronger advocates for the need for consolidation or take private in the sector. Obviously, Blackstone knows this industry as well as anyone and other PE firms. I would expect, again, just given the amount of capital that's on the sidelines, that clearly the hotel trade would accelerate over time. When that happens, I certainly am not gonna try to predict or comment when Blackstone or any other PE firm makes a decision to enter the space in a more meaningful way, other than to say, given the disconnect that, and not only for Park, but for others in terms of how wide the gap is in NAV, you would expect that it certainly would be enticing over time. Okay, great. Other one for me is just kind of going back to leisure ADR. I think everyone that we've heard report is pretty confident about the stability of leisure ADR and sort of a reset compared to last cycle and rates. I'm just, you know, very cautious on that. I mean, if you look at sort of, you know, people have never had more, you know, savings or at least previously, you know, from the lack of student debt, you know, having to pay interest, the, you know, a lot of people were paying nothing for housing, a lot of fiscal stimulus, unemployment, et cetera. You know, it just doesn't seem to me that, you know, it seems more likely that these people are doing these sort of non-sustainable purchases versus, like how many, you know, people out there in the country can afford to pay $800,000 for a room, you know, you know, keep it at 80% occupancy for a whole quarter. You know, it just doesn't seem like these very high ADRs are sustainable, you know, long term. I'd just like to get your take on, you know, what you're kind of seeing at your more, you know, the coastal leisure-oriented properties, you know, the kind of the demographic mix there and, you know, any trends that you're seeing that would give you caution of, you know, that we are potentially, you know, seeing that the peaks of. You know, revenge, and I have a lot more money mania going on in those sorts of hotels versus something sustainable. Thanks. Yeah. I think it's important to keep in mind as we all move toward a more hybrid working model, this concept of sort of bleisure, combining both your business and leisure. I think it provides more optionality, and I think it provides an opportunity for hotel owners and operators to continue to find that right balance, both in product and service and in pricing. There's no doubt, I think that the leisure trade remains strong. We continue to see that and even in markets like Key West, where we said we were up 150%-200%. Now, while we expect to see a slight moderation there, we still believe that you can expect that trade to continue to be strong here as we look out. Your comment about trees don't grow to the sky, I think is fair. We certainly don't see any peak at this point. Okay, thanks. Okay, great. Our next question comes from the line of Robin Farley with UBS. Please proceed with your question. Great. Thanks. Most of my questions have been asked by now, but just one circling back on the group topic. I know you've talked a lot about the acceleration in the last month or two. I guess it's just surprising for 2023, given that it seems like there will be groups that, you know, haven't met for three years and even groups that meet only every two or three years, that there would be something of a backlog in demand for 2023 group. From what you're seeing, do you think that you'll get 2023 group to be above 2019 levels? It's surprising that the pace for 2023 is still so not so far below, but that 73% of 2019 was 73% of 2019 as of early 2018, right? Not where 2019 ended up. You know, I assume we're further behind, you know, what full looks like. Just your thoughts on whether 2023, you know. If not, what are your folks hearing from the ground in terms of why aren't these groups coming back that haven't met in three years? Thanks. Robin, to your point, we certainly expect that it's going to continue to accelerate. As we noted in my prepared remarks, I mean, obviously we saw a threefold, 300% increase just between March and February. Again, 200,000 room nights are about $44 million, and about 117,000 room nights of that in 2022 for the year, and again, about 77,000 room nights plus or minus into 2023. Obviously, that was $44 million in really a 30-day window. We fully expect, and the body language and the feedback that we're getting from our operating partners is, we expect that that's going to continue to accelerate. I think you're spot on. We're not at all concerned. As we've said, we would expect that we'd get back to 2019 levels during calendar year 2023. In some markets, we may even get back even sooner here in the Q4 or so of 2022, just given how things are accelerating. I think Hawaii is an example of that. Just given the fact in the Q2, we expect it will be over 7%. Again, those are the two resorts there, two world-class resorts that we have there. Of course, what we're seeing in markets like Key West continue to accelerate there. We would expect the group is only gonna continue to accelerate. That need to be together, reclaiming, recapturing, bringing, whether it's incentive, whether it's group and training, we would expect that to continue to grow. Okay. Thank you. Great. Thank you. Our next question comes from the line of Patrick Scholes with Truist. Please proceed with your question. Hi. Good afternoon. Hey, Patrick. In your 2Q outlook, you give a range of down 14% to 16% for RevPAR versus 2019. How would you think about what, for the three specific customer segments, the transient leisure, transient business and group, you know, ballpark, are your expectations for those three segments in relation to down 14%-16% versus 2019? Thank you. You want that? Yeah. I think I mean, I think you're gonna see just kind of a continuation of improvement across obviously the group and the business transient standpoint. I haven't really, you know, we haven't broken it out in that regards too much detail, but I would say that, you know, you're still gonna see leisure, you know, basically about at or slightly up on relative to 2019. So call that kind of a slight positive. Again, you've got the leisure kind of running out on off of April there. So you get some strong April, but you kinda have it in slowing down in May. With the group you've got, I would say group is still gonna be somewhere in the neighborhood of, call it 105, you know, kind of on pace with that, with our guidance. 'Cause again, you've got some strong group here coming back. We're still obviously below normal levels. I would say on business transient, while still recovering, we're probably still pacing at close to 60%-65% of 2019 levels as we kind of entered the quarter. I think you're still looking at that being down 20% or so, 20% to 25%. Okay. Thank you. That's it. Our next question comes from the line of Chris Darling with Green Street. Please proceed with your question. Thanks. Good morning. Hey, Chris. Tom, hey, how's it going? I'm hoping you can provide a few thoughts on the supply backdrop across your portfolio. Do any markets stand out on the positive or negative side? More broadly, I'm curious, you know, how that outlook for supply kind of plays into your confidence around, you know, some of your urban markets recovering over the next couple of years. Yeah. Chris, thank you for the question. I mean, as we look out, I mean, if you think about just, you know, 3 of our larger markets, Hawaii, we're looking at near impossible to get new product done there and just given the barriers to entry. There, clearly, we would expect virtually no supply added. San Francisco is another market where we see certainly in the, you know, a sub-1% supply. Orlando is another certainly low supply. So when we look out kind of our exposure vis-à-vis our peers, it's certainly a sub-2%. As we look out across the industry, as we think about 2023, 2024, 2025, again, you're below the long-term average of 2% and probably in the 1% range. As you think about urban markets, and again, would be very difficult to replicate our portfolio, whether it's clearly in a San Francisco, New Orleans, Chicago, you know, even the two city block and what we have in New York. New York, probably the one market with a little more supply, but you've also got a bunch of hotels that are also being taken out and probably at a reset lower than where it was in the 2019 level. We see that again as another opportunity and a real benefit. While you're seeing other select service, you're not seeing urban full service hotels get done, given the fact that that entitlement process could be 3, 4, 5 years. See that being a real benefit. Of course, you know, we trade at a huge discount to replacement cost, probably 55% plus or minus. You're also seeing, obviously, in this inflationary environment, that's probably increased, given the fact that you're looking at replacement costs probably rising another 10%-15%, if not more. Got it. Appreciate the thoughts. That's all for me. Great. Thank you. Our next question comes from the line of David Katz with Jefferies. Please proceed with your question. Hi. Afternoon, everyone. Congrats on the quarter, and thanks for taking my question. Thanks. You have a target out there, I think of 200 to 300 of asset sales. I'm curious if you can elaborate on sort of how that number is derived and, you know, what, if any, you know, potential gating factors would be out there that you know might cause it to get, you know, bigger or go up. Yeah, it's a great question, David. Look, the reality is, you know, we set a target last year, sort of $300 million to $400 million. We were just kind of inside of $500 million. You know, what we constantly are doing is looking at the portfolio and, you know, there were four or five assets, as you may recall, that we were self operating or as part of the spin, we were required to obviously hold those for a period of time. Those are assets like that, smaller assets, but ones that we're working aggressively to certainly recycle that capital. There are other joint venture assets. There are other assets within the portfolio that we're working through. You know, we've set a reasonable target. I would expect, given how hard this team is working, that we're gonna exceed that. Again, raising those proceeds only gives us additional optionality. As I articulated early, really, given where we're trading, we think the highest and best use is to really invest back into this portfolio, either buying back stock, whether it's reinvesting through ROI projects, or alternatively, certainly finding the right balance and paying down debt as well. We're very confident that you'll see us continue to reshape the portfolio. You know, we've sold 32 assets for just over $1.7 billion. We've been very thoughtful and targeted about that, and this is really a continuation of our recycling, where we've really had a lot of success over the last 5+ years. Got it. If I'm sort of taking, you know, the context really is that 200 or 300 is a baseline. It sounds like just, you know, complexity and sort of finding the right, you know, moment and circumstance to execute is what the gating factor ultimately is. Yeah. It's a fair point. I mean, I think last year, as you think about what we sold, you know, we were being told that we really would be difficult to move urban assets. You may recall that we sold 2 in San Francisco at really comparable to 2019 pricing. It's not a fire sale, it's thoughtful, it's targeted. As I've said, there's plenty of capital, whether it's through PE firms, high net worth, family offices, no shortage of capital as people are gonna be looking for higher returns and being in both real estate or being in, certainly in lodging, where you've got a daily leasing business and certainly perception of more pricing power. We, you know, believe confidently that better days are ahead for lodging for the industry and certainly for Park. There are only so many 3- and 4-capped industrial deals you can do. I concur. Thanks very much. Appreciate it. Great. Yep, thank you. Okay. That concludes our Q&A. I'd like to hand it back to Tom Baltimore for closing remarks. Well, we appreciate the opportunity to visit with you today, and we look forward to seeing many of you in upcoming meetings and at Nareit. Stay safe, be well, and I look forward to seeing you soon. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day.