Welcome to the RLJ Lodging Trust second quarter 2023 earnings call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I would now like to turn the call over to Nikhil Bhalla, RLJ's Senior Vice President of Finance and Treasurer. Please go ahead. Thank you, operator. Good morning, and welcome to RLJ Lodging Trust 2023 second quarter earnings call. On today's call, Leslie Hale, our President and Chief Executive Officer, will discuss key highlights for the quarter. Sean Mahoney, our Executive Vice President and Chief Financial Officer, will discuss the company's financial results. Tom Bardenett, our Chief Operating Officer, will be available for Q&A. Forward-looking statements made on this call are subject to numerous risks and uncertainties that may lead the company's actual results to differ materially from what had been communicated. Factors that may impact the results of the company can be found in the company's 10-Q and other reports filed with the SEC. The company undertakes no obligation to update forward-looking statements. Also, as we discuss certain non-GAAP measures, it may be helpful to review the reconciliation to GAAP located in our press release. Please refer to the schedule of supplemental information, which was posted to our website last night, which includes pro forma operating results for our current hotel portfolio. I will now turn the call over to Leslie. Thanks, Nikhil. Good morning. Thank you for joining us today. Overall, we are pleased with our second quarter results, which were in line with our expectations. Our urban market concentration allowed our RevPAR growth to exceed the industry for the second straight quarter. With demand continuing to grow, we remain constructive on the overall health of lodging fundamentals, which continue to unfold with trends favorable for our portfolio. The industry is benefiting from the strengthened group and a continued recovery in business transient, which are disproportionately driving urban markets and enabling them to outperform. In addition to achieving year-over-year RevPAR growth above the industry, we delivered another quarter of solid execution on our key objectives, including ramping our three 2022 conversions, which are exceeding 2019 levels and are well ahead of our underwriting. Executing on our conversions in New Orleans and Houston, announcing a new conversion in Nashville, accretively repurchasing our shares, and enhancing total shareholder return by increasing our quarterly dividend for the second time this year. Our second quarter performance demonstrates the advantages of our urban concentration and the embedded growth within our portfolio, as well as the optionality that our strong balance sheet provides us to execute on multiple capital allocation opportunities simultaneously. With respect to our operating performance, our second quarter RevPAR increased by 4.5 over last year, exceeding the industry by 200 basis points. Year-over-year growth in demand and continued pricing power enabled us to drive a nearly 400 basis point increase in ADR. Our RevPAR was 96% of 2019 levels, representing a new high. We achieved these solid results despite the impact of the rider strike and poor weather in California and Florida. Our growth continues to be led by our urban markets, which are being driven by strong group, rising international, and healthy urban leisure demand. RevPAR in our urban markets grew 7.7% over last year and achieved 2019 levels for the first time, representing an improvement of over 300 basis points from the first quarter. We were pleased to see that our RevPAR growth over last year was balanced, with occupancy increasing by 200 basis points and ADR increasing by 5%. Notably, our urban ADR exceeded 2019 levels by 10% or more in most of our key urban markets. The second quarter also benefited from our successful efforts to increase out-of-room spending through revenue enhancement initiatives in areas such as parking and F&B outlets. These initiatives resulted in a robust 21% increase in our non-rooms revenue this quarter and led our total revenues to grow by 7% ahead of last year and achieve 2019 levels. In terms of segmentation, the positive momentum in business transient carried forward throughout the second quarter. Business transient demand continued to be led by SMEs and was bolstered by the ramp of a broad range of industries such as aerospace, automotive, insurance, healthcare, and consulting. Our BP revenues achieved 71% of 2019 levels, which represented a 300 basis point improvement from the first quarter. We were encouraged to see May and June achieve over 90% of total corporate room nights booked in 2019. On a year-over-year basis, our business transient revenues increased by 12%, which was evenly split between occupancy and ADR growth. Further evidence of our positive momentum in business transient demand was the improvement in our weekday RevPAR, which increased by 6% over last year. Our group segment benefited from increasing corporate demand for meetings and events, a robust volume of self-contained social groups, and strong citywide events such as Formula One in Miami and the Kentucky Derby in Louisville, which allowed our group performance to exceed our expectations for the quarter. Our group revenues increased by 13% over last year, which was primarily driven by a 10% increase in ADR. Group revenues achieved 103% of 2019 levels, a 400 basis point improvement from the first quarter, with ADR exceeding 2019 by 13%. The forward momentum in our group demand is evidenced by our current group pace for the third quarter, which is tracking at 103% of 2019 levels. Our leisure segment was driven by the continued strength in urban leisure demand, which was partially offset by the expected moderation in our resorts that saw normalization of demand. The strength in urban leisure enabled our urban weekend RevPAR to increase by 4% over last year. This robust growth led our urban weekend RevPAR to achieve a 500 basis point sequential improvement relative to 2019 from the first quarter. Healthy leisure trends in our urban markets are being bolstered by the sustained bleisure demand, driven by both the hybrid work and flexibility, and the return of concerts and entertainment events such as the Taylor Swift Tour, which benefited about a third of our markets during this quarter. These trends flow to our bottom line, with our portfolio achieving EBITDA that was 3% higher than last year and 93% of 2019 levels, which represented a nearly 700 basis point improvement from the first quarter. Our profitability continues to benefit from our lean operating model, with fewer FDEs, allowing us to offset broader inflationary pressures on operating costs. We achieved EBITDA margins of 34.4%, which was only 130 basis points lower than last year as labor markets are normalizing. Moving to capital allocation. We continue to make progress on multiple initiatives that are associated with significant embedded growth opportunities within our portfolio. This quarter, we announced our third conversion for 2023, with our Nashville hotel joining Hilton's Tapestry Collection. The hotel's ideal location, close to Broadway, was already poised to benefit from significant redevelopment, and now, as part of the Tapestry Collection, the hotel will be able to fully unlock its potential by immediately leveraging Hilton's ecosystem. We will complete a comprehensive renovation next year to further position the hotel to capture increased market share as a lifestyle boutique hotel. Additionally, we advanced our two previously announced 2023 conversions in Houston and New Orleans. Their transformational renovations will be completed by year-end and will position these hotels to capture incremental ADR in their respective locations. We are also benefiting from the ramp of our conversions in Charleston, Santa Monica, and Mandalay Bay, which generated RevPAR growth that is nearly 50% over last year on average. In aggregate, the EBITDA at these hotels was 20% above 2019 in the second quarter. We continue to expect our conversions to generate robust double-digit returns, which will further advance our operating performance and NAV appreciation. Additionally, once again, we demonstrated the optionality that our strong balance sheet affords by pulling multiple capital allocation levers simultaneously. This quarter, we repurchased $25 million of shares at attractive levels on a leverage-neutral basis. Our strong balance sheet and free cash flow profile also gave us the confidence to raise our quarterly dividend for the second time this year. Our third quarter dividend of $0.10 per share represents a 25% increase from the last quarter. As we look forward, while macroeconomic uncertainty remains, we are optimistic that the industry can continue to achieve positive RevPAR growth through the remainder of the year, despite tougher comps. Relative to this background, our portfolio is extremely well positioned, given that urban leisure demand should remain strong, driven by bleisure trends in this new environment. Business transient should continue to see positive trends for the remainder of the year. Robust group trends should carry forward. Our confidence is bolstered by our strong citywide calendars the second half of the year in many of our top markets. Additionally, we are seeing robust in the year, for the year booking activity, with our group pace reaching 97% of 2019, a 200 basis point increase since the beginning of the quarter. Improving inbound international demand should have an outsized benefit to urban markets, and the continuing ramp of our recently completed conversions should provide incremental tailwinds. We believe that all of these trends should enable us to continue to outperform the industry as we've demonstrated during the first half of this year. Longer term, we are bullish on the outlook for lodging fundamentals in light of the increased importance that consumers are placing on travel, combined with a multiyear horizon from muted new supply. Given our ability to capture this new normal, these dynamics will be especially beneficial for our portfolio, which is uniquely positioned to drive outsized EBITDA growth, given our concentration in urban markets, which have additional rum room for significant growth. Our high-quality, diversified portfolio that benefits from seven-day-a-week demand and is aligned with the new live, work, play environment. The upside from our completed conversions and recent acquisitions, the execution of our incremental internal growth opportunities, including the completion of our next three conversions and our pipeline of future opportunities, and our strong balance sheet and free cash flow profile, provides the optionality to drive incremental internal and external growth. We are encouraged with our strong relative positioning in multiple channels of growth. I will now turn the call over to Sean. Thanks, Leslie. To start, our comparable numbers include our 96 hotels owned throughout the second quarter. Our reported corporate adjusted EBITDA and FFO include operating results from all sold and acquired hotels during RLJ's ownership period. We were pleased to report strong second quarter operating results, which were consistent with our expectations. Second quarter RevPAR grew 4.5% above 2022, which was primarily the result of a 3.8% increase in ADR and a 0.6% increase in occupancy. Second quarter portfolio occupancy was 75.1%, which was 91% of 2019 levels. Average daily rate was $204, achieving 107% of 2019, and RevPAR was $153, which was 96% of 2019. Sequential improvement in our second quarter results were primarily driven by our urban markets, where RevPAR exceeded 2022 by 7.7% and exceeded 2019 levels in most of our urban markets, such as New York at 104%, Louisville at 118%, San Diego at 102%, Washington, D.C., at 107%, Tampa at 135%, Indianapolis at 108%, and Pittsburgh at 109%. Monthly RevPAR exceeded 2022 for each month of the quarter and grew 6.8% in April, 4% in May, and 2.7% in June, and achieved 97%, 96%, and 96% of 2019 levels during April, May, and June, respectively. Our second quarter operating trends led our portfolio to achieve hotel EBITDA of $122.8 million and hotel EBITDA margins of 34.4%. Our margins were only 132 basis points lower than the comparable quarter of 2022, and only 202 basis points lower than the second quarter of 2019. We were particularly pleased with our operating margin performance in light of the very difficult comp the second quarter of 2022, where margins benefited from the combination of a rapid revenue recovery quarter in the same period, with pandemic levels of hotel operating costs, which were still in the early phase of ramping. Turning to the bottom line, our second quarter adjusted EBITDA was $113.8 million, and adjusted FFO per share was $0.56, both of which were within our guidance ranges. While demand remained strong during the second quarter, hotel operating costs continued to normalize, underscoring the benefits of our portfolio construct and realization of our initiatives to redefine the operating cost model. Total second quarter hotel operating costs were only 2% above 2019 levels, which is meaningfully below the aggregate core CPI growth rate in 2019 of approximately 15%. There are many factors that influence these positive results, with the most significant contributors being in the successful restructuring of many of our third-party operating agreements and reductions in property taxes, both of which are expected to continue benefiting our operating costs. Second quarter wages and benefits, our most significant operating costs, at approximately 40% of total costs, were still slightly below 2019 levels. During the second quarter, our hotels continued operating with approximately 20% fewer FTEs than pre-COVID, demonstrating the flexibility of our labor model in the post-COVID environment. Our portfolio remains better positioned for the current labor environment due to the need for fewer FTEs, given our lean operating model, smaller footprint, limited F&B operations, and longer length of stay. We remain active in managing our balance sheet to create additional flexibility and further lower our cost of capital, including extending $425 million of debt to 2024. As previously announced, during the second quarter, we recast our $600 million corporate revolver and entered into a new $225 million term loan to refinance 2 2024 maturing term loans. Our new corporate revolver has a term of 4 years to 2027 and includes extension options for an additional year. The new $225 million term loan has an initial term of 3 years and includes 2 years of extension options to 2028. The other key terms of the transaction included retaining pre-COVID pricing grids and covenant modifications to increase flexibility. The execution of these transactions is a testament to our strong lender relationships and favorable credit profile. So far in 2023, we have taken advantage of continuing interest rate volatility to proactively manage our interest rate risk by entering into $450 million of new interest rate swaps. Today, our balance sheet is well positioned with an undrawn corporate revolver. Our current weighted average maturity is approximately 3.5 years. 81 of our 96 hotels are unencumbered by debt. Our weighted average interest rate is an attractive 3.98%, and 93% of debt is either fixed or hedged. Turning to liquidity, we ended the quarter with approximately $477 million of unrestricted cash, $600 million of availability on our corporate revolver, and $2.2 billion of debt. \With respect to capital allocation, as Leslie said, we remain committed to returning capital to shareholders through a combination of both share repurchases and dividends. During the second quarter, our board approved a new one-year, $250 million share repurchase program, which provides us with a tool to take advantage of capital market volatility. During the second quarter, we were active under our program and repurchased approximately 2.5 million shares for $25.5 million at an average price of $10.23 per share. In total, during 2023, we have repurchased approximately 5.3 million shares for $54.2 million at an average price of $10.22 per share, including $1.3 million repurchased so far during the third quarter. Turning to dividends, our Board recently authorized a 25% increase of our quarterly dividend to $0.10 per share, starting with the third quarter, which represents the third dividend increase since last summer. Our dividend remains well covered and supported by our free cash flow. We will continue making prudent capital allocation decisions to position our portfolio to drive results during the entire lodging cycle, while monitoring the financing markets to identify additional opportunities to improve the laddering of our maturities, reduce our weighted average cost of debt, and increase our overall balance sheet flexibility. Turning to our outlook. Based on our current view, we are providing third quarter guidance and anticipate a continuation of the current operating and macroeconomic environment. For the third quarter, we expect comparable RevPAR between $137 and $143, comparable hotel EBITDA between $94 million and $104 million, corporate adjusted EBITDA between $85 million and $95 million, and adjusted FFO per diluted share between $0.37 and $0.44. Our outlook assumes no additional acquisitions, dispositions, refinancing, or share repurchases. Please refer to the supplemental information, which includes comparable 2019 and 2022 quarterly and annual operating results for our 96 hotel portfolio. Finally, we continue to estimate RLJ capital expenditures will be in the range of $100 million to $120 million during 2023. Thank you, and this concludes our prepared remarks. We'll now open the line for Q&A. Operator? Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speakerphone, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Michael Bellisario with Baird. Please proceed with your question. Thank you. Good morning, everyone. Morning, Mike. First question for you, just on the transient side, can you maybe talk about the pickup that you saw materialize throughout the 2Q, and then also what you're seeing so far in 3Q, especially in the context of your guidance, assuming some slower year-over-year RevPAR growth in 3Q? Yeah, Mike, I think on the on the transient pickup side, as I sort of think about it, on the on the BT, BT is, you know, overall continuing to improve and we're seeing good momentum. We recognize that it's gradual, but it's been consistent. When we look at our midweek trends, our, you know, our RevPAR was up 6% year-over-year. When we look at May and June, our room nights were at 90% of 2019 levels. We're seeing the momentum play itself out. I think as we talked about on, in our prepared remarks, our BT revenues are up at 70% of 2019 levels at 300 basis points year-over-year. Overall, revenues are... I'm sorry, that was quarter-over-quarter. Year-over-year, our revenues are up 12%, and it's split between room nights and rate. We're really encouraged by that pickup that we've seen, you know, in BT. As we look forward into the third quarter, there's no holidays or anything that give us concern that suggests that that trend can't continue. It continues to be broad-based, with SMEs continuing to lead, but we are seeing the national accounts continue to, to make production, you know, for us, and so we're encouraged by what we're, we're seeing there. I would also say on the transient side, when I think about leisure, it's really a tale of two cities. We recognize that, you know, that leisure demand overall, the travel patterns are normalizing, and that's obviously affected resorts, you know, being down. When we look at urban leisure, urban leisure remains strong. Our weekend RevPAR in urban was up 4%, as we, as we talked about in our, in our remarks. It's about 115% of 2019 levels, and that's about a 500 basis point improvement quarter-over-quarter. When we think about what's happening in the urban markets, you know, last year, we saw urban weekend being really driven by social events. This year, we're seeing the venues that are still ramping. It's beyond just, you know, concerts, but generally, the commercial venues are producing for us, and that's attracting that live, work, play, you know, environment. I think from a transient perspective, we're seeing as we drill down on the data points, you know, both business and, and urban leisure continue to produce, you know, for us. Thanks for that. Then just one more from me, maybe on the operating side. Can you just remind us or help us understand sort of the flexibility that you guys have? Maybe what changes did you make during the second quarter, or what changes can you make on the fly to adjust to different demand environments going forward? Thank you. Yeah, I would just, I would just frame, you know, for you, we obviously feel very good, you know, about our margins. You know, you keep in mind that our FTEs last year were at about 75% of 2019 levels, and we're running at about 80% today. This, you know, that's obviously having an impact. Overall, you know, our operating model, given a small footprint, you know, given our length of stay, that some of the things that Sean talked about, it does allow us to sort of pivot, you know, our FTE model as we move through a quarter, as trends sort of unfold. I'll let Tom give some commentary. Yeah, Mike, good morning. I would say where we're finding synergies that we know are going to be sustainable is in the sales and marketing department, food and beverage, based on hours of operations and deliverables. We feel good about the staffing model that Leslie referred to on the FTE count, that, you know, as occupancy rises, that we'll maintain around an 85% FTE, which helps us, because, as you know, wages and labor is up compared to 2019 levels based on, you know, the market rates that we have to pay to be able to attract talent. Lastly, I would say we are finding that the opportunity to, you know, hire our own employees is increasing. Applicant flow is good. We're feeling good about retention rates, and we're seeing reduced turnover. It's a healthier environment as we go into the summertime because, obviously, we're busy, occupancies are good, and employees are getting hours. On an overall basis, we feel good about the environment, so the workforce. Yeah. Mike, what I would say is one of the things that allows us to, to pivot quickly is our split between, you know, wage, hourly wage employees versus, salary employees. So when you have, a higher percentage of, of hourly, you can pivot quickly, and I think that our model affords us to be able to do that. Helpful. Thank you. Our next question comes from Dori Kesten with Wells Fargo. Please proceed with your question. Thanks. Good morning. On your renovated and converted hotels, can you remind us what the rate spread was to the comp set, prior to conversion, and then where you are today and, and where you would expect those to stabilize? Yeah, Dori. So, you know, when we, when we talked about that pre-conversion, generally speaking, those hotels were running at roughly 90% of share, against, against our comp sets relative to, to where our portfolio ran, which is 110%. In dollar amount, that was, you know, somewhere in the, in the $20-$30, of, of rate appreciation. What we've seen since relative to 2019, is those hotels, you know, post-conversion and post-reopening are outperforming that and gaining share, and that share gain is, you know, both from a combination of incremental ADR, which is primarily driving it, but we're also the added room spend through the conversions has also been a, you know, a big driver of our ability to at those conversions. The other thing I would add, too, Dori, is when we look at our comp sets, you know, we now have more what we would call aspirational comp sets. We knew the rate was different in the market for some of the competitors that we weren't able to compete with. Now that you're c onverting to a Curio or an independent, and the capital that we're putting in there allows us to change the environment of where we're actually launching, and product is, you know, fantastic to be able to compete at a much higher level. That kind of changes the way we think about where we're going, and the underwriting really kind of looked at the current comp set versus where we're, where we think we're going to end up. Right. Can you talk about your current acquisition pipeline and if you'd expect to be a net buyer or net seller this year? Yeah. I, I would say, you know, Dori, not much has really changed since our last, you know, call. I think the transaction market in general continues to be constrained. Clearly, you know, the, the debt, you know, markets as well as rising interest rates are key factors to that. Many brokers are actually advising their clients not to take things to market in this environment. The solid fundamentals that we are experiencing are encouraging potential sellers just to hold, so there's been really limited, you know, transactions, you know, on that side. Given that the backdrop, we'll be opportunistic, you know, but, you know, we don't need to be programmatic given our balance sheet strength and, you know, where our portfolio posit- is positioned. I'd say that we're just, you know, looking at the current climate. What I, one thing I would say that has changed is we've started to have more conversations, but it's way too early to decide, you know, whether those conversations are going to translate into anything. What I do know, though, is that the reason why we're getting more calls is because we're an all-cash buyer. You know, that when the market does open up, we're going to benefit from that. I would say right now that the general transaction market, buyer or seller, is really constrained. Okay. Thank you. Our next question comes from Bill Crow with Raymond James. Please proceed with your question. Hey, good morning, Leslie and Sean, I want to go down a little bit of a different path, but let me follow up to Dori Kesten's question and ask you whether the environment in New York City is not good enough at this point to start thinking about the Knick and the sale of the Knick? You know, I, I, I think it's a great, you know, an interesting question, Bill. I think where we sit today in the capital markets, it really constrains the buying pool, and so we would wanna see that market improve. You know, in general, we think the way we positioned our portfolio today, at the urban lifestyle, that the Knick, given its key count, its limited F&B, fits well within our, within our portfolio. You know, having said that, I think the general transaction market is still constrained for us to, to looking at selling an asset of that quality, given its iconic location, and, you know, where it sits in our portfolio today. All right. I, I, I wanted to go down this, this leisure path a little bit, and I know it's, it's already come up, but you do sound more optimistic than, than your peers on, on leisure. At the same time, you said you're seeing some normalization. I'm trying to figure out exactly what it is that you're seeing that might be different than other people. I'm wondering whether, you know, it's a value proposition that your portfolio may offer or geographic footprint. I don't know, maybe it was the Taylor Swift benefits. I don't know if you can quantify for the second quarter how much that helped you, but, but what, you know, what are you seeing? Any changes in, in, in the, the consumer, whether it's, you know, trading up, trading down, longer, shorter stays, changes to your booking window that you can see? I think we're all trying to get a, a read on the consumer and demand here domestically. Yeah, Bill, thanks for that question. I really think it's sort of a couple things. I think first and foremost, as I mentioned before, your urban venues are still ramping. You gotta think about it for a second, and many of the concerts and things that are seeing that we're seeing right now, they didn't happen for two years, and so there's, you know, that's kind of rolling out, and we're seeing the benefit of that. Our hotels are typically, you know, located near these venues and are great pivots for that leisure that we've been talking about. We really see that, you know, given the work from anywhere environment, that our Thursdays are turning into check-in nights, and that the types of hotels that we have are able to pivot into a weekend experience off of a business play. You know, we think that we're benefiting from that in the urban end market, and we think that that's a trend that's here to stay. We think the types of assets that we own are able to capture that, and I think it's playing out, you know, within our, within our portfolio, and that's why we sort of call out urban, urban leisure, in terms of how it's performing. I think that, you know, there's still room to grow on that. We saw our RevPAR increase by 4%. Our rate was the primary driver of that, with increasing by 4%. You know, we just haven't seen any softness on the weekend side. I would add to Leslie's comments, Bill, in regards to the booking window, 'cause I know you asked about that. You know, when we think about the booking window, you, you look at a couple different, you know, categories of segmentation. One, when you think about transient, it's still a short-term booking window, so when the consumer has optionality and has choice, they can take longer. For instance, if you think about 0 to 7 nights prior to arrival, it's now at 58% versus 51% back in 2019. They're taking their time because they still have that last-minute, "Let's go," attitude. The other thing I would say is, on the group side, when we think about in the booking window, it's still short term, but it's starting to elongate a little bit, where we're starting to see, you know, booking pace getting more on the books further out. We're encouraged that the short-term bookings and the small groups are still booking short term, which gives us pricing power. Even when we look at our crossover goals for 2024 at some of our larger full-service hotels, we're way ahead, in 2024 versus 2023, and that's where I was talking about the booking window and the consumer now putting a little bit more, you know, credence into booking something further out and landing on a, on a, on a date. When you think about our portfolio and the value, it really is because we have 50% suites, too, Bill, when you think about how we differentiate ourselves, and that is very attractive in regards to a value buy when it comes to the consumer. You almost have two different hotels at a suite hotel during the week and weekend. You really have a much more, you know, family relationship and sports teams, and you see that on the weekends, where a weekday, you can act as a business transient hotel. That seven-day heart of demand location that Leslie talked about is critical for our portfolio to differentiate ourselves. Great. Thanks for the color. Appreciate it. Our next question comes from Anthony Powell with Barclays. Please proceed with your question. Hi, good morning. Maybe one more leisure question. Looking at markets like Key West and Miami, it, it seems like you took down ADR but maintained occupancy, and I'm seeing some other reports where that was the opposite, where they tried to maintain rate but saw a big drop in occupancy. I'm, I'm just curious, what do you think the better strategy is? And are you finding actually some price sensitivity in, in the leisure customer here? Yeah, so if you're referring to Anthony, quarter two, in Key West, we always have kind of drafted off of the location that is a little bit more desirable when you go to the back area of Key West than the southernmost point. We've always had great value purchases. When the resorts were really moving further ahead, we were able to draft off of that. On the way back down, we were able to kind of maintain our occupancy because we're a value buy, and then not lose as much rate when you look at Key West, because we have a DoubleTree Suites, as well as a Fairfield Inn, that kind of goes left and right when you go 2 mile by 4 mile onto the Keys before you go to the southernmost point on the water. That was one strategy we took there, and we take quite a bit of government business, because there's still a significant amount of volume of that, and per diem went up. It was a good strategy to stay in that direction. The second market you mentioned, I didn't hear your question. Miami. Miami. Miami, yeah. Miami, we were under a little bit of a renovation. We obviously had, a significant first quarter result. Then we went under the knife. One of our hotels will be back in the shoulder months of fourth quarter and feel good about that. That's primarily our hotel that's on the beach down there at Cabana, our Hilton down there. We'll see a better result in the fourth quarter based on we had some rooms out in in the second quarter. Yeah. Sorry. Go ahead. What I was gonna say, Anthony, just to sort of book in on to, you know, to Tom's comments is, is that, you know, our, our, you know, our resort markets or our sort of true leisure markets, we saw a lift, but we didn't rise as high. The price point is still very attractive. Our, our resorts were down 4%, and compare that to, to many of our peers who are, who are down much more substantial than that. It's a function of, of we had a more sustainable increase, you know, on a relative basis to, to many of our peers. Let Sean hop in. Yeah, that's, I, I echo that, Leslie. I think when you look at how our resorts have performed, demand is right on top of last year, and right on top of 2019. You know, when you juxtaposition how our resorts are performing relative to some of the others, the risk, our ADR has been outperforming it because we have not seen the rate degradation that others have seen through that high-end rate business leaving for other, for other jurisdictions, international, outbound international being, you know, one of the, one of the big drivers in the, in the, in the current quarter. whereas that was not sort of our, our, our bread and butter, you know, over the last couple of years and sort of isn't, likely isn't gonna be our bread and butter on a go-forward basis. I think we, our resorts present a more stable, you know, resort value proposition than maybe, sort of some of the highs and lows that you're seeing elsewhere. Anthony, this kind of goes to combining your question with Bill's. This really kind of goes to what we've been speaking to in terms of our portfolio being built to capture the new normal. It's, you know, we're positioned in the seven-day-a-week demand markets to be able to capture what's happening in the urban markets, and then the type of type of leisure resorts that we have, you know, can capture where we think rates sort of settle out at, you know, overall. We really think that our portfolio is built to capture the new normal as we, as we go, go forward. Yeah, thanks. Maybe one on, I guess, Silicon Valley and San Francisco. You know, one of the, one of the other peers, took down their expectations for that market for the balance of the year. What are you seeing in those markets? Yeah. What's interesting about San Francisco, the back half, as we stated earlier in the year, was set up better from a CBD standpoint based on Moscone and citywide towards the end of the year versus 2022. We're encouraged by what's happening in that market because CBD starts to compress and spread out. When you talk about Silicon Valley, it, it had a little bit of a unique situation because it had so much project business last year, and that's probably why others might have adjusted their forecast. What I would say to you is that, you know, we are in the middle. We just talked about Taylor Swift. We're in the middle of just had a concert this past weekend at Santa Clara. Silicon Valley, we're starting to see offices come back. The, the occupancy rates are improving in regards to the counts that are coming back, so we're starting to see a little bit more BT. We're, we're feeling better about the back half than we are the first half, as we have a tougher comp, obviously, versus 2019 and 2022. Anthony, what I would just sort of bolt on is that, you know, obviously, you know, we have a diversified footprint in Northern California, and the non-CBD is generally outpacing the CBD. I think in this particular case, what you saw is, just as Tom mentioned, there was some year-over-year comp issues relative to project business. I think that's it, that's it in a nutshell. Got it. I guess on the, on the CBD, I guess, there was some commentary that, you know, the back half was going to be worse than expected, but it sounds like you're not seeing that, and that, that comment from the other peer may have been a, a property-specific issue versus kind of a market, market issue. Is that fair? Yeah, Anthony, the citywides are up meaningfully year-over-year and much closer to 19 in the both in the third and the fourth quarter. I think when you look at the types of hotels that we have in the CBD, you know, one's a 400-room Marriott, the other is a 166-room Courtyard. You know, we're not as reliant on, you know, the big citywides as other, other larger hotels maybe that, that, that have, you know, specific issues that they're dealing with. I think our, our footprint, our size, and sort of who our core customer, gives us, you know, more confidence around the back half of the year maybe than you're hearing from others. All right. Thank you. Our next question comes from Gregory Miller with Truist. Please proceed with your question. Hi, thanks. Good morning. My first question is about service standards and guest satisfaction scores. Now that staffing is more fully in place, I'm curious how guest satisfaction scores have manifested between select service hotels and your full-service hotels in recent months. Is one type of hotel scoring better from a service experience in light of all the operating changes that have been implemented in the hotel industry since 2020? Good morning, Greg, it's a great question because, what we're seeing, and it's really important to be able to, you know, have customers want to come back after you work so hard to get them in the door. Because of the ability to have more certain hours, consistency of deliverable, it has made a difference in regards to what's happening on the, on the ground. You know, when we think about employee satisfaction, we think about that first, and then we know that we can drive guest satisfaction. We've spent a lot of time giving people tools and resources and making sure they have certainty in their hours, and that allows them to have good morale and, and build the type of environment we want at the asset. What we're seeing is the scores are going up both on select service and full service, because hours of operations are more consistent, where customers are coming in and have those expectations, and they're getting what they're looking for. The same thing on the housekeeping and cleaning. You know, I think we've come to a point where we're, we're still doing a, a tidy clean, if you will, you know, where we're going into the room and having that. That, I think Marriott and Hilton have all moved towards that in regards to more regular service, but the take rate's still at a smaller percentage. That's all contributing to what I would suggest, the increase in guest service scores, both on full service and select. Thanks. I appreciate that, Tom. For my follow-up, apologies if I missed this in the prepared remarks, I, I wanted to ask about Florida from a different context. You have several Florida hotels. A few of them are close to convention centers, there have been news reports of groups canceling events in the state due to Florida State Government legislation and action. I'm curious if you've seen any material negative impact to group demand or future bookings? Yeah. When we think about our footprint, we have 1 on I Drive, Greg, in Orlando, and we have an Embassy Suites. It really doesn't participate in too many blocks because of its location compared to the convention center. To your comment, we haven't seen anything happen in the Orlando area at this point in time that would make us think that there's not gonna be the compression, because the citywide's got a pretty nice calendar this year. When you go further south, you're looking at Miami as well as Fort Lauderdale. Lauderdale is in the, in the phase of expanding their convention center. We're actually pretty encouraged with what's going on down there, with cruises coming back and events that are going to be booking in future years. Just the opposite, we have not seen anything that's been a negative storyline. Miami really doesn't produce conventions that, you know, cause compression. We have a hotel at the beach and one at the airport, and our occupancy has been pretty good in those locations. I haven't really seen what you're looking for in regards to the, the commentary around legislation and, and cancellations. Yeah. The other thing I would just add in, if you look at our overall group pace for the year and what we're seeing across our portfolio, we're not seeing any of that degradation there. I would tell you, Greg, is that our group is on fire. You know, you know, we were 103% in 2019 levels of revenues for the second quarter. We're on pace for the third quarter at 103%. Our full year is at 97%. Our in the year for the year, we're only 7 months into the year, we've already booked 80% of all what we booked in the year for the year last year. Our in the quarter for the quarter pickup is 20%, where we expect that pace to continue. A lot of this is being driven by the, the small group, which is right in our sw- in our sweet spot. What we're seeing is that corporate group represents about 50% of our small group. In addition, we have a lot of self-contained, group, which is not being impacted, you know, which what Tom is referring to, not being impacted by that, that citywide, any events that's sort of happening along those lines. It benefits when citywide is there, but, it's not being impacted. The, you know, our group trends overall just have been extraordinarily strong. Yeah, and then, you know, our largest group hotel is Tampa, Gregory, in Florida. For the third and fourth quarter, we're projected to be roughly 30% above 2019 in both of those quarters, and they are our strongest quarters of the year. You know, our Tampa hotel, as I said, which is our largest group hotel, and the one most proximate to the convention center, is one of our strongest performing assets, so. Great. That's all very encouraging news. Appreciate the detail. Thanks. Our next question comes from Chris Woronka with Deutsche Bank. Please proceed with your question. Hey, good morning, everyone. Was hoping to go back to the Silicon Valley question I think Anthony brought up. Yeah, I know it's 6 hotels, it's primarily select service, but I mean, that, that, that was a 66% occupancy in Q2. I mean, pretty big step down, some of the lowest occupancy in the portfolio. You know, you guys sound pretty positive on that market. I think others have a different view. I mean, I don't think you'd give us the EBITDA splits, but I mean, can you tell us, I mean, are those hotels still profitable where they ran in the second quarter? Do you, do you give any thought to lightening up in that, in that market if things don't improve the way you think? Yeah. Well, what I would say, you know, overall, I think that we're, we're balanced and, you know, optimistic overall on that, you know, Northern California, where it sits from a standpoint of it being a, you know, strong economic base, where it sits within the tech, as being a, a, you know, tech capital, what's happening from a venture capital perspective and capital flows and what's happening in AI. Long term, we are optimistic, but we are very sober, you know, that Northern California, is, is lagging and, you know, in the near term. Having said that, we believe that the stat, the non-CBD will perform better than the CBD, and I think that's what you're hearing. I want to make sure that you understand we are balanced about how it, how it's, how it's performing. Again, you know, just think that you have to be patient in terms of what's happening in that, in that particular market. I think by and large, you know, what we've seen on a year-over-year basis is that we had significant project business, and that had an impact on a year-over-year basis. You know, we are generating positive EBITDA at our Northern California portfolio. Y ou know, specific, I think when you look at the second quarter in Silicon Valley, which is what was a difficult comp for us because of the project business that Tom talked about, when you look at year-to-date numbers, it's still down, but it's only down 6% versus 16%. I think you're, you're, you're looking at, at one of the more challenging quarters because of the comps, because of the, because of that project business. When you get into the fourth quarter, Chris, you do have the football games in Santa Clara. We were just awarded the Super Bowl in 2026. I think people are still thinking about this market as a lagging market, but it has got some potential as offices continue to come back, and campuses spend a lot of money on employee retention, and we're starting to see a return to that when we think about office vacancies and where people are starting to come back to work. Okay, fair enough. Appreciate all the color. Follow-up question is, you know, you guys have, have done a lot of, a lot of conversions of brandings. You're, you're pretty good at it. A lot of experience. When, when I look at the portfolio today, you still have certainly a handful, probably closer to 12 of hotels that I would say are, you know, affiliated with, with, with good brand companies, but, but maybe in some of their lesser brands, and some of those are in, you know, pretty nice urban or resort markets. Are there things on your radar? Obviously, you announced Nashville, but are there other things kind of beyond the Wyndhams as we look out a little further where you want to, you want, you want to go upbrand or soft brand from one of the, the major, but, but smaller brands? Yeah, Chris, that's a, that's a great question, I think a, a big component of our longer range story. What we've, you know, articulated is roughly 20% of our portfolio has optionality over the next, you know, call it, you know, 3-5 years because of franchise agreements that expire or some other lever that we can pull. The way we, the way we think about conversions and the way we've executed on the ones we've done to date are, are making sure that we put the right brand on the right asset that's going to maximize value on a risk-adjusted basis. I think the conversions we've done to date and the ones we've announced this year are examples of that. In the future, what we, what we've announced publicly, and we, and, and we stand by it, is that we have a couple conversions per year for the next several years. Some of those, you know, are, are, you know, fit the bill that you're discussing, which is in a brand family today, but probably have the opportunity either to go further up within the brand family or even, you know, switch or go independent, right, you know, based on what's the right thing for that particular asset. You know, the, the, the two per year, we think is the right cadence, you know, for us to, to roll it out. The two per year is also influenced by, you know, how the, you know, how the levers present themselves. What I mean by that is when franchise agreements expire or what, or what options are, et cetera. You know, to your point, we think it's a big part of our long-term value creation, and we appreciate the compliment around our ability, that, you know, the fact that what we've done has worked and that, that should be part of our platform value. Okay, very helpful. Thanks. Our next question comes from Tyler Batory with Oppenheimer & Company. Please proceed with your question. Thank you. Good morning. A couple questions for me. First, on, on the capital allocation side of things. I mean, look, I think as a management team, you guys have a really good track record. You've been very balanced, pulling on a lot of levers. You've been pretty consistent in terms of your commentary and execution as, as well. You know, have you thought more or thought at all about perhaps changing that? I mean, maybe leaning into, you know, different areas. You know, it's nice to see the, the, the repurchase, but, you know, not sure if you're still thinking about that on a, on a leverage neutral basis or, you know, perhaps, you know, maybe using the, the balance sheet capacity and the liquidity you have to, to maybe lean in a little bit more into one of these areas, or, you know, the preference just to, to kind of remain, remain balanced, you know, kind of execute on, on multiple different fronts. Yeah, Tyler, first of all, thanks for your comments. I, I would generally say that, you know, our actions demonstrate, you know, that we're going to continue to be thoughtful. You know, we continue to, to make sure that we're executing within the right windows. As you articulated, you know, our balance sheet provides us the optionality to do more than one at the same time. I think, you know, with our buybacks, we'll continue to, to use leverage neutral as a guidepost. It's not a hard line, but it is a, a guidepost, and, and I think it's served us well. We've been thoughtful if you looked at where we bought at, and we've continued to buy programmatically as opposed to, you know, one point in time. It's afforded us the opportunity to not only, you know, execute on that end, but we've obviously continued to invest internally with our announcement of, of our Nashville transition and increase our dividend as well. We recognize today that buybacks continue to be the most attractive, you know, we also want to be thoughtful and balanced as we kind of look, look forward at, at fundamentals as well as the economic backdrop. I think that discipline has served us well. Okay. Just to follow up on this leisure topic of discussion, you know, what's in the guide for resort markets in Q3? I mean, are you expecting that ADR to decelerate further or perhaps be a little bit more stable with Q2? Can you remind us your mix high level, what% of your transient is leisure versus corporate? Yeah, Tyler, to start, our, our resort mix is roughly 14% or 15% of our, of our, of our portfolio. You know, for the, for the third quarter, we would expect, you know, our resorts, you know, as a subset, to actually do a little better in the second quarter because of the ramp associated with a couple of our, of our resorts in Mandalay, as well as Santa Monica, where we will, you know, they are, you know, comping off, off, off periods. The, the heaviest renovation activity for both of those assets occurred in the back half of last year. The ramp is we're, you know, in the 1st year of the ramp, so we expect the momentum to continue for both of those assets, and that, you know, they are meaningful drivers of our resorts. I think on a, on a, on a net-net basis, we think the, the resort, the macro trends that impacting resorts, we don't think we expect to be in line, you know, quarter-over-quarter for the industry. You know, we believe that, that our conversions will allow us to, you know, to have, to, to outperform on the resort side. Okay. Just when you look at the transient, your entire portfolio of transient, I mean, what, what% would you guess is, is leisure versus, versus corporate? Yeah, I mean, historically, we were 80% transient, 20% group, and historically, that split was 55% BT and 45% leisure. We probably think, you know, that that is about 50/50 today, because of leisure and kind of what's being booked in your bar, it's hard to sort of separate, but that's our, that's our thought, Tyler, in terms of 50/50 right now. The breakdown on the mix, you think about it, we're back on the group mix side, as we talked earlier. I think the encouraging thing is bar is remaining at the highest level of our mix. When we think about pricing power and what's happening, that's important as we think about how people book. Retail has been, you know, kind of the winner, and when we look at 2023. Yeah, I think also when we look about Thursday nights becoming check-in nights, that's also affecting that, that mix of, 50/50 right now. Okay, great. All right, that's all for me. Appreciate the detail. Thank you. Our next question comes from Floris van Dijkum with Compass Point. Please proceed with your question. Yeah, I, I must say that the questions have been pretty thorough, so, I just curious to see, what, you know, maybe Leslie, if you can give a little bit of, you know, overview on what you think are the biggest risks right now, you know, that you're facing, to, to your outlook for, for the rest of this year? You know, I, I, you know, Floris, clearly, the sort of overhang of recession has been pushed out, but if that is wrong and, you know, and the economic backdrop, you know, erodes in some way, that's gonna affect, you know, all segments across. I would say, you know, today, you know, the holiday picture looks good for BT and nothing standing in our way. If BT doesn't continue to ramp, I mean, that would be an obvious risk. You know, leisure, you know, we feel good about what's happening in urban leisures, but if that were to soften, you know, that would be, you know, have implications as well. you know, international has been emerging, but, you know, if it doesn't continue to emerge, that would, you know, be something to look at, too, in particular markets like New York and, and South Florida. I think it's really, you know, the economic backdrop and the implication it has on for demand to continue to ramp. There's no particular event risk that we're looking at today. I think overall, we recognize that, that leisure demand is normalizing, but overall fundamentals feel stable. The trends that we see today, there's nothing that we're seeing that should stop us from continuing to see those trend, those, those trends move forward. Thanks, Leslie. That's it. There are no further questions at this time. I would now like to turn the floor back over to Leslie Hale for closing comments. Thank you for joining us today. You know, we're pleased with our performance, and our portfolio is well positioned for ongoing solid execution. We hope that everybody enjoys their summer and travels and contributes to the travel industry. We look forward to keeping you guys apprised on our progress, and we'll see many of you in the conferences in September. Have a good summer, everybody. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.