Greetings, and welcome to the Park Hotels & Resorts Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Ian Weissman, Senior Vice President, Corporate Strategy. Thank you. You may begin. Thank you, operator, welcome everyone to the Park Hotels & Resorts Second Quarter 2023 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 future 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 Form 10-K and Form 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 yesterday'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. Additionally, unless otherwise stated, all operating results were presented on a current basis and include all 41 consolidated hotels. In some instances, however, we will be discussing results on a comparable hotel basis, with comparable view excluding the two Hilton San Francisco hotels that we anticipate will be removed from our portfolio, as previously announced in early June. This morning, Tom Baltimore, our Chairman and Chief Executive Officer, will provide a review of Park's second quarter performance and highlight our strategic initiatives. Sean Dell'Orto, our Chief Financial Officer, will provide additional color on second quarter results and forward-looking guidance, as well as an update on our balance sheet and liquidity. 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. Welcome everyone. I am pleased to report another solid quarter for Park as we continue to benefit from ongoing improvements across our portfolio while executing on important strategic initiatives, which strengthen our balance sheet and better position the company for long-term growth. On the operations front, our portfolio generated solid RevPAR gains versus last year, fueled by a nearly 400 basis-point increase in occupancy during the quarter. In particular, we were very encouraged by exceptional results from our two resorts in Hawaii, the ongoing recovery across our comparable urban portfolio, and the continuation of accelerating group fundamentals. As we have previously disclosed in June, we made the difficult but necessary decision to cease making debt service payments on our $725 million non-recourse San Francisco CMBS loan, secured by the Hilton San Francisco Union Square and the Parc 55, San Francisco. In our review, the city of San Francisco faces an elongated recovery with an eventual return to 2019 peak levels that is uncertain for the 2 hotels. We strongly believe this decision greatly improves our optionality and is in the best interest of shareholders, as it will significantly reduce our exposure to the city and strengthen our balance sheet considerably. Following the removal of these two assets from our portfolio, San Francisco will account for just 3% of 2019 Adjusted hotel EBITDA on a comparable basis, while our net leverage ratio will be reduced by almost a full turn and help further by freeing up nearly $200 million of capital earmarked for future renovations at both hotels. I do want to emphasize that this decision is not intended to be a negotiating tactic, and we continue to work with the servicer to divest these assets and the loan as quickly as possible. Q2 RevPAR increased 5.3% year-over-year for our portfolio as a strong start to the quarter in April and May was moderated by tougher year-over-year comps in June. Our strength was led by solid results from our comparable urban hotels, which generated year-over-year RevPAR growth of over 14%, as well as both of our Hawaii hotels, which exceeded expectations with nearly an 11% year-over-year RevPAR gain. These results were partially offset by softer-than-expected demand trends across the Bay Area and certain resort markets, including Key West, where the disruption from our full-scale renovation at our Casa Marina Resort, which suspended operations in May, accounted for a 140 basis point drag on comparable RevPAR growth in the quarter. Turning to segmentation. We expect group and urban demand to be key drivers of our growth. We are very encouraged by the ongoing improvements we are witnessing for both. Q2 group revenues for the comparable portfolio increased 10% year-over-year to approximately $120 million, as we benefited from strong short-term pickup, adding approximately 45,000 room nights for 2023, or $9 million of incremental revenue. As a result, full year 2023 comparable group revenue pace improved during the quarter, increasing approximately 150 basis points to 91% relative to the same period in 2019, while 2023 comparable group ADR is projected to exceed 2019 by nearly 7%. As we look out to 2024, we are encouraged by the momentum in some of our larger group markets, with 2024 comparable group revenue pace over 93% to 2019 at the end of the second quarter. Healthy demand trends are being driven by strong convention and citywide bookings, especially in Chicago, with convention room nights projected to increase nearly 70% versus 2023 to nearly 800,000 room nights, exceeding the 2018 peak of 794,000 room nights. While in New Orleans, convention room nights are expected to increase nearly 14% next year to over 500,000 room nights, or just shy of the 2019 peak. At our Bonnet Creek complex, where we expect to complete our $200 million plus comprehensive renovation and meeting space expansion by early 2024, feedback from meeting planners has been incredibly positive. Group business on the books for next year is pacing ahead of 2023 by 42% and is well positioned ahead of 2019's high water marks, with Signia up 47% and the Waldorf up 24% to 2019. The complex has also witnessed solid pickup in group room nights for next year, up 76% through the first six months of this year relative to the same period for 2019 to 145,000 room nights. Strong forecasted rate gains of nearly 20%, coupled with a 65% projected increase in banquet and catering revenues, are expected to drive total revenue performance in excess of 2019 levels by approximately $22 million for the full year 2024. Turning to our urban markets. New York City demand has returned as one of the strongest markets within our portfolio, with the city generating year-over-year RevPAR growth of 26% during the quarter, or just 2% below 2019, with all demand segments contributing to results. Overall, occupancy at the hotel increased an impressive 18 percentage points over last year to 87%, while the hotel posted rate gains of 1% over 2022 and 7% above 2019. In Chicago, year-over-year RevPAR growth during the quarter was up 23%, driven by both solid rate and occupancy gains as the city benefited from a strong convention calendar during the quarter, while in Boston and Denver, RevPAR growth for the quarter reached 11% and 12%, respectively, versus 2022. Conversely, San Francisco continued to weigh on results, excluding the Parc 55 Hotel, which was closed for a portion of second quarter 2022. The 3 remaining hotels were at 175 basis point drag on the Q2 portfolio RevPAR growth comparison to the same period last year. Our resort portfolio demonstrated the continued strength for our unique assets, particularly Hawaii, which once again delivered impressive year-over-year results. Our Hilton Hawaiian Village delivered the strongest Q2 RevPAR results in history, bolstered by the best June performance on record. RevPAR increased 12% during the quarter versus the same period last year, driven by a nearly 6 percentage point increase in occupancy and ADR gains in excess of 5%. For the first time since the start of the pandemic, occupancy during the quarter exceeded 2019, while ADR was up 14% above the 2019 peak. Q2 occupancy averaged 96% during the quarter, an impressive result, with Japanese demand still pacing 92% below 2019 levels. At our Hilton Waikoloa Village hotel, RevPAR during the quarter increased 6% over last year, driven by a 770 basis point increase in occupancy to 81.3%, the highest. Q2 occupancy level at the hotel, at the hotel since spinning out from Hilton in 2017, and average daily rate at 57% above the second quarter of 2019. The performance of our Hilton Waikoloa Village Hotel has been impressive since 2019, when we reduced the size of the hotel and transferred over 600 keys to Hilton Grand Vacations to convert to timeshare. Over that period, through year-end 2022, total RevPAR has increased by nearly 49%. Margins have expanded by 775 basis points to 39%, and EBITDA per key has improved from $45,000 to over $83,000, making the hotel one of our most profitable assets in our portfolio. Market share continues to be the success story at both hotels, with Hilton Hawaiian Village running at a 24% RevPAR premium to the comp set, while Waikoloa RevPAR premium exceeded 15% for the second quarter. Looking out over the balance of the year, healthy domestic demand is likely to continue to drive performance in Hawaii with low to mid-single-digit year-over-year RevPAR growth forecasted over the back half of the year. Although we are encouraged by the expected increase in the number of direct flights from Japan to Honolulu, scheduled over the balance of the year, increasing to 175 flights per week by December from just 100 flights in July. Turning to guidance. Despite ongoing strength in Hawaii and acceleration in group trends, we are moderating our full year 2023 Adjusted EBITDA expectations by 2% at the midpoint to a new range of $619 million-$679 million, largely driven by the continued underperformance of the two Hilton San Francisco hotels, which are now expected to break even in 2023, versus the $15 million of combined hotel Adjusted EBITDA that was included in our prior guidance, and to a lesser extent, by some small pockets of transient softness across select markets expected during the third quarter. Despite the small change, we remain optimistic that the lodging recovery remains on track and that an improved macro backdrop will continue to support solid consumer trends and ongoing improvements in business travel over the latter part of this year. Additionally, we remain committed to executing our strategic goals, which we believe will create long-term value for shareholders and position the company for success. On the capital allocation front, we are maintaining our goal of $200 million to $300 million of non-core asset sales this year, including the $118 million sale of Miami Airport, which closed during the first quarter. Proceeds from non-core asset sales are expected to be used to further reduce leverage, to reinvest back in our portfolio through leverage neutral stock buybacks, and to fund our robust CapEx and redevelopment pipeline, which is in excess of $350 million this year. As with all strategic initiatives, we will continue to update the market on our progress. In summary, I want to reemphasize that we have a well-positioned portfolio that will continue to benefit from improved group and urban demand, in addition to ongoing strength in Hawaii. Our team remains laser focused on executing our internal growth strategies and capital allocation priorities, which we are confident will create long-term shareholder value and position the company for success. With that, I will turn the call over to Sean. Thanks, Tom. Overall, we were pleased with our second quarter performance. Q2 RevPAR for the portfolio was approximately $183, representing year-over-year growth of 5.3%, with occupancy at 74.4% and ADR at $246, or 8% above 2019 levels. Hotel revenue was $692 million during the quarter, while hotel Adjusted EBITDA was $191 million, resulting in a nearly 28% hotel Adjusted EBITDA margin. Margins were natively impacted by renovation disruption at our Casa Marina Resort, which suspended operations in mid-May for a full-scale renovation, accounting for a nearly 40 basis point drag on portfolio performance. Q2 Adjusted EBITDA was $187 million, and Adjusted FFO per share was $0.60. Turning to the balance sheet, our current liquidity is over $1.7 billion, including over $840 million in cash. Net debt at the end of Q2 was $3.8 billion, and net leverage on a trailing twelve-month basis was 6 times. When accounting for the eventual removal of the two San Francisco Hilton hotels from our portfolio, balance sheet metrics materially improve, with net leverage decreasing by nearly a full turn to 5.2 times and interest coverage improving by 0.5 of a turn to 3.7 times. Also, as a reminder, in June, we fully repaid the $75 million mortgage loan secured by the W Chicago City Center, which was set to mature in August, adding another property to our unencumbered portfolio. Turning to guidance, as Tom noted earlier, we are making adjustments to reflect weaker than expected results in San Francisco and softer transient demand, both of which are negatively impacting both top line and margins in the near term. RevPAR has been lowered slightly to a full year range of $168-$177, representing impressive year-over-year growth of between 7% and 13%. Hotel Adjusted EBITDA margin has been decreased by approximately 80 basis points at the midpoint to a range of 26%-26.5%, with the midpoint 35 basis points above the prior year. To dispel any doubts, please note that RevPAR and hotel Adjusted EBITDA margin guidance continues to include the operating results for both of the San Francisco Hilton hotels. With respect to Adjusted FFO per share, guidance falls by just $0.05 per share at the midpoint to a new range of $1.76-$2.02, as default interest and late payment fees associated with the default on the non-recourse San Francisco CMBS loan will be excluded from AFFO. Finally, one additional item to note. As of June 28, the ground lease under the 182-room Embassy Suites, Phoenix Airport Hotel, was terminated by the owner prior to its expiration in November 2031. Guidance, however, is not materially impacted, as this non-core asset was expected to make minimal contributions to the portfolio over the balance of the year. As a reminder, since spinning out of Hilton in 2017, we have successfully sold or disposed of 40 hotels for $2.1 billion, while materially improving the overall quality of our portfolio. 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, can we have the first question, please? Thank you. To ask a question at this time, press star one on your telephone keypad. A confirmation tone will indicate that your line is in a question queue. You may press star two if you would like to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, please limit yourself to one question and one follow-up. Our first question today comes from Floris van Dijkum with Compass Point. Please state your question. Thanks for taking my question, guys. Good morning, Floris. How are you? Good morning, Tom. I, I know that you guys have been. Yeah, I'm sure this, you know, this debt, CMBS return is, is weighing on all of you guys, but it's also weighing on your results, clearly still. Maybe if you can touch upon, it sounds like, you know, things have deteriorated significantly in, in San Francisco, where you've actually lowered your guidance because EBITDA is gonna, you know, leave the system there. I guess, it shouldn't really matter this year. I'm more interested in hearing about what's happening at your other hotels in San Francisco, and maybe if you can give a little bit of impact on why the situation there might be a little different. Also, if, you know, should we be penciling in a $0.14 increase in earnings next year based on losing these two, these two hotels with the associated debt? Yeah, there's a lot to unpack there, Floris. I guess the, the important thing is, look, we, as we said in the prepared remarks, we made the difficult but necessary decision. We continue to work with the servicer, to give back the keys as quickly as we can. We're certainly. Discussions are constructive, and we're cautiously optimistic that we'll have more to report here in the coming months. Our hope would be to get this done as quickly as possible, but as you know, we don't control the process, so we wanna be careful, and I probably shouldn't say more than that. We thought long and hard about this decision in San Francisco. I think you know, and I think, you know, many of the listeners know that in terms of the REIT CEOs, and I would respectfully submit, even this, the C corp CEOs, I spend as much time in San Francisco as anybody. You know, the key takeaways were that, you know, the recovery period there would be extended. We thought 1-3 years. I can tell you being on the ground as early as 10 days ago, it's probably 5-7 years. Office vacancy continues to rise. It's north of 30% now, an all-time high. The convention calendar is, again, continues to weaken. You're 40% below the pre-pandemic level, and that's probably 875,000 room nights now down to, you know, 530,000 and perhaps dropping. If you think about 2023, there's about 675,000 room nights in citywides, and, you know, most of that is backloaded in the second half of this year. Next year, the current outlook is about 450,000. San Francisco Travel, you know, the critical marketing organization, is going through a leadership change, and, you know, that leader, that new leader, has not been identified, and he or she has not been able to build out their team. That transition probably doesn't happen until the latter part of this year. The narrative that we all know, the sort of doom loop, is real, it's not helpful, and despite the fact that I think the city leadership and, and others are working very hard to change it, it's going to take time. It's been a consistent RevPAR drag on the overall portfolio of, you know, 700-800 basis points. If you look at the two subject properties, their group pace, just RevPAR for this year is probably 48%-52% below 2019 levels. If you compare that to, say, in New York, where we expect to end the year relatively flat, to perhaps 2% down, you can see that San Francisco is a real outlier. Our other two assets are faring better. They're smaller properties, one in the Fisherman's Wharf, one in, obviously, the JW Marriott there in Union Square, but they too, are still down to 2019 levels, probably in that 20%-30% range. It, it, it's not helpful to the overall narrative for Park that we continue to have to talk about San Francisco, but we realize until it is completely removed from the portfolio, it- and still in guidance, we still have to address it. If you take that out, and that was the lion's share of, of the reason that we had a modest and 2% reduction here in guidance to the midpoint, it is San Francisco. You know, we'd rather talk about Hawaii and the explosive growth we're seeing, given the fact we still don't have the Japanese traveler in the other parts of our portfolio, both group and urban, which continue to accelerate. Overall, very encouraged. The San Francisco story will play out. I, like many others, believe that San Francisco will recover. It's just going to take longer, and there are real structural impediments and challenges there that, that, you know, we're all aware of, but they're not gonna end anytime soon. Hence, the reason we made the difficult but necessary decision. Sorry, Sean, maybe you wanna touch on the earnings impact of that potentially next year, or is that too early in your view? Well, I, obviously, it, it kind of speaks to the timing that Tom Baltimore spoke to, that we're certainly doing what we can to ultimately have it removed. I mean, if you were to assume that it was, I mean, clearly, you would think that, you know, you're looking at properties that were basically earning nothing, this year, essentially, and ultimately carrying, if, if just at the stated rate of, of interest, of $30 million a year. Yes, we would certainly expect a, you know, pretty decent, uptick in earnings, FFO per share. Thanks. Our next question comes from Smedes Rose with Citi. Please state your question. Hi, thank you. just to quickly follow up Hi. on San Francisco. Hi, good morning. Just to follow up on San Francisco, is the, is the lower kind of outlook through the back half of the year, is it reflect actual group fallout that was on the books, but is now not coming, or are you just seeing less transient business than maybe you had initially anticipated? I think it's a combination of both, Smedes. I mean, you're clearly seeing, some wash out in some of the groups. Obviously, again, the narrative doesn't, doesn't help. There is the APEC conference, which is terribly important because you know, they expect 21 world leaders or up to 21 world leaders. I have to believe that the city, with support from other local municipalities and perhaps even the federal government and others, will ensure that, you know, the appropriate safety measures are in place. I would expect that that, you know, hopefully will be well-received and be productive and outperform. The reality and the numbers that I gave you are real, and I could give you more. It's just going to be an elongated recovery, hence the reason of the decision that we made. Again, we were only expecting a $15 million contribution, as Sean noted in his remarks, you know, today, we would see that being flat to slightly negative. We've washed it. We've removed that. We've essentially de-risked San Francisco, look, we'd far prefer to talk about all of the other exciting things that are happening, particularly, again, the extraordinary performance that we're seeing in Hawaii and other parts of the portfolio. Okay, yeah, and I just wanted to follow up on Hawaii. As, as you noted, the RevPAR was up, pretty healthy across those properties, but EBITDA was, was down at those properties, and I was just wondering if you could comment on kind of what you're seeing on the expense side and maybe how you're thinking about expense growth going forward, or maybe there was something kind of one-time in the quarter that weighed on, on margin, but just maybe some commentary around that. Yes, Smedes, Sean, in for Q2, specifically for Hawaiian Village, we had some accruals baked through early, you know, first half of, of, of last year and ultimately carried over from, from 2021, related to kind of the extensions we're doing with the union contract. Those were ultimately released in Q2, and certainly, ultimately helped out, reduced to, kind of reduced expenses, for, for that property. It's a one-time thing. Okay, thank you. Yeah, Smedes. Yeah, Smedes, certainly, despite that, please keep in mind, in Hawaii, we're. You know, Hilton Hawaiian Village, again, as we reported, is running a, you know, a 24% RevPAR premium. Hilton Waikoloa is running a, a 15% RevPAR premium. Despite the fact where I think many in our, in our sector are seeing a slowdown in leisure, we, we continue to see strong outperformance in Hawaii, and we still don't have the Japanese traveler, which again, had been, you know, historically 20% of our business, and, you know, it's down about 90%. We expect it'll be down 60%-70% by the end of 2023. Hope that that's reduced to probably down to about 30% by the end of 2024. You know, we remain very, very bullish in, in, in Hawaii. Look, we had a record year of EBITDA last year, and, you know, we certainly expect that we're trending towards another very strong year this year as well. Great. Thanks. Our next question comes from Ari Klein with BMO Capital Markets. Please state your question. Thanks, and good morning. Good morning. Maybe just thanks. Maybe just following up on that last point. Tom, you mentioned earlier the, the flight uplift in the back half of the year from, from Japan to Hawaii. Are you starting to see that translate into better booking trends that kind of give you the confidence that, that you'll see that improvement, or, or is it still too early there? We're, we're seeing some green shoots. It's still a little early, but as we pointed out, just given the flights alone, going from, you know, 100 a week to 175, and look, we're, we're very encouraged. You probably also saw that the Japanese government and officials had meetings with Hawaii tourism officials as well. They have, they have connected. There have been accelerated discussions. We remain very optimistic. If you look historically over the last 30 years, you know, visitation from Japan has averaged, you know, about 1.5 million. That's been down for 3, 3.5 years, and, you know, that's been among our most loyal customer. They stay longer, they spend more. Historically, we'd average about 150 sort of high-end weddings. I think last year, we were down to 4 or 5. We're very encouraged as we look out and just given the dynamics and certainly given the iconic nature of Hilton Hawaiian Village, I mean, it is one that generations of families have been visiting for, you know, for 60 years. We, we fully expect that it's not only gonna continue to recover, but really continue to grow and really outperform. Thanks. Then on the demand mix, group seems pretty positive, while leisure is weaker than it as it normalizes. What are you seeing on the business transient side, as we're now kind of halfway through the year? You know, even as urban markets have performed well, have you, have you been somewhat underwhelmed on the business recovery, and what are your expectations moving forward there? This- Ari, this is Sean. I mean, we certainly, I think we could see a little bit more out of, of business transient. I think ultimately, you know, as we kind of went through the quarter, we, we saw, you know, pretty strong in April, and then kind of, you know, lightened up through the, you know, May and June. Still kind of in the, in the mid-single digits year-over-year, as we kind of ended the quarter. We still certainly expect to see that continue in the back part of the year. I mean, obviously, as we kind of look at business transient, you know, the rack rate can, you know, be part of that, and that's kind of the one where you've seen the pressure from year-over-year, the compression leaving elsewhere. I would say it's more of a, a leisure element that plays into the, to the rack rate. When you kind of really look at the pure business transient, I think we're continue to see local and government perform well, and even the corporate negotiating, while it's still, you know, call it, was 40% below, it's kind of grinded up to 35% of 2019 levels in Q3, and certainly have expectations of that grinding forward to, you know, ultimately be positive year-over-year in the back half of the year. Appreciate the color. Our next question comes from Anthony Powell with Barclays. Please state your question. Hi, good morning, everyone. Morning. Morning. Following up on that question on transient, I mean, you called out transient softness in the third quarter. Was that, you know, plays any specific markets or segments? Maybe expand on that comment, and the guidance would be helpful. Sure. I mean, I think what you'll see, continue to. Clearly, San Francisco, which, you know, in Q3, while you've gotten some group activity and better than you had in Q2, I think, you know, just reliance to that market of needing the transient, has just not been, been coming together. I'd say there. Then I think particular weakness in terms of some markets are Chicago and New Orleans. Chicago and New Orleans had some good group and citywide activity in the first half of the year, but we're seeing in the back half of the year, you know, far less citywides there. We, we kind of have known that. We've got some good in-house group pace for in Chicago, in Q4, up 20%. In Q3, both markets are, you know, neutral to down, year-over-year. I think that's where we're kind of reliant on the transient as we looked in the forecast originally, and again, just see that, you know, seeing some softness across the board, we're de-risking that a little bit as well in those markets. The, the other thing, Anthony, Anthony, that I would point out is, you know, as Sean noted earlier, is that, you know, we had really tough comps, both in June and July. If you think about last year, you know, both of those, both of those months were about 4% below 2019 levels, you know, versus 10% for the previous months. We always expected that June and July, obviously, they ended up coming in a little softer than, than we expected. Obviously, April, we were up 9% at RevPAR, May up 10%, June down about 1.5%. You know, we're expecting July to probably be up around 1%. You know, the quarter, probably somewhere in the. 2-3%, plus or minus. Really looking at a strong fourth quarter, and, and a lot of that, as Sean noted, is while we lose a little bit of the group in the third quarter, we pick that up in the fourth quarter. In addition to strong transient expectations in markets like New York. We're still, you know, very encouraged when you think about, kinda 7%-13% up in RevPAR. I mean, this is, this is not a downer. This is not negative RevPAR growth as we look out for the balance of the year. Still encouraged. The market is still choppy. There's some issues of uncertainty out there, but it's hard to see a near-term recession when you have that type of top-line growth as we look out. Yeah, thanks. Maybe going back to Hawaii and leisure demand there, domestic demand. You know, you're generating very strong growth, very strong results in Hawaii on the backs of the domestic customer, and that's great, but we've seen that's a very, I guess, competitive market. How do you make sure that these customers who are traveling to Hawaii keep coming back, so that when you have the Japanese traveler coming back, can actually yield up the property and generate incremental growth rather than just replacing, you know, U.S. customers with Japanese customers? Yeah, it's a, it's a great question. You know, the credit to Sean, to our asset management team, and then the extraordinary leader, Debbie Bishop, and her team that, who run both Hilton Hawaiian Village and Hilton Waikoloa. I just think when you've got two iconic assets like that, Anthony, and generations of travelers and finding that right mix, they've just done an extraordinary job. I think the RevPAR premiums really show evidence of that. When you're looking at Hilton Hawaiian Village up 24% and, you know, Waikoloa up 15%. They've continued to outperform when, candidly, I think a lot of our peers are showing much softer performance in Hawaii and other markets of Hawaii, including, including Oahu. We feel very good, but it's a, it's a daily battle, and the playing field is competitive every day, and, you know, we don't take anything for granted. Thank you. Our next question comes from Chris Woronka Deutsche Bank. Please state your question. Hey, Chris. Hey, good morning, guys. Hey, morning, Tom. You know, San Francisco going away, and that effectively for, for you guys as a market, and that's, yeah, I think with the big group boxes, that's been part of your kinda ecosystem, so to speak, for the portfolio. You don't have really any group exposure in some of these markets where San Francisco groups are going. It's Las Vegas and Phoenix, Scottsdale, and San Diego, and Denver. Does that make you look any harder at potentially gaining bigger group exposure in those markets? In terms of another play? Let me make sure I understand the question, Chris. Yeah. In terms of another asset? Yeah, it's just to, you know, in some ways, kind of, you know, I hesitate to say replace the, the business because this is asset specific, but, you know, walking away from San Francisco changes your portfolio composition a little bit. Yeah, maybe it's better for the short term, but longer term, you have some of these Western U.S. markets where you don't have a lot of exposure, particularly on the, on the group side. Does it make you any more likely to, yeah, take a, take a peek at things that, that might become available? Yeah, I mean, obviously, you never want to speculate about the future. I would, I would say, look at, look at our balance sheet, look at the positioning after we've unloaded these two assets. We've got much better optionality, as we said in the, in, in our prepared remarks. We'll have a lot more liquidity. I, I would not redline San Francisco in any way, shape, or form. It's just gonna take time, and the issues are complex, and they're the result not only of the pandemic, but many other policy and other decisions that, that have been made many years ago. That recovery is gonna be elongated. Very comfortable with the two remaining assets that we'll have there. As you know, we sold two other assets in the early days of the pandemic at very attractive pricing. It is a market that only has 32,000 rooms, so, you know, it will come back. Look, we'll follow the job growth, we'll follow the opportunities and, and where we can generate the returns. We certainly wouldn't rule out San Francisco, and I don't think we'll be at any, any disadvantage because I think we'll be able to, whether it's assets in, in San Diego or in other markets out West, you know, we'll still, we'll continue to evaluate and look where they make sense. Right now, San Francisco is a very, very difficult set of circumstances, and, and I think we have communicated that very well. I think, as you recall, you know, back to Nareit, we provided an investor deck with 40 pages and great detail as to why the decision was made, that, that we made, and, and are very confident it was the right decision. Yeah. Yeah, understood. Thank, thanks, Tom. Second question is kind of, longer term. I'm, I'm not gonna ask you for any kinda multi-year guidance, but, it's really on CapEx. You know, maybe the question is: where, where do you see, CapEx needs for the portfolio? If we just think about what, what percentage of your, you know, top, top 20-25 assets, you think you might like to or need to put capital into over the next several years? Yeah, it's a great, it's a great question, and look, we've we also mentioned Bonnet Creek, which we can't wait to host investors and analysts and at some event next year when we reopen the Bonnet Creek. Obviously, are completed, it's open today, but when we, when we show off the expanded meeting space, both for the Waldorf as well as for the Signia, a complete lobby redo or renovation of the golf course and all of the guest rooms, and again, north of $200 million, and very encouraged by what we're seeing there. We're trading at, who knows, $200 a key. So you get a 350 acre resort, resort with 1,500 rooms and world-class amenities, and pretty excited about the upside there. You know, we've got the Casa Marina, which is closed in Key West. We had already renovated the Reach, and this is a sister property, and we expect a partial reopening this fall, and then a completed product at the end of this year. Very, very excited about that. Obviously, the Tapa Tower in, in renovation in Hawaii will also be completed this year. The Royal Palm Resort that we have in Miami, that will be on next on the list, and we certainly continue to plan and study that as well, and look to put additional capital there. We think, obviously, that's gonna yield tremendous returns for us. There, you know, there are other assets in the portfolio where we've got really embedded growth opportunities. The Santa Barbara Resort that we have out in California is another that we're looking at adding additional keys there. We've got Hilton Hawaiian Village, where we look to add the sixth tower, and we're going through the entitlement process. Hilton Waikoloa Village, we have the opportunity to add another 160 to 200 keys there. You know, all of those, Chris, would be on the list. Sometimes we hear comments of, you know, significant deferred maintenance in the Park portfolio, and I, I would respectfully submit it's really, it's a bit of nonsense. We're investing at $350 million in this year. We'll be somewhere in that range next year. You know, obviously, the big asset that did have deferred maintenance, obviously, was the Parc 55 in San Francisco, but that's, you know, one of the two assets that we'll be shedding as we've, as we've already communicated. Okay, very helpful. Thanks, Tom. Yep. Thank you. Your next question comes from Duane Pfennigwerth with Evercore ISI. Please state your question. Hey, thank you. Duane Can we just. Hey, how are you? Can we just play back the monthly trends over the course of 2Q? Your original expectations for 2Q in the month of June, specifically, how June played out relative to your initial expectation? Obviously, a lot of commentary around San Francisco. I think we all understand that San Francisco was weaker, but ex-San Francisco, what else played out differently in the month of June versus your initial thinking at the outset of the quarter? Yeah, I mean, certainly, San Francisco had a big impact on June and the quarter in general. As you think kind of through the expectations for June going in versus where we came out in the rest of the portfolio, I would, you know, I would say it's, it's kind of in the neighborhood of, you know, call it a 300 basis points or so drop in the month versus when we came into the month. You certainly saw that, you certainly saw, I think, through people were probably seeing that through the Star data week to week, you know, for the good, better part of the month and even probably into the first parts of July as well. We have seen, you know, things turn for the better in the back part of July, so it's encouraging as we go into the rest of the third quarter. I would say, yeah, I would say in, in, in general, call it 300 to 400 basis points in impact in June, kind of, versus expectations. You know, it was definitely a little bit of a surprise in a way and disappointing. Again, I think things are turning around, and I think we certainly see a better kind of, you know, tone from a macro standpoint, leads us to think we've got some more encouraging weeks ahead. Thanks, Sean, for that detail. Any specific markets you'd call out underlying that 300-400 basis points? I think you, you certainly see where, again, you've seen the, the, the compression of last year play out, where people are going elsewhere. The markets like South Florida, where you have Miami and, and in Southern, Southern California, like Santa Barbara, we continue to see pressure and certainly on the rate side, as they lapped last year. I would say those are probably the bigger, you know, the resort areas or the bigger contributors. Thanks. Then just, just for my follow-up on, on New York, why, why do you think New York is having such a strong recovery? What do you view as kind of the underpinnings of that strength as we think about sustainability into next year? I'd, I'd make a couple observations. Look, there are, there are only 3 hotels in New York that really have large meeting footprint, and the space to be able to accommodate large groups, and we would respectfully submit that we've got the best hotel in the Hilton Midtown there. The city is back. You know, I think many people thought it would not recover until 2025, 2026, 2027, and, you know, the reality is it'll be back, and we'll be back to 19 levels effectively this year. I think we expect to be within, you know, 2% of 2019, plus or minus. I know as you look at sort of the group forecast, group forecast, I think in Q3 is up 19-20%. Even transient as we look out, is up 14%-16% plus or minus. As you sort of look at RevPAR, up 26% in the second quarter, and I think July, we were up 26% in RevPAR. As we look out for the balance of the year, a very strong third quarter and a very respectable fourth quarter. Feel very good about it. International has played an important part there. It's up, I think it's about 19%-20%. Obviously, the group pace in 2023, again, about 187,000 room nights in New York. All of that contributes. With a hotel that size being located, having the meeting space footprint and, again, a talented team of men and women there. Again, not having a lot of competition for the big groups, you really have two other options. Again, we, we believe confidently we've got the best meeting footprint to be able to accommodate those large groups and take multiple groups at a time. Thanks for the thoughts. All right. Thank you for the questions. Yep. Our next question comes from Bill Crow with Raymond James. Please state your question. Hey, good morning, Tom, Sean. Good morning, Bill. Good morning. I'm gonna go back to, I think it was Anthony's question about Hawaii that I wanted to follow up on. Ask you if it's fair to draw parallels between the international outbound travel and domestic travel to Hawaii. In other words, there's been this pent-up demand and, and, and later recovery in international travel and long- apparently long-haul domestic travel to Hawaii. There's also some expectations that, that just like, like U.S. mainland leisure demand, that we might see some normalization next year in longer-haul travel. I, I guess my question is: Is there anything out there in your forward bookings that give you confidence in Hawaii, that if Japan doesn't materialize to the extent you, you think it will, that, that we're not gonna be sitting here talking about tough comps and normalization in Hawaii next year? Yeah, I mean, it's a, it's a fair question, Bill. you know, I, I think the first data point would really be the last, the last couple of years. I mean, you've added a lot more airlift, domestic airlift, you know, Southwest and other carriers into Hawaii. Those have been candidly at, at attractive rates, which I think has also been, I think, a real positive catalyst. Look, for many people, it's a, it's a once-in-a-lifetime trip. I think for many others, it's a repeat trip that, that people have become quite accustomed to. I think Hilton Hawaiian Village is just a great example of that. You've also got the Inter-Island traffic that has also accelerated and picked up. There's nothing that we see. It's been very encouraging. I mean, you, you have to believe that the Japanese traveler, again, as the yen continues to strengthen and, and being away, we're seeing it. We're seeing it obviously, with a lot of U.S. traveling to, to Europe this summer, right? You get the pent-up demand, you wanna recapture those experiences that, you know, people hadn't been to Europe in 2, 3 years, and, you know, we feel the same way and get the same signals about people wanting to go to Hawaii. It feels strong on the domestic front. I think the airlift and the capacity is an important part of that and at, at reasonable prices. You know, the other thing to keep in mind about Hilton Hawaiian Village is it's, you know, it's an upper mid-market hotel. It's not the ultra-luxury. You know, it's, it's a great experience at a great value, and consistently, I think it has shown that. We didn't get the huge spikes that perhaps some of our peers that saw, you know, 50%, 60%, 70% increase in RevPAR. We did see some of that in Key West when the Caribbean wasn't an option, and clearly, the cruise operators were, were suspended and, and not sailing. You know, that's not the case here. It's on a, it's on a steady path, and then we've also been able to retool the operation. You know, as Sean pointed out, there were a couple of one-times last year, but we're still running, you know, nearly 40% margins there and, with a great management team and feel very good about the outlook as we look out today. Things can happen. We're in a business that you, you and I both know we've been around a long time, but we certainly see nothing on, on the forefront now that concerns us. Tom, what's the booking window in Hawaii, or how does that compare to a typical mainland hotel? You know, from a mainland stand- like, certainly from a mainland customer, it actually could be a pretty short window. A lot of people can, last minute, can make those trips out there. You certainly would imagine that if you're looking at a mainland kind of hotel in general, and the booking window is 30-60 days out, you're gonna be more elongated than thinking about Hawaii by a little bit, but I wouldn't say dramatically from the mainland. Clearly, more international would be a longer dated exercise, call it, you know, 4 to 6 months. Clearly, you're gonna see certain elements, you know, whether, you know, known, known peak times, you're gonna see that booking pattern, that window be, you know, a, a longer length of time as people plan, whether it's around the holidays and, and December or whatnot. I think in general, it's, it's maybe a few weeks more than what you might see from a mainland as, as you talk about the mainland customer. I'll just add one thing to Tom's note, too, and to, to about looking to next year. You know, group pace, as you think about incentive travel and other group tours, activity coming back to Hawaii is up, you know, 16%. Again, another kind of layered demand. We talked about the Japanese, but there's some of that incentive travel and, you know, people winning, you know, the ability to, you know, with their sales, the sales teams and whatnot, winning the, the reward travel to go to Hawaii is picking up as well. No, that's, that's great. Sean, what, what's the percentage that group makes up in Hawaii? It's about 20%. It's not big. Okay. All right, that's it for me. Thank you. Thank you. Your next question comes from Dori Kesten with Wells Fargo. Please state your question. Thanks. Good morning. You talked about Good morning, Dori. Hey, Tom. You talked about eventually reducing your exposure to Hawaii. How high is it on your list of priorities? And is there any interest from, from Hilton Grand in taking on more rooms? Let me, let me start with the, the last question first. I mean, you know, I haven't talked to Hilton Grand Vacations. I think we've got a, you know, wonderful working relationship today at Hilton Waikoloa. It turned out, I think, to be a win-win. As we've noted, I mean, we are more profitable today as a, as a 600 room hotel than we were as a 1,200 room hotel, and plus, we get the benefit of, of their guests using our outlets. So it's been a win-win for both. We, we think really that's the optimal mix for that property, and as we look to expand it, you know, we would focus more on adding more guest rooms and, and perhaps suites and other amenities there as we, we look to expand Hilton Waikoloa over the, over the future. You know, Hilton Hawaiian Village is just a, it's, it's a jewel. I'm not sure that there is any REIT asset that generates as much EBITDA or as is, as is valuable. So we're, you know, we, we, we'd like to grow the company such that Hawaii is, is less of a contributor, but we're certainly not looking to sell or to joint venture. Also, both of those assets have, you know, a very low tax basis, so it makes it very complicated and would require pretty big distribution. you know, the, the preference would be to grow other markets, but certainly not look to sell or the joint venture out of those two properties at this time. Got it. Thanks. Just on your in-intention to sell the $200 million-$300 million in assets this year, is there any update you can give on just, you know, what's being marketed for sale, how you're thinking of that, and how close you may be to an announcement? Constantly working on it. I think, Dori, as we, as we mentioned, you know, people, we've, we've sold, disposed of 40 hotels for over $2 billion since the spin. you know, that's 14 international, that's joint ventures. I mean, that's been some heavy lifting. That's in addition to getting rid of some self-operated hotels as well as laundry facilities, which aren't included in that, in those 40. really proud of the work and all the, and all the effort in continuing to reshape the portfolio. we've sold, I believe, 8 hotels over the last 15 months, plus or minus, for about $435 million. we, we are constantly in discussions, but, you know, we're not, we're not a distressed seller. we're gonna have maintained price discipline. Tom Morey, our Chief Investment Officer, and his team are working hard, and we've got a number of active listings right now. As we said, we're confident that we'll get somewhere between that $200 million-$300 million. Again, we'll use those proceeds to pay down debt or on a leverage neutral basis, certainly buy back stock. Obviously, the best investment we can make, make right now is buying back our stock at this kind of discount, and you, you can certainly expect that we'll be looking at that in the future. Okay. Thanks, Tom. Okay. Our next question comes from Robin Farley with UBS. Please state your question. Great, thanks. I just wanted to circle back to Hi, Robin. Your group. Hi, how are you? Thanks. Your commentary on group, and I know you gave a lot of great color, sort of by region, by city. I don't know if I heard a sort of total 2024 group compared to 2019, how that, you know, what, whether it's revenue pace or room night pace for 24 overall compared to 19. Then do you have that excluding San Francisco, which sounds like would look a lot better than what the total company-wide is? Thanks. Yep. Yeah, group pace for 2024 revenue is about 93.1% versus 2019, and that, that does exclude San Francisco. Okay, that was versus- Including San Francisco. All right. Okay, thank you. That was versus 19, right? That, that was 19, yeah. Okay. Yeah. Great. That's it for me. That's it for me. Thanks. Sean? Okay, thank you. Our next question comes from David Katz, with Jefferies. Please state your question. Appreciate, you working me in. Hey, David. Good day, everyone. Good day. I appreciate all the commentary, and you talked about, the amount of investment capital we should be expecting going forward. Just thinking about, you know, post the San Francisco returns, you know, does that lead you to accelerate how that capital, the amount of capital that's being deployed, and, and does it raise the bar or broaden the standard of where you might put some of that capital to work? Without, without question, David, look, the, the beauty is it gives us a lot of optionality, right? The balance sheet will be stronger. you know, we're sitting on nearly $4 of cash per share today. whether that's buying back shares, whether that's investing back in strategic ROI, whether that's, distressed opportunities that could emerge. I mean, we all know there's a lot of debt to mature between 2023 and 2025 across various asset classes. We fully expect that we're gonna be a participant. You know, today, we'd say the highest and best use is to continue to sell non-core, invest back in our portfolio and buy back our stock on a leverage-neutral basis. We clearly will continue to be opportunistic, and, you know, we're seeing a lot of deal flow, like, like many of our peers. We will have a seat at the table, particularly when we're sitting with, you know, $1.7 billion in liquidity. It's certainly a much brighter outlook for Park as we look forward. Okay. That, that really was what I wanted to talk about. Appreciate all the detail today. Thank you. Thank you. Your next question comes from Gregory Miller with Truist Securities. Please state your question. Hi, good afternoon. Gregory Thank you for taking our questions. Hey, first question I have is on business transient. Following up on Sean's commentary on, on business transient room rates. At this point, how do you see 2024 negotiated corporate rate growth materializing? Do you think mid-single-digit growth is reasonable or perhaps above that? Gregory, hey, it's Sean. I mean, I, I certainly think we're too early in that process. Certainly had many discussions with, with our operators and certainly the, the big brands, and, and any of those negotiations. Typically, you see clearly a lot more activity going in the fall, you know, late fall. But, certainly, I would think the expectation is to be in the, in the mid-single digits range. I don't think that's unreasonable. Okay. The second question I had is on the F&B department and on margins in particular. How is pricing for your F&B outlets and banquets progressing in the back half of the year? You know, more specifically, how is F&B pricing trending relative to operating cost growth? Thanks. Yeah, I think for the, for the quarter, you're, you- I think you see a stabilization going on versus what you've seen between Q1 and Q2. You know, F&B profitability will probably dip down slightly in Q3. Just, again, we, we don't have as much group as we have in, in other quarters, and specifically, Q4, I think, is gonna be a strong group quarter. I think we'll get, again, with that higher rated or higher, you know, well, one higher rated as well as higher margin, banqueting and catering business, I think we'll see our margins kind of get more in the higher 20s versus the mid, mid-ish 20s in Q3 for, for F&B profitability. I think it's generally, it, you know, tracking. It's certainly, you know, I think from a profitability standpoint, right now, you know, below, below kind of the year to date, kind of below 2019 by a little bit. I think as we kind of look at, you know, how 2019 ended in the back half of the year, I think we're kind of be more commensurate with it. I think we're, we're kind of catching up in a way. As you think about group and just in general, the rates, that are contracting are, are getting higher. We've gone from, you know, really was, you know, probably this time last year, a little later, kind of flat to 2019 to, you know, getting upwards of, of higher single digits against 2019. As you kind of layer those higher-rated contracts in place over time here, I think you're obviously getting better at you know, getting better at pricing the F&B as well to kind of catch up, and you kind of get the margins more in line. Thanks, Sean. That's great. Thank you. Our next question comes from Chris Darling with Green Street. Please state your question. Thanks. Good morning. Hey, Chris. Good morning. Morning, Tom. Related to the Embassy Suites in Phoenix, can you disclose who owns the land or whether it's a public or private entity? Are there any other early termination options related to other ground leases that we should be aware of? I don't have that information available. Chris, we'll follow up with you to make sure you have it. Look, we have 45 hotels now in the portfolio, and there are 7 joint venture. There are several short-term leases that we continue to monitor and to work on. Our top 25, 27 assets, as we've communicated before, you know, account for about 90% of the value of the company. It's back to that earlier point of just the, the heavy lifting that the team has done over the last 6, 7 years and, and really reshaping the portfolio. Could not be prouder of their work and their commitment. Each one has its own set of challenges. You know, this was an asset that wasn't obviously a, a significant contributor. It was a non-core, and, you know, we've been working for some time to find the right solution, and we certainly got to the right outcome here, particularly with so many, with short years remaining on the, on the ground lease there. Fair enough, certainly recognize Yeah the relative size of that property. Maybe switching gears just for a sec. Thinking about Orlando, do you have an estimate for the disruption caused by the work going on in that market this year? Just trying to get a sense for how the comparable portfolio might start to ramp, you know, thinking into early 2024, as you consider that market as well as, what's happening to you all. Yeah, that market has been one where you certainly you got a couple of other factors going on. I mean, clearly, people are trying to understand, you know, with, with Disney and, and, you know, that demand driver, whether it's, you know, some political elements there. You're certainly seeing some groups shift out of the convention center, relative to politics. And you've also seen, I think, you know, I think a product combination of Disney just raising its rates, maybe, you know, aggressively, combined with the fact that people have, you know, again, people have other options to go places now, whether it's Europe or on cruises, they didn't have last year. I think you do see something that, you know, normalizes more for Orlando. I mean, for us, clearly, our story for next year is Bonnet. You know, Tom, in the prepared remarks, spoke to, you know, the meeting space, which we're seeing tremendous amount of interest in, in booking into that space and that in that complex. So certainly, we're really encouraged about, you know, layering in, you know, we talked about another $22 million in that asset relative to 19 so far in terms of, you know, what we've kind of booked into the new space and the renovated product. So I think we're certainly very encouraged. Not certainly, just prepared at this point to talk about 2024 and kind of, you know, uplift from that market. We certainly expect it to be a good contributor to comparable portfolio next year. All right. Appreciate it. That's all for me. Thanks. Okay. Thank you. That's all the questions we have today. I'll now hand the floor to Tom Baltimore for closing remarks. We appreciate everyone taking time, and have a great remainder of your summer, and we look forward to seeing many of you in September at the various conferences. Have a great summer. Thank you. This concludes today's conference. All parties may disconnect. Have a good day.